3rd Parliament · 4th Session
Mr. Speaker took the chair at it a.m., and read prayers.
– By this morning’s newspapers, the public are informed that the Railway Commissioners of New South Wales, presumably acting on the advice and with the consent of the Government of the State, refuse to carry coal except under certain conditions, one of which is that the Department shall take a percentage of the coal. In view of the fact that some of the coal may be under consignment for the completion of orders in other States, is not the action of the Government of New South Wales, in sanctioning this conduct, an infringement of the provisions of the Constitution prohibiting restraint of trade, and does not the Prime Minister think that the Commonwealth Government should take steps to put an end to an arrangement which is preventing coal supplies from Newcastle being obtained in the other States?
– The statements in the press as to the action of the Railway Department of New South Wales differ each day, and my perusal of the newspapers this morning has not made clear exactly what is being done. I do not know that any appreciable part of the Inter-State trade in coal is conducted by railway. If it were, no doubt the circumstances mentioned by the honorable member would call for, and immediately receive, the consideration of the Attorney-General. It is necessary to be guarded in these references, however, because, in the three past days, we have had three different versions of the action of the State Railway Department.
– Has the Railway Department of New South Wales any more right to the coal mined at Newcastle than have the Departments of Victoria, South Australia, Tasmania, Western Australia, or Queensland? If not, is not its action in seizing the coal in restraint of trade?
– It is somewhat dangerous to give, without consideration, opinions on questions which do not directly concern us. The action of the New South Wales Railway Commissioners appears to be one directly affecting the people of that State. As to whether there would be a breach of Inter-State law if the people of other States were affected is a question which I cannot answer without a knowledge of all the facts. There is a direct remedy, should there be interference with InterState trade.
– The Railway Department of New South Wales has refused to convey coal to ships at Newcastle. The position is most serious, though some honorable members seem to be somewhat impatient when questions are asked concerning it. As the Prime Minister is not satisfied with the newspaper reports regarding the attitude of the New South Wales Government, I ask him does he not think that the Commonwealth Government might ask to be informed exactly as to the position ?
– That will be done if necessary. That I, personally, do not happen to be informed of the latest developments in this matter is of minor importance. The action taken at Newcastle is being noted day by day, and from step to step, by those who are competent to judge, by whom I shall be informed immediately the occasion arises.
– Has the AttorneyGeneral noticed in this morning’s Age a statement that President Roosevelt settled in forty-eight hours a strike in Pennsylvania, after 400,000 miners had been out for four months, by serving a notice on Mr. Morgan? Has not the Commonwealth power to do something similar ?
– As I have said, it would be dangerous to offer opinions without a knowledge of all the facts. Our Constitution is not similar to that of the United States in all points; Very firm action has been taken in America at times, owing, in some cases, to the fact that the ownership of the land belongs to the Commonwealth rather than to the States. There have been cases, such as re Debs, in which, were the facts the same, action similar to that taken in the United States of America could be takerr by this Government.
– All these trivialities should be brushed aside.
– It is the ignoring of these matters which renders futile somewhat emotional attempts to interfere.
– Does not the law of eminent domain prevail here as in America?
– That is a phrase rather than a matter of substance. I am glad that the honorable member has drawn attention to the subject. We are doing all in our power to follow the course of events to see whether the Federal jurisdiction is touched at any point.
– Yesterday I asked the Prime Minister if there was any chance of the Inter-State Commission Bill being dealt with this session, as it had not been considered in the Senate for about seven weeks. The Prime Minister replied that it had not been considered, because of mat- ters of greater importance, namely, the Financial Bills.
– Of greater urgency.
– I ask the honorable gentleman if the fact that the Inter-State Commission Bill was before the Senate, but was not considered, for four weeks prior to the Financial Bills leaving this House shows any desire to push on with it ?
– The conduct of the business in the other House is that deemed best in the public interest. I answered the honorable member from memory yesterday, and should have to refer to Hansard to verify my recollection regarding the facts.
asked the Minister of Defence,upon notice -
– The answers to the honorable member’s questions are : - 1 and 2. Several reports were obtained. The final report by the Director-General of Medical Services was adverse.
Penny Postage - Uniforms and Helmets - Wording of Telegrams
asked the Prime Minister, upon notice -
Whether, in anticipation of the Financial Agreement being accepted by Parliament and the people (in which event the book-keeping system will be dispensed with), he intends to introduce a system of penny postage throughout the Commonwealth ?
– We have long looked forward to the introduction of penny postage, but the Inter-State conditions which permit of such a piece of legislation have not yet arrived. I feel confident that it will arise before the close of next session.
asked the Postmaster-General, upon notice -
– Inquiries will be made. So far, no complaints have reached me, either with regard to the pockets or the weight of helmets.
asked the PostmasterGeneral, upon notice -
Whether the letters “ C.A.F.E.” would be accepted as one word inan inland telegram if written “ cafe,” and such letters were intended to mean cost, assurance, freight, and exchange ; and, if so, cannot the Postal Department accept “Cife” as one word?
-“ Cafe “ being an English word coming within the regulation definition of plain language, would be accepted as one word in such language in an inland telegram, whereas “ cife” not being in the same category cannot be so accepted. The Department is not concerned in the meaning intended to be conveyed by words used in inland telegrams.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are : -
As appears from the prefatory recitals, it was intended to carry into effect certain resolutions agreed to between the Premiers of the three States on 16th April, 1906,. “ Having for their object the construction of certain works on the Murray River and its tributaries with a view to the improvement of navigation and the furtherance of water conservation and irrigation and the promotion of Inter-State communication and Commerce. 2 and 5. The Commonwealth was not consulted as to, but has considered, the possible effect of the proposed agreement upon the public right of navigation. Since October, 1906, communications have passed between the Prime Minister of the Commonwealth and the Premiers of the States mentioned on the subject of the agreement, and the Commonwealth has kept itself fully informed as to the scope of the agreement and course of the incidental negotiations between the States as to their mutual riparian interests.
A Royal Commission has been appointed by His Excellency the Governor in Council of the State of Victoria since the introduction of the Bills containing the agreement of 1908 into the Parliaments of the three States, “ To inquire concerning the flow of the Murray River and its tributaries and the principles which should govern the diversion of its waters between the States directly concerned,” and to report on particular matters therein specified. In each of the three States the agreement, which appears in the schedules to the adopting Bills submitted to the Parliaments, was the subject of both adverse and favorable criticism. 6 and 7. In November, 1906, and in January, 1909, the Cpmmonwealth was advised by the Attorney-General of the day that there appeared to be nothing in the agreement itself which necessarily conflicted with the constitutional rights of the Commonwealth” and its paramount power of legislation in respect of Inter-State navigation ; though any action under the agreement which obstructed ‘ Inter-State navigation might be a breach of section 92 of the Constitution requiring trade and intercourse among the States to be absolutely free. The agreement (which appears to have been an attempt to adjust amicably the rights of the riparian State inter se to a reasonable use of the waters of the
Murray River and its tributaries, beyond which it could not constitutionally extend), was never ratified.
The interests of the Commonwealth have always been, and are still being, kept separately in view, and the Inter-State Commission Bill contains specific clauses in relation to them. The Attorney-General of the Commonwealth, within a day or two of his appointment, informed me that in view of the possibility of the intervention of the Commonwealth becoming desirable in any suit between States for a declaration of their mutual riparian rights, he would be obliged to refuse a retainer to act as one of the counsel for the State of South Australia, and would so apprise the Crown Solicitor for the State. He has done so.
Motion (by Sir John Forrest) agreed to -
That leave be given to bring in a Bill for an Act relating to the surplus revenue of the Commonwealth.
Bill presented, and read a first time.
– I move -
That this Bill be now read a second time.
On the 24th November, the House passed, practically unanimously, the following motion -
That this House approves of the new scheme of Naval Defence adopted at the recent Imperial Conference, and is of opinion that immediate steps should be taken to provide the proposed Australian Unit of the Eastern Fleet of the Empire.
The purpose of the Government in submitting this Bill is to carry out immediately, as directed, that resolution. Honorable members are aware that the proposal for the Commonwealth to provide a naval unit is with the object of that unit acting in concert with similar units on the China and East India stations. The three units are to consist of a minimum total of thirty-nine ships, namely, 3 armoured cruisers, 9 unarmoured cruisers, 18 destroyers, and 9 submarines, which are to constitute the Eastern Fleet” of the Empire. I. think that honorable members will agree with me that thirty-nine ships of the classes I have mentioned will make a formidable force, giving us a far greater sense of security in these southern seas than we have heretofore enjoyed. In the few words I intend to address to the House this morning I shall confine myself to explaining theob- ject in view in asking authority to raise £3,500,000 by loan for naval defence. It was agreed at the recent Imperial Defence Conference, subject to the approval of this Parliament, that the Commonwealth should provide a fleet unit to consist of one armoured cruiser of the new Indomitable type, at a cost of £2,000,000 ; three unarmoured cruisers of the Bristol type, at a cost of .£350,000 each ; six destroyers of the River class, at a cost of £80,000 each ; and three submarines of the “ C “ class, at a cost of £55,000 each ; making a total of £3,695,000. The £250,000 which was voted in 1908 and placed to a trust fund is being expended on the construction of three of the six destroyers. The total annual cost in connexion with the maintenance of the fleet unit, pay of -personnel at Australian rates, cost of training and subsidiary establishments, and interest, and sinking fund is estimated at £785,000. To this, the Imperial Government has offered to contribute £250,000 a year for a time. At present, we are contributing to the naval defence of the Empire £200,000 a year, and it is proposed that that subsidy shall merge in the new arrangement so soon as the new Australian fleet unit takes the place of the existing Australian Squadron, which, it is estimated, will be about the 1st July, 1912, or two and a half years hence. To those who have studied the financial position of the Commonwealth, it must be clear that, even with the immense increase of nearly £2,500,000 in the revenue for 1910-11, if the financial agreement between the Commonwealth and the States is approved by the people, the proposed expenditure of £3,500,000 on naval defence cannot be provided from current revenue unless by a large increase of taxation. Honorable members are aware that the expenditure for the present financial year is £1,800,000 more than the revenue, and that that immense difference has been caused by the introduction of a great beneficent law, having for its object the amelioration of the closing years of the aged and deserving poor. This year the expenditure under that humanitarian law will be at least £1,500,000, while next year it will be considerably greater. The Government, having carefully considered, this question in connexion with the financial obligations of the Commonwealth, have come to the conclusion that it is neither necessary nor desirable to find £3,500,000 for naval defence by additional taxation. It was with very much regret that I listened yesterday to the taunt of honorable members opposite, that this Government and their supporters are desirous of placing the burden of the interest and sinking fund of this loan on the masses of the people, and relieving the wealthier classes.
– One of the honorable gentleman’s own supporters made that statement.
– One member from this side said’ so.
– He was the only member who made that statement.
– The one fact that the Old-age Pensions Act was introduced and passed by the present PrimeMinister, and supported by every honorable member on this side, for the special benefit of the poorer members of the community, is an all-sufficient answer to what I may properly designate’ an ungenerous accusation. The financial proposal which is now submitted for the approval of honorable members is to take power to raise by loan, and to expend for naval defence, £3,500,000, bearing interest at not more than 3 J per centum per annum. This, with the £250,000 already voted and placed to a trust fund, will make the total amount available for expenditure on the Australian unit £3,750,000. It is proposed to establish a sinking fund of 5 per cent, per annum - not 4 per cent., as stated in the Bill. The first payment of £175,000 per year is to begin on the 1st July, 1912, when the fleet will be completed. It is proposed to invest the sinking fund so that it will amount t!o the principal sum of £3,500,000 in about sixteen years. For the current financial year, it, is not expected that more than £500.000 will be expended, and the interest will therefore be little. For 1910-11, it is estimated that the interest will be about £70,000, and for 1911-12 about £123,000. When the fleet unit is completed, the annual interest and sinking fund will amount to about £298,000 a year, which sum is included in the total expenditure of £785.000. When the annual Imperial contribution of £250,000 is allowed for, it will be seen that the amount which the fleet unit will cost is £535,000 a year. And allowing for the present contribution of £200,000 a year, it means £335,000 a year more than is paid at present if we keep within the estimates. Besides, it is expected that the local naval expenditure, which amounts to £80,000 a year, will be saved, so that the extra cost of the new naval scheme is estimated not to exceed £255,000 a year more than we at present pay. It will be seen, therefore, that the financing of the expenditure on the fleet unit involves the provision of from £20,000 to £255,000 a year for interest and sinking fund, when the unit is completed and carrying on its duties. Such expenditure will not to any great extent inter fere with our finances, and there is no necessity to make special provision for it at present. As it is supposed that the present unit will not become obsolete foi” at least twenty years, the present proposal is that the cost of providing it shall be spread over sixteen years instead of being charged to one or two years only, as it would be if we endeavoured to provide funds from revenue exclusively.
– And we shall have only one unit during the sixteen years?
– I am only dealing with the present proposal. It is not for me to say now what we may do in the future. The proposal to borrow £3,500,000, and repay it by annual instalments of .£175,000, instead of raising the whole capital at once by taxation, is based on the way in which financial business is ordinarily carried on throughout the world. There is nothing unusual, about it ; and, in my opinion, it is a far better and more economical plan, especially in a new country like Australia, with its immense undeveloped areas, than resorting to primitive methods, which would hamper progress by imposing unnecessarily high taxation on the people. It is, I know, argued sometimes that borrowing for defence is an unsound policy.
– That is everywhere admitted !
– It is not everywhere admitted - it is not admitted by me. It is argued that borrowing for defence is an unsound policy, because, it is said, defence is not reproductive. In my opinion, that is merely an assertion, the whole question being entirely governed by local con ditions. Insurance of property and goods is not reproductive, except when disaster arises, but it is considered a sound policy.
– We do not borrow to pay insurance.
– We are not proposing to borrow to pay interest and sinking fund. Expenditure on defence is, however, admitted by all to be an absolute necessity, and, under our circumstances, the plan we are following is, in my opinion, the wisest one, as well as the least burdensome on the people. This proposal to provide ,£3,500,000 to strengthen the fleet of the Empire is one that recognises to the full our Imperial responsibility. To those opposed to a separate navy - and, of course, there are some - as well as those in favour of a separate navy, this proposal provides a via media, for it gives exclusive control to the Commonwealth in time of peace as regards the movements of the fleet and general administration, while it provides that officers and men shall be governed by regulations similar to the King’s regulations and shall be under naval discipline, and that, when employed with other units of the Royal Navy, the senior officer shall take charge of the whole.
Colonel Foxton. - He may be an Australian.
– He may be, but I am not now dealing with that matter. This arrangement recognises each unit as an integral part of the Eastern Fleet of the Empire. Further, when the Australian unit is placed by the Commonwealth Government at the disposal of the Imperial authorities in war time, the vessels are to be under the control of the Naval CommanderinChief. I have always urged, both here and in England - perhaps this may be news to some honorable members - that the retention of the power by the Commonwealth Government in time of war, to place their unit or units at the disposal of the Admiralty, was not only a fair and reasonable provision, but was taking no risk at all. Indeed, it was, in my opinion, the best way of insuring cooperation and cordiality ; and when the Naval Agreement was being considered in 1903, I urged this on Mr. Chamberlain, who was then Secretary of State for the Colonies. I believe that, if at that time it had then been found necessary to make such a provision, he would have supported it. I should like to quote here from an address delivered by Mr. Chamberlain at the opening of the Colonial Conference, in 1902, on the defence of the Empire. Mr. Chamberlain said -
We in the United Kingdom for centuries past have been holding our house like a strong man armed against all our enemies. We have felt throughout ail the period the burdens as well as the privileges and advantages of Empire. We see now that all other nations are also arming to the teeth.
I shall not quote the whole of that portion of his address, but Mr. Chamberlain went on to say -
I point out to you that in the clash of nations, you have hitherto derived great advantage, even from a purely material stand-point, from being part of a great Empire. But the privileges which we enjoy involve corresponding obligations. The responsibility must be reciprocal, and must be shared in common ; and I do not think that any Empire may be said to be on a sure foundation, which is not based upon recognised community of sacrifices.
Those eloquent and statesmanlike words have borne fruit in the Bill now before us. I feel some satisfaction, too, in the knowledge that, so far back as 15th March, 1902, I advocated practically the same course. In a minute addressed to the then Prime Minister, Sir Edmund Barton, I wrote in paragraph 18 -
Our aim and object should be to make the Royal Navy the Empire’s Navy, and not solely supported by the people of the British Isles, as is practically the case at the present time. It is, I think, our plain duty to take a part in the additional obligations cast upon the Mother Country by the expansion of the Empire and the extra burdens placed upon her in maintaining her naval supremacy.
-Is that what the right honorable member wrote in London?
– No, I wrote that here. I do not think that the opinion I then expressed differs materially from the proposal before us to establish the Eastern Fleet of the Empire. I have said all I desire to say on this occasion. I do not touch on the financial position further than in the few words I have already offered, because we shall shortly have the Estimates before us, and any information in regard to current finances or other matters that I am then in a position to give, will be gladly supplied. In conclusion, I rejoice that we are starting in real earnest to assist the Mother Land in maintaining the safety and integrity of the Empire. We are making a goad beginning, and on a basis approved by the very best knowledge andexperience available. We are acting in complete sympathy and accord with the Imperial
Admiralty, and with the people of the other self-governing Dominions of the Empire; and, above all, we are showing to the world that the British Dominions beyond the sea are determined, without any pressure, of our own free will, in the time of peace and prosperity, to make such provision that, should the day of adversity unhappily come upon us, we shall be in a position to stand shoulder to shoulder with our kinsmen of the Old Land.
.- I presume that the Government are not in a hurry to proceed immediately after this carefullyread speech, and, therefore, I move -
That the debate be now adjourned.
– Until later in the day.
– We shall consult the convenience of the Leader of the Opposition.
Motion agreed to; debate adjourned.
In Committee (Consideration of Senate’s amendments resumed from November 26th, vide page 6486) :
Clause 7 -
A person appointed to be the High Commissioner shall not during his tenure of office, except as prescribed or allowed by the Minister be or act as director or agent of or hold any office in any company or syndicate whether incorporated or unincorporated or hold any other office or employment, whether within or without the Commonwealth.
Senate’s Amendment. - After “ hold,” line 6, insert “ or exercise.”
Upon which Mr. Groom had moved by way of amendment -
That the amendment be disagreed with, but that the clause be amended by inserting after the word “ employment,” line 7, the words “ or engage in any business.”
– The amendment is merely verbal, and, upon my honour, I cannot see the difference between the proposal of the Senate and the proposal of the Minister of External Affairs.
– We desire to send theBill on to the Senate as early as possible.
– The Bill has been resting comfortably here for six weeks, and about three weeks ago the Minister of External Affairs told me that the reason it was not brought on was that the law authorities of the Crown were investigating the legal effect of the Senate’s amendments.
– That is so.
– It is now proposed to alter the Senate’s amendment in such a way that even legal members on both sides of the House cannot tell what is the difference in the phraseology. In my opinion, the Government have other reasons for proposing the amendment, but they can take their own course, so far as I am concerned.
.- The Minister of External Affairs should tell honorable members that this amendment is absolutely necessary, and is not proposed merely for the purpose of delay. The phraseology which the Minister proposes to alter is his own drafting.
Mr.Groom. - The honorable member is quite wrong - the words “or exercise” were inserted by the Senate.
– Two words were put in by the Senate. The phrase originally read, “ or hold any other office or employment.” The Senate proposed to insert after the word’ “hold” the words “or exercise,” and to omit the words “office or.” The phrase would then read, “hold or exercise any other employment.” The Minister proposes to strike out the words “ or exercise.” I really can see no reason for doing so. Do I understand that it is also proposed to leave out the word “ employment “ ?
– We do not propose to touch the word “employment.” The proposal is to disagree with the Senate’s amendment inserting the words “ or exercise,” and to add after the word “employment” the words “or engage in any business.” We also propose to agree to the Senate’s amendment omitting the words “office or.” I have stated the reason for omitting the words “ or exercise.” The phrase is not technically correct, and the desire is to put the clause in strict legal phraseology.
– Does the Minister really think that the High Commissioner would take advantage of the position if the clause were not altered ?
– It is necessary to have our Acts couched in proper phraseology. The intention is, of course, to prohibit the High Commissioner from engaging in any outside occupation whilst holding his position.
– Would not the word “ employment “ cover everything ?
– No, because objection has been made that “ employment “ means the service of an individual; but a business is something which a man carries on pos sibly as a member of a firm, on his own behalf. The desire is simply to give effect to the intention of Parliament that the High Commissioner shall not engage in any outside occupation.
.- It still seems to me that it is not necessary to dissent from the Senate’s amendment. The clause as it now stands is sufficient to cover everything. All that the Senate has proposed is to insert the words “or exercise,” whatever they mean, and to strike out the words “or office.” The Government prefer to make the clause read, ‘ ‘ hold any other employment or engage in any other business.” If the Government thought that the words with reference to engaging in business were necessary, I cannot understand why they were not inserted in the first instance. I still think that the matter is not serious enough to cause this Bill to be hung up by being sent back to the Senate, unless the reason be to save the Government from the necessity of making an announcement before the session closes. Indeed, that seems to me to be the real intention. I cannot imagine that the Minister of External Affairs can really believe that the amendment now proposed is vital. I venture to say that if this were the last day of the session, we should not hear of its being necessary to make such an amendment.
.- The Government can reasonably be charged with paltering with this important Bill.
– The honorable member has had three shots at the matter.
– Does the head of the Government really think that the man who will be selected to hold this important position would be likely to try to get behind a clause the clear intention of which is to prohibit him from engaging in outside business ?
– We hope not.
– But we cannot tell.
– Can any one imagine that the High Commissioner, appointed to be the mouthpiece of Australia in London, is going to take advantage of the technical phraseology of the clause?
– The god of Boodle does a lot !
– If the god of Boodle is going to influence the exercise of an office of this description, I shall be very sorry. Surely the man who will be appointed High Commissioner - whether he be one or the other of those whose names have been suggested - will go to the Old Country with a desire to do his best for Australia, and will be content to devote the whole of his energies to promoting the interest of this country. But the Government have been holding this Bill back for a number of weeks. It has been an urgent matter for some years. The Opposition are prepared to dispose of the matter right away, provided the Bill is not to be sent back to another place to be hung up until the session closes. Some time ago, the Prime Minister made a statement to the effect that it was his desire to intimate to Parliament before the session closed the name of the High Commissioner. Am I correct in that statement ‘t
– It is quite probable. If the honorable member remembers the statement, it must be correct.
– Will the Prime Minister make the same statement now? Will he promise to make an announcement to the House before the close of the session as to who is to be High Commissioner?
– I will endeavour to do so, certainly. I always intended to do so.
– That statement does riot indicate that the Prime Minister will do so.
– If we do not get an opportunity, it will be the Opposition’s fault.
– Does the Prime Minister think that the quibble which is going to result in the Bill being returned to the Senate justifies the delay?
– I think the amendment is necessary.
– Evidently, the Prime Minister Is in such a frame of mind that he is easily convinced. What I desire is that the House shall have a notification of the person to be appointed before the session closes.
– If the Bill be passed now, I shall do my best to induce my colleagues in another place to take it up without delay, and get it out of the way.
– One can never pin the Prime Minister down to anything. Here we have an amendment which amounts to nothing proposed by the Senate. Every one admits that, it is merely a quibble over verbiage. The Prime Minister can get the Bill forthwith if he accepts the amendment. The fate of the measure is uncertain if the amendment be rejected.
– The Government mayhave made up their mind that the Bill will go through the Senate. But they cannot be sure.
– What odds if the Bill never passes?
– That is another question.
– Let us get it through now.
– I shall be content if the Government will promise to make an announcement before the session closes.
– Then sit down.
– Then the Bill will go to another place, where it will be delayed, and there will be no announcement until we are in recess.
– Does not the honorable member know who is to be High Commissioner ?
– If the appointment be made before the session closes, one man is a certainty. That man is a member of this House. But if- the appointment be made after the prorogation, there may be an alteration in the opinion of the Government on this important question. Personally, I should have preferred to have a more complete arrangement made bv the States.
– I trust that the honorable member will confine himself to the amendment.
– Let it go. The honorable member has done his party another good turn.
– This is a most important matter. When Parliament transfers to the Executive the responsibility of making an appointment, it ought to be made while Parliament is sitting.
-The honorable member should confine his remarks to the amendment.
– There is no justification for returning the Bill to the Senate on a matter of verbiage. The intention of Parliament is pronounced in definite terms, and I think that the phraseology of the Bill is sufficiently precise. Evidently the draftsman thought so too. But the Government take a different view1, and are prepared to do anything to cause delay. If no announcement is made before the end of the session, they must accept any odium that may come upon them in consequence.
Mr. BATCHELOR (Boothby [11.58].- This humbug is really too palpable. Why do not the Government accept the Senate’s amendment? It is absolutely ridiculous to propose to dissent from it. There is really no difference between the Senate and this Committee. Yet we are asked to go through the foolery of sending the Bill back. It is the clear duty of the Government to have the Bill passed without delay, and to announce the appointment they have made. We have been told throughout the session that the Government were anxious to get on with business, and to pass certain measures, but that the Opposition has “ stonewalled.” Yet we are now asked to cause delay over a stupid disagreement that has no sense or meaning in it. We have the unabashed and unblushing pretence that we are in disagreement with the Senate. I hope the Minister will withdraw his opposition to the Senate’s amendment, and let the Bill go through. If the Government are so determined that the Bill must not pass until the close of the session, so that they need not announce the name of the High Commissioner until it is too late for the House to express an opinion, why do they not put it at the bottom of the notice- paper ? Their present action is such an obvious piece of hypocrisy that I am surprised at their persisting in it.
.- In view of the speech made by the honorable member for Gippsland last Friday, we were quite justified in asking the Government to accept the Senate’s amendment. The honorable member for Gippsland challenged the Minister in charge of the Bill to state that there was any practical difference between the clause as amended by the Senate and his own proposal. The honorable member announced that, if the Minister would do so, he would withdraw all his opposition, but the Minister was not prepared to say on his own authority that there was any difference at all. It is strange that the Government should be “stone-walling” their own Bill, which at one time they considered so urgent that, during the second-reading debate, theyapplied the gag to the first member on this side of the House who spoke against it. The Committee is prepared to accept the Senate’s amendment at once, whereupon the Bill will become law. The honorable member for Gippsland, who is a member of the legal profession, says there is absolutely no difference between what ‘ the Senate proposes and what the Government have now put forward.
– And they do not deny it.
– They do. The honorable member was not present this morning when
I showed that there was a distinction be- ‘ tween “ employment “ and “ engaging in a business.”
– If the Minister has accepted the challenge of the honorable member for Gippsland, well and good, but on Friday he did not do so. The honorable member for Darling pointed out on Friday that it was absurd to think that any person who is to be appointed High Commissioner would take advantage of the wording of the Act in order to do something that the Government did not want him to do. What sort of person do the Government anticipate appointing as the first High Commissioner? Do they think that he would not obey thespirit of the Act under which he was appointed, but would take advantage of itin order to engage in business or become the director of a company? The Bill should have become law 6n Friday. I suppose the reason for what has happened is that the Government are notanxious to appoint any one just yet. If it had been intended to adopt my suggestion that some one outside of Parliament should be appointed, I suppose there would not have been the same trouble over it.
– The Bill would have been back in the Senate to-day but for the action of honorable members opposite in blocking it last Friday.
– It would have been law on Friday but for the action of the Minister in blocking it with an amendment which is a mere quibble.
– Nothing of the sort. It is considered necessary.
– Necessary, I suppose, in order to delay the Bill. If the Government had fixed up who was to be High Commissioner, they would have let the Bill pass on Friday.
– Of course, I must accept the Minister’s assurance. We are quite prepared to accept the Senate’s amendment, and let the Bill become law at once. Why does not the Minister take that course, iftime is so valuable? I still believe that the Government are not anxious that the Bill should become law for a day or two. I suppose there is a bit of squabbling going on between one or two knights as to who is to be the High Commissioner. The Government propose to send the measure back to the Senate, which already has a great deal of work to do, merely for purposes of delay. I regret that the Bill, which is most important, should be further delayed. The High Commissioner should have been appointed long ago. I shall vote for accepting the Senate’s amendment.
.- Do I understand that the Minister of External Affairs is prepared to say that the amendment is absolutely necessary in order to carry out the principles involved in the Bill, and is not being proposed simply for the purpose of delay ?
– I challenged the Minister to make that statement on Friday, because I did not think he was hardened enough politically to rise and say what he thought was incorrect. The word “ office “ was in the original drafting, and if it was desirable to leave it out, and make the sentence read “ shall not hold any employment or engage iri any other business,” why was not the clause originally drafted in that way?
– I told the honorable member before that there was a difficulty about the word “employment,” as it suggested that a man was in the service of another person. The intention of the House was that the High Commissioner should not engage in any other occupation, whether on his own account or in the service of another. I explained that we wished to put in the words “ or engage in any business “ because we were advised, and considered it necessary, in order to carry out the intention of Parliament and to preclude the High Commissioner from carrying on business on his own account or as a member of a firm, that they should be put in.
– Why not have put them in before the Bill left this House?
– That is another point. The honorable member asked me to give a reason for our proposed amendment, and I did so immediately. If we had let the Bill go through, and technical defects had been afterwards discovered, other motives would have .been at once attributed to us. When we tn to carry out the intention of Parliament, all sorts of stupid suggestions are made as to the reasons for our action. ‘ I do not apply that remark to the honorable member for Gippsland, who put his question fairly, and has received a fair reply. If honorable members opposite are in earnest, and desire to assist us to carry the measure through, why do they not do so?
– We are prepared to vote for the Senate’s amendment.
– The honorable member spoke again for some time to-day, indulging in tedious repetitions of what he said last Friday. It is palpable that his object was to humbug and cause delay, in a sort of make-believe earnestness.
– The honorable member is not acting badly himself now.
– I. never speak strongly unless I feel strongly. As a matter of fact, when the Bill was before us previously, it was under the consideration of the Attorney-General, and he made a note in his original draft to have this particular phrase revised. The Government are eager to pass the measure, and have it made law as quickly as possible.
– The Minister seems to be making a mountain out of a molehill. The Senate has endeavoured to strengthen the clause with an amendment which embodies a very necessary safeguard, and to which I can see no reasonable objection. A man may not legally hold an office of profit for his own private benefit, but still he may exercise all the duties of such an office. The Senate simply asks that the High Commissioner, when discharging important functions, on behalf of the Commonwealth,’ shall be wholly and solely a Government representative and agent.
– This is the way in which the last valuable hours of the session are being occupied.
– My sole desire is to make the Bill perfect. That also was the object of the’ Senate, but the Government are asking the Committee to disagree with what the Senate has done. The Senate proposed an amendment which would safeguard the intention of the Government.
– The Minister explained in the Senate that he was not prepared to say whether the words suggested there were the most apf that could be used, and we are now proposing the use of the most apt words to give effect to the wish of the Parliament.
– Then the honorable gentleman’s proposal is really to give effect to what the Senate desires?
– We desire to define it more completelythan by the words of the Senate’s amendment. We propose the insertion of the words” or engage in any business,” which would make the prohibition more complete.
– With all due respect to the honorable gentleman, there is a distinction to be drawn between engaging in any business and exercising the functions of an office. There might be nothing to show that a man held an office, though he might, at the same time, be an active canvasser and agent for a particular business.
– Then it might be that he would be engaging in business.
– I think the word “exercise” meets the desire of the Senate more completely than the amendment suggestedbythe Minister of External Affairs. A man may disclaim any connexion with a business, but, at the same time, may exercise the powers of his office to advance it as against some other business.
– The honorable member is only wasting time.
– Everything done on this side is, of course, a waste of time.
– It is not ; but this is a wicked waste of time, in view of the fact that we have only a few hours at our disposal.
– If the Government will allow the words “ or exercise,” as proposedby the Senate to be included in the clause, as well as the words suggested by the Minister of External Affairs, we shall be prepared to pass the Bill at once. I consider the amendment carried in the Senate is necessary.
– We have an AttorneyGeneral, and we prefer his opinion.
– I am sorry that the Government should take this stand. The only logical conclusion is that every attempt made on this side to improve a measure is a waste of time. The best thing the Government could do in the circumstances would be to put the Opposition out of the Chamber altogether.
Question - That the Senate’s amendment, inserting the words “ or exercise,” be disagreed to - put. The Committee divided.
Majority … … 13
Question so resolved! in the affirmative.
Senate’s amendment disagreed to.
Senate’s amendment omitting the words “office or” agreed to.
Amendment (by Mr. Groom) agreed to -
That the words “ or engage in any business “ be inserted after the word “ employment,” line 7.
Motion (by Mr. Groom) proposed -
That the report be adopted.
.- I have no objection to the Bill going through, but I think that perhaps it would be convenient at the report stage for the Prime Minister to make an announcement on the subject of the appointment of the High Commissioner. The honorable gentleman might take the House into bis confidence, and say when the appointment is to be made. When the Bill was introduced, I consented to assist its passage, and it was decided by all parties that it should be considered urgent. The Prime Minister knows that I am onlystating a fact when
I say that he was himself exceedingly anxious a long time ago that this appointment should be made. The Government have had ample time to make up their minds on the question, and I think the House is now entitled to know the result of their matured consideration. I ask the honorable gentleman if he is in a position to say when the appointment will be made ?
– Although it is somewhat unusual, I have no hesitation, in response to the appeal of the honorable member for Wide Bay, in telling him the exact position of affairs at the present time.
– The request is not unusual in a matter of this kind.
– When considering the Bill, we agreed, as a preliminary, that it would be necessary to lay down the conditions of this appointment quite apart from any personal consideration whatever. We ruled out any reference to any parson. No name was mentioned in the Cabinet or out of it during the consideration of the Bill. That attitude has been observed up till the present, and at the present moment I do not know the opinion of a single one of my colleagues as to the most appropriate appointment to be made under this measure. As soon as the Bill becomes an Act - as soon, that is to say, as the responsibility of making an appointment rests upon us - the first opportunity for considering it will be taken, and, if that be possible, before the House rises, which will be within the next few days. It is a matter which might well call for prolonged consideration. As I say, I am not aware of what opinions are entertained by other members of the Government, but, so far as I am concerned, shall make an effort to have this subject considered by the Cabinet before the House rises, and, if the Cabinet is agreed, to inform the House.
Question resolved in the affirmative.
In Committee (Consideration resumed from 4th August, vide page 2054) :
Clauses 7 and 8 agreed to.
Clause 9 (Inland and foreign bills).
– I confess that I do not know a great deal about bills of exchange, but I have a decided objection to the clauses of any Bill being rushed through without any explanation from the Minister in charge of it.
– I shall call the attention of the Committee to any point that I think ought to be mentioned. This is a very technical Bill.
– That is why I think it undesirable to resume its consideration for a few minutes, merely to fill in time. 1 understand that some other measure is to be proceeded with after lunch.
– I have devoted a lot of time toit.
– If the honorable gentleman says that this Bill is merely a consolidation of the State laws in relationto bills of exchange, I shall be prepared to give great consideration to his statement.
– I shall be happy to call the attention of the Committee to any point that ought to be brought specially before it. This is a very technical Bill, and almost every clause contains two or three declarations of specific matters of law. Sometimes there is something underlying a clause which does not appear on the surface, and requires study rather than debate. The Bill is really based upon an English Act, to which much consideration was devoted, and which is now working very well.
– There was a banking matter, to which special reference was made on the second reading of the Bill.
– That question relates to clause 81 ; when we reach the clause, I shall tell the Committee what has been done in regard to the matter. In most of the preceding clauses, however, there is nothing requiring the special attention of honorable members, unless they desire to discuss matters that have been finally settled in England.
Clause agreed to.
Clauses 10 to 24 agreed to.
Clause 25 -
– This clause, in effect, provides thatifa simple signature on a blank stamped paper, stamped with an impress duty stamp, is delivered by the signer, it mounts to an authority to fill it up as a complete bill for any amount the stamp will cover. Under sub-clause 4, the question arises as to what stamp should appear on such a paper, and I propose to ask the Committee to shorten that provision by leaving out all the words after “State,” and inserting in lieu thereof the words “ in which the instrument is issued, to be impressed on a b’.ll.”_ The stamp must be that of the State in which the instrument is issued.
– Could not an adhesive stamp be attached to such a document? Why should we provide for only impress stamps ?
– In the case of bills of exchange, stamps are usually impressed. We are really providing that where an instrument in* blank is handed over, bearing a stamp to cover the principal amount, that is to operate as a prima facie authority to fill it up for any amount that the stamp will cover, and that the stamp shall be the stamp of the State in which the instrument is issued. I move -
That all the words after “State,” line 3, sub-clause 4, be left out, with a view to insert in lieu thereof the words “ in which the instrument is issued, to be impressed on a bill.”
– What would be the position if the Commonwealth, later on, imposed a stamp duty ?
– The probabilities are that, if we imposed such taxation, the Bill providing for” it would incidentally make provision for the use of a Commonwealth stamp.
– The position could be met by the use of the words “ Commonwealth or State.”
– I prefer not to deal with a matter that is not before us. As scon as we have a Commonwealth duty stamp, the Act providing for it, if this Bill does not apply, will make the necessary provision for its use. Many of these provisions are not contained in the English Bills of Exchange Act; several provisions in regard to cheques are to be found in Stamp Acts. The law as to stamping cheques and bills is not expressly embodied in the Bills of Exchange Act.
– What would be the position in regard to documents issued in the Commonwealth territory ?
– The law prevailing there would be the law of the day - this law, in fact, unless altered.
.- I should like the Attorney-General to explain why it is proposed to prescribe that only an impress stamp may be legally used in connexion with bills of exchange? I am informed that in some of the States adhesive stamps may be legally used. If the Attorney-General’s proposal is adopted, many people in country districts will be seriously inconvenienced. It is sometimes very difficult for them to obtain bills of exchange bearing impress stamps, but there would be no difficulty in drawing up a form and attaching to it an adhesive stamp. Why should we not follow the practice in Queensland, where the public have the option of using either adhesive stamps or forms stamped with a duty stamp ?
– It would be rather dangerous to provide that any stamp may be used. If a blank-stamped paper bearing a simple signature were handed to an individual, and filled up by him, the fact that it bore an impress stamp would afford good security that it was stamped when the signature was attached to it; but a person might obtain the signature of another to a blank sheet bearing no duty stamp, and fill it in for any amount.
– Who would sign a blank sheet of paper in that way ?
– We know that men do issue blank authorities bearing impress stamps. One of the biggest bills of exchange cases that has been tried arose in 1827, and was a case in which blank cheques had been given by a man to his wife to be filled in.
– No sensible person would sign a blank cheque.
– Such things have taken place.
– Will the AttorneyGeneral say how the. danger will be obviated by the use of papers bearing impress duty stamps?
– If the stamp be impressed, there must either be forgery of the signature, or nothing. If it were not impressed, the signature might be all right, but the stamp might have been affixed after the signature was obtained. It was thought better not to follow what is the practice in England, and, I think, most of the States,, and require that impress-stamp documents shall be used.
.- I do not think the Attorney-General has made the position clear. I agree with the honorable member for Riverina that sometimes it is almost impossible for people in country districts to obtain impress-stamp forms. If one is foolish enough to accept a bill of exchange which does not have attached to it a duty stamp, one accepts something which is of no value, and must be trusting to the other party to place upon it, later on, the necessary stamp. Would not a person be foolish to accept a bill of exchange having no stamp upon it, as required by the law? The States in which stamp duties prevail issue adhesive stamps for the convenience of the public, both adhesive and impress stamps being recognised, and there does not seem to be any justification for the proposal to compel people by law to use only forms bearing an impress stamp.
– We could not have adhesive stamps on promissory rotes.
– Something may be said for the use of promissory-note forms bearing impress stamps, but my ,point is that, if we adopt what the AttorneyGeneral now proposes, and it is not the law of the States, it will override the State law.-
– It will not prevent the use of an adhesive stamp, it merely provides that, if there is no impress stamp on the document, there will be no authority to fill up the blank.
– The Minister proposes to recognise the law “of the States, and he ought to agree to recognise in the Bill the State practice of allowing adhesive stamps to be used. . The State law, whatever it may be, will be adopted in both cases. We must recollect that the people grow accustomed to the laws of their respective States, and, therefore, I do not think it would be wise for the Commonwealth to upset that law upon a detail of this kind. I should like to hear some discussion upon the matter. So far, no reason has-been assigned why we should refuse to recognise the use of an adhesive stamp in lieu of an impress stamp.
.- I would remind the Attorney-General that in South Australia a duty stamp has to be affixed to documents in connexion with almost every transaction with the Crown Lands Department. But in that S’ate it is optional for the parties to use either an impress stamp or a duty stamp. Frequently the adhesive stamp, which may be purchased at any post-office, is used. But in the city it frequently happens that men visit the Titles Office, and have the stamp impressed upon the documents. If this provision means that an impress stamp has to be attached to all inchoate instruments, country residents will be subjected to very great inconvenience.
– A duty stamp may be purchased in the country, but not an impress stamp form.
– I am very glad of the criticism to which honorable members have subjected this provision, but, on the whole, it has been thought wise to declare that where a blank sheet of paper has to be filled up, the stamp used shall be an impress stamp. Some honorable members have suggested that it is very foolish .to issue blank stamped papers at all. I quite agree with the honorable member for Riverina that it is foolish for business-men to hand over a blank piece of paper with an impress stamp upon it. The practice is the cause of a good many frauds. But where a man’ does issue such a paper, I think it should bear an impress stamp, which will confer a guarantee that if there be anything informal in the document it must be in relation to the signature to it only.
– Under this provision forgery can take place.
– If a document bears an impress stamp it will be issued with more safety than it would otherwise be. If we provide that a blank paper may be filled up so long as any sort of stamp be attached to it, greater inconvenience in respect of negotiability will result. At present there is no inconvenience experienced in regard to the stamping of bills in general. This clause does not provide that any bill which has not .an impress stamp upon it shall not be valid. All that it says is that blank or unfilled bills of exchange bearing a stamp shall, for the greater security of the public, bear an impress stamp.
– Will not that provision render the document invalid if an impress stamp be not upon it?
– No, it will destroy the authority to fill up the paper. That is all. In the Queensland Act an adhesive stamp for general purposes - not this purpose - is provided for. I do not know that that is not really a limitation, because an impress stamp is not an adhesive stamp. Tn England the use of any stamp is sufficient. But we do not slavishly follow British precedent, and, on the whole, we think it better to provide that the stamp used in cases of this sort shall be an impress stamp.
.- The Minister has not yet dealt with the question of how the Federal Territory will be affected in the event of this Bill being agreed to in its present form. I thought that he would have touched upon that aspect of the matter when I put the position to him by way of interjection. Sub-clause 4 of this clause reads -
For the purposes of sub-section 1 of this section, “ duty stamp “ includes a duty stamp, required, by the law of the State (if any) in which the instrument is subject to stamp duty, to be impressed on a bill, but a paper shall not be deemed to be stamped by reason that it has impressed on it a duty stamp of any other State.
We have recently passed a Bill providing for the acceptance of certain territory in New South Wales, which will eventually become Federal Territory. Seeing that we have already assented to that Bill, it does appear to me that we ought to make provision for the Territory. Quite apart from that consideration, the Commonwealth may at some stage in its history impose stamp taxation.
– The sub-clause to which the honorable member has directed attention says that ‘ ‘ duty stamp ‘ ‘ includes a duty stamp required by the law of the State. That will not exclude the Commonwealth stamp if we ever pass a Stamp Duties Act.
– It will not admit it.
– But the earlier part of the clause does that.
– Perhaps the AttorneyGeneral will explain how a stamp which is peculiar to the Federal Territory will fare if it be attached to bills or instruments which are sent outside that Territory.
– I assure my honorable friend that it is all right.
– But provision for it is not made in this clause.
.- I would point out to the honorable member that the earlier part of the clause does not refer to the duty stamp of anv particular State. What it says is -
Where a simple signature on a blank stamped paper stamped with an impress duty stamp is delivered by the signer. . . .
That prima facie covers a Commonwealth stamp, because when we speak of the law we speak of the law of the Commonwealth. Therefore, if we do pass a Stamp Act for the Commonwealth, this provision will ‘ apply to it, and the delivery in any part of the Commonwealth of instruments of this sort with a Commonwealth stamp attached to them will be covered by it. We also say in sub-clause 4 that “ duty stamp “ includes a duty stamp, required by the law of the State. That does not derogate from the general position that the Commonwealth stamp will be applicable in any part of the Commonwealth for the purposes of this clause, including the Federal Territory, because the laws operating there will be Commonwealth laws, although their operation will be limited to that particular Territory. Therefore my honorable friend will see that if ever the Commonwealth passes a Stamp Act, the provisions of this clause will apply.
– Of course, the Attorney-General is aware that if a promissory note issued in one State be placed in the hands of a bank in another State for collection, it has to pay duty in two States. Could not that difficulty be overcome? In America, one stamp is sufficient to pass a bill through the forty-eight States of the Federation, from San Francisco to New York. Only one stamp is used, and that is the national stamp. To require stamp duty to be paid in more than one State is, tomy mind, an interference with Inter-State trade and commerce. I should like to know from the Attorney-General whether something cannot be done to overcome this difficulty ?
– We cannot interfere to prevent the States enacting stamp duty laws, although we may eventually havea stamp Act which will run throughout the Commonwealth.
– A bill of exchange is a document which is intended to facilitate the transfer of money from one person to another in different parts of the country. That is all that it is. But, under this clause, stamps must be affixed to these documents in the different States.
– The clause deals only with the State in which the instrument is issued.
– Does the AttorneyGeneral think that there is no possibility of having a national stamp, which will be applicable to the whole Commonwealth ?
– There is that possibility, and this provision will apply to it.
– I cannot see the necessity for requiring an impress stamp to be attached to these inchoate instruments. It seems to me that if swindling is going to be perpetrated in connexion with bills of exchange, the party who has that purpose in view will, under this provision, be able to secure a blank paper already stamped just as readily as he will be able to obtain a blank paper which has not been stamped. On the other hand, where transactions are bond fide, this provision will place a difficulty in the way of honest traders by insisting that only an impress stamp shall be used instead of allowing them the option of using either an impress stamp or an ordinary stamp.
– The clause is really designed for the protection of the man who signs the paper.
– I am quite aware of that. Can the Attorney-General tell us of any difficulties which have arisen in this connexion in States where an adhesive stamp is used? In Queensland, for example, a man is at liberty to use either an adhesive stamp or an impress stamp. It seems to me that there is no heed to amend the law in this connexion.
– I think, but am not sure, that the Imperial Stamp Act of 1853 or 1 89 1 requires the use of an impress stamp, and, therefore, the Imperial “Bills of Exchange Act does not refer to impress stamps. Under section 40 of the Stamp Act of Queensland, it is optional for parties to. use either an adhesive stamp or an impress stamp for other purposes : but I think an impress stamp is required for this purpose.
– That section reads -
Every person into whose hands any < bill of exchange or promissory note drawn or made out of the Colony of Queensland comes in the Colony of Queensland before it is stamped, shall, before he presents for payment, or indorses, transfers, or in any manner negotiates or pays the bill or note, cause the same to be stamped with an impressed stamp, or affix thereto a proper adhesive stamp, or proper adhesive stamps, of sufficient amount, and cancel every stamp so affixed thereto.
– It is a matter for consideration, but I think that the clause is better in its present form.
– But in Queensland either an adhesive stamp or an impress stamp may be used.
– A similar system obtains in South Australia.
– I have never seen a bill in South Australia which did not bear an impress stamp.
– I would suggest to the Attorney-General that, unless it can be shown that cases of hardship have occurred, no good purpose can be served by altering the law. Perhaps the honorable gentleman will look into the matter during the adjournment for lunch?
– I will, but my present impression is that the clause is all right as it stands.
Sitting suspended from 1 to 2.15 p.m.
Amendment agreed to.
Clause, as amended, agreed’ to.
Clauses 26 to 45 agreed to.
Clause 46 (Rules as to presentment for acceptance and excuses for nonpresentment).
.- I do not wish to discuss this measure at any length, but the Ministry would be doing- much better service to the community as a whole if, instead of devoting the very few hours now remaining at our disposition to the consideration of this measure, it pressed on with the Seamen’s Compensation Bill.
– I am willing to proceed with that next, if the Prime Minister is agreeable. I doubt whether we could do more to this Bill if we were to keep it back until the Day of Judgment, when all bills have to be met. It has given me a lot of trouble.
– I dare say it has. I gave the matter some study a few months ago, and have since forgotten much that I then learnt. It must be remembered that, although the passing of the measure may convenience the commercial community, they are not now enduring any substantial wrongs, such as are being suffered by those whom the Seamen’s Compensation Bill would benefit.
– I ask the honorable member not to discuss that matter further.
– Ninety-nine per cent, of what we are enacting is already law. I do not object to the facilitation of the business of merchants, but, in my opinion, this measure is hardly as important as the other to which I have referred. In connexion with the clause before the Committee, I wish to know from the Attorney-General why he has not adopted the provision in the Tasmanian Act, under which, if a drawee has an office, presentment may be made by leaving the bill at that office for acceptance.
– Paragraph d of sub-clause 2, of clause 50, provides that a Bill may be properly presented at the drawee’s place of business, where no place of payment is specified and no address given. That is a presentation for payment. Presentations for acceptance are on a different footing, because, directly acceptance is made, the drawer of the bill becomes liable to be sued. A man might not attend at his office for three or four days, as he does not necessarily know when it will be presented for acceptance.
– If the Attorney-General has considered the matter, I am satisfied.
Clause agreed to.
Clauses 47 to 55 agreed to.
Clause 56 -
– It is provided later that, where there is not a notary, the signature of another person will do, and to bring this provision into conformity with that, I move -
That after the word “ notary “ the words “ or person “ be inserted.
– I wish to know from the Attorney-General whether there is any provision as to the time within which a bill must be noted or protested.
– It must be done within a reasonable time.
– The New South Wales legislation requires the noting of a bill on the due date of presentation, which is very often inconvenient.
– Sub-clause 4 provides that a bill must be noted within twenty-four hours after its dishonor.
– That is sufficient.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 57 to 59 agreed to.
Clause 60 (Liability of drawer or indorser),
– I wish to know why a departure is made from the New South Wales provision regarding rights to contribution from co-sureties. It is provided by the State law that, where two or more persons indorse as co-sureties nothing shall disentitle one or more of them to contribution from the other or others, and that the rights or liabilities per se of such indorsers shall be subject to the contracts whichthey have indorsed.
– The right of contributions depends on the common law, which is not abrogated in any way.
– If that is why the New South Wales provision has not been inserted in the Bill, I am satisfied.
.- The Bill consolidates the laws of the States regarding bills of exchange, and is, to a certain extent, declaratory. Therefore it seems to me that the provision in the New South Wales Act to which the honorable member for Werriwa has referred might well have been adopted. Apparently it was originally drafted to define the common law.
– There is not such a provision in the English Act.
Clause agreed to.
Clause 61 agreed to.
Clause 62 -
Where a bill is dishonoured, the measure of damages, which shall be deemed to be liquidated damages, shall be as follows : - (ii.) interest thereon from the time of presentment for payment if the bill is payable on demand, and from the maturity of the bill in any other case.
.- The AttorneyGeneral will remember that theSouth Australian Act provides that where interest may be recovered as damages, it may be withheld wholly or in part, or where a Bill isexpressly payable with interest at a given date, interest as damages may or may not be paid at the same rateas interest proper, which is defined as interest at the rate of 10 per cent. In my opinion, we should provide for interest at the rate of 5 per cent., where a Bill is dishonoured. At the present time, there is no limitation. I submit that under present commercial conditions, which are likely to exist for some time, the rate of 4 per cent. or 5 per cent. per annum is a fair one. Unless we adopt some limitation, those who are under the necessity of giving bills may be required, especially when dealing with money-lenders, to agree to pay exorbitant rates.
– The Court need not allow interest where it may seem unjust todo so.
-Paragraph c does not touch the point under discussion.
– It seems to me that this is a matter for the Parliament. The fact is that a man, seeking accommodation under the circumstances contemplated by theBill, is buoyed up with the hope that, when it becomes due, he will be able to pay it, and he probably agrees that if he does not he will pay a good deal of interest for the time being. I am not particularly wedded to 5 per cent., but that seems to be a fair limit. None of the solid men of the commercial community would object, but only the worst class of money lenders.
– Many a business man has found himself utterly bankrupt owing to there being no power to limit the interest that the owner of a promissory note may charge if it be not redeemed. The Commonwealth Parliament possesses the power to say what maximum interest shallbe charged, and we should certainly not leave the matter to the Judge or the Court. One of the Judges of the Victorian County Court reduced interest claimed to 12 per cent. the other day, but, on appeal to the Supreme Court, it was held by the Chief Justice, Sir John Madden, that interest was a matter of contractthat it was what a man was able to obtain on a bad security. A lender is not obliged to take a bad security, but, having lent money, he has no right to penalize the unfortunate man who has the interest to. pay. I forget whether in the case I have mentioned there was an appeal to the High Court, and the Full Court’s decision was upset; but it only shows what different opinions different Judges may hold in regard to interest. At 5 per cent., with the interest paid half-yearly, and re-loaned, money doubles itself in a trifle over fourteen years, and in twelve years at 6 per cent. I shall vote for the amendment of the honorable member for Werriwa, believing as I do that there should be no interest over 5 per cent. . If we had a system that would keep interest low, the industries of Australia would be stimulated all round, with much benefit to the people. I know business men in Melbourne, who, with lower interest, would enlarge their factories, employ more people, and increase production. The man who handles money and earns interest never “ goes broke,” while hundreds of business men who conduct their affairs on the most up-to-date principles are frequently forced into the bankruptcy court.
– I agree with a good deal that has been said about unfair rates of interest, but that is a matter which for all purposes is covered largely by State Acts, under which, in some cases, the interest charged is restricted ; while in others certain contracts are invalidated. The interest dealt with in this clause, however, is simply interest by way of damage, the other interest payable on the bill being provided for in an earlier clause.
– But there is nothing to prevent our introducing a limitation.
– That is so. Clause 14 provides that a bill may be payable with interest, but this clause deals, as I say, merely with interest by way of damages, and, therefore, will have no effect in regard to the interest on the bill, which may be at any rate. Even if we were to place a limitation in both clauses, there would be nothing to prevent a lender adding to the principal. I suggest that it would be better to leave the control of this matter to the State Acts. Bills of this kind have to be very carefully drawn, because the parent English Act, as to usurious interest on which they are modelled, has given rise to a good deal of litigation in regard to the meaning of the provision. Under the circumstances, I think it would be better for the honorable member not to press an amendment. The South Australian Act fixed the rate at 10 per cent, but, at that time, that was not very different from the ruling rate in the banks, and all that is recoverable is the ruling rate at the moment.
.- If it is good in South Australia to have a maximum of 10 per cent. when that is the ruling rate, it cannot be bad for the Commonwealth to fix a maximum of 5 per cent., seeing that that is about the ruling rate now.
– The ruling rate is 6 or 7 per cent.
– If the Attorney-General moves that the maximum be 6 or 7 ner cent., I shall supoort him.
– I do not wish to fix any rate. If the Court be left unfettered, it will cut the interest down.
– One or two cases have come under my notice showing what the Courts are prepared to allow in the way of interest on bills; and I know that they are very loath to interfere with contracts. If a man agrees to pay 20 per cent., it has to be proved that he was almost a lunatic before the Court will ignore a solemn, written agreement. I know that the Courts are disposed, where there is no written agreement, to limit the amount of interest, but I think there ought to be some limitation fixed in the Bill.
– In the Local Courts Act of South Australia, there is a limitation to 8 per cent. If there must be an amendment, why, not say., “Not exceeding 10 per cent. “ ? I think, however, that any such provision is a mistake.
– I would rather say that the interest should not exceed 8 per cent. The honorable member for Darwin proposes to introduce a clause which will be much more effective in protecting people by dealing with the interest which forms the consideration for the bill itself ; but that, of course, is a different matter. I think the Attorney-General might well accept the limitation of 7 per cent. No commercial transaction is done on more than 7 per cent. ; indeed, the other day a case came under my notice in which one of the leading soft-goods firms of Melbourne charged a country retailer only 6 per cent. on a dishonoured bill. I move -
That after the word “ interest,” line 4, the words ‘‘at a rate notexceeding seven per centum per annum “ be inserted.
– Laws are made to protect lambs from wolves, wild dogs, and other destructive animals; orchardists are compelled to protect their orchards from codlin moth and other vermin, and squatters are forced to dip their sheep to protect them from tick. What is there more helpless than a man who wants to preserve his little property against another man who has the conscience of a rattlesnake, the heart of an alligator, and the mind of a shark? The AttorneyGeneral is a sympathetic man, and many a time has been in the Courts defending poor people against the ravages of human wolves. When a man’s all is going, is it not ridiculous to say that he should not be protected ? No man will lend money even at from 15 to 30 per cent. unless the security is good, and, if the security is good, he has no right to charge such high rates. I have myself backed a bill for a man who afterwards got it discounted at 14 per cent., without my knowledge. I renewed it several times, until I suddenly discovered what he had done. Then I said to him : “ Why didn’t you let me know ? I could have let you have the money at less. I am doing that kind of business.” The time has come toprotect the unfortunate lambs in their myriads from the consolidated, concentrated, powerful wolves of society, whose teeth are sharp, and claws sharper, and so I ask that at every opportunity in this Bill we should reduce the rates of interest. Some day this Parliament will get courage, and have in it a few men with financial ability who will establish a banking system that will reduce interest rates. Meanwhile let us do everything we can in that direction. If we did what we ought to do to establish a national postal banking scheme, we should have the whole of the industries of Australia booming.
– High rates of interest are always obtained in good times, and low rates in bad times.
– Where interest is high, values are low. British Consols are at only 82 or 84 now, not because they are not as good as ever, but because the owners have disposed of them in order to get the high rates of interest offering in the open market. I ask the AttorneyGeneral to accept the amendment, which cannot in any way affect the efficacy of the Bill, and will have behind it the stamp of the national belief in justice tothe multitude that must borrow.
Question - That the words proposed to be inserted be so inserted - put. The Com- mittee divided.
Ayes … … … 15
Noes … … 26
Majority … . … 11
Question so resolved in the negative.
.- In the corresponding section in the New South Wales Act there appears a sub-section providing that nothing in the section shall deprive any person of the right to recover any unliquidated damages to which he may bb by law entitled. Has the AttorneyGeneral considered the effect of dropping that provision?
– It is a saving clause which I do not think is required.
Clause agreed to.
Clauses 63 to 68 agreed to.
Clause 69 (Alteration of bill).
– Will the Attorney-General explain this clause? Does if mean that a man who found that a bill was materially defective would simply have to sell it to some one else, and let him sue for it?
– The first sub-clause really declares what the general common law principle is, that any material alteration, no matter who made it, avoids the bill, except as against persons who are parties thereto. A man cannot obtain any benefit from his own fraud. . If he were a party to a material alteration he would be bound by that alteration, but it would not affect any one who was innocently connected with it. It was decided that people who subsequently bought a bill which had been materially altered, would be affected by the alteration - that a holder in’ due course who has honestly bought up such a bill without any taint or fraud would be affected. It would be most unfair, however, to allow him to be affected by a material alteration which vitiated the bill as against others. This clause provides then, that a material alteration made in a bill will lie binding upon persons who are parties to it, but that any one who takes a bill from the indorser after the alteration has been made, is not to be affected, as against the indorser, who of course indorsed for the altered amount. An honest man buying the bill without any knowledge of an alteration is not, to the extent of the original amount, to be affected by an alteration made by some one else.
Clause agreed to.
Clauses 70 to 73 agreed to.
Clause 74 (Holder’s right to duplicate of lost bill).
.- Does the Attorney-General propose to provide any substitute for the section, appearing, I think, in the New South Wales Act, which enables a summary application to be made to the Supreme Court, or to a District Court, in certain cases on a bill of exchange.
– That is a matter of legal procedure. We are merely declaring the principles.
– But this Bill will supersede all State Acts.
– That is so.
– I understand that on the passing of this Act, no State Act relating to bills of exchange will remain in force.
– The States Acts will remain, but they will be superseded by this Act, .which covers the whole ground. We do not express the repeal, but in the schedule we declare that the State Acts cease to apply. That is the way in which we always put these matters. We have never, I think, repealed a State Act.
– We have repealed some State Acts.
– That was done once 01 twice, but it was pointed out that the proper course to follow was to declare that the State Acts ceased to apply.
– There is high legal authority for the view that we have power to repeal a State Act.
– It was said by high authority that this was the proper procedure.
– This Bill will not disturb the existing procedure under the State Act ?
– No; in the schedule, we expressly exempt those parts of State Acts which deal with procedure.
Clause agreed to.
Clauses 75 and 76 agreed to.
Clause 77 (Rules where laws conflict).
– I should like the Attorney-General to explain what is the real purport of this clause.
– This clause really adopts what is the general law as regards contracts, and new contracts based upon them, where different countries are concerned. The honorable member who takes a great interest in marriage matters knows that several questionsof jurisdiction arise in connexion with them. There is, first of all, the question of entering into the contract; secondly, we have the question of dissolution ; and, thirdly, questions as to rights arising out of the contract. And so in regard to bills of exchange we provide that the laws of the place of issue shall determine one part ; and further, in paragraph a, that such questions as the requisites of acceptance, indorsement, or acceptance supra protest, are determined by the law of the place where the contract was made. Each subsequent transaction becomes a new contract between certain parties, and its requisites are determined by the law of the country in which it takes place. As to that part of the clause which deals with the question of stamps, there has alwaysbeen a dispute as to whether one country is bound to recognise the stamp laws of another. We have therefore provided that the fact that a bill of exchange ought to have been stamped in a place outside Australia is not to affect its validity within Australia.
Clause agreed to.
Clause 78 (Cheque defined) .
– In my opinion, a cheque is not a bill of exchange; they are two different instruments.
– They have always been so defined legally.
– In this country ?
– Yes; and also in England andother countries.
– England is antiquated. I hold that a cheque and a bill of exchange are two different instruments.
– All cheques are bills of exchange, but all bills of exchange are not cheques.
– Cheques are instruments of currency, but they are not bills of exchange.
Clause agreed to.
Clause 79 - (2) Where a cheque is not presented for payment until twelve months after it becomes payable, a banker shall not be responsible or incur any liability by reason of refusing the payment thereof.
– I propose to ask the Com- mittee to omit sub-clause 2, which deals with stale cheques. It was inserted by the Senate, but has, in reality, nothing to do with this clause. Moreover, as drafted, I do not think that it carries out the intention of another place. The clause dealswith the right of the drawer and the holder of a cheque which has not been presented within reasonable time, where the drawer had funds to meet the cheque when he drew it, but where the bank on which it was drawn had suspended its payment on the date of presentation. Stale cheques, however, are quite another matter. I propose to omit this sub-clause, and, later on, to move the insertion of a new clausecovering the same matter, but expressedin different terms. I move -
That sub-clause . 2 be left out.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 80 agreed to.
Clause 81 -
a cheque, drawn on a banker by a. cus tomer, has been drawn by the customer with negligence, and
the negligence of the customer has. afforded facility for the fraudulent alteration of the amount of the cheque, and
the cheque has been fraudulently altered so as to increase its amount, and (d) the cheque as so altered has, in good faith and without negligence, been paid by the banker, the banker may recover from the drawer in a court of competent jurisdiction any amount expressed in the cheque over and above the original sum so drawn.
– - This is the clause which has, perhaps, teen most debated. I am sure that honorable members will not desire me to explain at length the principle involved, because on the motion for the second reading I endeavoured to give a fair explanation of the position from the point of view of both the banker and the drawer of the cheque. Up to about 1906 it was believed to be the law in Australia, and also inEngland, and probably it is the law in England at present - that the drawer of a cheque was under a duty to the bank so to draw it as not to afford facilities for forgery. That, I think, is the gist of a decision on the subject given in 1827, in the case of Young v. Grote, and supposed to have decided the whole question until about 1916. A bank is bound to pay a cheque, otherwise it is liable to an action, but it is not bound to pay a bill of exchange made payable there without arrange- ment, because that is a matter of agency. As to cheques, there is supposed to be between drawer and banker a contract that the banker will honour a cheque up to the amount of the funds of the drawer, or the extent of his overdraft limit. That was regarded as the law until 1906. It may still be the law in England, and I think that it is. We have had two decisions here - one by the High Court, and one by the Privy Council - both declaring that, whatever may be the duty cast on the customer of a bank, it dees not include the obligation to so draw a cheque as not to give facilities for forgery. That was the decision given in the case of Marshall versus The Colonial Bank of Australasia by the High Court, on appeal from the Full Court of “Victoria. The case, in the first place, came before Chief Justice Madden arid a jury. The learned Judge then gave a direction to the jury that the customer was under an obligation to the bank to so draw his cheque as not to facilitate forgery. The Full Court of Victoria upheld that direction, but the High Court, on appeal, decided, quoting Lord Watson in a case relating to bills of exchange, that whatever might be the duty as between customer and banker, it did not include the obligation of so drawing a cheque as not to afford facilities for forgery. The Privy Council indorsed that decision. I would remind honorable members, however, that the decisions of the Privy Council relate only to the British Dominions. The Privy Council does not decide what is law in England. So far as English cases are concerned, the House of Lords is the appellate tribunal. Hence, as X have paid,. it may be that if the matter comes before the House of Lords, .that tribunal will revert to what has been thought to be the law since 1827, and decide that a banker is protected against the negligent drawing of cheques by a customer.
– But the House of Lords has not decided against the Privy Council in this matter.
– No ; but I think the House of Lords decided in a case relating to a bill of exchange that a banker was liable to pay on a bill the amount of which had been altered. When I was approached by members of the commercial community, including bankers and others, I pointed out that I have endeavoured to differentiate in this Bill - and I find that I am sustained by writers on the law relating to bills of exchange - between the obligation of a banker to pay a bill of exchange and his obligation to pay a cheque. A bank is bound by a contract implied from the relationship, to pay a cheque, but is not bound to meet a bill of exchange unless it is domiciled, or by arrangement with the bank, made payable there.
– The clause gives the bankers additional privileges.
– No. The bankers desire more than they have got in the Bill. I do not say that they were not right in pressing certain views.. The commercial community is much interested in the measure, and we should be only too glad to hear the views of its representatives, which have been expressed by leading bankers and chambers of commerce. It was desired to obtain the same protection regarding bills of exchange as the clause gives regarding cheques. In regard to cheques, the relation between the parties is one of contract, as regards bills of exchange, it is one of agency, the liability depending on the terms of the agency. The clause attempts to declare that if a customer so draws a cheque as to afford facilities for forgery, the bank will not be liable ; that if the cheque is so drawn as to admit of the variation of the amount, the negligence of the customer shall protect the bank. I think, however, that the provision is capable of being better drafted. It was, I understand, inserted during the consideration of the measure in the Senate.
– It was in the original Bill.
– Perhaps the honorable member is right. I was not responsible for (he drafting of the Bill before it was introduced into the Senate; that was done by the present Minister of External Affairs. Several honorable members - the honorable members for Brisbane, Oxley, Robertson, and others - and certain solicitors, have brought under my notice the views of the commercial community. Of course, one is not bound to accept such views, but they ought to be examined. While I declined several suggestions, I felt bound to consider one for the redrafting of this provision. The attempt is made to restore the law to what the best text-writers believed it to be down to 1906, and to what it may still be in England. The wording of the clause, however, has been strongly, and, I think, effectually criticised, it being contended that under it a double negligence would have to be proved : that the clause suggests that two acts of negligence must be performed by the customer ; that, although the cheque may have been drawn in such a form as to permit of a fraudulent alteration, some other act of negligence must be proved as well. My intention, therefore, is to ask the Committee to negative the clause. If that is done I shall move the insertion of the following provision in lieu of it : -
In the absence of any agreement between the customer and the banker to the contrary, the customer owes to the banker a duty to exercise reasonable care, in the filling up or drawing of each cheque drawn by him U/)01. the banker, not to afford facility tor any fraudulent alteration by which the amount .of the cheque may be increased.
The duty of the customer is to so draw up the cheque as not to afford facilities for fraudulent alteration. That was assumed to be the law down to 1906, but the High Court and the Privy Council said that it was not. I think that the provision which I have read will accomplish what is desired.
.- I wish to acknowledge the courtesy of the AttorneyGeneral in listening to the suggestions put before him by myself and others. I have found him at all times desirous of protecting both bankers and customers. Although bankers have not got all that they would like to get, they have not much fault to find with the provision which has’ just been read by the Attorney-General, while the customer is fully protected by it. I shall support that provision. It will greatly improve the Bill.
– I do not know that it is quite fair to introduce a new provision of this sort in a consolidating Bill submitted at the end of the session. Both the Privy Council and the High Court have held that the banker was liable for ‘ negligence in the case of Marshall v. The Colonial Bank of Australasia. Our duty is to protect the public as well as the bankers, and we should not, at the instigation of any institution, pass special legislation, unless we are quite satisfied that the general public will be protected. In the case to which I have referred, the Crief Justice said -
The substantial question for our decision is whether the mere failure to take precautions against forgery is a breach of the implied duty owed by the customer to his bank. If it is, it would appear, prima facie, that a similar duty must be implied in the case of all contracts in which the duties of one party arise upon written communications from the other.
The Privy Council indorsed the decision of the High Court. Therefore, we must take it that the law is that bankers are liable for negligence in paying cheques. After the decision of the Privy Council in Marshall v. The Colonial Bank of Australasia, the bankers of England asked the Imperial Government to introduce legislation similar to that now under discussion, but their request was refused. Only Queensland and Tasmania have granted immunity to the banks, the law of the other State remaining as it was. I shall oppose the clause in the Bill. The provision which the AttorneyGeneral wishes to substitute for it, does not go so far, but I should like an opportunity to consider it more fully. Are we to make a law to meet only, one case ? Since the case of Marshall v. The Colonial Bank of Australasia, there has not been another of the kind. It has been held that people are not supposed .to commit forgery, and that the protection against it in cases of this kind is the law of the land. We appear to be considering legislation in the interests of institutions and against that of the general public. I do not think it wise to rush this matter through.
– It was agreed that, at 3 o’clock, the consideration of the Naval Loan .Bill should be resumed. I do not wish to delay the passing of the Bill before the Committee, but suggest that, as we have now before lis a serious departure from the existing law, we might very well postpone the further consideration of the matter.
– We all agree to the striking out of the clause before the Committee.
– I am willing that that should be done, but immediately afterwards .we should proceed with the Naval Loan Bill.
– I should like to know what the AttorneyGeneral proposes to do with regard to this clause.
– I propose to strike out the clause and substitute another which I think is absolutely justified.
– This is a question of general importance, affecting almost every person in the community, and certainly every customer of a bank ; and it should be considered very carefully. I suggest that the Attorney-General, if he can do so without inconveniencing business, might give us a short time to consider the proposal .
.- My experience is that a bank is always able to make a contract to protect itself in an agreement with a customer. A clause of this description does not affect ordinary customers.
– It does not affect honest men.
– There are, in addition to dishonest men, illiterate men, who may have difficulties in even drawing a cheque, and yet, under this clause, they may be held to have been negligent. In my opinion the duty and responsibility ought to be cast on the bank, which, as I say, is always able to protect itself. A man from the country may know nothing at all about bills of exchange, or be even aware that he has to make a special agreement in order to evade the responsibility cast on him by this clause, whereas every officer in the bank will know the law. If a man draws a cheque so carelessly as. to leave the way open for forgery the bank has always the remedy of telling him that it does not want his account. Our first and paramount duty, where there is a clash of interests, is to protect the customer - the public - and not the bank itself. I shall vote for the excision of this clause, but not for the proposed new clause.
– I understand that the Committee desire to consider this clause apart from the other questions raised in the Bill. I suggest, therefore, that we strike out this clause, and discuss the question of whether another should or shall not be inserted when I propose the new clause. We are now near the end of the Bill, and the remaining clauses are technical, and I suggest that we should dispose of those and consider the proposed new clause later.
Clauses 82 to 86 agreed to.
Clause 87 (Effect of crossing on holder). Mr. KING O’MALLEY (Darwin) [3.37]. - I should like the Attorney-General to explain what this clause means.
– It is an advantage to the public to put the words “ Not negotiable” on a cheque. The effect is not to stop its transferability; it may be passed from one to another, but if, in the course of passing, it has been stolen, the person who has stolen it cannot give a title to any one who possesses it afterwards.
Clause agreed to.
Clause 88 (Protection to collecting banker).
Mr. KING O’MALLEY (Darwin) to the trading community, and I should like to know what is the meaning of this provision.
– It means that the remedy shall be against the owner, and not against the bank.
– If a man steals a cheque, and the bank pays it, there is no claim on the bank?
– This was a matter in which I refused to accept some suggestions from the bankers, because, in my opinion, they went beyond what is logically justifiable. The law has created a class of cheques known as “ crossed,” which can only be collected through any bank if generally crossed, or through the bank mentioned, if specially crossed. The State has in effect imposed an obligation on bankers to act as collectors in the case of crossed cheques, and it is only right that, in the discharge of the duty, they shouldbe protected from responsibility. This clause only gives the banker who is acting as collector for a customer protection against loss. The bankers desired this protection extended not only to crossed cheques but to open cheques. As a bank, however, is not necessarily the collector for open cheques, which may be cashed at the counter or anywhere else, I refused the request. I mention this in order that honorable members may consider the matter in connexion with clause 81 which I propose to insert.
Clause agreed to.
Clause 89 (Promissory note defined).
– I had intended to move the insertion of a new sub-clause as follows : -
I desire to make a few remarks in support of my proposal, but, as I understand there is a desire to proceed with some other business, I shall submit it as a new clause later on.
– It would be better to move it as a new clause.
Clause agreed to.
Clauses 90 and 91 agreed to.
Clause 92 (Notepayable on demand).
Mr.KING O’MALLEY (Darwin) [3.44]. - I should like to know what is “ a reasonable time,” as mentioned in the clause for the presentation for payment. Would twenty-four hours be regarded as a reasonable time? I should like some explanation from the Attorney-Generalon the point.
– Iamsurethat twenty-four hours would not be the limit of a reasonable time. It might be six months ; but all depends on circumstances. Throughout the Bill it is provided, as in this clause, that in determining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particularcase. In regard to stale cheques six months is held to be a reasonable time in some places, and twelve months in other places ; it all depends on the country, the facilities for intercourse, and so on, and these must be left to the Court.
– So that in order to find out, it will be necessary to engage a couple of barristers and spend a week in Court, incurring costs, perhaps up to £500, when the sum involved may be only £20 or£30?
Clause agreed to.
Clauses 93 to 97 agreed to.
Clause 98 -
– I move -
That sub-clause 5 be left out, with a view to insert in lieu thereof the following new subclause : - “ (5.) Where, in pursuance of the law of the Commonwealth or of a State, any portion of a day is declared to be a bank half-holiday in the Commonwealth or in a State or in a part of the Commonwealth or of a State, the day shall be deemed to be a bank holiday so far as regards bills of exchange and promissory notes payable on that day at any bank in the locality to which the half-holiday applies and not presented for payment during the portion of the day not included in the bank half-holiday.”
Under that proposal the bill can be presented next day. As the clause at present stands, the bill might be presented either on the open half of thehalf-holiday, or on the next day, and a man might dishonour a bill by not accepting it when first presented, and be held entitled to have it again presented on the next day, thus upsetting business arrangements.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 99 agreed to.
Clause 100 - (1.) Where a dishonoured bill or note is authorized or required to be protested, any householder or substantial resident of theplace may, in the presence of two witnesses, give a certificate, signed by them, attesting the dishonour of the bill, and the certificate shall in all respects operate as if it were a formal protest of the bill.
– technical amendment is necessary, because the word “place” is rather ambiguous. I move -
That after the word “ place “ the words “ where the bill is dishonoured “ be inserted.
Amendment agreed to.
.- Does not the Attorney -General propose to insert words requiring the attestation of a notary where he is available? I understand that when the Bill was first introduced in the Senate the then Government fought for the retention of the notary, but were defeated, and an amendment was introduced enabling any householder or substantial resident of the place to give a certificate. Will that certificate be accepted in other countries? How will it be proved that a, resident is a householder or substantial resident? Notaries are known to international law and are judicially recognised in every Court. They have a history extending through centuries, from the time that they were created by ecclesiastical law.
– It is provided in the English law that where there is no notary a householder may be obtained, and apparently that has caused no disadvantage.
– I presume because anotary is usually available. The certificate of persons represented to be householders or substantial residents might not be recognised abroad. Could not the AttorneyGeneral follow the Judicature Actsby providing for the signature of the Mayor or magistrate of the town? How will it be known that the signature is really that of the party who purports to sign ?
– What is the case in regard to justices of the peace?
– In Victoria the fact of a person signing himself “ J. P.” is ac- cepted as prima facie evidence that he is a justice of the peace.
– The fact of a person signing himself as “householder” might be accepted on the same ground.
– I would put the proof that such a person did exist upon anybody who objected to such a description. The Attorney-General might as well say that the order may be signed by any person in the presence of two witnesses. The words “ substantial resident or householder “ do not carry the matter one whit further, and the difficulty of getting a certificate under this clause accepted abroad will have to be faced.
– This clause is practically a copy of the English Act, which provides that in case a notary is not obtainable, a householder may be obtained. If there is a notary, a man can make his choice. So, under this clause, if the person who holds the bill has any doubt about the signature of a householder being accepted inany part of the world, all he will have to do will be to get that of a notary.
– A notary would not submit to the indignity of having to go before two witnesses.
– I know that a notary proceeds with a great deal of formality. At the bottom it amounts to this, that we are still keeping up the old principle that there must be some notarial evidence; but we are trying to modernize it a little, as has been done in England, and so we allow an alternative. Where there is a notary the man concerned can go to him, and not be prejudiced. With regard to the suggestion of the honorable member for Corio that the certificate of a householder or substantial resident might be challenged abroad, on the ground that there was no evidence that he was what he purported to be, the principle that “ everything is supposed to be rightfully done” will apply, especially as the form of notarial protest is given in the schedule. If that is filled up in accordance with the Act, it will be presumed, as there are two witnesses to it, that the householder was really one of the class mentioned in the Act. The whole matter of protest is a question of inference. When a notary signs, there is no questionin any country as to whether he is really a notary or not, and the same principle will be followed in this case.
– The signature of a notary has always been ac cepted as evidence of the existence of the notary, except in some of the American States, where it is necessary to prove by the certificate of a Consul that the notary does exist, and is authorized to practise as a notary. I can quite understand a provision like this in the English or any other Act being used to get over the difficulties that might arise where no notary was available; but where a notary is available he ought to be used, as his signature is everywhere accepted as evidence that the bill has been properly presented and duly dishonored. Under this clause it might happen that a bank official was a householder, and the whole business might be done in a hole-and-corner fashion in a bank, with two bank clerks as witnesses. In such a case the bill might not have been properly presented, and yet it would ‘lie in the hands of the bank officials to say that it was presented within twenty-four hours of its becoming due, and was duly dishonored. The object is really the protection of the maker of the bill, in order that he mav be sure that the bill is properly presented. Even where no notary is available, the objection of the honorable member for Corio, that it would be necessary to prove the existence of the householder and witnesses, has considerable weight. The notarial protest applies only to foreign bills, and the law as to the evidence of due protest will be governed, not by this clause, but by. the Bills of Exchange Act of the particular country from which the bill came. In nearly every case I think the notary would be still necessary and the Attorney-General would be well advised to provide, as the English Act does, for the signature of a householder only where no notary is available.
Clause, as amended, agreed to.
Clause101 agreed to.
Bill returned from the Senate with a message intimating that it had agreed to all the amendments made by the House of Representatives, except one, to which it had agreed with an amendment.
That the message be taken into consideration forthwith.
– The amendment made by the Senate is a formal substitution of the word “ any “ for the word “the” in clause 31a inserted in the Bill in regard to disorderly behaviour at a public meeting. In that clause as it left this House if was provided that the penalty should be -
Five pounds or one month’s imprisonment in some house of detention more than seven miles from the polling place for the division for which he is enrolled.
As amended by another place, it provides for imprisonment in some house of detention not more than seven miles from “any” polling place. Honorable members will recognise that there may be several polling places in a division.
– I think that the whole provision is bad.
– So do I.
– Then why not negative the whole?
– It is too late now to do that. I move -
That the Senate’s amendment be agreed to.
Question resolved in the affirmative.
Debate resumed (vide page 6635), on motion by Sir John Forrest -
That this Bill be now read a second time.
.- This is a rather unusual procedure. When the Treasurer concluded his speech I invited the Prime Minister to consent to the adjournment of the debate until to-morrow. The honorable gentleman seemed to be of opinion, however, that the matter was one of urgency, but of little” importance. In my view, it is of the greatest importance, and will have to be seriously considered by the House.
– To-morrow will do if the honorable member wishes an adjournment.
– It is clear from the statement of the Treasurer - most of it carefully read from notes - that the Government have seriously considered the matter. The right honorable gentleman read that portion of his speech in which he declared that the Government had given full consideration to it, and had bound themselves to the proposition submitted in the Bill. Those who were in the first Parliament will remember the attempt of that careful Treasurer, Sir George Turner, to augment his income by raising a loan of .£500,000 to meet Commonwealth expenditure, and particularly for reconstruction works. That proposal had the support of the Government of the day, but it met with serious opposition from the Labour party, and a few honorable members now sitting in the
Ministerial corner, who did not belong to the Labour party. Sir George Turner fought strenuously for his Loan Bill, but was defeated. Speaking subsequently, both in this House and at a Conference of Premiers, he said that he was glad that he was defeated, and declared that those who opposed him in that effort had more information than he was able to obtain from the Treasury. I believe that the position is exactly the same to-day. What better tribute could we have to the action taken at that time by those who were opposed to a borrowing policy than this statement by Sir George Turner? Notwithstanding that statement, . and notwithstanding the evidence before us as to the position in which the States have found themselves as the result of borrowing, the present Government, without any mandate from the electors, are deliberately proposing to inaugurate a policy more far-reaching iri its financial consequences than the financial agreement with which we dealt a few days ago. It is a matter for calm consideration on the part of the Government whether they should or should not proceed further with this proposal at the present time. They ought to consider whether in the closing hours of a dying Parliament they should try to thrust upon the people a policy as to which they have not been consulted. No responsible party leader has declared himself before the electors as being in favour of a borrowing policy. The Treasurer, in moving the second reading of this Bil), quoted as his justification for it the resolution carried by this House in favour of an Australian naval unit, and seemed to indicate that that was the Government’s justification for altering the settled policy of the Commonwealth. I do not think that it is. The Treasurer has entirely misunderstood the position, and the same may be said of the Government generally. They are not justified in altering the policy of the country because they find themselves ‘in financial difficulty. If that were permissible, then, I presume, responsible government as we understand it would be at an end. The fact that the electors confirmed the action of the Parliament in 1902, in refusing to adopt a borrowing policy, was a direction to all Commonwealth Ministries that the settled policy of the Commonwealth should be to abstain from borrowing until a contrary direction had been given by the people. I hold the strongest views on this question, and am in no doubt regarding my own POS1- tion as to the wisdom of a non-borrowing policy. We took a wise step in- refusing to borrow in the early days of Federation, and I hope that we shall continue to do so. I never thought that a Commonwealth Government would be ready to enter the money market while the six States remained in their present position as borrowers. I did not think that a Commonwealth Government would be prepared to become a seventh borrower from Australia, as a complement to the people who created this Parliament mainly with the idea that there should be but one Australian borrower, and one consolidated State debt. As I understand the Treasurer, the Government intend to justify their position on the ground that the money is to be used for defence purposes. That is no justification for their proposal. If I understand the position of Australia, it is that hitherto we have been depending largely, almost wholly, upon Great Britain for the sea defence of the Commonwealth, and our adjacent islands. Our contribution towards the expense incurred in that way by Great Britain has been ^200,000 per annum, but for all practical purposes that6 defence has been provided by British money, British ships, and British sailors. It is true that quite a number of young Australians have been trained on British vessels during the last few years, and that, according to Admiral Fawkes, and the present Admiral on the Australian station, they have acquitted themselves exceedingly well ; but for all practical purposes we may say that the sea defence of Australia has been pro0vided by British men, ships, and money. The position taken up, both at the Imperial Conference and in Australia, was that it was the intention of the Parliament to ask the people of Australia to provide the men, ships, and money necessary for our de-, fence. What is the Government proposing? That we shall establish a naval unit, but that our ships shall be built in Great Britain, that the money to provide for their construction shall be borrowed in Great Britain, and that we are to be a debtor to Great Britain in respect of both. That is -a declaration to the world that in the height of our financial and commercial prosperity we are willing to go on with our defence, but will neither pay foi it nor provide the men necessary to it. It means either that or nothing. In seeking to launch this loan policy, we are making a declaration of our own impotence - of the impossibility of getting the youth and the statesmen of Australia to recognise the obligations of the Commonwealth. What a humiliating position we shall occupy in the eyes of Canada and the rest of the world if we adopt such a policy. 1 shall deal later on with the question of nonurgency ; I am dealing now only with the question of policy. I understood that whilst advocating the naval and military defence of Australia by Australians, and defraying the cost of that defence out of Australian money, we were going to ask the people to contribute the funds necessary for it ; but the Treasurer, in the course of his speech, read the following statement : -
The Government having carefully considered this question in connexion with the financial obligations of the Commonwealth have come to the conclusion that it is neither necessary nor desirable to find ^3,500,000 for naval defence by additional taxation.
That is a declaration on behalf of the Government, and I presume that the Prime Minister agrees with it.
– They do not even propose to find the interest on that loan by additional taxation.
– I am going to deal now with another question. In February last, speaking at the General Council of the Australian Natives’ Association - and the question of defence was then prominently before the people - I asked whether they were in favour of an Australian naval and military defence policy, and, if so, whether they were prepared to pay for it. To do them justice, they responded with an almost unanimous “ yes.”
– Does not this policy propose the same thing?
– No; it does not provide for Australian naval and military defence. It provides for borrowing money for that purpose, and repaying it, according to the Treasurer, sixteen years hence. 1 understood from the debates in this House and the public platform utterances of honorable gentlemen now occupying the Treasury bench, and those supporting them, that the outcry was against Australia’s action in not making a larger contribution to the cost of defending the Empire. It was pointed out that we in Australia are better off individually and collectively than the people of Great Britain, and yet have been content to enjoy the benefits of the protection of the Mother Country for the contribution of the paltry sum of ^200,000 per annum. It has been stated that the cost of defending the Empire amounts to 23s. per head, so far as the people of Great Britain are concerned, and to only 5s. per head so far as the people of Australia are concerned. In my opinion, the contribution of 10s. per head would be a fair thing, and an additional contribution of 6s. per head for three years would pay for the proposed new ships, with their equipment. Is that more than the people of Australia should be asked to pay? This young nation having declared for a scheme of defence, should it not be. capable of contributing 6s. per head to pay for the cost in three years ? To do so would be to declare to the Mother Country, and to the rest of the world, that in asking for a defence force of our own we were acting in good faith, understanding what we were doing, and were prepared to give effect to our wishes. As to the scheme of the Treasurer for the redemption of the loan in sixteen years, I ask : Is there any guarantee that the proposed vessels will last for that time, or even for five years? His scheme is based on the assumption that the vessels will not meet with accident of any kind, and will not get out-of-date, and, of course, ‘takes no regard of the contingency of war.
– The vessels may be seagoing for sixteen years, but will not be effective for naval defence during the whole of that period.
– Experts estimate the life of a first class modern battleship at from five to eight years; but the Government expects its vessels to remain good for sixteen years. That, however, is only a detail. The question with me is not one of money. As I said in 1903, when discussing the proposal for a naval subsidy to Great Britain, the contribution of a paltry £200,000 was a mere nothing. What I objected to then was the suggestion that the defence of. Australia should be delegated to others than Australians. By taking from Australians the opportunity to defend themselves, you take from them the incentive to a national feeling. We should provide for our defence the men, the material, and the money. I said that I had no objection to our fleet being sent wherever it could strike the most effective blow, though I have always been strongly of the opinion that the Australian naval unit should be at all times under the control of the Commonwealth Government, subject to the condition that, in time of war, or emergency, it must co-operate under the Admiral of the nearest station for the defence of the Empire. The proposal of the Government is ostensibly to help the Mother Country. It rests upon the declaration of that hysterical period when so many honorable members opposite shouted for the gift of a Dreadnought to the Mother Country to protect her against a great European nation.
– Does the honorable member still say that the offer was hysterical ?
– Wiser men than myself agree now that it was a time of hysteria, and the explanation given is that it was due to political action of which we now see the sequel in Great Britain.
– Additional ships have since been laid down there.
– That is beside the point. It was proposed then that Australia should make a gift of£2,000,000 to the Mother Country. Now it is proposed to ask John Bull to lend us . £3,500,000. We say, “ Lend us your money, and we will buy ships to fight for you.”
– And pay back what we borrow.
– Yes. I understood at that time that the patriots of Australia were afraid that Great Britain had not enough money to maintain vessels to defend herself, and wished to rush to her aid with the offer of millions.
– That is what ought to be done.
– I agree with the honorable member; but the Treasurer savs that the Government has not a penny, and does not see itsway to raise money by means of extra taxation. Therefore, we must be beholden to the moneylenders of Great Britain, or of this, or some other country.
– This will force direct taxation.
– Let us not be deceived. This is a Loan Bill. We are discussing the second reading of a measure toauthorize the raising and expending of £3,500,000 for the purposes of naval defence.
– It is only the first of a series of loans.
– That is only too true. Some of us will happily not be here tolisten to the opinions of more enlightened men as to the results of this policy. If we once commence to borrow, there wilt be no end to it.
– That :’s, if we wish to keep our navy efficient.
– Our borrowing will noi be confined to loans for naval or military defence. The Government will borrow for anything. A Government like this would not hesitate to borrow to wipe” out a deficit. Its first attempt, when it found itself in financial difficulties of its own making, was to propose the issue of Treasury ‘ bills. The necessity for that has been avoided by a financial arrangement, and now, without a word of warning, Ministers ask Parliament to authorize them to pledge the credit of the Commonwealth in the money markets of the world. The Treasurer admits that this demand is being made at a time of great prosperity. In a carefully-written portion of his speech, he said -
We are acting in complete sympathy and accord with the Imperial Admiralty, and with the people of the other self-governing Dominions of the Empire ; and, above all, we are showing to the world that the British Dominions beyond the sea are determined, without any pressure, but of our own free will, in a time of peace and prosperity, to make provision so that, should the day of adversity unhappily come upon us, we shall be in a position to stand shoulder by shoulder with our kinsmen of the Old Land.
The right honorable member has borrowed a phrase from Sir Wilfrid Laurier. That astute leader stated in regard to the offer of the Dominion of preferential trade to Great Britain that it was given out of love, without any hope of reward or return. The Treasurer paraphrases that in the words “of our own free will.” Further on he states that what is proposed is only a very slight increase in our contribution to the defence of the Empire. It is proposed to discontinue the subsidy of £200,000 to the Imperial authorities, and, further, to claim from the latter £250,000 towards the expenses of the Australian unit. Does the Treasurer really mean what he says? Does he mean that Great Britain is to continue to pay £250,000 towards the upkeep of our Navy? The Prime Minister nods his head. Is this an Australian Navy - an Australian-owned, Australian-manned, and Australian-controlled Navy ? It will be seen that this proposal makes a difference to the Old Country of ,£450,000.
– And the Old Country saves money by it.
– We now see what is in the mind of the Government. Because the Imperial authorities are put to considerable expense in maintaining a Fleet here that is not very effective, this patriotic Government say that if the Mother Country practically gives us £450,000, we will borrow £3,500,000 to provide an effective Navy for our own defence. Is that patriotism? Is that the idea the Government have of helping to protect the Mother Country and the Empire? This £250,000 has’been very generously offered at the Imperial Conference, apparently as a means of smoothing the way for the proposal now before us. A more robust, Australian-minded Government would have said to the Mother Country, “ You have difficulties and’ trials enough in Great Britain, and, seeing that we were prepared to give £2,000,000 for a Dreadnought for you, we ask you to keep the £250.000 for your own defence, leaving us to provide the whole of the money for the defence of this part of the world.”
Colonel Foxton. - Without borrowing?
– Good heavens, yes ! The idea, of defending our own country without borrowing seems to shock some people. The honorable member for Brisbane is not altogether free from blame, because he was in a Government in Queensland for a long time which used to buy ammunition, out of loan funds.
Colonel Foxton. - Because the ammunition was re-sold - it was an asset.
– Most of it was discharged from the muzzles of guns or rifles.
Colonel Foxton. - The honorable member is quite wrong.
– What I am saying is quite correct. It may be that some of the ammunition was re-sold; but, at any rate, I know that rifle ranges were made and replaced out of loan moneys in Queensland. We are not, I hope, going to revert to the old rotten method of financing, when money was borrowed for guns which became obsolete in two or three years, and then had to be renewed, again with borrowed money. Such a system would undoubtedly lead to inefficiency and disaster. The Australian people are either capable of providing money for their own defence or they are not. In my opinion, the people, if the are invited, will be found prepared to double their contributions towards the defence of Australia. If they are not, I can only say that they can never have thoroughlymade up their minds to defend the country. If we borrow £3,500,000, and some of the ships become obsolete in, say, ten years, they will have to be renewed ; and how are they to be renewed on the lines proposed hy the Government ? In ten years’ time, roughly speaking, only halt the redemption of the £3,500,000will have been provided, and the probability is that we shall then require a larger navy than now. Another loan will have to be raised; and it is quite clear that it will be much easier for the Government then to float a loan than it is for this Government to initiate the policy. The proposals of the Government were very lucidly set forth by the Treasurer.
– They were all written out.
– Nearly every Minister, when making an important speech, has it practically written; and to that I do not object - they may put their case in their own way. In the Treasurer’s speech we find this statement -
It is proposed to invest the sinking fund so that it will amount to the principal sum of £3,500,000 in about sixteen years. For the current financial year, it is not expected that more than £500,000 will be expended, and the interest will therefore be little. For 1910-11, it will be about £70,000, and for 1911-12 about £123,000.
– That is interest.
– But in another place the Treasurer says that there will be no interest charged until 191 2.
– I say that there will Le no sinking fund until July, 1912.
– Perhaps the Prime Minister, or whoever speaks on behalf of the Government, will show us where the urgency is for a loan this year. Is there any demand for £500,000 for naval construction this year? Ev en if there be any such demand, I presume there would be ample time when Parliament met after the el ctions, at the end of April, or the beginning of May, to pars a Bill of this kind, if thepolicy is confirmed by the electors. If the Government proposals have the approval of the electors, there will be no difficulty, and, consequently, there is no urgency. There is one part of the Treasurer’s statement that is rather interesting. The Ministerof Defence, when he was in the position of “ greater freedom and less responsibility,” stated to the press that the Riverclass destroyers, ordered by the previous Government, were unsuitable, and that there was not a singleone on the stocks in Great Britain - he ridiculed the idea that such a class should be ordered by any sane Government. The honorable gentleman is in the happy position of being a member of a Government which has, I presume, on the advice of the Admiralty, invited the Parliament to authorize the construction and purchase of these vessels. This shows how little reliance we can place on statements made by critics who are absolutely biased.
– My statements stand to-day ; I do not withdraw one.
– The honorable member entirely misunderstood what “ River class “ meant.
– That is the joke of it; but the Minister of Defence repeated that these River class vessels were unsuitable forserviceinAustralia.
– I say that they are most unsuitable as a fleet - except as auxiliaries to a large fleet.
– An Admiral who occupies a high position in Australia to-day’ differed from the Minister of Defence when he made his statement. That apparently does not matter to the honorable member, but the Admiral said that this class of vessel was undoubtedly the best for Australian defence, and that we should get better value for our money from them than from any other class. It is true that the Government have added to all previous proposals the idea of an Indomitable or an armoured cruiser. I shall obtain the quotation from the speech of the Minister of Defence.
– I shall be glad if the honorable member will do so, and I hope he will also quote what the Admiralty says about these local defensive flotillas.
– When the destroyers of the River class were ordered by the previous Government, the honorable member, as was his duty in his position as Leader of the Opposition, criticised our action severely, but fell into the serious error of thinking that as the vessels were called River class they were only suitable for river defence. That, however, is an error which we all forgive him.
– I neversaid so.
– But it was a subsequent statement that they were unsuitable, and that there were none in the dockyards of Great Britain that I have to complain of.
– I never said so. All that I said was what I say now, that the honorable member began at the wrong end.
– I do not want to do theMinister an injustice, and so I have sent for the quotation. I trust the Government will refrain from pressing this measure at this time. I sincerely hope that they will not put up a signboard, which every nation in the world can see, to declare that we are a people not well enough off to find, or capable of finding, the men and money for our own defence. I hope they will take the manly course of appealing to the people for the necessary amount to provide ships and material, and ask every one to bear the burden according to his position and capacity to do so. The Treasurer said that he did not agree with those who said that defence expenditure should not be provided, like public works expenditure, out of borrowed money; but I do not believe there is any country in the world that can justify borrowing for ordinary defence purposes. I could understand a country borrowing when under special disadvantages, or in case of war or emergency ; but in those circumstances the people are always ready to pay an excessive amount of taxation in order to wipe off the indebtedness as early as possible. Great Britain in war time frequently has to increase its indebtedness largely by loans, but coincident with that increase it also increases the taxation on the wealthier portions of the community, until the national debt is brought down again to what is regarded as the ordinary level - an amount equivalent to no indebtedness at all in this country.
– We have to thank Gladstone for that.
– There is no . doubt that Gladstone had something to do with that policy. Let me put my position again regarding taxation. In a matter of this kind we should face the fact that defence expenditure should be regarded as an annual matter. I admit at once that £3,500,000 is more than can be raised in any one year ; but two and a half years at the least will have passed before the Indomitable is launched and paid for. In fact, we may easily say that three years will have gone before a ship of that class is actually equipped and ready for the defence of Australia. In those three years we should be able to raise the total amount of £3,500,000. At any rate, it would be possible to do so in five years; although I hold to the three years. If we raised the contribution of the people by 5s. per head per annum, that would practically do it, because £3, 500, 000 represents between 17s. and 18s. a head, and with an increasing population-
Colonel Foxton. - Does the honorable member mean a poll tax?
– The honorable member was in the only Government that ever passed a poll tax. What do all these interjections about raising taxation mean? We must either raise taxes or not raise them. If the honorable member intends to borrow now, and then borrow again to pay the interest, and borrow after that again-
Colonel Foxton. - The honorable member knows that that is not the scheme.
– Then why does the honorable member continually ask, “ How are you going to raise the money? “
Colonel Foxton. - I did not ask that. I merely said, “ Do you mean a poll tax?”
– But money will have to be raised to pay the principal and interest.
– The honorable member meant per capita.
– The honorable member for Dal ley does not quite realize the fact that the honorable member for Brisbane was a member of a Government that passed an Act poll-taxing every person, whether he had an income or not. If a man earned 10s. a year, the Government took possession of it. That is the position that the honorable member for Brisbane takes up.
Colonel Foxton. - That is not correct.
– At any rate that is the meaning of the honorable member’s interjection, according to his previous Ministerial record. I do not say that the honorable member states that that is the proposal of the present Government, but if he is against raising the money by taxing the people, it will not be possible for him to pay off the loan.
Colonel Foxton. - I will show the honorable member that it is possible under this scheme.
– No Government or individual can get rid of a liability simply by borrowing more money to pay the debt. They only add to it, and make it more difficult to free themselves. I quite agree with the Government that the amount of £3,500,000 should not be raised in one year, but it would add to the spirit and energy, and strengthen the moral fibre of the people of the Commonwealth, if they would tackle their obligations and raise the money in three years, as they are quite capable of doing.
– By what system?
– It is not in my province to say how the money is to be raised.
It is the duty of the Government to find ways and means. I simply say that in all matters concerned with defence the money ought to be raised at the time the obligation is entered into. I would lay it down as a sound proposition that in time of peace at any rate, no liability should be incurred or expenditure entered upon for defence purposes until the Government have brought down a Budget providing the necessary funds to pay for the services or materials required. That applies to the present proposal for a navy as much as to ordinary military defence.
– Does the honorable member think that the Government have not made provision for paying off the £3, 500,000 ?
– I do not, but my objection is that sixteen years is far too long a period to allow. It is shifting the obligation on to posterity. Posterity will probably in ten years have ships which are practically useless for defence purposes, and only half of the £3,500,000 will then be in the sinking fund. At that time a new obligation will probably arise, because if other countries have improved vessels, it will be necessary for the Commonwealth to have an absolutely new and much larger and more costly navy. If so, the borrowing obligation will then be about £5,000,000, which will have to be added to the half of the £3,500,000 not then liquidated. We shall therefore get into the absurd position of not providing the money to pay for our own defence. .
– Is it not already provided for by means of interest and sinking fund ?
– I do not quite follow the honorable member.
– I want the honorable member to prove that the Government have not the means to carry this thing on.
– I confess I have a difficulty in following the honorable member. The Government proposal is to go on to the money market for . £3,500,000. That £3,500,000 is to be expended upon ships and material.
– And paid back sixteen years hence.
– The Government do not propose to create a sinking fund until 1st July, 1912. Thenceforward for a period of about sixteen years they propose to make an annual contribution to that sink ing fund sufficient to liquidate both principal and interest within that time.
– The Bill provides for a 4 per cent. contribution. That will not be sufficient to liquidate the debt within the time named.
– The Treasurer explained that the contribution would amount to 5 per cent., and his words must be taken as indicating the policy of the Government. Let us assume, and it is not a rash assumption, that ten years hence the ships for which this loan is to provide will be obsolete. At the end of that period there would not be to the credit of the sinking fund more than about £2,000,000, so that it . would still be £1,500,000 short of the amount that we had expended. In the meantime I presume that the electors of Australia would at the end of ten years have demanded that we should have an up-to-date navy like that of any other nation. Are we to ask young Australians to accept the navy now proposed as all that will be possible for the next sixteen years? Are we to ask the people to continue a navy that is out of date and obsolete? Does the Treasurer wish us to understand that we are not to do anything more until this sum shall have been paid off? That, at all events, is not my idea of defence, or of the way in which a defence scheme should be inaugurated. It is fundamentally bad from a financial point of view; it is even worse in the effect that it will have on the young Australian mind! I agree largely with the view of the Government regarding the owning and manning ofthe ships, and the position they have taken up in regard to the use of the vessels of our navy in time of war or emergency has been borrowed from their predecessors in office. The late Government communicated with the Imperial authorities in a clear and direct message which we refused to publish at the time. We clearly indicated in our message that these ships should be under the control of the responsible Commonwealth Minister in times of peace, but that in time of war or emergency they should be placed at the service of the Admiralty on theauthority of the Commonwealth Ministry. That I think was a clear and distinct policy. With it I entirely agree. My complaint is, however, that the Government have no mandate from the people to put the credit of Australia in pawn. They have no mandate from the people to seek to borrow money for defence purposes of this kind, and if they succeed it will be a retrograde movement on the part of Australia. We have hitherto refrained from borrowing for any purpose. I should have thought that if we inaugurated a borrowing policy it would be to provide for great public reproductive works. But to enter upon a borrowing policy for defence purposes will be to humiliate the manhood of Australia. A Government that are afraid to ask the people to make, by way of taxation, the necessary provision for defence, may be afraid later on of their own shadows. The honorable member for Parramatta denied a statement.
– Where is he?
– As the honorable member is not present I shall not read the quotation that I was about to make, but shall put it before him privately. I suppose that no appeal that I may make to honorable members opposite will have any serious effect. They may think that I am biased because of the position that I occupy. I may say at once, however, that the stand I take to-day is by no means new to me. In 1903 I took up the position that I now take up. I believed then as I believe now that the way to inculcate in the minds of a young community like ours right ideas in regard to defence is to tell them that they themselves must provide their own defence, and must provide also the money necessary to it. By borrowing, either here or in any other country, the money necessary for naval defence, we shall fail to inspire the youth of Australia with the idea that they are providing for their own defence. They will still think that the means are being provided by another country, and, in the first stages, at least, the men required to man the fleet will have to be recruited largely from the sailors of the Old Country. They will be joined I hope by young Australians who will take to the sea as they have hitherto taken to the bush. In this great insular continent of ours, lying as it does in the South Pacific, and separated from all the civilized nations of Europe and America, we have imposed upon us a great obligation to start upon right lines. The Government do not propose to recognise it, and they have been unfortunate in their action in regard to borrowing. As to the main policy I give them my support, but I think it was unfortunate that the question of the composition of the unit was not further discussed. Speaking generally, the holding of an Imperial Con ference on naval defence was an excellent idea, and I hope that it is not the last that will take place. Indeed, I go further and say that the moire frequent the Conferences between the self-governing Dominions and1 the Mother Country the better for the Empire.
– But the Prime Minister should attend such Conferences.
– The Imperial Conference on Naval Defence was alter all only a subsidiary one. lt was convened as a subsidiary and not as a main Conference to deal with principles of legislation. It was of necessity a secret Conference, be- . cause the details of the questions that had to be discussed ought not to be in the possession of other nations. We, as a Commonwealth, undoubtedly wish to live at peace with the rest of the world. Our nope is to develop this great continent of ours in peace and quietness ; but at the same time we should be unwise if we were to take the view of some people that we can safely relegate to other countries the question of providing a proper means of defence while we leave ourselves open to attack. That would be an unwise position for any Parliament, or Government, or people, to accept. I am therefore in entire agreement with the general line of policy which the Government have proposed, although I am entirely opposed to the position taken up by them with regard to the method of raising the money to carry out that policy. For that reason I hope that this Parliament will not accept the proposal of the Government to borrow. I trust that the Government’s own followers will ask them to withdraw from their present position until they have consulted the electors on this point. The electors on the occasion of two distinct general elections have condemned the policy of borrowing, and I believe that they will not now indorse it, although the Government say that it is necessary for the purpose of naval defence. I believe that they are ready and willing to pay the taxation necessary for that purpose, and that until they have refused to do so we should refuse to believe that they hold any other opinion. It ‘ the people of Australia say that they are not prepared to make a contribution, by means of taxation, to cover the expenses of the fleet in at least five years, I shall take it as a declaration that they are not prepared to adopt that line of defence.
– I am happy to be able to congratulate my honorable friend upon the tone in which he has addressed himself to this subject, and upon the manner in which he has associated himself with a policy as definitely as the Leader of an Opposition is tilled upon to commit himself.
– This is not new to me, as the .honorable member knows.
– Quite so j I am simply offering the honorable member my felicitations upon the way in which he has opened this debate. I hope to be even more brief than he, although it appears to me that the subject must be approached from a somewhat different angle. This is not the first step towards naval defence, although it is by far the longest and most decisive that we have attempted. The scheme comes before this House and the people of Australia with the sanction of a discussion extending over some years, increasing in the closeness of its criticism and in the extent of the knowledge available to us. The Trea-surer !s reference to the conscious acceptance by the Dominions of the Empire of a share of the responsibility of a defence, which is not only their own defence from a narrow point of view, but their own defence from every point of view - Imperial, national, and local - must commend itself to all. It has become impossible for self-governing and selfrespecting communities to consent to be dependent even upon their own, nearest and dearest kinsmen for those acts of citizenship which, though they take place with arms in hand, are just as much a necessary part of their duties as any others essential to the daily maintenance of the community in which we live. We in Australia probably realize more than European countries are called upon to do, that failure to provide for our defence would mean not merely the loss of the old flag, of our place in the Empire, and of the freedom which they assure, but possibly the destruction of every social, religious, and political ideal that we now cherish. These being at stake, our people are justified in asking themselves, and still more in asking us, their representatives, how we stand prepared for a crisis which might break upon us with but brief warning. In these times of combinations, not only among classes and industrial interests, but also among nations, that crisis might well be a war which, so far as the Empire is concerned, would be waged on every ocean, and on more than one continent. I shall not attempt to develop further the allimportant series of considerations which we must bear in mind when putting to ourselves the simple question, “Are we prepared for the defence of Australia, one of the largest, richest, least populated, and most distant of the dominions of the Empire ?’ ‘ We have made this year a decided advance, having dealt with the requirements of land defence with greater liberality - and with greater efficiency - than ever before. It has been realized from the first thai its necessary complement must lie the most efficient naval defence we can provide. The remarks of the Treasurer this morning gave a sufficient sketch of the stages by which we have arrived at the conviction that upon the sea the future of the Empire lies, and there not in fleets owned and manned entirely by the Mother Country, but in a great Imperial Navy, embracing the fleets of the Mother Country and subsidiary fleets, built and manned, and, in times of peace, controlled by the Dominions which make them their care and charge. What we owe to the recent Naval Conference is, as the Leader of the Opposition very properly put it, the consummation and completion of the work of previous Conferences, and of a long though intermittent discussion. The advance at Home since 1907 is remarkable. In the first instance, our own proposals for local naval defence were of the most modest character. What is sometimes termed a mosquito fleet was proposed : small vessels available for the defence of harbors and for offensive operations at no great distance from the mainland, in association with the forts, and as auxiliaries to the British squadron in these seas. Gradually that skeleton scheme has enlarged and materialized. It was left for the Defence Conference to submit to the self-governing Dominions, after discussion with their representatives, proposals not merely for small auxiliary naval defences, but the creation and maintenance of what might be called self-dependent fleets, or more properly, “fleet units.” These will be sufficiently strong and self-supporting to provide for the adequate training of the men and officers employed on them. That is an all-important consideration governing the size of the unit planned for Australia, and the other two units which are to be its companions in the great Eastern Fleet. Otherwise, unless there were perpetual transfers to distant squadrons of the Empire, perhaps on the other side of the world, which would involve great cost and loss of time, we should never be able to maintain the efficiency demanded by the British Navy. The crews of our vessels could not ‘be kept abreast of the latest tactics, which in that progressive navy are always being amended. We must remain in a sense parasitic, until each dominion possesses a unit which in itself suffices for the training of almost all engaged on it. To-day, at comparatively small expense and with little delay we are to have what may fairly be termed an Australian squadron, a unit constituting one-third of the great fleet which will protect the Imperial flag, Australia, and other British possessions in the eastern Pacific. At the late Conference the Government were represented by one of its members, to whom we owe a debt of gratitude for the thorough, patient, and untiring manner in which he successfully accomplished his work. No one is in a better position than I to appreciate all that we owe to him. Our departure is important, both to us and to the Empire. -We are offered, by the expert advisers of the Admiralty, the best heads the world possesses to advise on naval affairs, not merely a political device to gratify the public spirit of this country, but a scheme of real defence with its conditions of employment and control in peace and war denned for us in the printed documents which have been presented to Parliament with the reports of the Conference. It is this remarkable stride, our entrance into a new sphere of practical naval defence, that brings us face to face with the necessity for making an entirely new departure, if we are to be true to the aspirations we have previously expressed, and worthy of the responsibility given to us and the other Dominions by the Mother Country. The House has, I am happy to say, assented to a resolution which, though carried under unfavorable circumstances - I should have liked the discussion to be fuller - is in some respects the more significant because it shows that, subject to the qualifications of one sort and another which individual members might have wished to make, it expresses the unanimous conviction of this Chamber. That is a very important thing, and deserving of notice. The manner in which the motion was agreed to demon strated, as by a touchstone, how far the mind of this House has developed. The proposal of the Admiralty for this Australian unit has been cordially adopted, and that at once. The Leader’of the Opposition - and I am, for the sake of brevity, grouping remarks which he made in various parts of his speech - said truly that the points of difference between his party and ours begin, not in respect to the construction of the proposed Australian unit, or the conditions of its manning or control, but in respect to the question how the fleet is to be financially provided for. This being a financial Bill, that question must bulk largely in our minds at the present time. The honorable member expressed the sense of the House when he said that up to this point we march side by side, that there is no party division, and, we believe, there is no division in the country either.
– There used to be.
– Yes. Happily there has been a great growth of national, Australian, or as some would prefer to term it, Imperial sentiment, a general sense of the unity of Australia, distinguished from the old sectional feeling which, prevailed for a time. It is felt that Australia has a great future, if we are worthy of it, full of great opportunities which require to be seized. That feeling strengthens year by year. Witness the support given today to what a few years ago would have been termed ambitious schemes of land and sea defence, not then treated as serious or practical proposals. In this House we are apt to unduly magnify our disagreements, and I rejoice, therefore, that so far we are in harmony. Our paths divide when we come to the question, “ How is the fleet to be provided for?” Before touching upon that, may I indicate a point in which our attitude may. differ from that of our honorable friends, though I am not sure that it does. The Leader of trie Opposition conveyed to me an impression that he enjoys a leisurely and comfortable expectation of an immediate future of international peace. Claiming in this respect no more information than any other honorable member, I have formed an opposite opinion which may or may not be snared by my colleagues. No man who reads the cable messages which are published every week, and almost every day, describing the increasing naval expenditure of one or other of the great nations of the world, can entertain much confidence that the peace of the world will be maintained, even amongst civilized communities, for more than a relatively short period. God grant it may; and for a long period. But no assurance is being supplied while many circumstances, extremely disquieting to the thoughtful, are presented in the most open fashion. We may be sure that if there be in the mind of a statesman or a nation an intent to provoke or commence war, earlier or later, the most serious preparations which they make will not appear in the cable columns of the daily press. What appears there is what cannot be concealed - what is known to everybody. I trust there may be nothing to conceal, but of that we know nothing. I approach this question from the stand-point of one who believes that the relations between the great Powers may “be fairly described as critical, and, within a few years, are likely to be still more critical. At the present moment, as every one may see, even the most civilized powers are arming with something like frantic haste, especially for naval defence. Under the circumstances, if we in Australia are to be prepared to meet the possible shock, and, if needs he, do our share in assisting to make the risk less attractive and render it more undesirable far aggressive peoples to enter on the combat, I do not think any of us will say - and certainly the Leader of the Opposition did not - that, while agreeing with and cordially indorsing this particular proposal for naval defence, we can afford to postpone the construction of our unit.
– I say that we should pay for it.
– Though my honorable friend did not make any suggestion the general attitude of his mind, as indicated by his speech, is what I have described.
– I said that we should not enter upon this work until we could pay for it.
– But if, when we need a particular thing, we are told that we should wait until we can pay for it, there has to be taken into account the pressure of our necessity. Some things we may well afford to do without, but. under other circumstances, we must sell all we possess in order to obtain the one thing needed.
– I guarded myself by saying that in case of emergency borrowing was justified.
– I admit that is so; but my point is that we not only need our fleet unit, but we need it now - we need it without delay. When the honorable member admits that borrowing may be necessary in time of war and emergency, there is the obvious reply that, if we have good reason to suspect the need is coming, it is bad business to delay borrowing until war or emergency come, if only because we have then to pay much more dearly for what we want. If we can foresee an inevitable expenditure, the sooner we face it in times of- quiet, before the disturbance is close at hand, the better. Then again, there are many things in modern society which even money cannot buy on the instant, and one thing above all others, which the richest nation in the world cannot buy in a moment, is naval strength. That includes, of course, naval training and general efficiency. Let me call attention to the building of vessels of war, by what might be termed without offence minor Powers, not very likely to need them, which they may be persuaded to sell for a consideration. These are always watched and reckoned with by nations able to purchase in an emergency. It is perfectly clear now, even to the most uninformed, that to obtain the simple unit, proposed at the Imperial Conference, and indorsed by the advisers of the Admiralty, will take two years and a half, and mean an expenditure of £3,500,000. In our opinion, this is not a matter which ought to be postponed. The answer I make to my honorable friend’s plea that we should put this aside until after we have consulted the people at the elections is that such a course would mean a delay of at least six months. In my opinion, we have not six months to spare - we have not six months to throw away. In the meantime, in the present condition of affairs, having regard to the fact that our new unit has to be built up from the beginning, and that we have much other organization to accomplish in connexion with it, we could not calmly look forward to delaying another six months, even to have an opportunity for consulting the people. If we could consult the electors it would, from a Ministerial point of view, be a distinct advantage, seeing that it would relieve us from a serious responsibility we are now assuming. We gain nothing Ministerially from a purely electoral point of view bv taking our present course. When the Leader of the Opposition, in criticising our proposed action, asked where was responsible government. I was sorely tempted to interject that this was responsible government if anything was, because we were seeking to act first, taking our responsibility for acting within a few weeks afterwards at the hands of the electors. I do not think we have anything electorally to gain, but I believe Australia has something to gain by the saving of six months.
– The saving will be more than six months.
– I put the saving at the lowest estimate. Two courses, and only two, are open to us. If we propose to commence at once, we must either tax or borrow sufficiently to find £3,500,000 in two years and a half. I think that some portion of my honorable friend’s speech might have been taken to imply an oversight of the fact that, in the case of this unit, we require to give our orders early in order that they may be attended to, and that we must make heavy progress payments regularly as the structure proceeds.
– Taxation could go on in the same way.
– Although, as the Treasurer showed this morning, for the current financial year - that is for the next six months - the commitments will not exceed £500,000, we must find £1,500,000 a year for the next two years.
– The Commonwealth had control of the means, but they have been given away to the States.
– If it were possible to imagine a condition. of affairs in which, in addition to the extra ,£2,500,000 we propose to take, we should add another £1,500,000 a year in taxes, making £4,000,000 a year for two years less than the sums which the States have hitherto been receiving from us, we should find a financial situation in Australia ten times more serious than any that can be created by a proposal to borrow only £3,500,060 altogether and spread its repayment over a term of sixteen years.
– The honorable gentleman has admitted that the money is not wanted for two years and nine months.
– Let me press this part of my argument. What taxation have honorable members in their minds which would give us £500,000 in addition to the £600,000 provided under the financial agreement during this financial year, and a sum from the same source calculated to be at least £1,000,000 for the next financial year? We should need it all. Then we should also have to find out of taxation £2,500,000 more’ within the next two years. Even a -rich and prosperous community like Australia would find that no inconsiderable burden.’ Tothat must be added, of course, the cost of the machinery and means of raising it. As my honorable friends opposite, when in office, realized, Federal land taxation involves a prolonged series of investigations and valuations, occupying a considerable period before there could even be a basis for the levy. I fancy that if the Leader of the Opposi-tion still had control of the Commonwealth Treasury, and was presented with a problem of this character, even he, with his dislike of borrowing - which to a considerable extent I myself share - could not refuse to give the Commonwealth its unit fleet. If he gave that, he could not refuse to adopt the means which the Government are now proposing for providing its cost. It seems to me that to propose such extra taxation at the present time, or during the next two and a half years, is really not practical politics. The money could hot be obtained. The crisis at the coming election would be keen indeed if such a proposal were submitted; personally I have very little doubt as to what the response would be. The people of Australia, while perfectly willing to face all their responsibilities for land and sea defence and local development, would say they were not prepared within the next two or three years to endeavour to anticipate payments that are fairly spread over the next fifteen or sixteen years. They would say that this was a demand out of reason, and that they were entitled to be considered by a gradual adjustment to their backs of the new burden about to be imposed. Personally, I come to a proposal for borrowing in connexion with naval defence, or defence of any kind, with a great deal of reluctance. I am not enamoured of borrowing, even for reproductive works, when borrowing can be avoided ; but I am unable to dispute the undoubted fact that, borrowing can be best justified in a young progressive community which is still unfurnished with a great many of the means of development required. Although rich in resources and prospects, we ought not to discourage those prospects by heavy taxation. As a mere matter of business, we shall find the investment cheaper if we resort to the means to which every great enterprise is obliged to resort, so that the burden may be more evenly and fairly distributed over the people. But. above all, we shall then be in a position, as soon as conveniently practicable, to enable the country to take its share of Imperial defence. I do not wish to press too far calculations, which, though the Leader of the Opposition has indicated them vaguely, are not limited to his 5s. a head, or to £1,000,000 a year. Taking into account the heavy cost of the old-age pensions and allowing for the £2,500,000 a year we hope to gain under the financial agreement, the Treasurer had no other resource but to follow the road we have taken, unless the unit had to be postponed. The Leader of the Opposition, has repeated several times his apprehension that this borrowing policy is all the graver, because he believes that, once commenced, it wil.l continue. Indicating that a whetted appetite will seek for gratification, he insisted that extra demands would be encouraged fer larger and more costly navies. He insisted that within ten years at least we might expect the navy to be renewed or enlarged, and claimed that consequently we could not look upon £3,500,000 as the limit of our borrowing even in this regard. We must be prepared for a still larger expenditure. I do not know that it is necessary at this stage to follow the honorable member in that line of argument sufficiently to determine whether from our point of view his opinion is justified or not. I will only say that, accepting his own foreboding, he supplies us with another and still stronger argument for the necessity of the step we are now taking. If we shall need a stronger and more costly navy in ten years, it shows that we badly need the navy now proposed. No one will forecast a stronger and more costly navy within, the next ten years, unless the present expenditure is believed insufficient. If my honorable friend’s forecast is correct, it proves that we are not too lavish, but, if anything, rather mean today. He holds that even £3,500,000 is not going to give us an adequate defence.
– That is what I contended last night.
– Delighted as I am that my argument should l)e reinforced by my honorable friend’s view, it appears to me to be slightly pessimistic. Accepting it, however, for the time being, it is surely the strongest argument in support of the present proposal and of passing it at once. If we shall want a bigger navy in a few years, we certainly want this navy without a moment’s delay.
– It need not necessarily be a bigger one. lt might be smaller, and more powerful.
– The only point I am dealing with assumes that it will be more costly.
– The whole point is whether the necessary money is to come out of taxation or loan.
– Exactly ; and if we are going to need more than we now ask within the next few years, it will mean that even the million or million and a half per year of new taxation involved in the alternative proposal of the Opposition will be insufficient. In addition to putting on at once new taxation to that amount, we should have to look forward to increasing it within a few years bv another half-million or million. What would the people of Australia say to us if we asked them within the next seven or ten years to build up out of taxation a fleet for the defence of Australia which, without regard to the growth of land defence, was going to cost us millions a year all out of new taxes? 1 could not understand this view, or attach greater weight to it if our fleet unit were to be really the only defence of Australia, but, as a matter of fact, it will be but a part of a great Eastern Fleet of thirty, nine vessels. It is upon that fleet Australia will depend for her naval defence. Whatever naval battles may be fought for the protection of Australia, the invader will ,be faced by those three units in combination. Until any mass power brought into these waters is dispersed, that fleet will operate, as its name implies and as is intended, as one fleet, under one flag, and one control, thus dealing with the one grave danger which the British Dominions in this part of the world have to face. Consequently, although even the thirty-nine vessels may in time be found insufficient for all the needs of these great waters, I do not at present look with much apprehension to greatly increasing needs for the next few years. Of course, in prophesying, we are all equal. We all start from scratch, and our achievements are taken with great reservations. The Leader of the Opposition, at one part of his speech, appeared to define an Australian Navy as one of which all the ships must be built in Australia, manned only by .Australians, and the money spent upon them raised in Australia. To take the last first, it might be the unkindest thing to Australian industries and interests if the money for an Australian Fleet were withdrawn from here. I quite’ admit that in the case of the third destroyer, which we hope to see successfully put together in Australia, and of the three others which the Minister of Defence hopes, as he said, to see built in Australia, the money might well be raised in Australia, instead of being transmitted from England, but in the present special circumstances, the naval resources of Australia are barely sufficient to build the destroyers. I fear they are not yet sufficient to attempt the cruisers, and are certainly not capable of the construction in any reasonable time of the Indefatigable armoured cruiser, which will represent the real heart and force of our unit. Australian building being impossible, that vessel will have to be’ obtained from the greatest, shipbuilding yards in the world, under the most skilled supervision - that of the Admiralty itself. We shall have the assurance that the vessel that we get will be one of the best and most recent types, and thoroughly up-to-date, from the fact that it will be built under those conditions. Although built in England, it will be none the less Australian in its operation when it arrives in. these waters under the old flag, and none the less Australian if it is paid for by money not raised in Australia.
– Would not that apply to all forms of production? It is a good Free Trade argument.
– I do not agree. It applies only to forms of production in which the Mother Country has a monopoly so far as we are concerned, and in some respects a monopoly so far as the world is concerned. She has few if any rivals. In these special circumstances we have the great guarantee that we shall get the best article. The building of that vessel in Great Britain, and the paying for it by money raised in Great Britain, does not, in the sense in which the honorable member for Wide Bay used the term, really place us under a further obligation to the Mother Country. London is still the money market of the world, not perhaps unchallengeable in supremacy-, but still deserving the title better than any other city. To London allnations, or most . of them, resort when they desire to obtain money, and if we resort there in preference to anywhere else we are only taking a course which is wise and prudent, and, at the same time, patriotic. . It is certainly a course which would be welcomed there, since the British lender is always seeking for securities of the high class which, fortunately, Australia is able to offer. So far as Australian money and Australian ships are concerned, I am in many respects largely with my honorable friend. There is nothing in the Bill which prevents the raising of all or any part of the money in Australia.
– But not by taxation.
– No, not by taxation. But if, without unduly depleting the money market, and injuring local development - the danger of that has always to be borne in mind in a new country - we could obtain the money in Australia at as reasonable a price as in London, we should cer.tainly be inclined to take it. If we could obtain it at a lower price, we should certainly take it. There is no restriction in the Bill upon the obtaining of the money, except that the Treasurer must secure the best possible terms. So with the building of the ships. The idea will be, if .possible, to undertake the building of the destroyers there, and so pave the way for the building of cruisers, which, having regard to the extent of our coast-line and the work to be undertaken, will naturally form a considerable arm of any naval force that Australia will maintain. I fear that the days when we can look forward to the construction in Australia of armoured cruisers of the highest type are sufficiently beyond the probable duration of the present Administration to render it unnecessary for me to refer to them. Might I also remind the Leader of the Opposition of two points criticised, and which are not necessarily confused, as he appeared to suppose? He will find in the official papers of the Conference that the statement in regard to the £250,000 per annum is as follows -
Except that the Imperial Government, until such lime as the Commonwealth could take over the whole cost, should assist the Commonwealth Government by an annual contribution nt £250,000.
– But the Treasurer calculated it as existing for all time.
– He calculated it as existing for the period of the construction of these vessels, and also for the period of his sinking fund, as he ought to do, since the circumstances of future years ire still dark to us. It is, however, distinctly provided that the agreement is subject to the Commonwealth. The Commonwealth may, at any time, if it thinks fit, decrease the sum which it will accept from the Mother Country, or obliterate it altogether, and make full provision itself. That freedom remains with the Commonwealth in every financial year without trammel or hindrance.
– The Treasurer claimed both the £200,000 and the £250,000.
– Speaking from memory the £200,000 contribution would come to an end, in any case, in 1913. As I interjected at the time, even allowing for both amounts, for the fact that the newarmoured cruiser alone, in weight of metal, strength, speed, and efficiency, will outclass, and could destroy, the whole of the existing squadron, and that the new squadron, therefore, will be far superior in variety of ships, completeness, character, and weight of metal, yet that new fleet unit is put at the service of the Empire at a cost of half-a-million pounds a year less than is paid by the Admiralty for the present inadequate and unsatisfactory squadron. Surely we are entitled to derive some gratification from the fact that not only will Australia be better protected by this fleet unit, but that we are building up not merely a separate squadron, but a new fleet, known as the Eastern Fleet, which will maintain the interests of the whole Empire in these seas.
– Not a single member cavilled at that.
– My honorable friend criticised it, and yet, so far as the Mother Country is concerned, it means already an expenditure of half-a-million pounds a- year less, and will mean in the future an expenditure of £750,000 a year less, without reckoning £50,000 a year for the dockyard, and certain other outlays which will come upon Australia in two and a half years from now.
– Does the honorable member think that the whole cost of defence should be thrown on the Customs revenue ?
– I do not know that it will be. It will fall on the Customs revenue only until this .Parliament, with the sanction of the people, thinks fit to widen the area of its taxation, and when that may be will not depend upon any individuals or majority here. The Leader of the Opposition alluded to the insufficiency of a sinking fund of £175,000 a year. On that point, again, I am not inclined to disagree with him. On the contrary, it will be wise, and we shall be fortunate if we are able, to put aside a larger sum, and provide a sinking fund which will equal the debt we are now incurring before the sixteen years are over, and, if possible, in about half that period, or, at any rate, in ten years. That question was considered by the Cabinet. The 4 per cent, appears in the Bill on the recommendation of the Admiralty ; that being the reserve fund which they would establish if they were providing out of loan moneys for the cost of vessels of this type and character. The provision for an annual contribution to the sinking fund of an amount equal to 4 per cent, of the sum raised was inserted in the Bill on expert advice. On consideration in Cabinet we decided to go farther, making it obligatory to pay into the sinking fund every year an amount equal to 5 per cent, of the amount borrowed. We also took into consideration how far it would be wise to increase that amount. On the whole, having in view the uncertainties of the next few years in regard to the expenditure that must be incurred if the untoward events which these preparations are designed to meet should -happen, we thought the wisest course to pursue was to make provision for a fixed payment, and allow the Treasurer of the day to set apart from year to year such a sum as Parliament may think fit. The proposed contribution of £175,000 a year to the sinking fund, so far as we can foresee, can be increased without much difficulty by another £75,000 per annum. That will mean a very considerable difference in the period to run according to present prospects. We deemed it wise to follow the line of prudence and safety, and whilst we have provided for a higher contribution to a sinking fund than, so far as I know, has. been thought of in Australia, in connexion with loans of this character, we confidently expect the Parliaments of the future to face this obligation with at least as much courage as we feel to-day, putting aside a sufficient sum to reduce considerably the term of that sinking fund.
– No other loan of this kind has been proposed in Australia.
– Has a sinking fund ever been honoured?
– The sinking funds of one or two of the States - and particularly of Western Australia - are very considerable. If I have made these few points with any clearness, I have trespassed sufficiently on the patience of the House. There are only two questions to be considered. The first, that briefly alluded to at the outset, is as to what we need, and when we need it. In my opinion we need at least this unit, and need it now. That being so, we have to consider the second question how the funds to provide for that unit shall be raised. Could any scheme be suggested which would allow the cost to fall more evenly and lightly on the Commonwealth? Having regard to the fact that this is the first occasion on which any of the Dominions oversea have faced the necessities of their situation, and have undertaken to create a fleet which, in peace time, will be under their control, and both in peace and in war at their charge and cost, I am reluctant to believe that we shall fail to find in the money market of England a very cordial welcome from those who have not only their own sovereigns in mind, but the future of the Empire at heart.
– That is rich !
– They may be rich, but we are not poor. Neither of us, I hope, is poor in patriotism. lt is not long since the Government of the Mother Country found the financiers of the country rallying behind them in- a handsome and generous fashion at the first indication of national need.
– And we shall find the same feeling -in Australia if the matter be put to the test.
– I believe so. We propose to put it to the test within the next two or three months by asking the people of Australia to indorse the action which this Government has taken. If the Government were unable now to obtain the assent of Parliament to this proposal, we should go to the people with the same proposition and ask for their authority. If the necessary authority were refused by Parliament we should ask it from the people. We are convinced that the national emergency has made itself plain to the great bulk of the Australian people; that the future of this continent is much in their regard, that deep in their hearts they realize that the time for sacrifice has come, and that without sacrifice no nation can be built up. The sacrifices they are asked to make to-day for land and sea defence are but the first that they will make for the sake of their own manhood, their own country, and their own Empire. The Government run an unnecessary electoral risk” in facing the electors immediately after taking upon themselves a responsibility that they might have left on the shoulders of their constituents, but they do so without fear, and in all confidence. For my own part, rather than accept the responsibility of postponing the defence of Australia’s needs, I would prefer to be beaten at the elections, and to leave the responsibility of the neglect of our greatest national interests to some other Government.
.- T was extremely pleased to hear the cheers that greeted the last phrase which fell from the lips of the Prime Minister, because I happen to be a member of a party which six years ago stood almost alone in this Parliament in the expression of such sentiments, and was prepared then to put its policy before the country. It is a matter for congratulation on the’ part of the Labour party, that the Prime Minister should now declare that it is the duty of the people of Australia to provide for their own defence and to pay for it, and that he would rather be beaten at the polls than go back upon the policy that he has put forward. One may be pardoned for referring with some pride to the fact that six years ago the Labour party in the face of strong criticism, and notwithstanding the accusation that they were bringing forward chimerical projects and Utopian proposals impossible nf accomplishment, stood by their proposals, and that they are indorsed to-day by the people. We were opposed by the Government of which the present Prime Minister was a member, when we submitted the very proposal-
– Oh, no.
– I am not referring to the exact details of the scheme which we advanced ; the details of any scheme must change as it develops and takes concrete shape.
– The honorable member describes as a detail the difference between a proposal to expend £2,000.000 and one to expend £80,000.
– The Minister of Defence, who is leaving the Chamber, was not then prepared to vote for an expenditure of even £80,000 to provide for an Australian Navy. Nothing but a continuance or an increase of the subsidy paid by Australia to Great Britain, and which meant the annihilation of the proposal to create an Australian Navy, would satisfy him. There were then before the country two propositions in respect of naval defence. One was that we should increase the navai subsidy paid to Great Britain, and the other was that we should establish an Australian Navy.
– When was that?
– Why ask the question ? The honorable member knows perfectly well when those propositions were put forward.
– The honorable member is misrepresenting the position.
– I think not ; if I am the honorable member is entitled to correct me. He may perhaps be able to bring forward evidence that he was of a different opinion, and I admit that some honorable members now supporting the Government held that we should increase the naval subsidy to Great Britain, and also gradually build up an AustralianNavy. Generally speaking, however, there were two antagonistic policies, one being that we should adopt at the earliest possible moment a system of building up a navy for ourselves, and the other a proposal to increase the naval subsidy to Great Britain. I think that on such an occasion as this I am justified in drawing attention to the fact that although this naval project some six years ago was held by the Conservative press and many so-called Liberal newspapers in Australia to be utterly impracticable and chimerical, it is approved to-day almost unanimously by the peopleof Australia. At the time to which I refer it was supported only by the Labout party, the honorable member for Dallev. and one or two other honorable members of this House. Then, again. T cannot help feeling some satisfaction in thp knowledge that whilst the proposalsthat have now been submitted bv the Government are more complete - as thev shouldbe - than any which have previously been submitted it was the Fisher Government which forced the situation and brought the matter to a head by placing an order for the construction of three torpedo boats of the River class. That proposal was adversely criticised by the then Leader of the Opposition - the present Minister of Defence ; but, as a matter of fact. I understand that the Prime Minister’s scheme of an earlier date included proposals for the construction of vessels of the River type, and submarines.
– Hear, hear.
– The action of the Fisher Government in placing that order helped very materially to bring this matter to a head.
– The honorable member’s laugh does not alter the position.
– The Labour party were hastening on the project.
– The money had been allotted.
– The placing of certain money to a trust fund for naval defence purposes brought the matter to a head.
– It would not have had that effect had no further action been taken, and as a matter of fact the late Deakin Government were pledged not to take any further action. The Labour Administration were under no such pledge, and we laid violent hands on the money which had been placed to the credit of a fund for the specific purpose of providing for naval defence, with the result that we were not only the first to proceed with’ a complete scheme, but forced our successors to go on with that scheme to create an Australian Navy to co-operate with the Mother Country and the other Dominions in the defence of the Empire.
– The honorable member forgets that foreign influences were as great a factor as was the placing of the order for the construction of three torpedo boats in bringing this matter to a head.
– The honorable member refers to the Dreadnought scare?
– To the building of warships by other countries.
– I admit that the Dreadnought scare had a great deal to do with the advertising of the need for Australian defence, and helped to bring about the unanimity on the subject which now exists, but anything more foreign to the Dreadnought proposal than the scheme under consideration is hardly conceivable. The objection to the proposal that Australia should provide Dreadnoughts for the Old Country was that it would prevent the creation of an Australian Navy to co-operate with the British Navy, and would be no part of the scheme which the supportersof an Australian Navy favour. It is satisfactory to know that the Imperial naval authorities are now in absolute agreement.
– The Canadian stand has had as much to do with that as our own.
– I do not wish to. criticise Canada. Her stand was somewhat different from ours, and perhaps had the effect of bringing the Imperial naval authorities to see the advantage of co- operation with a certain degree of local autonomy. Their agreement is a very great gain to the defence of the Empire. I believe with the Prime Minister that the people are with us. I think, too, that they are generally agreed as to the need for compulsory training. Certainly, all those who think, and many who do not think much, believe that defence is a national duty, and are prepared to make sacrifices for it. I should like to see a method adopted for testing the genuineness of this feeling. My opinion is that the people are prepared to pay taxes directly for the defence of the country. One of the chief reasons why I object to the Bill is that the Government does not provide for direct contributions for defence.
– The only division of opinion is in regard to that matter.
– Yes. It was not so a few years ago. The Government propose a course which will prevent the electors from being heard on this matter. If it obtains authority to borrow 500,000, proposals for providing for the expense of the scheme cannot be put before the electors. I presume that the money will be raised at the first favourable opportunity.
– It will depend on the market.
– No doubt, if the market is favourable the Government will borrow at once, and thus the electors will be deprived of an opportunity to express their views on the subject.
– The Government will require money before the new Parliament meets.
– I think that it will.
– It is through fear of the elections that they have jumped the situation.
– I think that the Government is not too sure of coming back with its majority, and it knows that if the Labour party is returned with a majority, proposals will be put forward for obtaining money by means of taxation for a not less ambitious scheme than this. The Government is preventing an expression of the real opinion of the people on this subject.
– The owners of property should pay their fair share of the cost of defence.
– Undoubtedly. I have said that the people are ready to pay for defence.
Colonel Foxton. - To whom does the honorable member refer when he speaks of the”people “ ?
– The whole people. Every adult who is earning anything should contribute towards the. cost of defending the nation.
Colonel Foxton. - That is bestarranged for by taxation through the Custom House.
– No. Every person in the community is interested in protecting his life, the lives of his friends and relatives, and his home; but the wealthy have, an additional obligation. They should pay for the defence of their possessions.
Colonel Foxton. - I do not know that their lives are of more value than those of others. What is the good of property to a man who has lost his life?
– Every one must pay for the defence of his life, and those who have property should pay more for its defence. When Customs taxation is imposed, the breadwinner who has a large family contributes a great deal of the cost of defence, while the wealthy bachelor contributes comparatively nothing, although he has a much bigger stake in the country.
Colonel Foxton. - Then,interentially, we should tax bachelors.
– Reference has been made to the imposition of a poll tax. The Government’s proposals are equivalent to a poll tax for defence on every man, woman, and child in the community. But those who are best able to pay ought to contribute most.
– The honorable member proposes to test the patriotism of the rich, not of the whole people.
– Every one should contribute. It would be impossible to tax only the rich. Whatever scheme is adopted, the burden of taxation will be shifted on to those who do the work of the world. The person who does not work produces nothing, and cannot pay taxation. That, however, is going into an economic question.
– Does a man who consumespay taxation?
– Not merely by consuming.
– I think we ought to have a quorum. [Quorum formed.]
– I do not for one moment say that borrowing for reproductive works is not justifiable, and in some cases necessary; but it will always stand to the credit of the Federal Parliament and the Commonwealth that we have up to the present resisted borrowing, and have constructed out of revenue works which otherwise might have been carried out with loan money.
– The Northern Territory railway will not be a reproductive work !
– How does the honorable member know that? The NorthernTerritory railway may be constructed in portions that will enable it to be reproductive. I do not know that the present Government have been conspicuously in favour of continuing the no-borrowing policy. We heard rumours of borrowing, and later we found the Treasurer proposing to raise money by loan in order to meet a temporary shortage of funds during the present year. That idea, however, was knocked on the head or dropped, and we then had the financial agreement with the Premiers.
– The idea was not dropped, because the Treasurer said he would see what policy he would adopt.
– In any case, the present policy is as far removed from that previously followed as any policy could be. It is not now a question of borrowing for reproductive works or for works that might possibly be reproductive in time. We are, on the contrary, invited to sanction borrowing for works which cannot possibly be reproductive, or even permanent, but which must in a few years become obsolete, and will leave us absolutely nothing to show for our money. No form of defence becomes obsolete so quickly as ships of war. By the time it is expected that the loan will be repaid with a sinking fund of 5 per cent., I suppose that not one of the ships will be considered serviceable. I do not think that there is a single ship in the fighting line of the British Navy to-day which was there sixteen years ago; indeed, as a matter of fact, the developments in naval architecture are such that the tendency now is to place vessels on the scrap heap even earlier than formerly. The whole naval fighting strength of Great Britain has been made up since the launching of the Dreadnought, which is now considered the basis of the two-power standard.
– That is not universally admitted. Lord Charles Beresford dissents from that view.
– Lord Charles Beresford takes the view that some of the old ships are still serviceable, but it must be admitted that he stands alone amongst naval experts, and we know hiin to bc a fighting Admiral rather than a naval architect. Defence, and especially naval defence, ought to be the last work for which we should borrow. The ground which the Prime Minister gives for departing from our previous policy is that we cannot otherwise raise £1,500,000 in a year, or £3,500,000 in the next three years. I am not so sure that we could not raise the money by other means if we so desired. The burden of the Prime Minister’s remarks this afternoon was that we are in a position of extreme danger, or that, at an rate, the outlook is ominous ; and I* am quite sure that if that be so, and the necessity for raising money were put seriously to the people, they would respond.
– The money would come out of the wages fund, would it not?
– In any case, the money has to- come out of the earnings of the workers. What does the ‘ honorable member call the “ wages fund”?
– The fund from which are paid the wages of workmen.
– It is very questionable whether the money would come out of that fund, seeing that the bulk of the work would be done here, and it would be returned in wages. I am very sorry that the Government have not given the electors an opportunity to express their views on this matter ; and this forms one of the most serious accusations that can- be brought against the Government in connexion with the proposed borrowing. This Bill is introduced on’ the eve of the close of Parliament, thus preventing any expression of opinion by the people at the general election.
– I think we ought to have a quorum. Quorum formed^
– The people have had no opportunity of expressing an opinion as to the inauguration of a loan policy. As a matter of fact, they have never had an opportunity of agreeing to a policy of large expenditure on naval defence. I am prepared to take the responsibility of agreeing to that policy, because I am certain that the people are in favour of it. On questions of national defence Parliament is entitled to take risks, and is not expected to wait for a general election in order to consult the electors when the country is in jeopardy. It is necessary to take early steps to guard against danger. I do not think there is the smallest doubt that the electors will indorse what this Parliament has done in passing the Naval Defence and Military Defence Bills, but it was wholly unnecessary for the Government to propose to borrow money to provide for the expenditure for some three years hence. There was no need for them to ask for authority to float£3,500,000 when a good deal of the money will not be required for about two and a half years. At the very outside not more than £500,000 will be required during the next twelve months.
Colonel Foxton. - Oh, yes.
– During the next six months.
– I would not mind wagering that £500,000 will not be spent during the next six months.
– We have to enter into contracts.
– But the Government have also to make provision for raising the money.
Colonel Foxton. - It will take two months at the outside for making contracts.
– When the honorable member works out all the details-
Colonel Foxton. - I am not working out the details; I am giving Admiralty figures.
– Admiralty figures as to when the construction of the vessels will be actually begun?
Colonel Foxton. - Yes.
– Does the honorable member think that within three months any payments will require to be made?
Colonel Foxton.- Certainly within six months. A heavy first deposit has always to he made on contracts.
– We could not enter without authority into a contract to build a Dreadnought at a cost of £2,000,000.
– We are not going to build a Dreadnought. At any rate, the first six months, during which not more thnn £500,000 will be required, would take us well over the elections, and then there would be ample opportunity to obtain Parliamentary sanction for raising the rest of the money.
– We shall not meet for a long while.
– We must meet, according to the Constitution, within one month or six weeks after the return of the writs.
– That can be got over by extending the time for the return of the writs.
– That would be only a subterfuge. Is it necessary on the eve of an election to pass this measure without giving the people an opportunity to decide whether defence in all its forms should be paid for out of direct taxation, or whether we should resort to a borrowing policy? There will be ample time after the elections to deal with the question. In authorizing this loan, we are at the beginning of what is admitted everywhere to be a pernicious system. I do not mean that borrowing in itself is necessarilypernicious ; but to borrow for what is wholly unproductive, for works which are not only not permanent, but which will shortly be obsolete, is to institute a new and pernicious system.
– We are borrowing for our protection.
– Is it necessary to borrow for our protection ? Honorable members opposite want to borrow because they wish to avoid their absolute duty of asking the people to find the money out of their own pockets. The public are not afraid to take up this burden. If it is necessary for us to find £3,500,000 in the next three years, the people, when called upon, will do it, and there is no necessity to go to the bond-holder. We have not reached a stage at which we have to borrow for our protection. We can pay for our own protection, and the people are quite ready to do it. Honorable members opposite are anxious to avoid paying a land tax, and that wealth should escape paying its just share. They want the burden of defence to be thrown on the masses of the people. They would put the heaviest burdens on those least able to bear them, as is the case with all Customs taxation. The burden of protecting the rich man’s property and goods is to be thrown on to the backs of those least able to bear it - the people with the largest families - because the interest on this money will all come out of Customs taxation. True, that is protection, but it is protection of the wealthy at the expense of the poor.
– Is not the burden thrown on the people of the Old Country?
– Does not the honorable member know that there is something resembling a revolution in Great
Britain upon that very question? All the wealthy classes, all those whose interests are specially looked after by the House of Lords, all those whoserepresentatives in this country are behind the Fusion party opposite, all the great commerciai and banking concerns, all the great land-owners of the Old Country, are banded together in order to prevent the just taxation of wealth to provide for the proper protection! of the. nation. So here, the party opposite will adopt any scheme to avoid asking the wealthy classes to pay their fair share of the burden of defence. Honorable members opposite prate about patriotism, and about the duty of every man to do his best to protect the country. They sneer at the Labour party because it is not enthusiastically supporting a loan policy, and does not. content, itself with mere talk. We propose that everybody shall bear his fair share of taxation for defence.
– The Labour party want to borrow the money when war has started.
– We propose to do nothing of the kind. Instead of borrowing, we propose to. find the money to pay for the ships as. we want them.
– How would the honorable member find the money that it is proposed to raise under this Bill ?
– I am not the Treasurer, and it is not my business to show how the money can be raised, but if the people were asked to pay£3,500,000 during the next three years, they would readily do it. I do not cafe very much what system of taxation is adopted in order to provide the money. Every honorable member opposite knows that the people are ready to find the necessary funds. Notwithstanding the humbug talked, they know that there is a serious possibility of menace to Austrafia unless we properly protect ourselves. I believe also that those who have the money, those behind the Fusion party, will be prepared ifcalled upon to contribute their fair share. I believe that land taxation, income taxation, or any other form of direct taxation which this or any ether Government introduced, would find a ready acceptance at the hands of the electors, if the Government only had the pluck to put it before them.
– So long as it is taxation for the other fellow, it is all right !
– I admit that there is a natural tendency for everybody to load the other fellow with the burden, but there is in the Australian community to-day a spirit which is genuinely in favour of making some sacrifice in order to provide the funds necessary to place this country in a position to properly maintain its integrity. I believe that in saying that I am speaking for the wealthy classes as well as for those who are poor. ‘ The poorer classes must always pay their share by means of Customs taxation. To those below the line of comfortable existence, every penny that they have to pay in taxation means actual deprivation of some of the minor luxuries or even the necessaries of life. There are thousands of men out of work to-day owing to the coal miners1 strike.
– Whose fault is that ?
– What has that to do with the point under consideration ? If the honorable member desires, however, an answer to his question, he has but to ask the people of Australia-
– Order !
– The honorable member should not interject. If he did not do so, it would be unnecessary for me to get away from the question immediately before the Chair in order to reply ; but I am confident that if he put the question to the people of Australia they would tell him almost unanimously that the fault rests with the mine-owners in refusing to meet the men.
– Order !
– I admit that I am transgressing, but the honorable member for Indi drew me off the track.
– I ask honorable members to allow the honorable member to proceed in his own way. It is unfair, both to the House and to the honorable member that his thoughts should be diverted from the subject under discussion by interjections, but there is no excuse for replying to interjections which are in themselves disorderly.
– Did not South Australia provide for the gunboat Protector out of loan money?
– I do not know. I was not in the South Australian Parliament when the Protector was constructed, and, therefore, I do not hold myself responsible for what was done bv it in that regard. But the question of whether South Australia did or did not provide for the cost of the Protector out of loan money has nothing whatever tb do with the matter now before us. What we have to consider is whether it is true, as the Government allege, that Australia could not, within the next three years, raise , £3,500,000 to pay for thesevessels. The people have never been put to the test, and the Government are not giving them an opportunity to say whether or not they themselves are willing to provide for the cost of these vessels. I am convinced that if any reasonable proposal for raising this money during the next three years were submitted to the people, it would be carried, and that the party who opposed it would be annihilated. I should not hesitate to put before the electors of South Australia a proposal to raise the necessary money within that period. I admit that the amount is somewhat large, but I would remind honorable members that the circumstances are unusual. We are assured by the Prime Minister that the present situation is distinctly ominous and menacing. Only a few years ago the Treasurer asked, “What is a million? A pint of beer all round, and you have it.” Do honorable members think that the people would not be prepared to provide even more than that?
– That they would not be prepared to give up a pint of beer all round every year?
– I think that they would. I should be sorry to have so poor an opinion of the people of Australia as to believe that they would not be prepared to raise , £1,000,000 per annum for this purpose during the nextthree years. On the contrary, I feel that they would readily do so, and that the Government, in seeking to carry this proposal, on the eve of a general election, are endeavouring to prevent the people from expressing their views with regard to it, and are laying the foundation of a system which will do lasting damage to the Commonwealth. Throughout their career, the Government have been most reactionary, and one of the most reactionary measures which they have introduced is that now before us. I hope that it will be rejected.
.-The Prime Minister, in speaking to this question, delivered one of the most eloquent speeches that he has made in this Chamber, and in his concluding remarks, metaphorically speaking, drew about him the mantle of Imperialism. I have no objection to his doing so, but this newly-awakened cry of Imperialism is by no means new to me.
Ever since I have had an opportunity to vote, and to take part in public affairs, I have, in season and out of season, been a stubborn and robust advocate of Imperialism and Imperialistic thought. As an Australian, I do not associate Imperialism with Chamberlainism, or any other “ism,” or with any party that may happen to have charge of the public affairs of the Motherland. I read into the principle that which I am sure Australians generally read into it. To my mind, it means the maintenance of our own nation, the supremacy of the British Empire in the Pacific and elsewhere - in other words the paramountcy, of the Power to which we belong. As the Prime Minister has said, . there have been in connexion with the question of defence rapid strides, and in many cases speedy changes of opinion. We are told not only in this Parliament, but in the Parliaments of the Empire, that the question of defence - the question of the maintenance of the supremacy of our own race - is far above party considerations, and free from any “isms.” The Prime Minister, together with his colleagues, in approaching this question, has said from the very inception, that it is a non-party one, and I am sure that the House was thoroughly in accord with five-sixths of the powerful address which he delivered. Indeed, we agreed last week to the naval proposals of the Government. We are unanimous in our approval of the decision of the Imperial Defence Committee which met only a few months- ago. We are willing to give credit, not only to the representative of the Commonwealth Government at that Conference, but to the authors of the innovation of a national Conference to mould for the time being a system of naval defence for the wholeEmpire. We have to dealonly with the civil side of the Question : so far as the naval and military sides are concerned, we have torely upon the opinions of experts. The Imperial Defence Conference consisted of delegates from all parts of the Empire, who met to confer with the central authorities in Great Britain, assistedby their expert advisers, and to arrive at some common line of action forthedefence of the Empire. So far as that is concerned, the House and the country are unanimous.. Australia is not only prepared, but is willing and anxious to play her part earnestly and effectively in the work of naval defence. It was quite unnecessary for the Prime
Minister to call to his aid the power of rhetoric in dealing with this question. It was unnecessary for him to use his skilful powers of declamation, and to appeal through you, Mr. Speaker, and the press, to the people of Australia, as if this Parliament were wanting in its true duty in respect of matters of defence. The section in Australia opposed to a naval policy is infinitesimallly small. There may be in the Commonwealth, as there are in the heart of the Empire, a few individuals who are opposed to national defence, but we aro swayed to-day by national aspirations - bv a desire not to get away from the Motherland, but to strengthen the tie which binds us to her - the strongest of all bonds - the bond of race and kin. There was no necessity for an appeal such as has been made by the Prime Minister, and I was astounded when I heard him rise to such heights of eloquence in his closing remarks, and saw him gathering about him, so to speak, the folds of the Union Jack. I am pleased to think that the Prime Minister, an Australian born, is to-day an ardent and powerful advocate of the Imperial idea. It is not long since he was not so strongly in favour of it. lt is not long since he was rather in favour of a distinctly Australian Navy.
– Parties have changed since then.
– I do not wish to put the position unfairly, hut I think it will be admitted that at one time the Prime Minister was not an outstanding advocate of Imperialism. He was always a loyal citizen of the Empire, always proud of his own country, and no ohe’ is more pleased than I am to find him now adding the great weight of his influence to the advocacy of an Imperial sentiment. Since the Prime Minister jaw fit to make a powerful appeal of this character to the House, it is well for those who are opposed to him so far as the details of the Government’s scheme are concerned, to place their views before the public, and to point out that they aTe in reality in entire agreement with five-sixths of the views thai the Prime Minister expressed. The difference of opinion that exists in this House relates only to the way in which it is proposed to finance the naval scheme, and there is not the slightest tittle of disloyalty associated with that difference of opinion. All that we claim is that the payment should be equitably adjusted. Although this Bill relates merely to a loan for naval purposes, we have to discuss in connexion with it the whole question of the Naval Agreement. Both the Prime Minister and the Treasurer have done so. Last week, unfortunately, the Minister of Defence, when explaining the Naval Agreement, was silenced by the application of a certain standing order, and I certainly think that the honorable member who availed himself of that standing order to silence the Minister at a time when the country desired to have clearly put before it the facts relating to the Naval Agreement-
– The honorable member must not refer to that matter.
– Strictly speaking, I presume that it is not in order in discussing this Bill to refer to the general question of naval defence, but under- cover of this motion, the Treasurer was allowed to describe in his own language - and he had taken care to prepare his speech - what is to be known as “ the Australian unit” He was allowed to go into details as to the fleet to be created. The Prime Minister defended his colleague’s proposals. He went further, and pointed out the need for properly defending Australia. Under a rigid application of the rules of the House, the discussion of neither subject would be permitted during the consideration of a Loan Bill. I shall not abuse the liberty which has been given to us, but I wish to reply to those who have addressed you, Mr. Speaker. The Treasurer said this morning, in reference to my speech of yesterday, that it was most ungenerous to contend that the masses of the community will be unjustly dealt with if we raise a loan to finance our naval policy. What I am chiefly concerned about is not whether the statement was ungenerous, but whether it was true. As to its want of generosity, that is a matter of personal opinion. If it is alleged to be untrue, let me examine the position. The Treasurer excused his proposal by stating that this Government have placed on the statutebook the most humane piece of legislation that the Commonwealth has yet passed, that providing for pensions for the aged poor. He thus tried to prove that my remarks were ungenerous: instead of doing so, he demonstrated their truth. The Commonwealth has now only one source of revenue, Customs and Excise taxation. The humane measure to which he referred is financed from that source. The pensions that are given, to the aged poor are provided, not by the wealthy as compensation for the dis- tresses sufferedby those who have been less fortunate than themselves, but by the whole community. To the Customs and Excise taxation the masses contribute most heavily, it being proportionately greater in their case than in that of those who are better off. Furthermore, the Government, to provide for old-age pensions, had to secure the assistance of the House. Honorable members generally voted for the measure. But it is financed by means of Customs and Excise revenue, the poor contributing most largely to the assistance of the poor. I have nothing against the proposalto establish a naval unit; but I object to the manner in which it is to be financed. The Prime Minister admitted that he was not enamoured of the system of borrowing, and was not very desirous of paying for naval construction from Customs and Excise revenue. Yet he wishes the country to believe that money should be borrowed to build the proposed vessels. We are all desirous of having a navy. Australia and her Parliament are tardily awakening from a lethargic sleep. We have been aroused by our sense of the danger of the Empire, and consequently feel compelled to concern ourselves with our part of the national responsibility for defence. But the Government propose to borrow £3,500,000 to pay for the first instalment of a navy which it will take two and a half years to complete. It does not propose to impose fresh taxation for the purpose. Hitherto the Commonwealth Parliament has not sanctioned borrowing, even for reproductive and developmental works. The people have not to pay interest on any Commonwealth loan. While borrowing for reproductive works may be justified, borrowing for defence purposes cannot be excused. The Mother Country has never borrowed to pay for naval construction ; she has always built her fleets out of revenue. At the present time a struggle is going on in Great Britain to determine how taxation should be distributed amongst the community. The Prime Minister led us to believe that he would like direct taxation. Not only would I like it, but I want it. If we borrow money now, this will be only the first loan of a series. The thirteen vessels which it is proposed to construct will be only a beginning, and within ten years will be obsolete. That is the experience of the great naval Powers of the world. The nations we fear are not at the ends of the earth, but our next door neighbours. Our possible enemies are China and Japan. It is that which causes us to consider so seriously the requirements of naval defence. The proposed unit is to replace the existing Squadron, which has never been an effective naval force. It has merely furnished surveying ships, and vessels to patrol the Islands. Even the Powerful and the Challenger, the strongest ships in the Squadron, are not fit to go into an engagement. Under the Naval Agreement, Australia contributed £200,000 to the cost of her defence by Great Britain. The Mother Country spent between £700,000 and £800,000 per annum in defending our shores. We allowed her to carry that burden too long. Why should the 40,000,000 inhabitants of Great Britain, who are so heavily taxed for the administration of their internal affairs and the defence of the Empire, be burdened by Australian defence? The Imperial Defence Conference has reversed the position. Great Britain is to pay £250,000 in future, while we are to pay £780,000 for the upkeep of the proposed fleet. My contention is that this money should not be provided by Customs and Excise taxation. If the Government said that it needed a temporary loan, and would pay interest charges out of direct taxation, promising not to borrow again, I would not object to its proposal. I do notsay that all the money required should be obtained by direct taxation ; but the interest and sinking fund in connexion with the proposed loan should be provided by other than indirect taxation. The Customs revenue pays for land defence and all the other services of government, and it would be unjust and cruel to draw upon it for naval defence as well. It is simply a scare on the part of the Prime Minister to say that the raising of this loan is urgent. According to his own statement, the vessels cannot be on a warlike establishment under two years and a half. Even if war were declared to-morrow, there would be no effective naval defence availableby the fleet of Australia. The honorable mem ber for Brisbane, who was the representative of Australia at theConference in Lon don, interjected that the money will be required within six months.
Colonel Foxton.- What I said was that a substantial amount, or about £500.000, would berequired in six months.
– I shall take the corrected interjection. Here I should like to say that the country would be pleased to hear the honorable member address himself to this question, seeing that he was in the councils of the Empire as the representative of Australia, and, while there are certain matters he cannot make public, there is much on which he could furnish interesting information. If even to-morow morning ^£500,000 were provided, we should be no nearer any effective defence; indeed, if the whole loan of £3,500,000 were floated in Collins-street within the next twenty-four hours, we should be no nearer a fleet, though we should commence at once to pay interest.
– The whole loan will not be floated at once.
– On whatever portion is floated, interest will at once have to be paid. The Prime Minister says that if he could see any other means he would not apply to the loan market ; and I am trying to show that there is no necessity to borrow, and that, even if we did so successfully to-morrow, we should still for a long time to come be without effective naval defence. I am proud of the fact that Australia is to have a navy ; but if we hope to be a self-contained portion of the Empire, the mere building of the ships in Great Britain will not tend to that end. If we desire to help the Empire, we should be able to build and equip the vessels here ; and though at present we have not facilities for constructing a battleship, there is no reason why we should not be getting ready to do the work. The ship-building yards of Great Britain have as much work as they can do, and we should be in a position to construct as well as establish a Navy. If the Government are determined that there shall be a loan, I ask that some system be devised by which the interest may be met out of direct taxation. I am opposed to the proposed lam, because I am afraid that the £3.500,000 will have to be added to in the near future. We cannot suppose that thirteen vessels is the limit of the Australian Navy, and the 5 per cent, proposed will not.be sufficient to meet depreciation. Battleships are obsolete in ten years; and we have to remember that Japan achieved her naval victories because she keeps thoroughly up-to-date in construction, equipment, and training. As a matter of fact, the Japanese Navy in the recent war was simply a replica of the British Navy, composed of, the same class of vessel, and under the same system of training. It is essential to have naval defence, but it is also essential that that defence shall beeffective. To keep a vessel sixteen yearsin commission is to keep it six years longer than it can be useful. Our idea is not to have a fleet to sail round Australia and; make a display, but one to defend not only this country, but also, in part, the Empire. The Prime Minister told us that, if needs be, we must sell all we posses in thehour of danger, thus admitting that in an emergency he would not wait for a loan. In case of war, the wealth of the country would be at the command of the Government, as in Great Britain and elsewhere. The remark of the Prime Minister reminds me of a Scriptural quotation, which tells us to sell all we possess and give it to the poor ; but, in the present instance, it would appear that we are told to sell all we possess, and, at the same time, to take from the poor and keep on taking from the poor in the shape of Customs and Excise duties. The man at Footscray, with his wife and family, pays more to the Customs and Excise revenue than does the manat Toorak, even if he does not indulge in liquor or stimulants. Taking the contribution to the Customs and Excise revenue at £2 10s. per head, and the average family at six persons, the working man who is married, pays about 6s. per week, and he is to beasked to pay more in order to meet thecharges of naval defence, while the resident of Toorak - the business man or successful speculator - absolutely escapes under thisLoan Bill, the whole of the interest charges, depreciation, and sinking fund being met’ out of Customs and Excise. The present Government, is composed of men some or whom. have been known as Radicals. Indeed, the Prime Minister was only yesterday, as it were, the foremost Radical in Australia, and his political traditions were dead against a loan policy, the payment of interest out of Customs and Excise, ot the taxation of food and wearing materials for defence. Our legislation in regard to the land forces calls upon the masses of the community to send their sons to defend the country, and it is most unjust and unfair that they should now be called upon to pay this further cost of defence. In resisting to the utmost the flotation of a loan for such a purpose, no honorable member can be charged with disregarding either Australian or Imperial interests. The proposal to establish an Australian Navy shows a wonderful growth and unanimity of opinion in this connexion ; and Australia, as years roll by, will be compelled to give more and more attention to naval defence and less to land defence.
– There will be more people to pay the cost.
– But so long as the cost comes out of Customs and Excise revenue, the burden will be on the sameclasses. In Great Britain the Chancellor ofthe Exchequer never dreams of asking the people to provide the necessary revenue through Customs and Excise. To her credit, the Old Country builds herNavy out of current revenue, while other powers resort to loans. I think Australia is not so poor that she could not finance £3,500,000. If the fortunate people of Australia, who have surplus capital, lend to the Government,they -are paid liberal interest ; and we must not forget that this is a country which has been made by the masses, and is protected by the -masses, and that the more fortunate ones reap the benefit of that defence. Defence is not only for the humbler portion of the community, but also for those with property and wealth.
– Who pay the humbler portion of the community.
– In what sense does the honorable member mean that? If he refers to wages, no one pays wages unless he gets a return for them. Surely we have not come to the stage that the humbler members of the community, because they are paid a wage, must sink on to their “knees, and thank those who give them that wage ?
– They are often underpaid .
– I shall not go into that side of the question, but one would think from the remark of the honorable member for Indi that the well-to-do were a body of philanthropic individuals who were keeping the millions of Australia. The position is really the reverse. Those people could not have become wealthy if there had not been a population whose demands had to be supplied. No man lives to himself, whether he be rich or poor. There is an interdependence between the two classes that no one can destroy. It is disgraceful for any one to suggest that the humbler classes should approach the wealthy as though they were tributemongers, or that the wealthy should approach the poorer classes as though granting them a charity or a dole. That doctrine has never yet lived in Australia, and never will. Fortunately, we have neither a very rich nor a very poor class. We have a large middle class who are doing fairly well. In fact, in nearly all cases our wealthy men are only removed by a short space of time from the period when they were workers… I know of no true merino in Australia in the shape of the real aristocrat. The true merino and aristocrat in Great Britain would resent any accusation that he desired to escape his fair burden of taxation. It is the true aristocrat of the Old Land who to-day is fighting to help the masses to place the burden of taxation on the shoulders of a certain class who are well able to bear it. The aristocrats of Great Britain have never tried to escape their contributions for naval defence purposes. It is only the plutocrat and the parvenu who try to evade their proper responsibilities for national necessities. I regret that I did not catch the interjection which the honorable member for Indi has just made.
– I said the honorable member wasawfully clever.
– I do not think so. If I were clever I should probably be fighting for my own personal advantage with those on the Opposition side. My position in politics is that I am not only compelled to fight the Labour party, but also find myself frequently out of touch with members on this side. But I would much sooner fight for all time with honorable members on that side in regard to the question now before us than fight for any time with those who wish to assist certain classes of the community to escape their proper share of taxation. I can choose my own course, and in this instance I have chosen the oneI have indicated. It is preposterous for the party on this side to call themselves Liberals. A Liberalism that desires to allow the burden of defence to be financed by the poorer classes of the community is not Liberalism to my ears. It sounds to me like Toryism of the deepest dye. At the same time, when an honorable member remarks, “ You are awfully clever,” it is just as well to be prepared for what that means. We are warned to beware of the Greeks whenthey bring presents, and I am afraid that the honorable member is acting the part of a political Greek. No matter can be put more effectively on the platforms of Australia than a just and proper system of defence. The people of Australia are more earnest and serious over it than the
Commonwealth Parliament has been up to date. This Parliament stands disgraced before the people, because the solemn and serious question of defence was not taken in hand many years ago. The people of Australia have awakened, and look to their representative men to insure the proper protection of themselves and families. But when a question of this character is before the people, the Prime Minister, with his powerful eloquence, can easily cloud the issue. Although there is no difference of opinion in the House regarding the necessity for naval defence - and I am even more earnest upon that question than most members, because I think the scheme now proposed is only a small instalment, which will have to be increased within five years - yet the public may be misled into believing that those who are against a loan are against effective naval defence. It will have to be explained to the people that to vote against a loan does not mean voting against effective defence. One of the cutest and most cunning devices adopted in modern politics is to try to submerge a great issue by means of small side issues. If one differs in method, it is said that one differs in object, but to differ in method or manner is not necessarily to differ in matter. The object of defence is a sound, a glorious, and even a solemn one, and as such, I am as earnestly with it as am member or supporter of the Government. The mere fact of my resisting a loan does not proclaim that I am disloyal. There is no disloyalty in fighting for a just distribution of the burdens of taxation. Loyalty, on the other hand, consists not only in seeing that the Empire is effectively defended, and that Australia does her duty, but also in seeing that the cost of defence is not placed on the wrong shoulders. I should not be such a miserable recreant as to say that only one class of the community should pay for it. I am prepared to advocate that the masses shall pay their fair and just share of the burden, but they should pay no more. The masses of the community do not require any apologist to ask that they shall escape their obligations. Even the humblest worker does not desire to be freed like a pauper from his responsibilities, but the masses do desire that their public men in apportioning the cost shall see that the burden is properly and equitably ddistributed. That is all I am fighting for, and all that I believe most members of the House are fighting for. I regret exceedingly that the Government should have introduced this Loan Bill, because the £3,500,000 is only a first instalment, and, even if a Labour Government succeed the present Government, once the policy of approaching the loan market for purposes of defence has been resorted to they - will have to continue that policy. It is not sufficient simply to buy a navy, and place it on Australian waters for the protection of the land of the Southern Cross. Unless it is kept effective and strengthened as the years roll by it will become useless. We do not want to have in 1915 vessels which are only fit for the scrap-heap. We want our vessels replaced when they are obsolete by others that will do the work. No one desires that they should be put to the test of battle. We all hope that the mere fact of our having a navy will be the insurance against attack that we require. We are not an aggressive people. We have a large territory of our own to develop, and have no desire to extend it, but it is absolutely necessary that we should be allowed to do our work of development along the lines of humane treatment and the higher civilization. I am glad that the House is in a frame of mind to assist the Mother Land in the defence of the ‘Commonwealth, r am pleased that there is so strong an Imperialistic spirit abroad in Australia. Only a few years ago one section of the community desired to cut the painter. - a foolish policy. As an Australian 1 am proud to think that public men, who read the barometer of public affairs pretty accurately, are unanimous in their desire not to cut t the painter, but to bring Empire ideas and Empire interests closer together. For that reason we do not require the strong appeal which the Prime Minister made this afternoon. When he made it. it was only natural that an innocent member like myself sshould think, “ This is not intended for home consumption ; it is for export.” It is to be used not in this House, but at election time. I am not the man to be caught in a cleft stick, or to be told that in fighting against a loan I am fighting against the Empire. That would not be believed in mv own district, where T have been known” from m,hood. 1 I advocated the Imperial idea and assistance to the British Navy llong before many on the Ministerial bench ever uttered Imperialistic thoughts. I am glad to think that, with their greater command of language and their clarion notes, they are ringing out such strong Imperialistic tones as they have done to-day, but I fear that their sentiments are for use only on the hustings. I warn them that those of us who oppose a loan policy are not to be called the enemies of the Empire or of Australia. We all know the weapons that are used in political warfare, and the most successful, but at the same time the most dangerous weapon is the distortion of statements. The attempt will doubtless be made to lead the people to believe that opposition to a Loan Bill, because it has the word “navy” on the top of it, is an indication of antagonism to the Imperial spirit. I know the battle that is before us, and if ever there was a righteous cause, it is to be found in this question of direct taxation for defence. If a loan for this purpose is inevitable, will the Minister of Defencebepreparedtoseethat the intereston the loan is obtained from the channels of direct taxation? The Minister was, many years ago, a close acquaintance of mine, and took a foremost part in fighting the Radical battles in New South Wales. He fought the battle of the proper apportionment of taxation, and of placing the burden on the backs of those best able to bear it He and the Prime Minister now assert that, in order to obtain anavy speedily, it is absolutely essential to undertake a loan. Will he then undertake to see that in the next Parliament the interest charges upon that loan are obtained from direct taxation? That is a simple question. If he is not preparedto answer it, it is an admission to me that the Government look only to the one class - the masses of the community - notonly to pay the interest, but to repay the loan.
– Does the honorable member mean interest and sinking fund?
– I mean both. I refer to the proper financing of the loan. Do the Government intend to finance it by taxing those to whom naval protection will give the greatest benefit?
– The amount mentioned by. the honorable member is a very small matter.
– It means the introduction of a great principle.
– Itis a big principle.
-Only yesterday, comparatively speaking, the Attorney-General, who admits that the principle is a great one, was a leading light among those who advocated the fair adjustment of taxation. In South Australia his work and record in that respect will stand him in good stead.
– Because a man does not adjust when the honorable member wishes him to do so - because he does not declare that he is in favour of a certain proposal, the honorable member says that he is against it.
– The honorable member does me an injustice.
– That is what the honorable member says in effect, and I hold that it is not a fair presentation of the position.
– I do not wish to put the matter unfairly to the Minister of Defence. He is taking refuge now in a half-way house. I desire no cut-and-dried scheme. I simply ask the honorable gentleman, who is the second in command, whether, in the near future, the Government will look to direct taxation to supply the money necessary for defence purposes?
– The Minister dare not reply.
– I should be glad if honorable members opposite would not gird at the Minister of Defence. Surely we are all citizens of Australia, and are not going to make the question of defence a party matter.
– This Bill is already under a party whip.
– I am a member of the Fusion party, and no whip has been applied to me. I may deserve the whip, but if the Ministry were only as generous to the general public as they are to me,.- I should be satisfied. I do not wishthis question to be made a matter of party warfare. There are on this side of the House many honorable members who are as stoutly opposed to direct taxation as I am in favour of it. They are entitled to their own opinions; but my only fear is that the Conservative section of this party have captured the ablest Radical in Australia, Alfred Deakin. I could not have believed six months ago that the Prime Minister would submit a Loan Bill for defence purposes and propose that the taxation to pay interest on and redeem that loan should be borne by the masses. He saidto-day most apologetically that, personally, he did not like it; and I wish to know whether I am to draw from that statement the inference that the Conservative section of the Fusion party have gained their end, and are opposed to direct taxation of any kind.
– The honorable member makes me hugh
– The public will not laugh when they are called upon to pay for’ this. After all, this struggle will not be concluded in this House. It must be carried to the platforms of the country. I am a loyal Fusionist ; I am loyal to the Radical wing of the Fusion party, and when the Fusion was brought about, the Prime Minister was the Radical of Radicals in Australia.
– Order ! This is rather a departure from the question.
– I shall connect my remarks with the question immediately before the Chair. As a loyal Fusionist, I had hoped that the Government would subject its supporters to as few handicaps as possible before the next general election. Was there ever a more severe handicap placed upon a party than this, proposal on the part of the Government to float a naval loan, the interest on and the redemption of which is to be borne by the poor? The wealthy sections of the community are not called upon to bear any special proportion of the cost. Was a more severe handicap ever placed upon a Liberal party?
– They deserve it all; they took on the job.
– Here we. have party feeling again being introduced. I am not playing the game of the Labour party. They will not play mine. They will fight me, and good luck to them. But as a loyal Fusionist, I certainly cannot fight on the public platform for a loan policy in connexion with naval defence. This may be unpleasant and inconvenient for the Government, but surely, they must appreciate a man who tells them before the footlights, fairly ,md squarely, what his opinions are.
– But the honorable member differs from the Government on only one point, so far as this matter is concerned, He will have the other ninety-nine points in his favour.
-That is all very well-
– The honorable memtier for Indi offers the honorable member a political umbrella,
– It is something more than a political umbrella : it is a political circus tent. I have a recollection, Mr. Speaker, or your being a Radical. T cannot deal with the matter ; but” I regret that you are unable to stand with me on the floor of the House and help me to fight this battle. If you were not in your present exalted position. I am. sure you would be found fighting with the Radical wing of the Fusion party. We are both Australians, and are glad of the growth of the Imperial spirit; but we cannot be pleased with the proposal to call upon the masses to bear the whole burden of taxation. I had hoped that the Government would not persist with this loan proposal at the present juncture. Let us take it first of all to the electors. If they say that they are prepared to accept a loan policy in respect of naval defence, and toprovide for it out of Customs and Excise, they must have their way ; but I do not think that the Government are called upon to spring on the people this most dangerouspolicy. The speech made to-day by the Prime Minister was an astute move on the part of a powerful leader of men. It indicated to me that he intends at the coming elections to make use of his powerful’ command of rhetoric to appeal to the sentiment of the people, and there is no subject on which one could appeal more powerfully to the sentiment .of the people than* that of Imperial unity. The Prime Minister regrets that he has to fly to the loan market in connexion with his naval defencescheme. There is an easy way out of the difficulty. We have not exhausted all thi? means of taxation open to us. The working classes have been taxed-
– What percentage of the Customs and Excise taxation is borne bs the working people of whom the honorablemember speaks?
– Ninety-five per cent.
– 1 believe that the honorable member for Yarra is correct. Ninetyfive out of every hundred people in thecommunity are not millionaires; they donot own motor cars, live in Toorak, have more than half-a-million invested in the banks, or more than £20,000 invested in consols. They have to work . for their living, and 95 per cent, of the revenue derived from Customs and Excise is paid by them. That is my answer to the honorable member for Wilmot. The farmers’ in hisown electorate do not belong to the wealthyclass, and I think it is unfair to ask them to carry more than their fair share of defence taxation. I am grieved that the Minister of Defence, who holds a high position in the Commonwealth Parliament, and holds it well, should be a party to a pro- posal to allow the wealthy class to escape their fair share of taxation.
– I am surprised to hear the honorable member put the matter so unfairly. Are we going to increase taxation for this purpose?
– No,but we are going-
– How is the interestbill to be met if taxation is not increased ?
– We shall pay it out of our present revenue. Having the revenue, the honorable member wishes us to impose more taxation.
– I thank the honorable member for his interjection. Our revenue to-day is obtained from Customs and Excise, and is more than sufficient to cover the ordinary cost of government. The Minister of Defence believes that the Government will be able to pay the interest on this loan and the contributions to the sinking fund for its redemption out of the present revenue. That is the position. My answer to his contention is that the Commonwealth Government have not yet exercised all the powers that they are able to exercise under the Constitution. They have not yet fulfilled all their ordinary duties under the Constitution. They have yet to construct railways, take over light-houses, and carry out various works which will make demands on the general revenue. Every £1 that is taken out of the Customs and Excise revenue to pay interest on this naval loan will mean £1 less for expenditure on civil administration.
– It will be time to argue in this way when the Government proposes fresh taxation.
– The cost of naval and military defence will increase every year. The honorable member’s military scheme will be much more expensive two years hence.
– There will be a corresponding increase of revenue.
– To-day the Senate has agreed to an arrangement under which the Commonwealth contracts to pay to the States, practically for all time, 25s. per head per annum.
– They are to receive £2,500,000 per annum less than we have been giving them.
– That money is to come out of Customs and Excise revenue. On the night of the day when that agreement is ratified, the Government has the impudence and audacity toproposea loan.
– Suitable language - “ Impudence and audacity! “
– I speak in a political sense. This loan is proposed on the same day as that on which, in the most gracious and benevolent manner, we hand to the State Treasurers 25s. per annum per head of population.
– Our action is neither gracious nor benevolent ; it is merely just.
– The Minister of Defence looks at this matter through one pair of spectacles, while I look at it through another, though no one can charge me with looking through green spectacles.
– The honorable member looks through yellow spectacles.
– Occasionally ; but although yellow is a bilious colour, I am seldom bilious. It will seem strange to the public to read in to-morrow morning’s newspapers that the Government on the same day provided for paying to the States 25s. per head of population and for raising a loan of £3,500,000 for naval expenditure.
– To be repaid out of the contribution to the States. The agreement will permit of that being done.
– The Minister is trying to make us believe that the interest on this loan will be paid, not with the money in the Commonwealth pocket, but with that in the State pocket. If so, this is a roundabout way of financing. Why go to the trouble and expense of raising a loan if we can find the money directly?
– I do not know what has come over the honorable member lately.
– There was a time when the Minister would not have objected to my company on a platform, but as things are going, I do not think that he will have me within forty miles of him, andwill not give me the opportunity to have him with me. The Prime Minister told us that the British money lender would beonly too pleased to lend us what we require. All money lenders are only too pleased to lend their money to those who will pay them interest and repay the principalwhen it becomes due. What do the moneylenders care about Imperialism, patriotism, or anything else, except the return which they will get from their investment? Are we so foolish as to believe that moneylenders make advances for charitable or benevolent purposes, or because they ‘‘knew our father.” I apologize for having detained the House so long. I have been carried away with my subject. To my mind, it is most dangerous to borrow for defence purposes. For that there is no excuse, whatever may be said about borrowing for reproductive works, while to pay the interest out of Customs and Excise revenue would be monstrous. I hope that the measure will be defeated, though I am afraid that it will not. In any case, the position will be put clearly before the people. I hope that the new Parliament will repeal the measure, pay off any loan which may have been contracted, and provide for the expenditure on our naval system out of some source other than Customs and Excise revenue.
Mr. KING O’MALLEY (Darwin [9.39] - The honorable member for Dalley has given us a grand exposition of the whole situation, showing the Government in a clear light and in its true colours. The idol of the Fusion Government is Mammon, the god of gold, and its trinity coin, credit, and boodle. We have recently been fighting a great fight to save the Constitution, and have lost. Now,on the eve of a dissolution, and before taking the electors into our confidence, we are asked to borrow £3,500,000. The National Parliament is to float a loan at the worst time in the History of finance for doing so. Europe will watch the flotation of this loan very closely, and whatever price our securities bring now will fix the standard for future stock. We can offer only half the Customs and Excise revenue as security ; the other half has already been mortgaged by the States.
– The proposal will be defeated at the polls.
– Let us hope so; but one can never tell. This Government was to bring forth a financial scheme which the world could copy. It is supposed to contain all the financial intellects of the House.
– Not all.
– That is the supposition. We, on this side, are the humble Labour party.
– The honorable member has touched the most important point in connexion with this matter, the fixing of the price of Commonwealth stock.
– The Fusion Government has ransacked the rag-bags of the heretofore for a policy, and all it can do is to propose the old system of borrowing, which has been the plague and blight of the States. The public debts of the States, including municipal debts, amount to £270,000,000.
Colonel Foxton. - What would Australia have been had not the works for which the money was borrowed been carried out?
– How much of the money was borrowed to carry out developmental works?
– Three-fourths of it.
– How much of it was spent on reproductive works?
– More than £150,000,000.
– Of the sum I have mentioned, £182,000,000 does not earn 4 per cent, and only .£144,000,000 was spent on railway, and tramway construction. . Over £100,000,000 was spent on useless works, no redemption or renewal fund, and practically no sinking fund, having been provided.
Colonel Foxton. - There are some very useful works which do not pay interest; many of the railway lines in western Queensland, for example.
– Does the honorable member think £100,000.000 a big national debt?
– I do. I come from a country where they have grappled with the national debt question, and where the Treasurer is always a trained financial man. Having had that training myself, I cannot understand how it is that slipshod “ roosters “ are permitted to run this show.
– Is it not fair that posterity should bear a portion of the burden ?
– It is fair ; but posterity should not pay for the bungling of its ancestors. Is it fair for the owner of a big estate to mortgage the whole to the detriment of his children? I seriously object to our starting borrowing for the purpose. of buying a little fleet of tin-pot ships. If I had dreamt, as a member of the Labour party, that this is what the Australian Navy would mean, nothing would have prevented my voting for the continuance of the subsidy to Great Britain. The Brooklyn, which was here at the opening of the Federal Parliament and was then only a year or two old, was put on the scrap-heap long ago. The Oregon - the ship that made the wonderful trip round the Horn, and took part in the battle of Santiago, is also there. As a matter of fact, the great fleet of American warships which were here only a year ago is being placed on the scrap-heap now ; and yet we are asked to go into debt in order to provide a little fleet to defend, I suppose, the entrance to the Yarra. We are told that there is to be a Big sinking ‘ fund, but no steps are taken to establish a trust. Apparently this sinking fund is to be conducted in the same haphazard way as have the sinking funds of the States, in which case the Treasurer, at any time he is a bit short, will not be able to resist the temptation to grab. With the exception of those of Western Australia, the sinking funds in the various States are not worth considering. Who is to watch over the sinking fund and invest it? The Commonwealth Treasurer. No matter how honest a Treasurer may be, if he is impecunious, he pursues the line of least resistance, and grabs what is at hand - the sinking fund. The loan to be raised is one of £3,500,000, and in the calculations I have made, I have placed the interest at 3^ pex cent., and the issue at 98 *</inline> per cent., which is the highest that. any loan at 3J per cent, has reached in New South Wales. At 98J, the realization will be £3,447,500. “The underwriting at
Colonel Foxton. - The £750,000 covers everything.
– That is not so, according to the figures.
– It will practically mean £1,000,000 a year.
– Exactly. We in the Commonwealth always appear to be afraid of Germany, but we are following the example of that country in borrowing for the purpose of beginning our N aw ; in deed, Germany for a long time has been floating loans to build Dreadnoughts, while England, which is the mother of nations and of Parliaments, has always built her ships out of revenue. On 26th November, the Sydney Morning Herald, an anti-Labour and purely “ boodle “ newspaper, and a supporter of the Fusion Government, published a sub-leader, which I think it well to read, as follows -
It has been announced that Sir John Forrest proposes to ask the Federal Parliament next week for authority to float the first Commonwealth loan. This loan will be for 3J mil linns sterling, the sum estimated to be necessary for the construction of the Australian Navy. Further details have not been vouchsafed us so far beyond the statement that the money will not be required at once, nor will it be expended immediately. As a matter of fact, it is much to be regretted that the Commonwealth should require to borrow for this purpose at all. Indeed, borrowing money on which interest will have to be paid in perpetuity for the construction of vessels that must be “ scrapped “ in a very few years can only be justified on the ground either of urgent necessity or as a temporary expedient, pending the more satisfactory readjustment of the financial relationship of States and Commonwealth.
I urge on the Ministerial party to take those words to heart. There is a day of judgment awaiting them next March.
– That article is based on the assumption pf a loan in perpetuity, not a loan to be paid off by instalments. .
– But that paper knows what Australian Governments are. Can the Postmaster-General point to one Australian State that has ever done anything but borrow in perpetuity ?
– This Bill is based on a sinking fund, payable in sixteen years.
– But the Sydney Morning Herald knows Australia even . better than I do, and realizes that the first time the Treasurer is a bit short he will grab the sinking fund.
Colonel Foxton. - Can the honorable member quote a case where a sinking fund has been treated in that way ?
– Queensland. I think the sinking fund of that State, which has. the biggest debt in proportion to population in the world, amounts only to £68. The Sydney Morning Herald adds -
Despite her heavy annual expenditure on war vessels, Great Britain has never yet borrowed money either for construction and equipment or maintenance. The cost of the navy has been an annual charge that has fallen year by year upon the finances of the particular year in which the expenditure has been made. In the case of Germany a very different system has been pursued. There loan moneys have been freely bor.rowed for naval purposes, and year by year the interest charge is being more heavily felt by the people of the Fatherland. Some believe that before long the strain will prove too great. Whether this be so or not it is not possible to say with any certainty, but this much is sure, that had the German Empire done as Great Britain has done, and paid its way as it went, its navy would not to-day be anything like the present proportions.
Is it a fact that we in Australia are justified in following the German- rather than the British example?- - f want again to urge the Government to copy Great Britain. In adopting the German system of finance as against the old and tried system of the Mother Country, they are not only anti-nationalists, but antiBritishers, and pro- Germans -
Perhaps we are for the present, if only because the immediate financial circumstances of the Commonwealth leave no option. But that does not say that we should take a second step along the same- lines. When the Commonwealth has more money at command the whole of the defence expenditure, whatever the form it may take, should, be drawn from revenues. As it is, the cost of the first ships might well be spread over a comparatively short period, say, 10 years. Were that done, the immediate burden would not be too great, while at the same time the burden on the department would not b’e of a permanent character. The currency of the loan would thus bear some relation to the life of the asset, if war vessels may be so described. 1 think war vessels are always a liability -
Doubtless, when the Treasurer unfolds his proposals, it will be found that he has some such scheme as this in his mind. Meanwhile it is scarcely idle to note that the London money market is still adverse, though somewhat less so than it was a few weeks ago.
That is what makes me sad. I have calculated this loan at 981-, but I should not be surprised if it were sacrificed at 95 oT 96. The Commonwealth would then be for all time at the mercy of the London brokers, who are in a ring just like the Coal Vend at Newcastle. South Australia had an experience with them. Mr. Peake, the present
Premier and Treasurer, and one of the ablest financial men in Australia, tried to float in London a loan independent of the brokers, but he found that they were like the Himalayan Mountains in his path. There was no Khyber Pass for him. ‘ They cornered him, and he had to do as they said. That is why I have urged the House to establish a bank of its own, with headquarters in London, where we could have Australian Commonwealth consols on tap. A country like Australia can always use 3 or 4 per cent, money, and with such a bank, there would be no necessity for the Ministry to run to the London market with their hats off and their knees bent to plead for an advance on their securities. They would be able to obtain the money in Australia through their own Department. I have found in- business that there is’ a vast difference between hunting the fellow and the fellow hunting you. -The Sydney Morning Herald further remarks - ‘
Probably, in the course of a month or two, it will be normal once’more, though it is never safe to dogmatize in this connexion. This much,, however, is certain, that very soon we shall have a practical test of the much-discussed question as to- the relative standing of the State and Commonwealth credits in the, London money market.
That paper, which is favorable to the Government, is very anxious about their policy, and has sounded a trumpet-tongued alarm, warning them of the dangerous path on which they are treading in going to the London money market with an unorganized credit. I should not bc astonished’ if the Government were told- by the London money lenders that they had mortgaged their securities beforehand, and therefore could not expect good terms. Here we are building ships, when I find, from an article in the American Review of Reviews, that ships are coming to be regarded as almost obsolete and useless on account of the advance in the science of air-ship building.
– Still the United States are building’ ships.
– It takes the United States, as it takes other countries, years to learn sense. The action of the United States in this case is no criterion. Australia ought to be the leader of the world on these questions, because her population is small and compact, and she can make experiments which 95,000,000 people are afraid to undertake. The article in this magazine refers to the immense Zeppelin air-ships, which, it is said, will soon be made bigger than :he Marne- tania. The article is headed “ Aerial Battleships.” “The End of War.” 1 doubt if honorable members on the Ministerial side spend any time in looking at articles like this, as they are so occupied in scheming to keep the Opposition out of office. When a nation borrows three or four million pounds to build a railway or a canal, te clear land, or to lay out a township, it is embarking upon a reproductive work. Every time you make a spade or a plough you make a useful instrument, of industry. ‘ Ail these things have n specific value, and help to create great productive industries, but when you borrow money to build a navy, you create an institution which is not’ reproductive, and in which even the fighting men are not assets. The soldier on land, and the “ Jacky “ at sen, although great in their way, are not national assets. We are now engaging ir. something that will paralyze industry and cause a mildew on commerce.
– - The honorable member’s party is in favour of a navy.
– I tried to show them at Brisbane the way to salvation. If we used £3, 500,000 to place immigrants in the Northern Territory, which is to be our own land, we could settle there 35,000 healthy male adults. Assuming that there was in each family an average of three persons - man, wife, and child - we should thus have a total of 105,000 persons in the Northern Territory,- as compared with its present population of 3,000, exclusive of aboriginals. If we further assume that the wealth production of the Northern Territory would, like the rest of the Commonwealth, average £40 per head per annum, we should have an annual production of wealth amounting to £4,200,000, while the annual contribution of the Territory to the Customs and Excise revenue on the basis of the average of 1908-9 would amount to £260,000. That is the kind of defence for which we ought to fight. I would vote to-morrow for a Bill to provide for a loan of ,£3,500,000 for immigration purposes - to settle people in the Northern Territory, to build a railway, or to be devoted to some other reproductive purpose. But the money is to be borrowed merely to enable us to go about looking for war - for the spilling of human blood. It is an absolute contradiction of Christianity. War is inseparable from a low state of civilization. There is nothing in the New Testament to warrant our raising a loan to enable us to shed the “blood of Christians. Who is threatening
Australia? No one. It is unsound to borrow money for war purposes. It is not right for a Christian country to be setting itself up in open defiance of modern civilization. In “the Old Testament we are told, that “ The Lord is a man of war,” and I am afraid that Ministers have been reading the Old Testament and neglecting the New. I referred the other night to a meeting of an Englishman and an American, both Quakers, in Washington, about the vear 1817. They were a British Minister and an American Under-Secretary, and they signed a little bit of a contract which led to the abolition of the warships that were on the lakes and the forts that were on the frontier. Since then there has been no trouble between America and Canada. Had chose ships continued to sail the lakes, had those forts on the frontier been allowed to grow, what would have happened? Not far from the place of my birth there was on the Canadian frontier a fort which was ultimately abandoned, and to-day one cannot tell whether one is -on. the American or the Canadian side of the border until one meets a Customs officer. That is the result of the peaceful relations between those two countries. I have no hesitation in saying that, had the system of building forts on the frontier and constructing warship’s on the lake3 been allowed to continue, there would have been a great war between England and America many years ago. Our flag might not have been flying over Canada to-day, for, after all, 6,000,000 of people cannot fight 90,000,000. In Australia’ we have had peace, prosperity, and comfort, but suddenly a fighting spirit has been aroused. The people want to kill somebody. In Isaiah we have the passage, “ Wherefore art thou red in thine apparel, and thy garments like him that treadeth in the winefat “ ? I am- afraid that that is what the Ministry are doing. Men can become intoxicated without touching liquor. They became excited, and, so to speak, live in the air. I wish to draw honorable members away from the mad desire for militarism. T opposed militarism at the Brisbane Labour Conference, and shall always do so. I am a man of peace. After every war representatives of the contending parties have to meet round a table and talk over their differences, and I would sooner talk for twenty years than fight for twenty minutes. ‘ There was a neighbour of mine in America who was a great bully. In 1863 he was drafted into the army and sent to the front, but as soon as the first shot was fired he ran away. The commanding officer, seeing him running, cried, “Where are you going?” The man replied, “I am trying- to get away. I am not a coward, but I am scared.” “ Well,” said the officer, “ do not be a baby.” “ Ah !” replied the man, “I wish I were a baby, and a girl at that, for if I were 1 should not be here.” He was a man of peace. The nations are now engaged in trading with each other. At one time they used to build walls to keep out people; now they build ships to bring them in. We ought to proceed on lines that will enable us to build up the great industries of the country. It is wrong for us as a Christian people to borrow money to build little warships which will sail along our coasts manned by “ roosters “ wearing feathers. I heard one honorable member say to-day that Imperial officers would take charge of our navy. I am opposed to anything of the kind. If Imperial officers in time of war are going totake charge of our navy we shall have no navy at all todefend us. If that is to be the position why not rescind the whole scheme and vote £500,000 a year to the British Navy ? I was led to believe at the Brisbane Labour Conference that in time of war the proposed Australian fleet would be commanded by Australian officers, and that it would remain here to defend our ports. It would appear that I was deceived, for the Treasurer said to-day that Imperial officers would take charge of our navy on the outbreak of hostilities. They might take away our fleet and leave our shores unprotected. This means misdirected energy. Many great cities - Vienna, Paris, Antwerp, and “the rest - have fallen in spite of their enormous defence expenditure. But it is useless to speak further on the subject. The Government cannot leave the old fines. Their only proposition is more borrowing. If the money were to be borrowed to assist in the settlement of immigrants, or in the development of territory by the construction of canals for a great irrigation scheme, such as the cutting of a tunnel by President Roosevelt through the Arizona Mountains, to water 200,000 or 300,000 acres of arid land, I would be behind the Treasurer, even without the national postal banking system. As it is,I can only say sorrowfully that the Government are making a great and expensive mistake. This loan will prove a dismal curse, blackening, impoverishing, barbarizing, and corrupting the country. . But of what use is it to discuss the matter further? The honorable member for Dalley, like a modern Demosthenes, placed the gospel before the’ House, and not one honorable member repented. They are all lost souls.
Debate (on motion by Mr. Kelly) adjourned.
Bill returned from the Senate without amendment.
Bill returned from the Senate without amendment.
House adjourned at 10.34p.m.
Cite as: Australia, House of Representatives, Debates, 1 December 1909, viewed 22 October 2017, <http://historichansard.net/hofreps/1909/19091201_reps_3_54/>.