4th Parliament · 1st Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
Mr. SPEAKER reported the receipt of a message recommending an appropriation for the purposes of this Bill.
Referred to Committee of Supply.
MINISTERS laid upon the table the following papers : -
Postmaster-General’s Department - General Post Office, Sydney - Hours worked by Officers in the Delivery and Despatch Rooms.
Papua - Ordinances of1910-
No.2 - Supplementary Appropriation 1909-10, No. 5.
No. 3 - Deputy Chief Judicial Officer.
No. 4 - Mining Ordinance Amendment.
Public Service Act - Papers relating to the appointment of F. J. Quinlan as Chief Cleric, Department of External Affairs.
Mr.W. ELLIOT JOHNSON.- I ask the Minister of External Affairs if he has read the following paragraph, which appeared in the Standard of Empire under the heading, “ Australia’s New Cable Service”:
A private cable message received in London this week from Mr. T. Temperley (one of the Australian delegates to last year’s Imperial Press Conference), states that the Commonwealth Government has definitely announced its decision to granta subsidy of £6,000, extended over three years, to the recently created Independent Press Cable Association of Australia. The subsidy is expected to begin from next month, and is intended to stimulate the cable service of news published mainly in the organs of the Labour party, and in various rural newspapers. Complaints had been made that the existing cable news service did not cater sufficiently to Labour interests. Mr. Temperley is the managing director of the Independent Association.
Are the statements which I have read true, and, if so, does the Minister think that it is proper that the taxpayers’ money should be utilized for the purposes of party propaganda ?
– In replying to the question I do not intend to discuss the point raised by the honorable member ; I merely say that the Government, as has been already announced, has determined to submit to Parliament proposals for a subsidy whose nature is not accurately stated in the paragraph which has been read.
– I wish to know from the Minister of Home Affairs why it is that some of the returning officers who acted at the last election have not yet been paid?
– I am not aware that any of them have not been paid, but I shall look into the matter.
Prime Minister, upon notice -
Does the Prime Minister interpret section 22 of the Commonwealth Public Service Act 1902 as meaning that -
– The Public Service Commissioner states -
Mr Chalmers Post Office - Uniform Postage
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are these -
asked the Postmaster-General, upon notice -
Whether, in view of the fact that the States are now practically being paid under theper capita system, it is his intention to introduce, at an early date, legislation to provide for a uni form postage rate throughout Australia?-
– It is hoped that a Bill to provide for uniform postage rates throughout the Commonwealth will be introduced during this session.
.-I move -
That this Bill bc now read a second time.
The legislative powers of the Parliament are stated briefly in the thirty-nine articles contained in the sub-divisions of section 51 of the Constitution. Let me read the words of the section covering the legislation which I have introduced. They are these -
The Parliament shall, subject to the Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to - (xii.) Currency, coinage, and legal tender; (xiii.) Banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money.
In the reports of the debates of the Convention there is little to show why these provisions were put into the draft Constitution Bill.
– They were prepared by the Constitutional Committee, and accepted on its recommendation. The discussions of the Committee were not reported.
– I find a slight variation from the position indicated by the honorable member for Ballarat, who was a member of the Federal Convention. This proposal was not in the original Constitution Bill, so far as I can discover, but was inserted on the recommendation of the Legislative Assemblies of New South Wales and Victoria and the Legislative Councils of South Australia and Tasmania. It. will be seen that there was not a monopoly of wisdom in what were called the ultra-Radical sections of the Parliaments of the States, nor in what were designated the ultraConservative sections. At any rate, so far as the legislative powers of this Parliament on the question are concerned, it will be admitted that they are not in doubt.
– The proposal relating to currency, coinage, and legal tender was in the Constitution Bill of 1891.
– The issue of paper money was, I think, suggested by the Chambers I have mentioned, and banking was also included. - Mr. Deakin. - I am not sure that ‘ ‘ legal tender” does not cover the ground.
– I am inclined to think that it does. It is rather singular that this important matter did not evoke considerable discussion in the Convention ; and my point is that it seemed to be understood by all the members of those Conventions-
– Paper money was also provided for in the Constitution Bill of 1891.
– But not in the draft Bill submitted to the people.
– “Currency” in the American Constitution covers the whole - even legal tender.
– That is true. I do not desire to say more on this aspect of the question, except that the principle of this Bill appears to have been accepted all round in the Convention without any discussion. 1 admit quite freely that this meant giving to this Parliament the power to legislate on its own account, or to delegate powers to private persons, as thought fit.
– The absence of discussion might mean that the Convention did not attach much importance to the matter.
– Or probably that it appeared to be so obviously a Federal matter.
– It will tend to the peace of mind of a great number of worthy citizens of the Commonwealth when it is found that members of the Opposition agree with me that the principle was admitted by every one when the Constitution was before the people, and that the Convention, in its wisdom, contemplated this Parliament taking early action in the matter. I am now answering what has been said in the press, on one side and the other, regarding this proposal, and showing that when the Constitution was under consideration it was accepted as a sound principle, with the expectation that this Parliament would legislate. It will be admitted, therefore, not only that this Bill is unassailable from a constitutional point of view, but that the framers of the Constitution expected this Parliament “to take even earlier action than is now being taken. I shall not attempt te argue the principle of the Bill. I venture to say that the discussion in the press has been of such a character as to show that those who are maintaining the soundness of this measure, have totally annihilated the arguments of their opponents. Very briefly I should like to say that the main principle of the Bill is this - It is a measure to authorize the Commonwealth Government to take all steps necessary to provide, as part of the currency of the Commonwealth and its territories, Australian notes of particular denominations, and if the public demand these notes, to supply them.
– But it is proposed to make the banks take the notes, whether they desire to do so or not.
– That is quite an error.-
– What about clause rr. - I think it is?
– As regards the banks, and the ,£25-
– I must ask the Treasurer not to go into the details of the measure.
– The principle of the Bill is practically embodied in . the statement that if any person or corporation desires to have Commonwealth notes, application will have to be made at the Treasury, and a deposit made in gold of their face value.
– Will not the Government pay some of its obligations in notes, without being asked for them?
– Not necessarily.
– “ Not necessarily ! “
– Is it contemplated ?
– Subject to the point raised by the honorable member for Ballarat about clause n, the principle is that only those who apply for the notes at the Treasury will be supplied with them.
– Will the notes be used in payment of Commonwealth contracts?
– Not necessarily ; that is not the desire of the Government.
– It is left to the option of the people?
– The notes will go automatically into circulation at the desire of individuals, or for the convenience of monetary institutions.
– Actuated by a desire to save the tax of 10 per cent. !
– The notes will go into circulation on being applied for at the Commonwealth Treasury, and gold to their face value being deposited, with the safeguard that, as soon as any inconvenience is felt, those holding the notes may be relieved by returning them to the Treasury, where they will receive gold for them.
– That is only in one State, I understand.
– It is absolutely necessary, under ordinary circumstances, that payment for notes should be made only at the Treasury, at the seat of Government. This is no departure from the practice of banks, or the method adopted in the case of the Queensland State issue, and a number of other State issues of the kind. I
Should not like. to bind myself to the statement that there could not be convenient depots at times to meet the convenience of persons engaged in banking and trade, but the actual place for payment on demand will be at the Commonwealth Treasury, at the seat of Government. That, however, is a matter for consideration at the Committee stage; my only desire now is to deal with the main principle of the Bill. The question of making the notes legal tender throughout the Commonwealth has been raised. The same principle prevails in Queensland, and I venture to say in a number of other countries which I need not enumerate, and is a perfectly sound one to apply to the Commonwealth issue. I am confident that it will cause no embarassment whatever. When the Bill was before the Queensland Parliament, Sir Hugh Nelson, the then Treasurer, laid down the same principle of legal tender, and I asked him whether it would not be a very great inconvenience to a person at Thargomindah or Camooweal, who was leaving Queensland for South Australia or the Northern Territory, to hold a Queensland note which was not redeemable in gold except at Brisbane. His reply was, I think, complete - that every self-respecting banking institution would undoubtedly exchange that note for any other medium of exchange more convenient to the holder, without charging discount. While that might have been a danger so far as the State note issue was concerned, it hardly applies to a Commonwealth issue, because within the Commonwealth there can be no boundary lines so far as our notes are concerned. The Australian notes will be legal tender in every part of Australia, and therefore the only places where actual coin would be required for them would be at the sea-board ; but at every shipping port there are undoubtedly banking and other financial institutions, as well as business places, which will be very glad to oblige any “citizens who desire to convert. their paper into coin.
– Would the Prime Minister think it unfair for a bank in Queensland to require 6d. exchange when asked to give gold for a note payable only in Melbourne?
– I should”. On that point it would not be out of place to remind honorable members that the actual bank notes in circulation between State and State were at a discount prior to the delivery by me of an address in Gympie, in which I stated that a proposition of this kind would be part of the policy of the last Labour Government. Whether it was a coincidence or not, I am not here to say, but within two months after the delivery of that speech the Associated Banks of the Commonwealth came to the conclusion that their notes should be interchangeable at their face value at the principal banking institutions of the chief cities in the various States. After all, that proposition is not so good as the one we are submitting to the people. Our proposal is that the Australian note should be legal tender in every part of the Commonwealth, and it will not be necessary to search out a particular bank - or any bank at all for that matter - to get its absolute legal equivalent in coin. In that respect, therefore, our proposition is superior to anything that can be done by any private banking institution, or the whole lot of them combined, or by any State, or indeed by the whole of the States combined, because this Parliament is the only body that has the power to direct that throughout the Commonwealth the whole of its currency shall be respected and be legal tender.
– Is this to be legal tender in addition to existing legal tender in the Coinage Act ?
– Yes. This measure deals with currency only. It is not proposed in it to deal with banking. The time with come when that large question will have to be dealt with by this Parliament in a broad and general way. In the meantime, the view of the Government is that it is not only advisable and proper, but also safest, to- deal in the first instance with the currency.
– I suppose we maytake it that this Bill is part of the larger question ?
– This Bill deals entirely with the currency. May I remind honorable members that this party heartily supported the previous Government when they brought in a proposal that the Common- ‘ wealth should have a, silver coinage of its own? The intrinsic value of the actual silver in the present Commonwealth coinage does not represent more than 8s. in the pound. The coinage is legal tender up to a certain amount, but its intrinsic value is not equal to the actual face value. The Commonwealth has, therefore, backed its silver coinage and is prepared to pay gold for its face value.
– But it is legal tender only up to £2 worth - a very different thing.
– Admittedly so; but the Commonwealth is prepared to back it to that extent, or to any extent. Although the law both in Great Britain and Australia makes silver legal tender only to a limited amount, I have never known in my life- time, or ascertained in my reading, that any banking institution or firm has ever refused to accept any amount of silver tendered to it. Everybody knows, and nobody better than the honorable member for Parkes, that any quantity of silver with the British or Commonwealth stamp on it will undoubtedly be worth its actual face value.
– In section 9 of the Coinage Act of last year we defined the amount of silver that should be legal tender.
– The honorable member for Darling Downs reminds me that this Parliament has actually made silver legal tender in Australia to a limited extent, but no one in his ordinary senses would say that any quantity of silver with the Commonwealth stamp on it would be refused.
– Why is not that the case in India? Although there is no limit upon it as legal tender, the rupee is worth only is. 4d., and sometimes less.
– If it is any satisfaction to the honorable member to know it, I have myself bought twenty-three shillings for a sovereign at a certain place. I come now to the Bill itself, and, without going into all the details, would point out that in clause 3 we have definitions of the meaning of “ bank,” “constable,” and “ Treasury bill.”’ The next clause is rather important, since it imposes a prohibition upon the circulation of State notes- after a proclaimed date. Six months after this measure comes into operation the banks will be prohibited from issuing or circulating any State note. The Queensland Government issue will then cease. A penalty of £500 is fixed in respect of a contravention’ of the clause.
– How will that provision affect existing conditions in Queensland?
– I do not think that it will seriously affect them. I read in the press- a statement by Mr. Kidston, Premier of Queensland, that he thought the Commonwealth proposal would not affect the State issue, but,, with all due respect to him, I think that it would be inadvisable for the Commonwealth Parliament, whilst legislating for an Australian note issue, to allow a separate currency to remain in existence.
– The 10 per cent, note tax, at any rate, will be sufficient to knock out the State issue.
– Speaking with the greatest deference, as a layman, I do not think that the 10 per cent, note tax would apply to a State issue. Under clause 4 We are taking power to prohibit the States from issuing notes as a legal tender.
– Has the honorable gentleman considered whether the time allowed will be sufficient to enable Queensland to make a proper adjustment ? .
– I think that the time allowance is sufficient. The probability is that the complaint made against the Commonwealth Government will be, not as to the length of time allowed for the withdrawal of the State issue, but as to there being any differential treatment. Six months is a fair time to allow, because I understand from* the statistics that the Queensland Government have in gold reserves fully one-third the amount of their issue, and a further amount on deposit with the banks. That being so, their financial embarrassment, if any, is not likely to be very great. There ought not to be, in this respect, any serious suggestion of undue harshness on our part. The tendency will be, perhaps, to say that we are offering more lenient terms than might reasonably have been expected. Part II. of the Bill gives authority for the issue, re-issue, and cancellation of notes, and also deals with their denominations. It is proposed, for the first time, I believe, in the history of Australia, to print and issue a note of the denomination of 1 os.
Mi. G. B. Edwards. - Hear, hear !
– I am glad to know that the view that a note of that denomination should be issued by the Commonwealth is not confined to this side of the House. After all, this is not a party matter, and I think that fact will be recognised. The Government are of opinion that the time has arrived when there ought to be issued a note of a lower denomination than one pound. The experience of other countries has proved the utility of such an issue, but I do not think it would be advisable, at the present time, to issue notes of any lower denomination than 10s.
– Is there any necessity for issuing a note of the denomination of 10s?
– I think there is. The half-sovereign is a most inconvenient coin, and, I believe, the 10s. note will be one of the most popular of the issue. This is an important provision, and as it is entirely new, I draw the special attention of the
House to it. I believe that the issue of a note of the denomination of 10s. will add to the aggregate amount of paper issue voluntarily held by the people of Australia, and will also prove a great convenience. There is in the Bill a provision that will enable the Commonwealth Government to enter into an arrangement with banks of issue at the present time, to accept their unsigned paper, and to issue it as Commonwealth notes with the Commonwealth stamp upon it. By the adoption of this course we shall be able to issue Commonwealth notes much earlier than would be possible if we had to await the printing of our own notes. I am happy to inform the House that this arrangement will be carried out in an amicable spirit as between the Government and the banking companies concerned.
– Will the Government deal with Queensland State notes in the same way ?
– I shall have no objection ; but, in all probability, as the Government of that State will not be compelled to discontinue their issue until six months after the coming into operation of this Bill, their note issue will be running concurrently with the Commonwealth issue for some time. It is unlikely that the Queensland Government will be prepared to surrender the right to issue notes which they will enjoy for some time after the passing of this Bill. The application of the money derived from the Australian note issue is clearly set out in the Bill, and I do not think that there is one dangerous proposition in connexion with the provision. Honorable members will observe that under clause 8 it may -
It is further provided that -
The Treasurer may sell or dispose of any securities in which any moneys are invested in pursuance of this section- and so forth. We have, therefore, a provision which absolutely protects the issue, and practically gives Parliament full control over the total amount that comes into possession of .the Treasury as the result of the operation of this Bill. I have already said that this is to be a paper currency on a gold basis, and honorable members will find in clause 9 a provision that the Commonwealth Treasurer shall hold in gold coin a reserve equal to one-fourth of the amount of Australian notes issued up to ^7,000,000. It is also provided that when the issue exceeds ^7,000,000, the Commonwealth Treasurer shall be compelled to hold gold against the total notes issued in excess of that amount. It will, therefore, be seen that there is a special precaution in this Bill - a precaution which, I admit at once, is not, in my opinion, absolutely necessary. But out of consideration for the views of people who are quite, as earnest as I am in desiring the success of this measure, we wish to make things doubly secure, and have, therefore, deemed it advisable to limit the issue of Australian notes, or rather to increase the protection to the. note-holder by compelling the Treasurer to hold gold against all issues in excess of ^7,000,000. Therefore it will be seen that while the Treasurer may hold gold up to one-quarter of ^7,000,000, he will have to hold a sovereign for every £1 note issued in excess of that sum. That precaution, in my opinion, makes this scheme absolutely safe. One reason which has influenced the Government to adopt that precaution is that there may at times be an inflation of the issue, although, in my opinion, that will not take place while “the note issue is under ^7,000,000. But if it should happen that notes are issued on demand to the extent of a million or two in excess of ordinary requirements,” then, of course, this precautionary measure would take effect.
– Does the Prime Minister expect that the Commonwealth will make any money out of this note issue?
– The Government, on this occasion, are not advocating the measure merely for the sake of monetary gain. We are out for the purpose of establishing an Australian note issue for the whole Commonwealth. We are out for the purpose of establishing a currency in every detail - a paper currency, a bronze currency, a silver currency, and a gold currency - the entire currency being backed by the whole of the resources of the Commonwealth. Whether what we propose be profitable or not - and I believe that it will be profitable - it is a sound proposition, and ought to be carried out without unnecessary delay. Therefore, the mere question of gain to the Commonwealth does not arise. But the question having been raised by the honorable member, this is a convenient opportunity for me to say something in answer to those critics - carping critics, I will call them - who have been alleging that this is an attempt by the Government to raise money from the public.
Within my own experience - and within our experience, also, Mr. Speaker - in 1893 the Queensland Parliament approved of this principle; and in my first address te the- electors, on . seeking a seat in this House, I made a prominent feature of a proposal for a Commonwealth note issue, lt is altogether too late in the day for honorable members opposite, or people outside, to seek to gain a temporary advantage by alleging that this is a proposal to rob the public and the banks, to get the Government out of a difficulty. It is a sound proposition, apart altogether from any advantage that the Commonwealth Government may derive from the enactment of the measure. It stands on its own merits.
– What is the necessity for the proposal?
– The honorable member’s youth protects him. He would have been assisted in considering the question if he had had experience of the events of 893-
– Things are very different now from what they were then.
– Exactly; and that is one of the reasons why I desire to have this question brought forward at a time when there is calm, at a time when we can consider it apart from crisis, apart from panic, apart from any of those disturbances which have occurred in several countries and at various times, affecting banking institutions.The best time to carry through Parliament a measure like that under consideration is one like the present. We seek to make provision early, and in advance of necessities.. That is an additional reason why we bring the matter forward and deal with it now.
– How would a. note issue such as that proposed prevent a recurrence of the events of 1893, when there was a run upon the banks?
– If the honorable member for Parkes has read the Bill he will see that the proposed note issue is to be so absolutely secure against failure that it would be impossible-
– That is not my question. How would this proposed note issue prevent a recurrence of the events of 1893?
– I am not speaking of banking at all. This is not a banking measure. It is a measure dealing with the currency of the Commonwealth. The protection of the banks is quite another matter.
It will be dealt -with under the heading of banking legislation, which will be brought forward later on.
– I thought that the Prime Minister gave the occurrences of 1893 as a reason for this Bill.
– Does the Prime Minister think that the Commonwealth notes will be safer than are the notes at present issued by our banks?
– I do. I am not here to cast any reflection upon the banking institutions of this country. No one will hear me utter a word against their security.
– Hear, hear; the Prime Minister can leave that to his followers, o
– I never did so except at a time when there was good reason. But that time has happily passed. I think that our banking institutions at present are in a very stable and satisfactory position in every way. We have many reasons for being grateful to them. There is no party in this country more anxious to protect every legitimate institution, whether banking or other, than the party of which I have the honor to be the leader. This party is exceedingly anxious to protect every one who has invested money properly. But it is the duty of this Parliament, and especially of this Government, to protect the people who accept notes instead of gold. I do not want to recur to the events of 1893, but what happened in Queensland at that time affords an “ample justification for this measure. In that State eight banks out of eleven ceased to redeem notes. They were not able to meet their obligations. Therefore the Queensland legislation was enacted at a time of crisis. At the present time no one suggests that the Australian banks are not sufficiently strong to meet the whole of their obligations and to redeem the whole of their notes. But I should like to add that while a number of our press critics have pointed out that the banks have specie in reserve far in excess of the notes issued by them, it is just as well for the public to remember that the note-holder has no preference over the man with a current account. And if honorable members look at the aggregate amount of current accounts in the banks they will see-
– Notes are a first charge upon the assets of the banks.
– I do not blame the honorable member for. Fawkner for his eagerness; but I am not attacking the banks.
– I am not defending them. I am attacking the Prime Minister’s statement.
– This is a technical subject, and not one of those in connexion with which party feeling is aroused. I have just said that I believe the banking institutions of the country were never in a better position than they are in to-day. I believe that they are able1 to meet their obligations in respect of their note issues and otherwise. Some of their friends have been indiscreet enough to say that they are able to pay up seven or eight times the value of their note issues. If that be so, I am glad to hear it. But if we take the total of the obligations which they are liable to be called upon to meet in respect of current accounts, honorable members will find that the note holder, in a crisis, would be in no better position than the current account customers of the bank. The first in would be first served. It is true that the noteholder would have an absolute priority afterwards, but that is not the time . at which he wants his money. During the 1893 banking crisis, I saw £1 notes sold for as low as 12s. 66. I admit that it was too low a price, but 17s. 6d. was the average price paid for £1 notes at the time, 100 miles from Brisbane.
– In 1866 I saw £1 notes sold for is. each.
– I am speaking of another time. Most people were aware that the notes would be ultimately met at their face value, but those who held them wanted their money at once. Clause 11 of this Bill, which has met with some criticism from the other side, is practically taken from the Canadian Act, which provides that the banks must pay $100 on demand, in the denominations asked for, under a penalty of $100, or about £20. I think it advisable to reduce the penalty for an offence against this provision to £5. I do not believe that the banking institutions of Australia will attempt to prevent the issue and circulation of the Australian notes. I believe they will, as a rule, be found to co-operate heartily in the matter.
– The Government oblige them to do so, whether the banks are asked for the notes or not.
– No, not unless they are asked for them.
– They must have them on hand.
– This provision is taken from the Canadian Act, but I do not hold any very strong views on the question, and I propose, in Committee, to amend the clause by omitting the words “ and in the denominations asked for by the payee.” Such an amendment should result in convenience. Further, I intend to propose that the clause shall come into effect only by proclamation, and in any case not before the 1st March, 1911. I think the honorable member for Ballarat will agree that, with the suggested amendment, the clause will not be a very terrible weapon to hold over the banks. I remember that, in connexion with the State issue to which I have referred, a slight attempt was made to boycott the Treasury note. I do not anticipate that that will take place in this instance, but I believe that the Government should have reserve power in the matter. I think the necessities of the case will be met by amending the clause in such a way as to give the Government power to proclaim it in operation at any time, but not earlier than the 1st March, 1911, for reasons which I shall be prepared to give in Committee. With this reserve power, if any of the banks should attempt to prevent the distribution of the Australian notes, we should be in a position to exercise a little gentle persuasion by the imposition of the proposed ^5 penalty. If amended as I propose, I do not think that the clause can be regarded as a penal one. The other clauses of the Bill are largely machinery clauses.
– Could the Government, under this Bill, come to the assistance of a bank in any way by advancing notes ?
– The interjection is a very important one, but, in my opinion, the question is one which should not be dealt with in a Bill of this kind. It should be dealt with in a Banking Bill. I have been extremely careful in this Bill to specifically take power to prevent the Treasurer from lodging Australian notes for the raising of money for any purpose whatever.
– As security for the raising of money.
– Just so. The suggestion in the honorable member’s question was that otherwise the Government might take advantage of their powers and pledge Commonwealth notes. I do not’ think it advisable to mix up that question with the currency at all. Instead of dealing with it in this Bill I have taken pains to prohibit any Government from doing what has been suggested. When dealing with clause 9 I spoke of the minimum amount of reserve gold which the Commonwealth must hold. It must be 25 per cent, of the value of the total note issue. I am quite prepared, in Committee, to amend the clause to provide that the gold reserve shall not be less than 25 per cent.
– Does the honorable gentleman think that sufficient?
– The experience of all countries seems to indicate that it will be more than ample.
– In ordinary times, yes.
– The actual experience in Queensland is that they have never had a demand in excess of 12 per cent.
– They have never had any financial strain in Queensland since the system was adopted.
– The honorable member is quite right, but things have greatly improved since the advent of the Labour party to Parliament. It is a fact that since 1893 there has been no financial crisis, and perhaps it is merely a coincidence that since that time the Labour party have been strongly represented in Parliament. The banking crisis of 1893 did not arise from any defect in connexion with the currency.. It was due solely to mad speculation. Honorable members on this side will be glad at all times to co-operate with honorable members opposite in every possible way to prevent that kind of thing, in order that they may protect from suffering people who are in no way responsible for what occurs. That is one of the missions of the Labour party in this Parliament, and in the State Parliaments. While under the Bill 25 per cent, of gold must be kept in reserve for immediate necessities, the Government, following the precedent in Queensland, ask for authority to issue Treasury-bills for the full amount of the issue of Australian notes. So that the note issue will have a double cover. These bills are not to be sold except in case of absolute necessity to meet the notes when presented for gold. It will be seen that the bills may be sold in any market in the world at an interest bearing rate not exceeding 4 per cent. That is practically a copy of the provision in the Queensland Statute.
– What is the difference between a Treasury note and a debenture?
– This is a double cover. It has never been found necessary in Queensland, and is not likely to be ever found necessary in our case. When Sir Hugh Nelson introduced this double cover in Queensland, he said, “ I do not think that there will ever be a single penny raised by the sale of bills, but I do say “-
– Is it not like a man 3 backing his own bill?
– These interjections may be very clever, but I am in the midst of quoting an able Treasurer who originated the Queensland issue. From Hansard, I could quote the speech in which he said that, while he believed that the provision for a gold reserve was ample to meet any emergency, he took the precaution of obtaining authority to issue and sell Treasurybills in any market in the world to meet any extraordinary emergency, in other words, “ to make assurance doubly sure.” But, he added, “I do not believe that a single penny will ever have to be raised by the sale of bills,” and his prediction was absolutely verified. I have told honorable members that there has never been a demand in excess of 12 per cent, at any period of their history of seventeen years.
– Will the honorable gentleman mention any leading country in the world where the reserve is so low as is proposed in this case?
– Speaking from memory,
I think that the Bank of Adelaide, incorporated here, has thought it possible to hold only 25 per cent, in gold.
– Will the honorable gentleman mention some leading nation in the world?
– I shall accommodate the honorable member by inserting in my speech, with the Speaker’s permission, tables showing practically the bank reserves and issues of the world.
– The honorable member will have to read the tables if he wishes them to appear in Hansard.
– I shall probably have to read those tables at a later stage, and also tables showing the Australian note issues since 1885. I do not want to bore honorable members by reading them, but I suppose I must do so, unless I get the Speaker’s consent later to their insertion in my speech.
– I hope that the honorable gentleman will get the consent of the Speaker, because they will be very useful figures.
– I shall read the tables, if necessary. I do not want to pick out countries here and there. On this matter, we want all the . facts to guide us. It is not one of those matters out of which one can get a political advantage to-day to tide one over a difficulty. It is a matter which has to stand. It is one on which the Government court the closest investigation in Committee. The Opposition may, if they so desire, attack the principle of the Bill, but once that principle is affirmed the rest will be a matter for Committee work. These Treasury-bills are, I think, necessary as a double cover. It simply means making “ assurance doubly sure.” By that method we shall pledge our credit in another way to enable the Com- monwealth to make a considerable sum out of the extra gold which it is not necessary to hold as a reserve for the protection of the issue. The other clauses of Part
Every person who, without the authority of the Treasurer (proof whereof shall lie upon him), snakes or has in his possession -
any copy of an Australian note, or
any writing, engraving, photograph, or print resembling an Australian note, or apparently intended to be or pass for a copy of an Australian note, shall be guilty of an offence.
Penalty : One hundred pounds.
That, I think, honorable members will admit, is a necessary provision to make in these days of expert photography, and I do not think that any complaint can be made on that score. In clause 30 honorable members will find what is undoubtedly a protection to the banks. It would not be advisable, I think, to allow any individual, on his own authority, to start proceedings in respect of an offence against the law. The clause reads as follows : -
Proceedings for offences against this Act shall be instituted only by the Attorney-General, or by some person acting under his authority.
– Of course, an offender may be arrested before a proceeding is started ?
– Yes ; but I think it is proper to enact that only the AttorneyGeneral should possess this power. In other words, the clause throws on a responsible person the responsibility of initiating a prosecution. I do not know whether it is absolutely necessary or not, but I think it is advisable that the provision should be made. On the general question, I find that the best available authorities on financial matters in Australia are of the opinion that this measure, if it becomes operative to the extent which we anticipate, will in some respects deplete the Commonwealth of its metallic currency. The view held by many of our financiers is that a note issue will drive the metallic currency out of the field.
– That is Gresham’s law.
– Whatever it is called, that is what financiers have told me. But here is the difficulty. It was stated by the London Times the other day that if the proposal of the Labour Government is merely a manoeuvre to raise money at ‘the public expense, it will prevent the banks from sending as much gold to London as they have sent during the last fifteen or sixteen years. Thus one critic, blows hot, and the other cold.
– The honorable member mistakes what is meant.
– There is no mistaking the suggestion that this is a device of the LabourGovernment to raise money by loan.
– Surely the honorable member does not deny that?
– I do.
– Is it not a loan?
– I wonder what we shall hear next ! Seventeen years ago I entered a Parliament which carried a similar proposal, and from that time I have advocated legislation of- this nature. When I first stood for this Parliament I put a proposal similar to this in a prominent position in my address to the electors, and the subject was given prominence in my Gympie policy speech, as well as in my address prior to the last election. Yet now it is said that this is a temporary expedient, a thing of the moment.
– The point . is whether it has not been proposed for the sake of getting a loan.
– It has been proposed to put the currency of the Commonwealth’ on a sound basis. Every authority says that the gain from a note issue belongs to the people, and not to private institutions.
– But, incidentally, the Government will acquire the use of some millions of money.
– Certainly. No one deceives himself on that point. But it is one thing to make it appear that we have brought forward the proposal, not to put the currency on a sound basis, but to raise a loan to help a needy Government, and another thing to say that incidentally to the putting of the currency on a sound basis the Government will be able, by the authority of Parliament, to obtain money which will augment the Consolidated Revenue Fund.
– Does not the metallic currency give a loan ?
– It does.
– The Prime Minister would not take this money if he could help it.
– The honorable member will find that we are not in so great a hurry as he thinks. We shall move more quietly and circumspectly than he imagines.
– The money cannot be appropriated except by the: Parliament.
– I am glad to meet with these interruptions. We do not hear it stated now that the desire of the Government is to make money by establishing a paper mill and a printing press. What has become of the critics who put forward that objection to our proposal ? They have scuttled into their holes. I am glad that the honorable member for Mernda is in his place. He was a member of a Royal Commission appointed in Victoria which in 1895 recommended a proposal of this kind. That Commission thought that 25 per cent, in gold was an ample backing for a note issue-
– As soon as the proposal was brought before the Victorian Parliament it was rejected.
– So much the worse for the Victorian Parliament. In 1895 both South Australia and Victoria were contemplating action on the lines followed in Queensland, but similar legislation was not passed here, because the monetary institutions were beginning to feel their feet again, and private influence was strong enough to prevent it. These are the names of the Victorian’ Commissioners who signed the report to which I refer : The Hon. N. Levy and A. Sachse, Ms.L.C., and R. Harper, T. Kennedy,J. Winter, Hume Cook, and W. D. Beazley, Ms. P. The Commission recommended that a State Bank should have the exclusive right to issue notes; to be legal tender within the colony, except at the issue Department, where it would bc compulsory to pay gold for all notes presented. A reserve of -gold, amounting to 25 per cent, of the whole issue, was to be held. Good reasons were given for that recommendation,.
– Did the proposal exclude the issue of notes by the banks?
– It could mean only that.
– Did the Commission report in favour of preventing the banks from issuing notes?
– I do not think so.
– In 1896 the Government of Victoria proposed a Bill for the establishment of a State Bank, with a monopoly of the note issue, and a 20 per cent, gold reserve against the notes.
– That Bill was rejected as soon as it came forward for discussion.
– These facts, which, show the trend of the public mind in the matter, are historical in a way, and it is only fair they should be referred to. What was said by the Honorable William Shiels, who put the case very well, I think, for the private banks?
– It is not at all fair to call his speech “ putting the case for the private banks.” It was a speech of a statesman, delivered in the interests of the people..
– The honorable member knows me too well to suppose that I amusing the words- in any reflective sense. It is quite proper for a member of Parliament, who is capable of putting a case for one side - wholly for one side - to do’ so ; he can be an advocate if he pleases, and all the better if he is. It is admitted, on behalf of the financial institutions, that no better case could have been put for them than was put by that gentleman ; and it is no reflection on any one to say that he has put the arguments for one side of a proposal as against the other.
– Mr. Shiels put the whole case.
– Of course he did.
– He regarded the State action from his point of view.
– Well, let honorable members listen to one brief quotation from Mr. Shiels’ speech -
I say that the first commandment in currency, over-riding all things else, is this - keep the breed of your money pure ; have no half-caste system.
That is what we are doing.
– Is that so?
– Instead of having banking institutions in the various States, issuing their own notes, the Government of Queensland, for example, issuing notes within the area of that State, we propose to have one Commonwealth issue in the shape of Australian notes. Mr. Shiels, able and accomplished as he was in finance, would, I claim, have been on our side had he had the opportunity ; at any rate, we have his own carefullyprepared statement. He said further
If bank notes had that attribute of legal tender I would candidly admit the right of the State to take over the issue. None but the State should be responsible for that which every citizen of the State must take in final settlement of obligation.
That is strong and very direct language.
– “Final settlement” - that is not the bank note.
Mr.FISHER. - Mr. Shiels was dealing with that phase of the question; and the honorable member for Richmond must admit that that gentleman was quite able to express himself.
– I am not objecting to what Mr. Shiels said, but to the way in which the Treasurer is using Mr. Shiels’ statement.
– Let me quote another authority, Mr. John Jay Knox, abbreviating as I go -
The attributes of a perfect system of paper currency in this or any other country are first, safety ; secondly, elasticity ; thirdly, convertibility ; and fourthly, uniformity.
I submit that in our proposals we have perfectly covered all these conditions. I admit at once that if anything can be charged against us, it is on the score of elasticity.
– What does the Treasurer mean ?
– If we are out of step with the principles of a note issue, it is, perhaps, in that the Commonwealth issue will not have the same elasticity that the issue of private banks may have at particular periods; but the advantages of the Commonwealth issue compensate for that disadvantage over and over again. There is the advantage that control by the Commonwealth will prevent any excessive issue of notes- will prevent any such issue becoming an acute danger. In a word, it is the duty of the State to protect the currency and to provide safeguards. It may be asked whether it is advisable to give the State or Government - these mean the same thing - unlimited power in this matter. But, in my opinion, the State must be the guardian of its own honour. I am not one of those who are afraid of the Democracy in any way, because I believe that the people will be able to send to this Parliament representatives, who, in the aggregate, will honour their pledges and protect the best interests and the welfare of the nation ; and I am prepared to trust the people. It may further be asked whether it is not undesirable or inadvisable, on the part of. what has been called the first Labour Ministry in the world with a majority in Parliament, to plunge into an alteration of this kind. That objection might apply if we were making a fundamental alteration in the monetary system of this country ; but we are doing nothing of the kind. If a charge can be brought against us, it must be that of being more copyists than originators of a scheme of the kind; and, therefore, on this score, we need have no fear.
– Will the Treasurer say why he is introducing this proposal now?
– If the honorable member looks at the Governor-General’s Speech, he will find, I- think, in the fourth paragraph, a statement that the Government would present to Parliament a proposal of the kind at a very early date.
– I saw that paragraph, and it left me wondering why this was regarded as one of the Government’s most important measures.
– Will the honorable member try to remember that the Labour party try to keep their pledges to the country? We were in duty bound to present this proposal for the final arbitrament of honorable members.-
– Did the Treasurer tell the country that this would be one of the first measures?
– I told the country that it would be one of the early measures;- The honorable member’ raises the question whether the real object of this measure is to provide money for the Government’s necessities, or whether it is to establish a sound principle in currency.
– I did not say that, but the Treasurer has divined my thoughts pretty well.
– There is no harm in an honorable member of this House, who has been a member of State and Commonwealth Governments, expressing, in quite plain language, what is really meant. I do not take the trouble to state that the Government have not introduced this measure wholly and solely to meet the Government’s necessities ; it did not come into our minds in any serious way that the Government’s necessities made this our opportunity. I have told the history of this measure again and again, and I, and others with me, have been in favour of it for a long time. If rumour be true, previous Governments nibbled at a proposal of the kind, and, doubtless, would have liked to introduce a Bill, but, I suppose, they had not the courage. That, however, is another matter. We, at least, are on safe ground, and we have pledged ourselves again and again to introduce this Bill. Personally, I have taken the greatest precautions to . consult every authority, not holding our views, financial or political, that could advise me regarding this matter. Whilst, of course, there are differences of opinion regarding the policy, there is no serious, difference of opinion as to the soundness of this proposal under proper administration, and the people of the Commonwealth are assured that so long as the present Government remain in office the administration of ‘ this and every other Act will be on. safe and proper lines. I think it advisable at this stage to put in the table to which T referred earlier in my speech.,– and which, I understand, the honorable member for Flinders and others desire to see embodied in Hansard : - …
Apart from the omission of the Queensland notes, honorable members will note the big fall in the note circulation after the bank smashes. There are also other tables, the first giving statistics as to the banks of the world, from Mulhall’s Dictionary of Statistics. Perhaps, Mr. Speaker, you would allow me to put these into Hansard without reading them.
– Order ! Documents have previously been permitted to go into Hansard without being read in the House. There are times when exceptions have to be made, and when those exceptions are made there is generally some’ one who feels aggrieved. Consequently, the position I intend to take up is that every speaker shall read’ out what he desires should appear in Hansard. If that is done it will, I think, have the tendency in many cases to shorten debate, and at the same tim’e will not put me in the position of having to differentiate between member and member.
– In August, 1896, the banks of the world stood in the positions disclosed by the following table : - “
The following table shows the issues of European banks, their bullion reserves, and the ratio of the latter to the former in March, 1898 : -
Then follows a most important table, showing the amount of paper money in Europe in 1895, 1896 and 1897 : -
These are statistics pure and simple, but I consider it advisable that they should be embodied in Hansard. The honorable member for Mernda has just pointed out to me that although he was a member of the Victorian Banking Commission - although his name appears in the Commission itself - he was absent from the colony when its recommendations were being considered, and did not append his name either to the majority or the minority report. I referred to his name not appearing among the list of dissenters to the report of the majority, and I am glad of the opportunity to make this correction, because the error wa§ one into which any person might readily have fallen. I have here further tables of considerable interest, giving information which does not altogether back up our proposal, although it is cognate to it. They deal with the banks trading in the Commonwealth, and, speaking generally, are rather in favour of the position occupied by those financial institutions.
In conclusion, may I say that I am happy to have the opportunity to submit to the House this Bill, which is founded, I believe, on sound lines, and deals only -with currency. I repeat that it does not deal with banking generally, and that we shall not attempt to deal with banking at present. , It provides for an Australian paper currency of legal tender, payable in gold at the Treasury of the Commonwealth, and there alone. The Government will take a favorable view of any proposal to provide later on, by regulation, facilities in other parts of the Commonwealth for the exchange of Australian notes for gold, and vice versa. They will not close their minds to that aspect of the question, but there must be only one place where these notes shall be compulsorily payable. I remind honorable members that the bank notes issued in such large States as South Australia, Western Australia, and Queensland, are payable only at the head office, and that since Thursday Island, for example, is further away from Brisbane than is Melbourne from Brisbane, no disability will be imposed on the people throughout Australia by” the provision that the Australian notes shall be legal tender throughout the Commonwealth, and shall be payable in gold only at the Commonwealth Treasury. The same remark will apply to the banking institutions of South Australia and Western Australia, for in the most remote parts of those States, bank notes are in circulation, and are honoured at their face value, except, perhaps, in time of crisis. I commend the Bill to the consideration of this House, and feel that, whilst there should be no undue haste in passing it, honorable members will’ agree with me that there is no need for delay, since no part of the Government policy has been so much discussed in the press. The people, indeed, are indebted to many of the newspaper correspondents, who have written upon this subject, for having relieved the tedium of a very dull time.
.- Whilst believing that the Prime Minister’s interference with the proposed paper currency of the Commonwealth has been the result of a conviction that it is justified on the grounds of public convenience, I confess that I have been unable to recognise the weight of the considerations which he adduced to-day in its favour, nor can I, on the spur of the moment, supplement them by any, which, with an open mind, might have occurred to myself. I do not think he need have apologized to the House for the introduction of the measure, because, from the inception of Federation, he has protested that it would be to the general interests of Australia if the Queensland system of currency were adopted throughout the Commonwealth. The honorable gentleman referred to the fact that people might, perhaps, say - I do not profess to quote the exact words used by him - that the Labour party, on the first occasion that offered, were taking advantage of their position to introduce this system of currency ; but since, to my own knowledge, he has held deep convictions on this matter for the last ten years, this Bill is only the legitimate exercise of the power which his position gives him to try to place those convictions on the statute-book. I am sure he will welcome from this side of the House criticism which is an endeavour, within the limits of my knowledge of the subject, to throw light upon a somewhat difficult and very much vexed question. I have not heard an answer to the challenge which was thrown out, towards the end of the honorable gentleman’s speech, by the honorable member for Parramatta, that, in recommending his Bill to the House, he should, first of all, point out the causes that had led to his opinion that a change of this sort is justifiable. If it could have been shown that control of the currency by the banks meant a monopoly detrimental to the public interest, that it meant a privilege and a profit that was beyond the reach of the taxation powers of either the Commonwealth or the States; that it meant inflation or undue contraction of the currency, commercial embarrassment, private inconvenience, or any of the many effects or concomitants of an ill-regulated paper currency, or a badly managed medium of exchange, I, for one, should welcome this Bill. But throughout the whole of the Prime Minister’s speech I failed to hear anything more than a casual assertion here and there that there was, in the present arrangement with the banks, something that necessitated this proposed interference with the currency. I would welcome the change were that shown, although, from my reading, I think it can be easily shown that the troubles in connexion with the currency have nearly all been the result of well intended but misguided efforts of the States to regulate it. I should be the. very first also to agree, if it were proved that this was a monopoly, that on grounds of public interest we should not hesitate for. one moment to interfere. If it were a monopoly clearly established, and beyond our legislative power to control, then I should say - as I should of all monopolies - that it was a case for State assumption or State destruction. No monopoly ought to be allowed to stand in the way of the public good. This is an age of control, in any case where a monopoly is established. It is an age which Democratic representation has shown to be one of control, because the conditions are altogether different from what they were some fifty or sixty years ago, when, perhaps, one class, and that, to some extent, the capitalistic and land-owning class, had a greater than its due proportion of the representation. It was under conditions of that kind that Herbert Spencer, in dealing with the currency question, and speaking of the growth of banking business and of capitalistic institutions, said -
In societies, associations, joint stock companies, we have new agencies occupying fields filled in less advanced times and countries by the State. With us the Legislature is dwarfed by newer and greater powers - is no longer master but slave.
I say that the conditions under which Herbert Spencer then Wrote are not the conditions of the present time, because the representation basis has been widened. The representation of all classes is now fairly balanced in the Parliaments throughout the Empire. We can, therefore, exercise our powers of control without the assumption of monopolies, even when they are clearly established. But, while making this admission to the full, I say that _ there is, in this case, no proof that a monopoly exists, or, if it does exist, that we cannot control it. I say that all that the banks enjoy at present in reference to their note issues is convenience plus a certain profit. The convenience we do not grudge them, because it is not at our expense, and is shared by the general banking public. The profit we can control to the extent to which a tax can be imposed upon the issue that does not overbalance the convenience that the issue gives to the banks. All authorities do not agree with those referred to by the Prime Minister - I think he quoted the late Mr. Shiels and others - that the profits of a note issue necessarily belong to the State. I could quote Lord Goschen, and also Mr. Gladstone, who wrote something to that effect about twenty years ago.
– John Stuart Mill also.
– I believe that Mill also expressed the same opinion. I wrote a pamphlet twenty years ago which necessitated a good deal of research upon this question, and I intend to draw upon it to some extent. McLeod, in his great work on The Theory of Credit, points out that the profits of a note issue belong, not to the issuer as of right, but to the banking public, who are the users of the issue.
– The customers of the. banks.
– The banking public are the users of the issue, and those who enjoy banking facilities, as well as the customers of the banks. I am using the correct term in speaking of the banking public. McLeod, as I have said, asserts that the profits ot a note issue legitimately belong to the banking public, but that their interests are best subserved by leaving the control and the profit - to the extent that the State permits it - to the banks. Here, I think, we have a better theory, and one which 1 urge upon the Prime Minister to adopt, if the Bill, in its present form, is. not beyond recall. I refer to the taxing principle - that of securing, by means of a royalty, that return which the State is legitimately entitled to get. It is the principle which was adopted indirectly, but less effectively, in Queensland by State assumption of the issue. It is the principle in America; because in America the National Bank’s currency is taxed at the rate of i per cent., and the other branches of the currency at the rate of per cent. .. per cent., I think, falls upon those banks whose currency partly consists of notes, and whose bond reserves bear a rate of interest of 2 per cent, to the Government of America. However, that is merely by the way. What I principally wish to point out now is that this theory as to the State controlling the note issue is a matter of practical convenience, and is not one that is generally acknowledged by the very ample writers whose views, on account of their very high standing, ought to be considered. We should also remember, in dealing with this matter, and in dealing with the banks, that, when it becomes a matter of judging from history whether the banks are more likely to manage the currency in a satisfactory manner than the State, I think that the prima facie impression is rather in favour of the banks. The first bank of issue established to cure the evils of the currency - and it did the work exceedingly well - was the Bank of Amsterdam in 1609. Before that, the currency was very attenuated, because there was a great deal of clipping and wasting going on; and, as a matter of fact, the value of bills of exchange was affected by the impaired and inflated currency, and the very small proportion of the currency of the country- represented by coin of mint value caused the bank to accept gold only at its weight value, and to issue receipts in exchange. These receipts ultimately became bank notes, and were called bank money. People were not in those times taught the prevalent heresy of these times, that it is necessary to have a settled reserve against notes. I thought that idea had been knocked on the head by the experience of the last thirty or forty years. As a matter of fact, in America, there is not more than 5 per cent, of gold against the note currency ; and I believe that the Comptroller of the currency - to whom I will refer again later on - : has said that that small amount is more than twenty times more than is necessary for the purpose of meeting the average note losses, or of conversion. I may refer to Adam Smith upon this point. He stated in his book, The Wealth of Nations, that the idea of the convertibility of notes had been based upon the impression formed of the solvency of the Banks of Amsterdam and Hamburg ; and that the bank’s paper might have remained for an indefinite time without conversion into gold, had not the policy of the bank led to changes in subsequent years. If honorable members look at the history of this matter from the inception, they will find that an unregulated currency has succeeded better, on the whole, than a currency which has been governed by the misguided efforts of some statesmen. I should also like to point out that the dangers, or inconveniences, that justified the establishment of the Bank of Amsterdam, are practically infinitesimal nowadays. There is no wasting of the currency for purposes of profit. I was a member of a banking commission in about the year 1889, and I remember that it was ascertained by that commission that the loss from the attrition of gold was only about 2d. in the £1 in eighteen years. We do not want to have power to save that comparatively small loss, which does not fall upon the customers of the banks, or the public, but is borne by the mint when the coin is sent in for melting down. The change now proposed to be made is not required for currency purposes, for purposes of revenue, or for purposes of solvency. All these points - somewhat dryly and curtly, I am afraid - I will endeavour . to prove. I do not think that I need say much about the proposal not being justified as a loan. What I say is that if any revenue be required from bank notes, it can be obtained by a tax. This Bill proposes to use the currency to the extent of 50 per cent, for purely loan purposes, but to the extent to which the Government are using this instrument for the purpose of raising a loan, they are not adopting the straightforward method of borrowing. I am quite as much op posed to borrowing as the Prime Minister is. I would only have the -Commonwealth driven to it under the stress of very cogent necessity. There seems to have been such a necessity last year. But, if borrowing, except for great works, is to be resorted to, loans should be raised for short periods, as was done at the time of the threatened war with Russia in about 1876 or 1877, when the Indian troops were called by Disraeli to Malta, and Treasurybills were issued under an absolute promise that they must be redeemed within a specific period. If we are compelled to borrow, we should adopt the straightforward method, and should make the loans as short as expediency would justify. We should make the people “ stump up “ to meet the necessities created by their own public affairs, or by the blunders of their legislators. We ought to be prepared to take the responsibility, and the people must respond.
– The only difference between Treasury-bills and debentures is that Treasury-bills cover a loan for a short period, and debentures a loan for a long period.
– I am quite awareof that.
– What would the honorable gentleman do with the revenue derived from the taxation upon notes which he is proposing?
– I should treat it.as part of the public revenue just as the State Governments do.
– Would not that also be merely a loan under another name?
– No ; because there is a continuous privilege given and taxed. The basis of this Bill is that the banks enjoy, not a monopoly, but a privilege, and the Treasurer says that we should take that for ourselves. What I say is that we should adopt the modern method, which our Democratic representation renders possible of continuous control, and which might, from time to time, be modified by increasing or diminishing the tax. “That is a method approved by no less an authority than the ComptrollerGeneral of Currency in the United States. Might I offer a word of advice upon this matter of banking and finance from one who, at all events, ought to be regarded as a very good authority? Edmund Burke, speaking upon some of the issues of his time, gives the advice that if the Treasurer wishes to borrow, he should do it openly -
The objects of a financier are, then, to secure an ample revenue; to impose it with judgment and equality; to employ it economically; and, when necessity obliges him to make use of credit, to secure its foundations in that instance and for ever by the clearness and candour of his proceedings, the exactness of his calculations, and the solidity of his fund.
Not by using the currency for the purpose of a sort of surreptitious loan. I direct particular attention to the words -
When necessity obliges him to make use of credit, to secure its foundation in that instance and for ever by the clearness and candour of his proceedings.
I say that this can be applied to the method adopted by the late Government last year, in what they considered the necessities of the time. I hope they will now be found not to be real necessities, and if the Treasurer, in his Budget statement, is able to show that we were mistaken on that point, no one will welcome the statement more than I will. I say that we did honestly face what seemed to us to be the pressing necessities of the moment, and proposed a method of borrowing which was the least objectionable open to us. It, at all events, was not a loan under the guise of currency, but a loan in reality. I say it was the least objectionable method open to us, because I have in mind that the proposed naval loan was to be repaid in a comparatively short time, and, further, except in so far as the revenue was deficient, the power of the Government under the Naval Loan Act was not to be availed of. The Leader of the Opposition, I am sure, will permit me to say that that was one of the understandings in his Cabinet. Might I be allowed also to point out that it seems to be one of the truisms in regard to the currency that the form and volume depend upon commercial needs, and that the more we lose sight of that under State regulation, the greater will be the tendency, as past experience shows, to the reality of disaster.
– What principle does the honorable gentleman say governs commercial needs? The term is a very wide one.
– I shall endeavour to point that out. I fore-ordained for myself a sequence for the few impressions which I wish to convey to the House, and, as far as possible, I will endeavour to pursue the course I mapped out for myself. Might I” quote on . the point I have mentioned, the evidence taken before the South Australian Commission on a State Bank, in 1899, and from an authority who was a banker in his time, but at the time he gave evidence before the Commission, was a member of a large stock and agency firm? I may tell honorable members that he was a man of liberal opinions which he pushed to the length of very great personal sacrifice, as far as any man I” haye met with in the arena of Parliament. I refer to Mr. William Liston, a South Australian banker, a very keen student of political economy, and - perhaps this may ingratiate him with some of my honorable friends opposite, as I confess it did with me - a keen advocate of the principles - so far as they are capable of just application - of land nationalization.
– A very good man.
– I did . not wish to prejudice opinion upon the point, but to render palatable to honorable members opposite a short quotation from’ his evidence, which was against any interference with the currency in the shape of a State bank. In answer to question 3430, in the Minutes of Evidence of the Commission, I find he says on the question of currency -
It is the public, not the bank’s, that unconsciously regulate the circulation. A paper currency is a spontaneous outgrowth of modern commercial life, natural and safe so long as it is based upon the certainty or very high probability that its component parts can when required be converted into gold to an amount equal to the amount represented or into commodities which gold to an equal amount would procure.
The latter alternative is very often overlooked. Let me pass on now to another authority, of far greater reputation, but no greater political honesty. I have personal reason to know that in this matter Herbert Spencer, the authority to whom I now refer, modified some of his theories affecting monopolies which are propounded in Social Statics. I believe that he became to some extent rather a Conservative, as honorable members opposite will probably know, if they have read the controversy between him and Henry George. I said I had a personal reason to know of the modification of his views, because I have seen a letter which he sent to Mr. Liston, and in which he admitted that, however true in the abstract his theories propounded in Social Statics might be, he felt they were inapplicable to the condition of society at the present moment. What be has to say on the subject of the currency is against any interference by the State. He says -
The balance of a mixed currency is under all circumstances self-adjusting. Supposing considerations of physical convenience out of the question, the average rate of paper to coin is primarily dependent on the average trustworthiness of the people; and, secondly, on their average prudence.
I shall not pursue the quotation at any greater length. Let me endeavour to prove what I have said by a few statistics which I published , in a little pamphlet on State Banking in 1889. I have said that the form and volume of a note issue are primarily determined by commercial needs, the perfection of banking organization, and, as Herbert Spencer says, by the average trustworthiness of the people. Now what centre, as a centre, in the world has inspired undoubted confidence? Par excellence, it is the city of London; the city of which the Bank of England is the centre commercially and geographically. The proportion of notes used in the city of London is less than 3 per cent. As we go outwards in the metropolis, it increases in proportion to the diminution in banking organizations and facilities. I give the figures for 1881. Later figures would be more favorable to my view, but I was unable to obtain them, though I endeavoured to do so in the Library this morning. The figures given for 1881 were these : In London the proportion of coin was .73 per cent., notes 2.04, cheques and bills of exchange, which are the modern currency, 97.23. If we take Edinburgh we find that coin is 55, or a little over one-half per cent., notes - for reasons which I need not elaborate, and which are dependent upon the form of the banking system in Scotland - 12.67, and cheques and bills of exchange 86.78. In Dublin we find that coin is 1.57, notes 8.53, which is less than in Scotland, and cheques and bills of exchange 89.90. In New York coin is 6.28, notes 1.02, and cheques and bills of exchange 98.70. I am giving here the proportion of the total currency, including paper, that is, bills of exchange and promissory notes; and I shall subsequently show the proportion for America, without the paper. Cheques and bills of exchange seem to be the modern currency. The ideal currency I believe to be cross debits, towards which we are approaching - the conditions of a highly organized country, of course with a small metallic currency, which in all circumstances is necessary. I am now dealing merely with paper. Let us see how, as banking facilities diminish, the proportion of notes and coin to the total volume increase. If we take the whole metropolitan area of London, we find that coin is 25.22 per cent., notes 11.02, and cheques and bills of exchange 63.76. Let me now take the figures for Scotland with eight branch banks. The figures are as follow : Coin 2.9, notes 39-15, and cheques and bills of exchange 57.95. The United States as a whole show 6.81 of coin, 4.06 of notes, and 96.13 of cheques and bills of exchange. The inference from these figures that the notes and coin are of smaller importance nowadays than they were formerly in the total currency is borne out by the statistics of the Commonwealth. I think it is generally true here that the greater the banking facilities are the. less is the proportion of gold in the currency, and that the greater the number of banks the less is the volume of the note issue. In other words, cheques beat the notes where banking organization is high and provisions for enjoying banking facilities are widespread through branches. Let us see how that seems to be proved. From the Statistical Register I find that in June, 1909, New South Wales had a bank for every 3,075 persons; and Victoria a bank for every 2,110 per* sons. So that in Victoria the provision for greater banking facilities has led to a note volume of about one-half of that of New South Wales, the figures being £857,827 for Victoria, and 659,826 for New South Wales, under conditions of State regulation which I think are practically similar. Before making a comparison with the liberal banking systems of the Continent, I desire to say a few words about the United States. In 1874 Congress passed the National Banking Act to get rid of alleged evils in the currency, which we need not more than mention.
An Honorable Member. - Very real evils.
– I do not think that the proportion of evil was much greater before the legislation than it was afterwards; but I do not wish to touch on that subject. Congress provided then for banks being established and a currency being permitted by them, the currency being United States notes as circulated by the banks on the deposit of a reserve of capital. They were to deposit, I think, bonds to the extent of one-fourth of their capital, where the total capital was $150,000 or less, or to the extent of $50,000 where the capital exceeded $150,000. And they were permitted to issue notes, the notes being made by the Government and supplied to the banks to the extent of the deposit of securities, and 5 per cent, of the circulation in gold which was the fluid portion of the reserve, and which has been found adequate in connexion with America. These notes are legal tender, not to the extent provided for in this Bill, but in exchange for Government taxes, except import duties, and for the payment of salaries. The States may by Act of Congress, tax the United States National Banks’ notes. I do not think it is by any means clear - in fact, I am rather of the opposite opinion - that we cannot tax the State note issues here. We have an express power in respect of currency and legal tender, and that may show that the currency is not necessarily an instrument of the States within the meaning of some of the decisions given on the point. I only mention that because it may be that the 10 per cent, tax which was the means of driving out certain uncovered issues in America, might be the means to be adopted here for the purpose of suppressing all issues.
– Have we not power to do that?
– I do not think it is by any means clear that we have not. In America we find the same thing - an increase of cheques in the currency as a proportion and a diminution of notes, notwithstanding the efforts of Congress to force the note issue of the banks directly upon the people as their chief means of currency. I desire to quote a few figures given by the Comptroller of Currency in 1888, and also to refer to the last report which I was unable to obtain until this morning. He points out that according to all natural laws the circulation of these National Banks should keep pace with augmenting resources and with increasing deposits and expanding business, but that has not been so. He shows that between 1879 and 1888 the voluntary circulation of the banks - that is, the circulation which .is not covered by that compulsory deposit of bonds to which I referred earlier - declined from $233,000,000 to $68,000,000. In that decade there was a decline of 53 per cent, in the total volume, although the banks had increased by 53 per cent. The Comptroller shows that the decline in the volume of the voluntary currency was greater than that in the total currency, being 701 per cent. He mentioned that the constant shrinking of National Bank circulation was largely attributable to the growing scarcity and rising price of United States bonds, but that there was also another influence at work, of which the im portance was npt generally recognised, namely, the displacement of National Bank notes by other forms of money. It is to that I draw attention. Undoubtedly, the variations, which are marked by a tidal decline, are, to some extent, due to the varying price of United States bonds, caused largely by the banking system of America. They found that a good way of using their very large surplus would be the redemption of bonds, and this sent United States bonds generally to a very high price. When the redeemable bonds in the market had been exhausted, some of those in the coffers of the banks were redeemed, the banks being obliged to substitute gold for them, the result of the Government buying being an appreciation of bonds generally. That, to some extent, accounted for a decline in the note issue in the years referred to by the Comptroller ; but he points out that it was also largely due to the greater use of cheques. He mentions, too, that the profit and the flexibility of the National Bank circulation depend on the cost of the bonds deposited as security, and points out that the ratio of National Bank notes - not to the total currency, including bills of exchange and cheques, but to the bank and State currency, independent of negotiable instruments - was greatest in 1873. It was 43.7 per cent, when they begun to regulate, but it decreased to 7.3 per cent, in 1891, largely owing to an increased coinage of gold and silver. In June, 1906, the proportion of National Bank notes to the total currency was 16.3 The Comptroller mentions two principles of currency that are very often overlooked by amateur financiers. He says that there are two general uses for money or currency in modern business ; the first is for bank reserves against deposits or note circulation, and for this use gold or its equivalent only should be employed ; the second is for daily cash transactions ; this is the proper field for the use of bank notes. This Bill is not based upon that use. It attempts to cover the whole currency, and at once to double the volume determined by commercial needs. May I now say something about the currency as regulated by the Peel Act? The Bank Act of 1844 divided the Bank of England into two departments, the issuing department, and the banking department. It was thought at the time that the amount held either in Government securities, or, what was as good, on the word of the Government, amounting to ^14,000,000, determined the value to which the currency might go, with the positive certainty that: there would be no demand for an exchange of notes for gold. Sir Robert Peel thought that gold would never be demanded in exchange for the floating currency below £.14,000,000, and’ on that he based the theory of the issue department, the provision being that £14,000,000 should be handed over by the banking department to* the issue department ; that the whole of the gold reserves should be deposited, and that the issue department should issue notes to the extent of £[14,000,000 - the gold thus transferred - and two-thirds of the lapsed issues of other banks.
– The sum of £14,000,000 was the amount which experience had shown to be the actual minimum.
– Yes ; but that experience was falsified by subsequent events. As in other cases, legislative prevision has not been justified in the sequel. I have not had time to bring my information up to date, but the later figures would tell equally, if not more strongly, in favour of my argument. The information is given every week in the banking results published by the Times. I find that in September, 1903, the banking department held £”22,011,110 in notes, while the circulation, which was analogous to our ,£3,500,000, and not to the Treasurer’s £[7,000,000, was £[28,643,390; in all, £[50,654,500. I quote these figures to show the comparatively small importance oi notes as part of the currency in highly organized communities. The figures given by the Treasurer to-day must be examined in the light of the facts which I am endeavouring to bring out. The volume of the note issue in Russia, in Germany, and in France must be considered in comparison with their banking organizations. Let us take the circulation in England, which may be regarded as that of the Bank of England. I do not refer to Ireland or Scotland, nor to other English issues, because, outside the sixty-five miles radius, there is a comparatively small volume of notes in circulation, though I forget what the figure is. The total circulation in England was £28,000.000, while in France it was £150,000,000, and in Germany £[56,000,000. Under the banking organization on the Continent notes had been fostered and forced by the Government on the people. I do net desire to elaborate this too much, but I pointed out in the pamphlet the fact that the private banking institutions in France, in 1800, When Napoleon interfered, were admirably fulfilling their functions in regard to cur rency. Napoleon tried to force the five or six associated banking institutions to agree to their being converted under his control into a State bank. Out of the Association known as the “ Caisse de Comptes Courants.” the Bank of France was formed. He tried, on being refused accommodation, to rush the competitive Commercial Bank by buying up practically the whole of the notes and forcing them on the bank; but the notes were met, and he finally accomplished his aim at the point of the bayonet by driving out all the directors and clerks. That is the history given by a French statesman in a treatise on the history of the Commercial Bank, which was the leading bank at the time. In 1844 or 1845 the State again intervened and tried to destroy the issue of the private banks, which were competitors of the Bank of France. These private banks had, in many respects, the monopoly of a particular class of business; and it was sought to accomplish the end in view by declaring that the issue of the private bank, which had only a local circulation, was to be inconvertible, while that of the Bank of France was not. Then came the operation of the principle which has never been defeated in working, namely, that the baser coin expels the better. The inconvertible and local issue had no chance against the convertible notes. However, I do not desire to give any more of the history of State control in France, merely pointing to the fact that, as every one knows, banking organization there is not so perfect as in England. In France the law, in regard to cheques, was declared only in 1865 and in 1874, in Belgium in 1873, ‘m Austria in 1906, and in progressive Germany in 1907. Cheques were not much used in those countries, the chief medium of exchange, so far as paper is concerned, being notes ; and we cannot, even by legislation, suddenly force a people used to one kind of currency to adopt another. On this point let me quote from the Journal of Comparative Legislation, vol. 9, for 1908, from an article on the cheque system of the Continent by Ernest J. Schuster, LL.D., who says -
The Act will encourage use of cheques, but it cannot be expected that the progress in this direction will be very rapid. The habits of the residents of a country as to keeping banking accounts and as to giving receipts in exchange for substitutes for money are not changed at the bidding of a Legislature.
So far, then, as regards figures from the Continent to prove my contention. The clearing house system does not, I believe, exist in France, or, at any rate, it did not a few years ago, though, of course, it may have been adopted recently. The absence of such a system, however, makes a difference in the volumes of cheques, and also gold, in settling balances. One of the best authorities on the Bank of England says that the employment of cheques since 1891 has increased more and more in England in proportion to the total currency. Fifteen or twenty years ago we had another form of currency craze, in which it was pointed out that we had only to dabble in the currency in order to become suddenly rich. We all remember the bi-metallic craze ; and on the Continent the Latin union, covering five or six States, has its bi-metallism still. It was thought in the Colonies, before Federation, that all we had to do was to increase the volume of the metallic currency in order to become rich, even if we lay in bed - that a man would have an addition to his prosperity by. the necromancy of the State in the issue of silver on a determined ratio with gold. What was overlooked was that the currency is only to a small extent affected by gold. As McLeod points out, 99 per cent, of prices is dependent on cheques, bills of exchange, and paper currency; and even McLeod is not altogether correct on the point, because true prices are determined, not by metallic currency, or even by the currencywe are discussing today, but by the average relation of the prices of one commodity to the prices of another commodity, as may be seen from the Economist any week, in which an average of the ruling prices is given for the guidance of merchants throughout the Empire and the commercial world. What determines prices is the relation of one class of staple commodities to another class of staple commodities on the Continent, and in various parts of the world. One of the three points I am endeavouring to establish is that the change now proposed is not required for currency purposes, and that the less we interfere by State legislation with the currency the better it will be in the long run. If we take the history of the Bank of England, either before 1844 or after that year, we find that every great crisis was either directly caused by Government interference or was the result of the Act regulating currency, and that equilibrium was restored by the suspension of the operation of that Act, or by stopping direct Government interference. Let me mention, for instance, the crisis of 1797. Under the Charter of 1694 it was provided that the Government should not borrow from the Bank of England except by the express permission of Parliament. In 1793 that principle was violated, and a permissive Act was passed by Pitt. The Bank was then forced to give a greater amount to the Government than convenience justified, and the gold was sent to the Continent for belligerent purposes. The coffers of the Bank were depleted, and to render the currency what statesmen thought secure notes were declared by Act to be inconvertible. In 1794 or 1795 an Act was passed declaring that the Bank of England was not to pay cash in exchange for notes except to the Army and Navy - notes were not made legal tender, but were declared to be inconvertible.
– I think that was in 1797.
– It was 1797 or 1793.
– Was not that for twenty-two years?
– The honorable member may be right, but the actual cash payments stopped in 1797. If my memory is right the Act was passed in 1793, but became operative in 1797.
– Perhaps the honorable member is right.
– As soon, however, as the Government recognised the willingness of the Bank to meet its issue, they relaxed the provision in regard to inconvertibility, and public confidence was restored. Let us take another instance after 1844; and here I may mention that, in 1833, bank notes were made legal tender. There was a crisis in 1846, and it was the first one that falsified the prediction of Sir Robert Peel that notes would never be sent in for conversion to a greater extent than the £14,000,000 - the amount to be covered by gold. As a matter of fact, in September, 1846, the total bullion in the Bank was £16,366,000, and in 1847,£9,867,000, while the total issue was about the same on both occasions. Instead, therefore, of a note being cancelled for every £5 in gold that left the Bank, as was anticipated, and thus the declared proportions of the reserve being preserved, the actual cancellation was only £200,000 of notes, while there was a shrinkage in the gold reserve of over , £7,000,000 sterling. The same thing happened in 1857 and 1866, two of the other great banking crises-
– What became of that gold?
– It was either in the banking department or paid to the depositors. The great cause of the trouble was that the depositors and the banking department made a rush on the Bank, the Bank sent in its notes to the issue department for conversion, and gradually reduced the reserve in the coffers of the issue department. The precautions of the framers of the Act were thus defeated within a few years after the Act came into force, and it was only when Sir Robert Peel,. in 1847, suspended the operation of his own Act that public confidence was restored. Why? Because the note issue was again made nominally unrestricted. It was made to the extent that the country had confidence in the general solvency of the Bank. That had been the position from 1711 to 1844 - an unrestricted note issue based upon the estimate of the power to convert that issue which the public held as regards the Bank. All that was required was a declaration that the currency would be restored to whatever commercial needs declared it to be necessary that its volume should stand at, and the moment the public were assured of that by the suspension of the Bank Charter Act, although the currency only increased to the extent of about half-a-million, the crisis was soon put an end to. I might refer to a similar operation in Russia. If honorable members will turn to the Russian Consular reports upon banking in that country, they will find that the Imperial Bank, which has been the most State managed in Europe, has been exploited time after time by the Government, and that its issue, which is regulated, is not as sound as the comparatively unregulated issue of the Bank of Finland, a country which is now unfortunately passing from State independence under Russian control. The English Ambassador, in a report to the Imperial Government, circulated here in 1892, says, as showing the effect of Government interference -
The Government helps itself to whatever it wants from the Bank, which is consequently obliged to issue more inconvertible notes in defiance of its charter. The Treasury may be said to have brought the Bank to bankruptcy.
A few words more as regards the United States. In the report for 1906- 7 the Comptroller of Currency points out that, notwithstanding all their State regulation and State interference, the currency is anything but perfect or elastic. In 1902, he issued a scheme for improving the currency of the United States, which has been embodied, I think, in every subsequent report issued by him and pressed upon the Government. I cannot, for the moment, lay my hand on the reference, but the point he dwells upon is the absence of flexibility. He makes a plea for greater elasticity, declaring that the currency is not elastic, and says that certain banks ought to be permitted to issue to a certain extent, without a cover of either bonds or gold. In fact, he is impreseed by the old theory upon which the Bank of England was worked, the theory propounded by writer after writer, and referred to incidentally by the Prime Minister to-day, when he mentioned that the cheques would exhaust the reserve of gold before the notes came in for payment, and that the real security - whether in the case of deposits or notes - and, as he points out, they are not different in kind, but stand upon the same basis as regards currency - is the general assets of the bank. I do not think there is a doubt about that. You may declare, as we have done, that your notes are a first charge upon the issue of the bank. That secures the public, and gets over their anxiety as to conversion, but there has never been a case in Australia in which the notes have not ultimately been met. They have been at a discount of about 2s. 6d. for a few weeks in Queensland, because some misguided members of the public thought they would not ultimately be paid. You cannot get over the anxiety of some people. They thought the moment the Queensland Bank suspended payment - which I think it did for a .time - that the notes would never be redeemed, but they need not have been anxious.
– In New South Wales, at one time, pound notes sold at 13s. 6d.
– Was there ever a bigger smash than that of the City of Glasgow Bank? Yet the other banks said they were prepared to take up the notes of that bank, and so confident were they in the ultimate capacity of the bank to meet the note issue, that they were prepared to advance at once 50. per cent, of the other current obligations. Those notes, I think, were all met eventually.
– The holders oflian and European bank notes here never got a shilling. There was also the case of the Provincial and Suburban Bank.
– We need not waste time upon that point. I speak subject to correction, but I stick to my impression that there has not been any case in Australia in which the notes have not been ultimately met, although they have been sold at a discount for a time. At any rate, whether that is. correct or not, now that the notes are the first charge upon the issue of the bank, there need be no cause for anxiety on the part of the public, so that you need not burn down the house in order to roast a pig - you need not defeat the working of good existing private institutions by unnecessary Government regulation. In the report, to which I have referred, the Comptroller of Currency suggests that the practice in America should be departed from by allowing greater elasticity through less cover for the notes. He. points out that the 5 per cent, of gold is far beyond the necessities of the amount that ought to be held in reserve for purposes of conversion.
– What is the reserve percentage ?
– Every bank is obliged to deposit bonds, and can issue up to, I think, 80 per cent, of the bonds deposited. Every bank must also have a gold reserve equal to 5 per cent, of its circulation. That is the position in the United States. It is called a guarantee reserve, and the ComptrollerGeneral mentions comparisons extending over 100 years.
– It is based on Government debentures.
– It is, and that is the most foolish way of assuring the public where the State issues. Whoever heard of a Government, so to speak, putting its hand into its pocket, and, pulling out a security, saying, “I am your security in one respect, and your debtor in another. I will assure you as a debtor against all obligations by simply executing another bond.”
– It is, in effect, securing a promissory note by giving a bill of exchange.
– Yes. That is what is done, under different conditions, in the United States, and in many places on the Continent, where there is a reserve of securities instead of notes, the reason being that the State does not do it. If the State appointed a board of trustees, then it would hand over to it securities for immediate conversion. We should not expect to be able to convert these securities in England on the occasion of a sudden crisis in Australia. In a few hours the gold reserves might be exhausted by, a run of cheques, and we would have to rely on a conversion of securities in England at a loss, to meet the clamourous demands of people here. The reserve principle here of the State issuing its securities against its own obligations is one to which honorable members will find nothing analogous in the systems of the rest of the world. As McLeod points out, it is based upon a misconception of what a reserve should be.. Unless we vest the management in independent trustees, with power of immediate conversion, the principle is inapplicable.; We must have a much larger proportion of gold than is necessary in the case of private institutions, or the national banks of America, which do other business, and must hold gold for general purposes. We must trust, beyond that, not upon our paper, but upon our general solvency, and the fact that the Commonwealth has powers of taxation, which can ultimately meet every demand. That is a security against all classes of demands ; the other is merely a bogus pretence of security. 1 do not wish to overlabour the points, but I desire now to refer to the question of circulation in Australia. I have endeavoured to show that this proposal is not required for currency purposes, and I think 1 shall be able to prove that it is not required for revenue. In order to support that contention, I shall give the House a tew comparative figures. The average circulation of the five States, exclusive of Queensland, for the twelve months ended March, 1910, was £3,569,709. Queensland’s circulation during the same period was ;£755,635» whilst £799,085 was held by the banks. .£755,635 was the actual circulation, because we cannot call what was held by the banks circulation any more than we could say that what the Bank of England has in its banking department forms part of the general circulation. The circulation in Queensland was, therefore, £755,635, which, added to the circulation of the other States, gives us a total of £4,325,344. If this Bill be carried, the five States will lose their present revenue, amounting to about £70,000 a year, from the bank note tax, so that, from the point of view of the people, this will not be a very fine financial operation. The people gain or lose in the long run, no matter what organ t of Government may enter the debit or . credit in the books. If we add to this loss of £70,000 which the five States will suffer the profit on the Queensland note issue, which, according to the annual report of the Commissioner of Audit amounted to £25,000, we have a total of £95,000, and that amount must be set-off against any alleged profit to be made under this Bill. The Commonwealth issue, if it be for currency purposes, will be ,£4,325,344. That will be the issue as currency ; but under this Bill that amount will be practically doubled, because it is proposed to issue what is really a loan of £3,500,000. That will be, not currency, but a loan, if the Government can get it out. We have also to deduct the one- fourth which is to be held in reserve, and we need that big reserve, because the Commonwealth will not be conducting the issue as a bank. A bank holds its reserves against all current obligations, and only to a very small extent as against its note issue. As a matter of fact, the gold in the coffers of either branch of the Bank of England is always, I think I may say, in excess of the issue; although there might come a period when, as in 1847 - when the gold reserve went down temporarily - it might not be. Taking the figures week after week, at all events, we find that the gold in the coffers of the bank is generally in excess of its note issue. Let us deduct £”1,081,336 in respect of the one-fourth reserve, and we have an issue of £3,244,008, upon which there will be a ‘ profit. The maximum profit must be the deposit rate. Even when we obtain money for nothing we canriot make upon it a bigger profit than the rate at which money is . obtainable in the market. If the banks can buy money at 3J per cent, on deposit, the maximum profit they can make is 3^ per cent. I do not think there can be any doubt as to that, although I have heard some people say that the true rate is the advance rate. That, however, is sheer nonsense. If a bank can buy at 3
– That depends a good deal upon the use to which the money is devoted.
– No. I am simply dealing with the distribution of money for the purpose of conversion - in other words, with the distribution of money to brandies or agencies of the State to meet demands sent in by holders of notes. If we deduct from the profits 1 per cent, in respect of the cost of issue and 2 per cent, in respect of the present tax, we have a total of 3 per cent., so that we shall thus secure a maximum profit of per cent. There are, however, other allowances which go to show that at times there is practically no profit, and that the note issue will be a great inconvenience to the banks. The banks will have to keep records of notes, which will cost a good deal. They will have to keep records of notes from time to time, as agents for the Government, and we shall be actually taxing them by forcing them to keep as reserves notes in respect of which they will have to give gold in exchange. Let us take the total volume. Say that there is a profit of s per cent, to the State. On the volume, after deducting die amount reserved, which I put as £[3,250,000. that will show a profit of £81,250, as against a loss to the States of £95,000. Because honorable members must not suppose that Queensland will be able to maintain its profit of £[25,000 in face of the competition of the Commonwealth. I think that it is as certain as daylight that Queensland will lose.
– Is the honorable member assuming that the hanks will cash these notes in the different States? The public will have to pay.
– The point which the honorable member raises does not touch the general principle of the measure. I prefer to eschew those points which are not of very great cogency. It is the general convenience which must be borne in mind. As regards distribution, the banks distribute their notes through their branches. There are twenty-one banks in Australia, and they have 1,727 branches. There are three banks having branches in every State. These three have 476 branches. Here wc have agencies provided by the hanks throughout the length and breadth of Australia for the conversion at once of the notes issued by the banks. That convenience is to disappear in favour of a system with notes convertible only at the seat of Government, which at present is Melbourne.
– The notes of the banks are not convertible anywhere now.
– The notes of a bank are convertible wherever the bank has branches.
– They are not, pardon me.
– I asked a question on the subject a few days ago.
Mi. Bamford. - A bank might convert a note for the honorable member, but not for every one.
– I know, as a matter of fact, that over £100 in National Bank notes was taken in Melbourne and cashed at par in Adelaide the week before last. Let us see what is done by those countries that have tampered with, the currency. Take Germany. The Reischsbank makes provision for payment at various branches throughout Germany. In France the same is true as regards the Bank of France. The bank has 377 branches throughout Departments to meet its notes, which are legal tender, and redeemable in specie.
– That is only “ a yarn.”
– It is not. I have the facts on record here, in evidence taken in 1889, in Melbourne, from representatives of the French Government, who were here in connexion with the Exhibition. Twothirds of the members of that Commission were in favour of a State bank. Look at India. India offers the only instance known to me of the total regulation of the currency by the State. It was found that, owing to the ignorance of the natives of the principles of banking, it was impossible to get bank notes in circulation outside the three Presidency cities. The rupee was too cumbersome for the remittance of money throughout India. A Commission which inquired into the subject recommended the establishment of a new system as being absolutely obligatory, in consequence of the imperfectly developed business civilization of India. I will not go into details, although I have them before me; but I may state that there is a note issue in India under which provision is made for notes being cashed at every Government Treasury throughout India. There were, in 1899, 250 branches at which these notes are at once convertible into gold or silver.
– Was not silver a standard of currency at that time?
– Silver had a currency until recently. There has, however, as the result of the report of a Royal Commis sion, been established, I think, a currency on a gold basis. The point is that the public would not take the notes of the banks of Bombay, Madras and Calcutta. They would not take even Government notes for a number of years ; and it was only when they found that these notes were exchangeable throughout the length and breadth of British India that the people were assured of their convertibility, and adopted them as one of the media of exchange.
– India has a peculiar population.
– I admit that. I have’ mentioned the imperfect civilization of India with reference to commercial affairs. We do not compare our commercial civilization with that of India, however much we may respect the people of that country for their culture, their theological learning, their social arrangements, and their caste system, which in some respects we might have made an exemplar for ourselves. I am only dealing with one aspect of Indian affairs, and hope that I am not laying too great an emphasis upon it. Furthermore, I would urge that this change does not mean new revenue, because there is a corresponding loss. It does mean, however, the loss of a great convenience to the banks rather than of the profit upon their issue, the probable measure of which is about one-half per cent. It does interfere with the adjustment of the volume to the needs of the public. It commits the Government to new expense in establishing a new Department. It tends to displace gold, which, as against notes, has become a more liberally used currency here as in America. Within the last seven or eight years gold has been used more and more by the public for the payment of small amounts. The real profit will only commence to the extent to which this currency is loan currency rather than true currency; that is, the extent to which- the Treasurer can force the public to take the difference between £[3,500,000, the real currency circulation, and the £7,000,000 provided for by the Bill. That is to say, it will undoubtedly be a loan in the “ guise of an addition to the currency. As a loan policy it is a wrong one. It does not fulfil the primary proposition given in the words of Edmund Burke of being dear. straight financing, and above-board. I do not wish to refer unnecessarily to Queensland, but I think that, generally, it is correct to say that the Queensland Government were forced, or thought they were forced, to adopt this State currency, owing to the anxiety created by the suspension of one of the Queensland banks.
– They have kept it going.
– No doubt. The Government make £25,000 a year out of it. In the circumstances, they would not be likely soon to retrace steps previously taken when, to do so, would involve a considerable revolution.
– How do they make £25.000 a year out of the issue?
– The Auditor-General’s report shows that £25,000 a year is made out of the system in Queensland ; but I am not sure, how the profit is derived.
– It is interest upon investment.
– I believe that it represents interest on investment, as well as profit on the issue, but of that I am not sure. In any case, it does not matter, because I have given the House the true circulation of the five States, and based on that, estimates for the six. Finally, I wish to say one or two words as regards the third point, which is that this measure is not required for the purpose of security. We had a big financial crisis in 1893. Between 5th April and 17th May of that year thirteen banks suspended payment. Within a couple of months most of them had been reconstructed on very much sounder lines, with a greater paid-up capital, and a greater proportion of fluid assets to total liabilities. The banks have been through their purgation, and it has done them good. I say that the banking system of Australia at present compares favorably with that of any other part of the British Empire. That cannot be doubted. Does the State get its due ? If it does not, tax, but do not interfere with- what is shown to be managed well.
– The honorable gentleman’s statement as to the position of the banks is only comparative, after all.
– I intend to give the figures. I state the position first, and then bring evidence in support of it. I could bring more evidence tnan I have obtained, but I did not wish to clog the subject. I have said that most of the banks that suspended payment in 1893 were reconstructed shortly afterwards on a better basis. The figures show a greater paid-up capital and a greater proportion of fluid assets. This is to allay anxiety, but it is not necessary to solvency. The solvency depends upon the total assets of the banks, as the note issue is a first charge upon them. What greater security could we have? The currency is secured by making the issue a first charge upon the assets of the banks. The liquid assets in 1901 were 48.41 per cent, ofthe note issue, which was then £3,399,462. In1909 the liquid assets of the banks represented 52.26 per cent, on an issue of £3,510,629. In 1909 the coin and bullion in the coffers of the banks amounted to £26,297,843, or a greater proportion than is shown even in England. I may say, further, that even if w.e leave out of consideration every other asset but the landed properties of the banks, the note issue has still to be a first charge upon them, and they are valued, ‘according to Mr. Knibbs’ book, at , £4,852,471, snowing an excess over the total issue when unregulated by Government, but responsive to the demands of the commercial public. The Government securities also are estimated at £3,085,000. Where, then, is the necessity, on the ground of security, for the proposed change? Having spoken at such’ length, I shall leave anything further I may have to say on the subject until we come to deal, in the way of helpful criticism, with the clauses of the Bill in Committee. I welcome the statement of the Treasurer that he will modify clause 11.
– I have proposed a modification.
– I hope the honorable gentleman’s statement indicates a little more sweet reasonableness as regards the general provisions of the Bill in the light of subsequent discussion. On the three grounds to which I have referred, the proposed change in the currency is not, in my opinion, justified. It is not required as a loan, or to give stability to the banks, and it will not provide an increase of revenue. If it is to be based upon true currency principles, I think this Bill is unnecessary, and, on the whole, if it is pushed to a second reading, I feel that I shall have to record my vote against it.
Debate (on motion by Mr. Thomas Brown) adjourned.
– Before passing to the next Order of the Day, I wish to ask leave to insert the tables I have in my hand in their proper place in my speech. I think they will be found very useful tables.
– Is it the pleasure of the House that leave be granted for the insertion of the table in Hansard?
Honorable Members. - Hear, hear.
– Leave is granted. Might I add that I hope this will not be regarded as a precedent. If it is to be so regarded, we shall have no finality in this matter; but one honorable member after another will ask that documents should be included, and if they are not read, it will be impossible for us to say what they contain. They will load up Hansard, which, after all, is supposed to be a true record only of what is said in this Chamber. If we .permit this kind of thing Hansard will cease to be a true record of our debates.
Naval Defence Expenditure - Proposed Visit of British Association for the Advancement of Science - New Hebrides - Petherick Collection - Tariff : GREYBOARD : Super-Calendered Paper - Commonwealth Buildings in Melbourne: Location of Parliament - Queen’s Hall: Accommodation for Visitors - Advertising Australia - Visit of Scottish Farmers - Papua - Federal Capital Site - Telephone Construction : Cronulla to Kogarah.
In Committee of Supply:
– I move -
That a sura not exceeding 280,876 be granted to His Majesty for or towards defraying the services of the year ending 30th June, 1911
One thing which distinguishes this Supply Bill from other Bills of the same character is the large amount of the proposed Treasurer’s Advance for a period of two months, to meet expenditure which is not political, and which has arisen through circumstances for which the Government are not quite responsible.
– What is it for?
– It covers a part payment on account of the naval unit, and an excessive amount on account of old-age pensions.
– It is all expenditure of which the House has approved.
– We want, while we are able, to meet an obligation which will fall due. I asked the Secretary to the Treasury to furnish the Leader of the Opposition with a memorandum showing exactly what the Bill is wanted for.
– Could not an item for old-age pensions go into the body of the Bill?
– Not into a Supply Bill. The money is already appropriated. That raises another question which can be discussed later. Our object is to avoid a double vote. This large vote is required to meet an obligation on account of the naval unit, and also to provide old-age pensions for two months.
– Is there not statutory provision for the payment of old-age pensions ?
– Then the honorable gentleman does not want a vote for that purpose.
– I hope that honorable members will allow me to bring in the Bill.
– It is a Bill for two months’ Supply ?
– Yes; by arrangement with the honorable gentleman I altered the period from three months to two, carrying out exactly what we had agreed to. The expenditure which it authorizes is calculated on the basis of last year’s appropriation so that no political advantage will be derived by the Government from its passage. It involves no new expenditure.
– I cannot follow the -Treasurer in his observations. I do not see what the question of old-age pensions has to do with this Supply Bill, because, as we all know, their payment is a. statutory obligation. They are payable without an annual vote, and therefore no payment will be made on that account out of the Treasurer’s Advance. They will be paid on statutory authority out of the Consolidated Revenue Fund. Their payment stands on exactly the same footing as the payment of the Governor-General’s salary, or any other obligation of a statutory kind, lt seems to me that if there is an illegal or wrong way of doing a thing, the Treasurer is sure to choose that way. It is a most extraordinary position which he wishes to put us into. On a former occasion, he asked us to approve of a vote of ,£250,000 for the Treasurer’s Advance, that is, £50,000 more than had ever been granted to a previous Treasurer for a whole year; and now, after the expiration of six weeks, he asks us to vote an additional £[350,000 for the Treasurer’s Advance. He wants an advance of £[600,000, and he has told us that he intends out of this advance to meet liabilities on account of the naval unit. Does he think that this Bill comes within the terms of the Constitution?
– I think so.
– Is this “a proposed law which appropriates revenue or moneys for the ordinary annual services of the Government” ? Is a payment on account of a naval unit a payment in connexion with the “ ordinary annual services of the Government “ ? I submit that it is not. In that case I contend that this proposal to pay, under a Supply Bill for “the ordinary annual services of the Government,” moneys on account of a naval unit which, so far as I know, has not received the approval of the House, is contrary to section 54 of the Constitution.
– Why does the honorable gentleman think it is illegal?
– It is contrary to section 54, which says that a “ proposed law which appropriates revenue or moneys for the ordinary annual services of the Government, “ shall deal only with such appropriations. How is it that every year we have to pass a separate Appropriation Bill for Public Works and Buildings? How is it that we do not include the appropriations for those purposes in the Bill which provides “ for the ordinary annual services of the Government “ ? Because section 54 of the Constitution forbids our doing so.
– I think that section 54 only limits the Bill to appropriations.
– Then the honorable gentleman thinks that he can include in” the annual Appropriation Bill “ for the ordinary annual services of the Government “ appropriations for Works and Buildings?
– The honorable gentleman should know that he cannot.
– For the annual services.
– An appropriation for the construction of public works and the erection of buildings is not an appropriation for an ordinary annual service, though an appropriation for the maintenance and repairs to buildings, and so on, is so considered. No one objects to Supply Bills, because it is necessary to provide funds for administering the affairs of the country. I look upon such measures as formal, because the appropriation which they cover is based upon the expenditure for the previous year. I do not intend to prevent the Government from getting temporary Supply as quickly as possible. But we all know that the Treasurer’s Advance is intended to meet unforeseen extraordinary expenditure, that is, expenditure which cannot be easily defined. I submit that it will be necessary to bring down a separate measure to authorize any expenditure on account of the building of an ironclad.
– Shall we not be able to cover that in the annual Appropriation Bill?
– No; because it is not an appropriation for an ordinary annual service of the Government.
– We can make it a section of the Appropriation Bill if necessary.
– It will have to be a separate Bill, or be included in the Appropriation Bill for Public Works and Buildings ; otherwise why has a separate Bill always to be brought down for authorizing expenditure on Works and Buildings?
– To get the expenditure authorized more expeditiously.
– I submit that that is not the reason. The reason is that it is desired to comply with section 54 of the Constitution. It seems extraordinary that we should be asked to vote money for the Treasurer’s Advance in order to meet expenditure on account of an ironclad, when we have never been asked to approve of the expenditure of money for the purpose, the authority given by the last Parliament by the “ Loan Bill of 1909 “ having been repealed. I think that the whole procedure in this matter is not within the meaning of the Constitution, and certainly not in accordance with the practice we have followed hitherto.
Sitting suspended from 6.30 to 7-45 P-m-
– - I shall not say anything on the interesting constitutional point raised by ‘ the right honorable member for Swan, because I have not had an opportunity to consider it, nor do I raise any objection to the passing of the Bill. But it will be within the recollection of honorable members that we were asked not to deal with the naval policy of the Government during the discussion of the Naval Loan Repeal Bill, being promised a full opportunity to do so when its proposals are outlined in the financial statement for the year. Now, however, by this Supply Bill, we are being asked to sanction the payment of between ,£300,000 and £400,000 in connexion with the construction of the naval unit. I raise no objection to the provision of the money, which I feel sure is necessary ; but I wish to make it clear that no honorable member should be taken as committing himself, in voting for the Bill, to any proposal of the Government regarding the method of financing this undertaking. The payments to which I refer are not like those for the ordinary services of the year. They are undoubtedly new expenditure, and I, therefore, wish to prevent myself and others from being regarded as having expressed, by voting for the Bill, an opinion on any proposal which may hereafter be put before us relating to the financing of the naval unit. I rose to elicit from, the Prime Minister the statement that by voting for the Bill we shall not be held to do that.
– I appreciate the terms and temper of the criticism of the Opposition, and assure its members that they will not be taken as having committed themselves in any way to our naval policy by voting for the Bill, nor will they be regarded as having thereby exonerated us from blame for any act of which they may disapprove. The provision to which exception is made is intended to safeguard the best interests of the Commonwealth from a monetary point of view, the Treasury officials seeing no other way of doing what is necessary. The payments in regard to the construction of the naval unit authorized by the last Supply Bill amounted to £[140,000. They covered a period of two months, the amount being taken from the Treasurer’s Advance.
– My argument is that that was wrongly done.
– I think the right honorable member is in error in saying that what we are doing is unconstitutional. We really need £[350,000 to send to London to meet payments due at the end of the year.
– I do not question that.
– Some of these payments will fall due before the Appropriation Act can become law?
– Payments fall due every month. Out of £600,000 voted as an advance to the Treasurer, £490,000 will be spent in payments on account of the naval unit, leaving only £110,000 for .the ordinary purposes for which the advance is intended, a sum much less than the right honorable member for Swan ever asked for. As to the point which he has raised, the Treasury officials are of opinion that every interest is safeguarded, and the law advisers of the Crown have not interfered. We hope to make adjustments in connexion with the Appropriation Bill which will prevent the voting of the money twice over, and avoid all constitutional difficulties. Perhaps honorable members will reserve further criticism until the Supply Bill hasbeen introduced.
.- I should not like to give a definite opinionon the point raised by the right honorablemember for Swan, but I desire the Treasurer to draw the attention of his advisers’ to it. What seem to be involved are not so much the rights of this House as those of the Senate. The other Chamber may object that in this measure are provisions which will preclude it from exercising the right of amendment in connexion with proposals with which it should be free to deal as it sees fit. On page 669 of Quick and Garran’s Annotated Constitution, it is pointed out that there are three kinds of public expenditure : the constant expense of maintaining the ordinary annual services, the fixed charge of permanent appropriations, and extraordinary charges and appropriations. Payment in regard to the naval unit is not an ordinary annual service, nor’ Lj it a permanent appropriation like a Judge’s salary. According to the right honorable member for Swan it savors of an extraordinary charge in the nature of appropriations of revenue or loan money for the construction of public works and buildings, or for the application of revenue or loan money to public purposes of a special character. The right honorable member says that the construction of a Dreadnought cruiser is a work of a special character, and, therefore, ought not to be provided for iri a Bill introduced to cover ordinary annual public expenditure. The Estimates are always framed in two parts, one providing for the maintenance of the ordinary services of the year, and the other for the construction of public works and buildings, or what is in its nature capital expenditure. These two sets of appropriations are sanctioned by two separate measures. The objection of the right honorable member for Swan is that, if we now vote a sum for the purchase of a cruiser, the Senate will not be able to deal with the Government’s naval policy by amending the proposal, and that the expenditure is not for any of the ordinary services of the year.
– Apart altogether from the strictly legal point of view, I may say that ever since I came into this Parliament there has been granted from “ the Treasurer’s Advance, money which has been undoubtedly used for the public work services pending the passage of the Works and Buildings Appropriation Act, and, therefore, it appears to be rather late in the day to raise the issue. At any rate, what I have stated is a fact j and I am sure that the honorable member does not wish to intervene further.
– - I quite agree with the Treasurer that probably some small amounts have been used in the way” he describes”.
– Very considerable amounts.
– It may be that some small amounts have been taken from the Treasurer’s Advance to meet very urgent cases, but, in nearly all cases, the works have been in hand, and the money voted by Parliament the year before.
– These works are in hand too.
– But the authority to build these ships has been repealed. I speak from memory, and I do not think there have been many instances. I know that it has not been the practice to commence new works out of the Treasurer’s Advance unless these works were very pressing. The Treasurer’s Advance has been used for keeping public works going that have already been approved, until such time as the Estimates were on the table, and a Bill passed granting money for special work. I do not think it is fair of the Treasurer to compare those comparatively small payments with the payments for’ large ships of war, which are to cost- £3,500,000. This is embarking on expenditure^ - the Loan Act 1909 having been repealed - without any authority from Parliament. I will not say that, technically, there is anything unconstitutional in the measure, because, apart from the Treasurer’s statement, we do not know how the £350,000 is to be used.
– Should we stop the payment of the monthly instalments?
– Certainly not. The Treasurer has only to introduce a separate Appropriation Bill for the purpose, and he will be then quite within the law. Just as we have to introduce separate Bills for Customs and Excise, so there must be separate Bills for the ordinary services, and for the public works expenditure. The point has been very well put by the honorable member for Darling Downs ; in fact, had it not been for the interjection of the Treasurer, I need -not have risen. The honorable gentleman knows that “ the Senate may not amend proposed laws appropriating revenue or moneys for the ordinary annual services of the Government,” and though I am not here to fight the battles of the Senate, I may indicate the position in which that Chamber will be placed by the action of the Government. In Quick and Garran we are told that section 54 of the Constitution -
Is intended to prohibit any attempt on the part of the House of Representatives to embody in the annual appropriation Bill provisions irrelevant and foreign thereto - a course which would prejudice the right of the Senate to amend or reject such provisions.
I have no doubt that the proposal to spend this large sum without an Appropriation Act is not within the intent of the Constitution, and certainly ought to be objected to by the Senate. I hope the Treasurer will consult the Attorney-General, and confine this Supply Bill to the ordinary services for the year, submitting a separate Appropriation Bill for any other expenditure. I can assure the Government that they will always find me ready to assist in giving temporary Supply, because I know that such measures have to be taken, and the sooner the better for everybody.
– The point raised is no doubt of considerable importance. Exactly what is covered by the term “ ordinary annual services ‘ ‘ is rather indefinite, and we can only explain it by a reference to the practice of Parliament, and to the circumstances in any particular case. It is very obvious that the term is not fixed and immutable in its meaning. For instance, in the case of the Government of to-day “ ordinary annual services “ covers very much wider ground than it covered in the case of the Government five, six, or ten years ago. It is perfectly clear from Quick and Garran that the term does include, amongst other things, provision for the annual charges imposed by the military and naval defence. The point is to what precise extent it applies. It appears to me that the object and intention of the section of toe Constitution is to prevent the tacking of incongruous matter on to a taxing measure, or to prevent the introduction into a Bill for the ordinary annual appropriation of matter of a debatable kind that may possibly involve questions of policy which ought to be presented to the House in separate form. I am inclined to think that, since the policy of the Government on naval defence is one on which, so far as the purchase of these cruisers and other vessels is concerned, this House has only one opinion, and as it is proposed to pay for the purchase of these vessels in monthly instalments, this purchase cannot be differentiated from that of ammunition, rifles, or anything else. 1 admit that the matter is not without difficulties, and ought to be very seriously considered. In the present instance, however, the difficulty is only technical, and not real ; that is to say, the point raised by the right honorable member for Swan as to this method of proceeding affecting the rights of the Senate can hardly be seriously contended. In the circumstances, therefore, I think the Bill may properly .cover the item to which the right honorable gentleman takes exception.
.- The Attorney-General admits that there is an important question of the interpretation of the Constitution involved in this matter, and I think it is much wider than appears at first blush. I invite the attention of the Prime Minister and AttorneyGeneral to this fact : The great scheme of an Australian Navy was initiated in this House by resolution. That was followed by the Naval Loan Bill, which afterwards became an Act, providing for a loan to pay for the Navy. That was the proper way for Parliament to authorize the whole scheme.
– Parliament has repealed that Act.
– I know, and at this moment there is no legal authority for carrying the scheme into execution.
– This vote gives it.
– This is apparently an indirect, but not a straight-out, method of authorizing the scheme.
– The honorable member means that if it is not constitutional it is not legal ; but if it is constitutional it is quite correct.
-It is a mere matter of constitutional method. Section 54 of the Constitution defines a method of procedure limiting the powers of this House in framing appropriations. It says -
The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.
It could hardly be successfully contended that the inauguration of a great scheme of naval defence, including a battleship to cost nearly £2,000,000, and a number of smaller vessels, can be included in the ordinary annual services of the year.
-It does not seem un- reasonable.
– It would be most unreasonable to contend that the payment for a battleship fleet should be included inthe annual Appropriation Bill. If wecould include provision for a battleship fleet or a naval defence scheme in theannual Appropriation Bill, we should prevent the Senate from amending it, and theSenate would not have a voice in the consideration of the details of the scheme. Any other money Bill, not being the annual Appropriation Bill dealing with theordinary annual services of the Government, can be amended by the Senate. I admit that in the words “ Advance to theTreasurer ,£350,000,” there is nothing toshow that the money is actually intended toprovide for the cruisers. But supposing it appeared in these words: “Towards pro’viding for battleships,” or “ Towards providing for payment for an Australian Naval Defence scheme,” then it would! be shown on the face of the measure that it was not a Bill for the ordinary annual services of the year, and be open to the objection urged. My difficulty in arguing the point is that the words used in the Bill do not show on their face that the money is not for the annual services of the year. . It may be that the money is intended for or may ultimately go towards the annual services of the year. The only intimation we have that it is intended for the extraordinary service of paying for the fleet is the word of the Treasurer that he intends to devote it to that purpose.
– The payments from the Treasurer’s Advance will have to be covered later by an Appropriation Bill.
– Of course they must be, but if it were done in the ordinary Appropriation Bill, and that Bill were sent to the Senate, who said, “ This is not a Bill for the ordinary annual services of the year, and the subject ought to be dealt with in a separate Bill,” where would the Government be then? Their action might lead to a crisis in the Senate. I do not say that we in this House ought in any way to adopt an attitude or observe a rule of construction limiting our rights and privileges, but we are bound by the Constitution.
– The term “ ordinary annual services “ is elastic Who is to define what ordinary annual services are?
– I admit it is one of those problems which can only be fought out and settled between the two Houses. I do not” think an’y legal question could arise, or that any Court in the Commonwealth could possibly intervene to settle it. But, as a matter of commonsense, if we had a conference with the Senate on the subject, could we successfully contend that provision for this extraordinary naval defence scheme comes within the meaning of the term “ ordinary annual services?” We could not, because the service is so extraordinary that last year we considered it necessary to make special provision for it by a Loan Act, which has been repealed.
– The late Government unfortunately did not make provision. They did not find the money.
– If that authority had remained in existence, the Treasurer could have floated Treasury-bills and paid for the fleet out of the money received.
– Why did not the late Government float it? Because they could not.
– Because there was no money due under contracts. It would be more consistent with parliamentary practice under the Constitution for the Government to bring down a separate Bill authorizing the expenditure of money for this purpose. There would be no doubt then about procedure.
– Ought this House to constitute itself the guardian of the rights and privileges of another place?
– I do not say it should ; but the point has been raised, and it should be dealt with, lest it bring us into controversy with the Senate later on. The point, having been raised, ought not to be allowed to pass without discussion. I believe that the right honorable member for Swan is right in his contention that the appropriation ought to be dealt with by a separate Bill in order to avoid the objection that it does not come within the meaning of “ordinary annual services.” The Prime Minister and the Attorney-General might at a later stage, if they include this vote in the Appropriation Bill, precipitate a very unsatisfactory controversy with the Senate.
– Does the honorable member say that we cannot appropriate the money in this way for the next six or seven years, for I suppose it will run to that?
– Surely the money can be appropriated, and the payments made to extend over a number of years, by a special Bill. The only justification for this course is that an emergency has arisen rendering it necessary to make immediate provision, for payment, and to that extent it may be excusable; but the AttorneyGeneral ought to consider the wisdom of getting over the difficulty later on by authorizing the naval defence scheme by a separate measure.
– I was very much amused to hear the Treasurer, for about the twenty-first time since the House met, girding at the Opposition for making no provision for financing the naval defence scheme. It is time the honorable member stopped talking in that way. During the past two days one of his actions has been to do away with the very provision which the late Government made to finance the scheme. He has been very eager to obliterate all trace of the Naval Loan Act, which up to date is the only concrete proposal put before the House to pay for the fleet. What provision has the honorable member made so far for that purpose? He has been in. office for three and a-half months. He says that we ought to have found the money before we left office. If the matter was urgent before we left office, what has he done to settle it during the time he has been in office ? I venture to say that the only pro?posal which he has in his mind for financing the fleet is that which he submitted to-day in the shape of the Australian Notes Bill, but he has not been honest enough to tell the Australian people that that is one of his main reasons for introducing this measure. He tells us now that the fleet is to be financed out of revenue. He will buttress his revenue with money that he is going to take from the banks of Australia. The only difference between our proposal and his is that, whereas we proposed to go to the market and, in a straightforward honest manner to borrow this money and pay interest upon it, the honorable member intends to go to the banks of Australia and to force this gold from them without paying any interest on it.
– The honorable member must not discuss that matter.
– I am discussing Ways and Means, sir, and merely making “an incidental allusion to the Australian Bank Notes Bill as being the only proposal. for finding the money with which to finance the building of the fleet. On the point that has been raised as to the regularity of this method of procedure, it is well known that items of this kind, of a special character, have always been voted in a special manner. I do not suggest that they have been segregated from all other items; but they have always been included in special schedules of Works and Buildings Estimates which, every year, are submitted as separate Estimates. The usual procedure is for the Treasurer to submit his financial statement, and with it the Estimates for the year, at the end of which there is a special schedule making provision for special works and material. Only last year a schedule of that kind was submitted and it was passed on 4th September. Included in that schedule was an item of £111,000 in respect of “ Defence “ under the Department of Home Affairs, and an item of £121,000 in respect of a new special defence provision under the heading of “ Department of Defence.” In other words, under such an abstract a total of £232,000 was provided last year in respect of special defence. Why has not the Treasurer followed the same course this year? So far from doing so he has, for the first time in the history of this Parliament, departed from the ordinary rule. If he said that he wished to post the money to London at once, I should not have a word to say.
– Obviously, we must do. so before we need a further Supply.
– Exactly. But this Supply is to cover a period of two months, and long before the expiration of that period, I hope, the abstract or schedule of special works will have been passed. I can imagine what would be the attitude of the honorable gentleman if he were sitting in the . Ministerial corner, to say nothing of being in Opposition, and a proposal were made by the Government to take a second instalment of Treasurer’s Advance amounting to£350,000 before the financial statement had been submitted to the House. It is about time that the Treasurer delivered his belated financial statement. He told the exTreasurer that eleven or twelve days was quite ample for the preparation of the Budget. He soundly rated the exTreasurer for deferring for fourteen days, what he has not done in thirty-four or thirty- five days, and apparently there is to be no Treasurer’s statement for some time to come. Why is he taking longer than al most any other Treasurer of whom I know has ever taken to prepare and present his Budget? I suppose that we shall get it later on, but” there is no reason for the honorable gentleman’s innovation in treating this special defence provision in this way. I forget, for the moment, what the honorable member’s last vote in respect to Treasurer’s Advance was.
– Here are the figures.
– The Treasurer is taking the unprecedented course of asking the Committee before the presentation of his financial statement for a Treasurer’s Advance, amounting to £600,000. We are asked to grant this sum before we know what the statement of accounts for the year is to be. I suppose that the Treasurer feels that he can treat the Committee as he likes. He has behind him a majority who do not seem to question any of his proposals, and that is why he treats us as he does. The honorable gentleman is creating a precedent. The Labour party have often said that they believe not in following precedents, but in making them.
– Hear, hear.
– Let me remind my honorable friend that this precedent means taking from the control of the House the ordinary financial safeguards which, in a democratic community, are always punctiliously adhered to. For the first time in the history of this Parliament t he Treasurer of the Commonwealth is asking for £600,000 in respect of special defence provision before he has told the House or the country what the financial proposalsof the Government for the year are to be.
– This is the first amount which has been sought in respect of anAustralian Navy.
– No; we have already made some payments on the same account. Does not the honorable member know that £250,000 has already been sent to London to pay for the three smaller vessels, and that since then there has been a first payment on account of the large Dreadnought cruiser. I use the word “Dreadnought” because it accurately describes the kind of vessel for which we are now about to pay.
– To make the word familiar to the honorable member.
– Yes; it is oneof the ironies of the situation that this very vessel which has always been satirized and jeered at by my honorable friends of the
Labour party is now a-building and in process of being paid for.
– As part of an Australian Navy.
– As an Australian Dreadnought. Will that satisfy the honorable member?
– Does the honorable member dread the payment?
– No ; I do not. If the honorable member had been listening, he would have heard me say to the Treasurer that if he wanted this money to send to London at once, I should not have had a word to say. But he can only tell us that he may want the money before the expiration of the term covered by this Bill. That is two months hence. In every reasonable probability - nay, it is a probability amounting to certainty - the whole schedule of works and buildings will be the law of the land before that two months expires. Therefore, the Prime Minister could have obtained this money in the regular way, instead of in the irregular and unprecedented manner in “which he is trying to put this Bill through. I suggest, even now, that rather than make a precedent of this course, the Prime Minister should withdraw the motion, and put the sum’ which he requires in the schedule to a Bill covering expenditure on works and buildings. He could, in that way, get the money just as soon as it is needed, and avoid the introduction of this most irregular method of obtaining so extraordinary an advance before the financial statement is submitted to the House.
– I, for one, have always raised a protest against this practice of carrying-on our financial business by means of temporary Supply Bills. It is a practice that cannot be too strongly condemned, except in cases of emergency, where it is absolutely unavoidable. This method of conducting our finances means that when the Estimates come up for consideration, we find that the great bulk of the money to be voted has already been spent. ‘ We have been sitting since the beginning of July, and there should have been time to prepare a financial statement. We should have had before us the Estimates for the year. We have already had one Supply Bill, covering an amount of £[774,331. Here we have another one, for no less than £[1,280,000. That is a very large sum’. The trouble about these temporary Supply Bills is that we have very little opportunity of knowing where the money goes. A large amount is included in such items as “contingencies” and “miscellaneous.”
– I must remind the honorable member that the Supply Bill is not before the Committee. We are dealing with a motion.
– I have a copy of the Supply Bill in my hand.
– How did the honorable member get it ? The Bill has not been circulated.
– A copy of the Bill was given to the Leader of the Opposition, and I hope that the honorable member will show the courtesy that is usually observed in matters of this kind.
– I hope that I am’ not displaying any lack of courtesy in referring to matters which have been dealt with by previous speakers. If others were allowed to refer to the Bill, the same right should be extended to me.
– Will the honorable member ask the Prime Minister where the failing in courtesy comes in?
– That is what I want to know. I take it that no member of this Chamber has privileges which others are not entitled to enjoy ; and that no member of this House can be deprived of privileges, unless others are equally deprived of them. I really do not know what the Prime Minister means by suggesting that I am guilty of discourtesy. I am not aware of any. I say again that the practice of dealing with Supply Bills in this manner is a bad one, and I also point out that the Treasurer should have made provision for what he requires in respect of this special naval expenditure in a very different way to the loose, and, I believe, illegal one he is now adopting in tacking special works expenditure, not even specifically indicated, on to the ordinary Treasurer’s Advance Account. In this case, there is a sum of £350,000 which could have been provided for otherwise, a portion of which, we are told, is to be expended on naval construction, which this House has as yet not been asked to approve, and of which it officially knows absolutely nothing, and which should have been appropriated by a special Bill. We are now in the month of August, and when this Bill passes, we shall have voted Supply to the extent of over £2,000,000.
– Surely that is enough.
– The Minister chooses to be flippant, but the practice is an extremely loose and dangerous one, and undermines the control of Parliament over public expenditure. It is a long way more than enough. The whole procedure is absolutely wrong. The Prime Minister is assuming a very high-handed attitude when he says that such a resolution ought not to be discussed, but that we should sit here as mere automata while he comes down with a motion, throws it on the table, and says, “ Take it or leave it.” If that is the Prime Minister’s attitude, it is very discourteous to honorable members. We are entitled to discuss motions just as we are entitled to discuss Bills, and when the Prime Minister states that a member of this House is guilty of discourtesy, because he takes advantage of an opportunity, and exercises his rights as a public representative, not bound or gagged by a caucus decision, he is assuming an attitude towards free men which he has no right to take up. I hope, therefore, that the criticism which has been launched will be heeded by the Ministry, and that in future they will bring down their proposals for expenditure in a more regular and business-like manner, so that they will not be open to the criticism which, under present circumstances, is justly levelled at them.
– I should like to have the mattsr made clear by the Prime Minister before this motion is agreed to. The procedure is so extraordinary, and the amount in question so unusually large, that one is justified in putting this aspect of the question. I presume that when we get the Estimates, these special items for defence purposes will figure, as they have done heretofore, in a special schedule of works and buildings, which will be considered immediately after the Budget debate. If that be so, the item to which I have been referring is likely to come up again some weeks after the period covered by this Supply Bill expires. In that case, I presume that the Prime Minister will adhere to the intention which he has made pretty clear to the Committee, and that this money, the expenditure of which in this way will.. I presume, be regularized by special Estimates, will not be used for any other purpose. There is nothing here to show the destination of the £350,000. There is nothing to show the purpose of the expenditure. The Prime Minister, I presume, would not want it except for paying for the cruiser, which is in process of building.
– The money could be used for anything else.
– It could, of course.
– The Prime Minister has given his assurance that it is to be used for the purpose specified.
– But immediately the Budget is submitted, this item will appear in a special schedule of works and buildings. Last year, the schedule was submitted in August, and the Bill embodying it was on the statute-book on the 4th September. All parties agree to put the Works and Buildings Estimates through so that the Government may get permission to spend the money. The Prime Minister really does not want this advance for the purpose indicated, because the Works and Buildings Appropriation Bill will come before us, and be approved of long before the expiration of the two months now being provided for. What I wish to be assured of, therefore, is that this advance to the Treasurer, which is so extraordinary, will not, when the matter has been provided in the ordinary way, by means of Estimates, be used for any other purpose by the Treasurer.
– I have twice previously given the information for which the honorable member is asking. Undoubtedly provision for this expenditure will have to be made in the way the honorable member suggests - that is, in the Works and Buildings Estimates. After all, the Government are the guardians of the public purse.
– The Government and Parliament.
– I mean that under responsible government, as it exists here, the Ministry of the day are responsible. They are bound to take the steps necessary to protect the interests of the Commonwealth. We need this money now, in order to transmit it to London for the payment of instalments for a certain work, or in other words, to meet obligations which were entered into by our predecessors, and for which, with all due respect to them, they did not provide the necessary funds.
– None were needed, as no payments for the work in question had fallen due.
– Does the Treasurer say that this money will be needed before he. can come down with an appropriation?
– The reason I ask the question is that the usual vote for the Treasurer’s Advance is £200,000, and if there were two appropriations in the meantime, it would give the Treasurer’s Advance Account considerably over the sum now asked for.
– Will the Treasurer say what provision the present Government have made to raise the money they are now going to spend?
– I told the Committee when the honorable member was not present that the Treasurer would have at his command, out of this vote, only £110,000. Not less than£490,000 is to be sent elsewhere almost immediately. There will beonly £1 10,000 in the hands of the Treasurer to cover the three months. From this honorable members will see how very economically we are endeavouring to conduct the Treasurer’s Advance Account during that period. I am not able to speak with respect to the legal position, but I think I should have no difficulty in finding evidence of previous cases in which advances were asked for prior to the delivery of the Budget statement or the consideration of the Works and Buildings Estimates.
– Some small amounts for special purposes.
– I wish again to remind honorable members opposite that the unusual vote asked for now is due to one of those legacies which very few people care to have to take up. The obligation to meet certain payments has fallen upon the present Government, and they must take the necessary steps in the best way to protect the interests of the public, and meet these payments month by month as they fall due in London.
.- Can the Treasurer inform the Committee whether tenders have been let for the construction of any of the other ships of the naval unit besides the armoured cruiser?
– I am not in a position to say at the present moment, but I do not think so.
– The point I wish to make is that, since the honorable gentleman has said so much about the late Government leaving him a legacy, it is as well that it should be known that we left him only one contract.
-i used the most polite term I could to describe it.
Question resolved in the affirmative.
Motion (by Mr. Fisher) agreed to -
That the Standing Orders be suspended in order to enable all steps to be taken to obtain Supply and to pass a Supply Bill through all its stages without delay.
Resolution of Supply adopted.
Resolution of Ways and Means covering resolution of Supply adopted.
That Mr. Fisher and Mr. Hughes do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Mr. Fisher, and read a first time.
– I move -
That this Bill be now read a second time.
I wish, in moving the second reading of the Bill, to mention a matter which is not at all one of party, but is of Australian interest. The Government had intended to seek an opportunity to indicate their view regarding the issue of an invitation to the British Association for the Advancement of Science. From time to time communications have been addressed to Australian Governments by members of that Association suggesting that if some consideration were offered to them they would hope to be able to meet here, perhaps, in 1 9 13 or the following year. The last session was held, I think, in South Africa, and the combined Governments there offered to the Association an advance of about £6,000 - I think that it was supplemented afterwards - to enable them to make the visit.
– They had a session in Canada, too.
– Yes. An invitation to. Australia would involve the provision of a sum of considerably more than£6,000. The Government are of opinion that the meeting of such an Association in Australia would be not only a good advertisement for us, but also a high compliment to the most distinguished men of our nation as regards the advancement of science. Possibly some distinguished members of the Association might open up some new scientific problems here which would make Australia known to the scientific world for all time. . Such things have happened in the past. I do not know of a more distinguished Association in the world to which we could offer an invitation. The Government are inclined, if the House will indicate its approval, to send an invitation. The cost will, no doubt, amount to about £10,000. I have ascertained that many of the States are anxious to co-operate, but the invitation must go, and, I think, rightly go, from the Commonwealth. The Minister of External Affairs has been giving his attention to the subject, and I thought that this would be a fitting opportunity to bring it under the notice of honorable members.
.- I am very glad that the Prime Minister has introduced this question to the House, and trust that it will receive universal approbation. The late Government absolutely committed themselves to the proposal many months ago on grounds which have been outlined by the present Prime Minister. Honorable members are no doubt aware of the high standing of the British Association, which includes practically every leading scientific man in the Mother Country, no matter what peculiar or special branch of science he may have made his own, and therefore represents in a collective way what may be termed the scientific judgment of the Mother Country. The opportunity, if we are fortunate enough to obtain it, of enabling them to assemble on this side of the world for the discussion of the great questions to be submitted - which invariably include the latest and most advanced proposals from many schools of thoughtby the most competent experts in those subjects, affords the most distinctively modern illustration of the growth of science, and at the same time furnishes illustrations of the powers of science, based upon a larger experience than even the Mother Country herself enjoys. We have to realize that it will not be an easy task to induce the members of the Association to conduct its meetings thousands of miles away from the homes of those who take part in them; but if we are fortunate enough to succeed we shall have every reason to congratulate ourselves. In the first place, we shall bring here some very eminent men, and a number of interested persons, hardly less eminent, though not yet so well known to fame. We shall also obtain, as the Prime Minister has said, a great advertisement. More than that, we shall have cabled from here day by day reports of the papers read, perhaps including some of the newest discoveries or hypotheses then for the first time made known to the civilized world. In every country in Europe and among the intellectual classes of America and Europe, the proceedings of the Association will be followed with the closest attention day by day. In making. Australia known we have to appeal as occasion offers first to one and then to another section of the world’s thinkers and the world’s population. The present affords us an unexampled opportunity of appealing to a body of men engaged in researches which ought to have, perhaps, more importance to a new country like Australia than to any .other part of the world, because a great number of these are either mediately or immediately of practical value. In natural science and other branches we shall have discussions in our midst upon some problems which are to-day, or will soon be, Australian problems. We are fortunate enough to have had in our midst men who hold a high place in the Association, and who, I hope, we shall be fortunate enough to again see. I mention Professor Gregory, formerly of the University of Melbourne, and now holding a distinguished position at Glasgow University as a professor of geology, whose contributions to the question of a White Australia have been of great interest to this country, and promise to be of much value. We may also have Professor Wallace, one of the principal professors at Edinburgh University, and one of the best authorities on agriculture throughout all portions of the British Empire, including all its climatic conditions. Others who know something of us, may possibly be amongst our visitors. Besides that, we shall hope to have many more who have not yet visited this country, but to whom in many branches Australia offers a comparatively virgin field for research. It is generally recognised that not only in geology, but in various questions relating to the earth’s later history, at very remote periods, there are opportunities for investigation here which are not possessed, or which are not known to be possessed, elsewhere. To have Australia made known as a proper place for further scientific research, and to obtain the benefit of the influence of high authorities from abroad upon our scientific growth, will be a great gain. Believing that I am addressing a House which does not need to be convinced, and is satisfied that the proposal of the Government is wise and prudent, it is unnecessary to endeavour to set out in detail all the possible advantages of a visit by the Association. It would mark an event in the history of Australia. It would bring us into the great brotherhood of nations. It would also be an Imperial recognition which, though hitherto extended to Canada and South Africa, comparatively distant portions of the Empire, has not yet been extended to the Commonwealth, situated at a far greater distance. “ This will visibly and before the eyes of the world bring us into notice as a portion of the Empire within the scope of visits from scientific men united by intellectual ties as well as by those of patriotism and of blood. I regard this invitation as an additional step towards Imperial unity in a hitherto untrodden path, and one likely to be of great value to the Commonwealth. We give to the Prime Minister our heartiest support.
– I congratulate the present Government upon the breadth of conception which they have displayed in this matter. I am quite sure that a great many persons will hardly give them credit for sympathizing with a movement of this sort. I think it is distinctly promising, if I may say so, that the Government are able to take such a cosmopolitan view of the world’s affairs as to realize that it is possible for Australia to derive a very great advantage from a visit by some of the most distinguished scientific men of Great Britain. We have a precedent for issuing this invitation in the late gathering of Chambers of Commerce which took place in Australia. That occurred under the auspices of the late Government. From them we should have expected something of the kind. The advantages of that Congress were very great, because it brought into our midst some of the leading commercial men of Great Britain. One important benefit was that prominent, commercial thinkers of England were able to throw valuable lights upon the commercial needs of Australia, by being upon the spot, and having their attention directed more particularly to the questions which arose in connexion with her relationship with other parts of the world. Another great advantage which I see in having visits to our shores by leading scientific men is that their attention will be very naturally directed to problems which touch Australian interests ; and not the least of these will be the results of the late Antarctic expedition. We have in Australia several very able scientists who were connected with that expedition. I mention particularly Professor David. He has not yet had an opportunity to speak upon it at length to what might be called a scientific audience. There are many scientific men in Australia whom he has been able to meet, but I am sure that he would feel it inspiring to be called upon to address the leading scientists of England regarding what he deemed to be its most valuable scientific results. This gathering would be an inspiration to him and others, and - I say it with all respect for the attainments of those who may come here - it would be instructive for our visitors to hear, close to the scene of the Antarctic expedition, an account of the observations of an Australian professor. We have in our midst eminent scientists who do not find it easy to get scientific audiences to incite them to put forward their best efforts on scientific subjects ; and the knowledge that such a galaxy of talent is coming to Australia will incite them to prepare papers which will throw a very interesting light on Australian possibilities. The invitation will show that we here are not insensible to the great part which science plays in the world to-day. The fact that Australia has invited this gathering to take place here, as it has already taken place in Canada and South Africa, will demonstrate to the world that, in the midst of our busy existence, we have an eye to scientific matters, recognising their value and importance. I know that there is a great deal to be said in other respects against the policy of Ministers, but the sending of this invitation should be entered on the credit side of the ledger of their reputation. I am glad of the opportunity to congratulate the Prime Minister and the members of his Government on having had the courage to propose an expenditure of £[10,000 to do something the effect of which on the interests of Australia will be so indirect.
– I thank the honorable member for Parkes for his congratulations, and, in turn, congratulate the Opposition on sinking all party feeling and assuring the Government of its cordial cooperation in this matter. Were the honorable member for Parkes well acquainted with the history of the Labour party, he would know that every project for the advancement of education and science has had its hearty support from the beginning. Australia is “to be congratulated on the fact that the leading scientists of Great Britain are desirous of visiting us. It will be a big thing to get them to come here, and I am glad to know, from private letters, that there is the greatest desire on the part of some of them to accept our invitation if it should be possible to get away. I shall not mention names, because some of those whom I could mention may not, in the end, be able to make the journey. All the State Governments are willing to co-operate with us, and will issue free passes, and assist in every way to make the meeting of the Association a success.
-It is an Australian invitation.
– Yes. Representative Committees have been formed in all the capitals to assist in making the visit as successful as possible. If the invitation is accepted, meetings of the Association will be” held, not only in Melbourne and in Sydney, but also in the other capitals. The invitation must be sent next week, because the Association meets in Sheffield at the end of the month, and will arrange then for the place of its next meeting, three or four years hence. Therefore, as soon as this proposal nas been considered by the. Senate, the Prime Minister will, in the name of Australia, send a cablegram to England inviting the Association to visit us. This was a convenient opportunity for bringing the matter forward, and I am pleased at the manner in which the proposal has been received by the House.
.- I am glad to hear from the Minister of External Affairs that it is probable that our invitation to the British Association for the Advancement of Science will be accepted. May I refer to a matter in connexion with the visit which, it seems to me, is as important as any that has been mentioned, the effect which the presence of, and the discussion of scientific problems by, distinguished men may have in encouraging and stimulating intellectual ambitions in our young people. I remember the meeting of the Association held in Belfast in my early youth, perhaps one of the most important and momentous ever held, when Professor Tyndall delivered his celebrated lecture on the atomic theory of matter.
– May we have such a meeting here.
– There is no reason. why we should not have here a meeting which will stir the minds of our young people as that did the minds of the growing generation in the Old Country. Hundreds of young men were stirred, myself amongst them, to ambitions, probably im possible of realization, and to efforts which would never have been made had our powers remained dormant for want of the stimulation of the wonderful intellectual activity displayed on that occasion. I mention the matter because it came within my own experience. I have no reason to doubt that discussions will take place in the Australian capitals, and that papers will be read and printed here, which will have a similar effect. The mere presence of distinguished scientific men in our midst will cause ambitious stirrings in our young people. I regard this possibility as of more importance than the other advantages which are to be anticipated from the gathering here, and I join in congratulating the Government upon having issued the invitation.
.- I, too, congratulate the Government upon having dealt with this matter. Great benefits will be conferred upon the people of Australia by the meeting here of the leading scientists of Great Britain. Of course, it must be remembered that we shall be able to give these gentlemen something very valuable in return. As the Leader of the Opposition has pointed out, they will have an opportunity to study, on the spot, a number of questions impossible to study without a visit to this country. There are conditions in Australia quite different from those that exist in any other part of the world, and the visitors will obtain a great deal of scientific information not available elsewhere. Further, we know that men of high scientific attainments are not usually of large material wealth, and it is a graceful act on the part of the Government to provide funds to assist an expedition of this character, and arrange a welcome worthy of the occasion. As we know, everything in this country is, as it were, upside down from a European point of view, and one phenomenon which the visitors may be interested in, and which they will be able to study and ‘discuss on the spot, is that latest development - the Caucus Labori.
– There can be nothing but cordial approval on this side for the proposal of the Prime Minister. I remember that during the term of office of the late Government a large deputation of scientific men of Australia interviewed the then Prime Minister, and their proposals met with instant and cordial approval. I have only to say now that if the Government find that the £10,000 suggested is nofenough they ought not to allow that to stand in the way of making the visit a complete and unqualified success. I can .conceive of no money which could be more usefully spent or which will more contribute to the commonweal of the Commonwealth.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clauses 1 to 4 agreed to.
– I am informed that matters are in anything but a good way so far as the control of the New Hebrides is concerned. This is one of those delicate problems as to which the Australian Government are not able to do quite as they like, having only a very tentative and divided control. None the less do I think that the Minister of External Affairs might exert himself to the utmost - though I have no reason to doubt he has already done so - to place matters on a more satisfactory footing. I suggest that the honorable gentleman should at once put himself in communication with the Imperial authorities in order to find some way out of the trouble. At present there is a dual, or, perhaps, I should say, a tripartite control, wherein lies one pf our initial difficulties. The Convention entered into provides that there shall be three Commissioners, one representing the Imperial Government, one representing the French Government, and one appointed by the King of Spain; but so far, the appointee of the King of Spain has not put in an appearance, and, therefore, the judicial control of the islands is not yet complete. The result of the present inadequate and ineffective arrangement is already making itself felt amongst the natives in a way which I am informed is neither more nor less than disastrous to the good government of the island, and to our own interests in particular. For instance, one of the articles of the Convention sets out that no firearms and no intoxicating liquor shall be supplied to the natives, but that article is being so far violated that it is scarcely observed in any particular by the French traders. I am told that our traders supply neither liquor nor firearms.
– They are not allowed to.
– Of course, they are not allowed by law, but neither are the French traders ; yet somehow or other I am afraid that, somewhat like our own licensing laws, that article of the Convention appears to be very largely evaded, with disastrous results to our own traders. The French traders are freely supplying the natives with liquor and firearms.
– Through New Caledonia.
– I do not know whence the liquor and firearms come, but I am told that the native is a very thirsty soul, and becomes absolutely frenzied in his desire to get hold of these spirituous drinks. The firearms and liquor are supplied by the French traders along with other goods, with the result that the natives show a decided preference for these traders, and that is where the whole demoralizing influence begins, the appetite of the natives doing the rest.
– The traders of each nationality are under the control of their own national representative.
– I quite understand that, but each nationality has signed the Convention agreeing that these goods shall not be supplied to the natives. My information is that one of the signatories to that convention is violating it so far as to supply liquor and firearms to the natives. The result is disastrous to our own traders, who in all conscience suffer enough disabilities now by reason of what we ourselves do as a Parliament. I am not going to argue the question whether there should be preferential treatment and trading so far as the territories of the Commonwealth are concerned ; but I always think a strong case can be made out for some kind of differential treatment to those who are pioneering in our own territories. I call them our own because we have a more than paternal interest in all that makes for British influence in the southern seas ; but so far from doing anything to. facilitate intercourse between them and us, we prevent them from trading with us except upon the same terms as are extended to foreign nations. It must always be remembered that pioneering in these islands, so far from being easy, is a risky matter from a commercial standpoint. Before to-day Australian merchants have laid out money in the islands from purely patriotic considerations in an endeavour to keep them under British control. They believed that in the ordinary course of events, perhaps not in their time, their faith in the supremacy of the British race and in the trade which always follows the flag, would be justified. Our traders and shippers are doing their part to keep the islands loyal to British traditions and British laws, even if it means the expenditure of their own money in doing so; but they are receiving poor treatment at present, and they feel their disabilities very keenly. I do not pretend that we can remove all those disabilities, but we can at least try to have the terms of the agreement carried out in their entirety and see that substantial justice is done to our people while doing no injustice to the other signatories to the convention. My suggestion to the Minister is that he should go into the matter very thoroughly, if he has not already done so.
– He should go up there and have a look at them.
– A very good suggestion, and as we are going to have an early recess, he might take some of us with him, so that we might have a good look around the islands and come back better seized of all that is proceeding there. I do not think we can get to know too much about the islands in the Pacific. They are going to increase in importance year by year, and become of supreme importance in the consideration of Australian defence. All round us foreign nations seem to be gradually closing in, and getting a foothold upon the islands. These facts make our defence problem infinitely more complex and delicate to deal with than would have been the case if we had retained all the islands to ourselves, as we might have done. It is of no use crying over spilt milk now.
– Does the honorable member want honorable members to go and see the place?
– I suggest that the Minister might go into the matter very thoroughly.
– I think it is a good idea, if members can afford to go - if they can afford the time.
– We cannot afford to go; but if the Prime Minister refers only to affording the time, I dare say there will be time for many of us to go. While the Prime Minister is having an even more congenial journey, some honorable members would be glad to make the trip.
– I have always been in favour of honorable members seeing Australia and the surrounding countries’.
– I want to emphasize the effect on the natives of what is going on in the islands now. Spirituous liquors are playing havoc among them. That in itself is quite sufficient excuse for doing all we possibly can to keep the liquor from diem. In the next place, our planters are finding it exceedingly difficult to get labour to carry on their enterprises. Here, again, the Frenchman has the preference every time. When he takes his liquor to the natives he can get labour where our traders cannot, and sell his goods where our traders cannot; and the whole thing is demoralizing the British trade in the islands. We cannot allow the matter to go by default. We must interfere. We have a very direct and special obligation and responsibility regarding all the islands in the group. I do not doubt that the Minister is doing his best to meet a situation which is as difficult as it is delicate; but he might well do his utmost to get the convention completed and the Court established, get the nominee of the King of Spain appointed, and let them get to work, and see if they cannot so police the convention as to prevent the practices which are working so much demoralization and harm to British trade and British interests.
– I wish to ask the Prime Minister whether he has any objection to have the papers including the correspondence with the late Sir Frederick Holder in regard to the offer of the Petherick collection to the Commonwealth laid upon the table of the House, and to request Mr, Petherick to furnish a report to the House as to the best methods to adopt to protect a very valuable collection from injury by climatic influences and dust. I understand that the collection is at present very inadequately housed.
– I think better arrangements are being made now in the Bill which has been circulated. I shall meet the honorable member in any way.
– I should like to see some of the original correspondence, because I understand a difficulty has arisen.
– There is no difficulty. We are bringing in a Bill to settle the whole matter.
– I wish to get at the bottom of the matter before that ‘Bill is dealt with. I am not at liberty to discuss it, but I understand that it is framed in such a way as to ignore altogether the original proposals under which the offer was made.
– Will the honorable member see me about the matter?
– I shall be glad to do so.
.- I wish to offer a few observations in reference to the remarks of the honorable member for Parramatta regarding the New Hebrides. Have honorable members ever thought that, although we have had possession of Australia for some hundred and twenty years, all that we have been able 10 do with it has been to settle upon it a population of about 4,250,000? But not satisfied with our own enormous territory, embracing about 3,000,000 square miles, we are reaching out for a few hundred thousand acres more in the New Hebrides, and desire to obtain control there. It seems to me that if we wish to keep out of mischief, we ought to be satisfied with the territory that we now have, and do our level best to govern it as it ought to be governed.
– The honorable member will be satisfied some day with sis feet of it.
– I do not quite recognise the appropriateness of the interjection, but I hope, before I have to be satisfied with six feet of this country, to be able to make a few observations concerning the rapacity and greed of politicians of the same type of mind as the honorable member for Parramatta. We have an enormous territory, of a great portion of which we know nothing whatever. Honorable members must be aware that there are many parts of Australia, and especially of Queensland, that have not even been explored. Yet here we are, with a population -)f about 4,250,000, trying to prevent the French, or any other nation, obtaining control of a few islands in the Pacific. And for what purpose? The honorable member for Parramatta says we need to do this in the interests of our trade and commerce. He says that our trade is languishing, because the French, or others, by offering the natives liquor and firearms, are able to do better business with them than we can do at the present time. Our ‘own dealings with the natives of Australia and the neighbouring islands have been of such a character that we might well say nothing whatever about the treatment of the natives of the Pacific islands by other people. The aboriginal races of Australia have been decimated, and are fast dying out, with the advance of the white man. The same thing is taking place in the islands, and when honorable members like the honorable member for Parramatta profess sympathy with the natives of the islands of the
Pacific, I take leave to doubt their sincerity. It is inconsistent for us to make any attempt to colonize the islands of the Pacific until we have done our duty Dy Australia. Some years ago, we were actually subsidizing farmers to go to the New Hebrides and establish colonies there, when we had, as we now have in Queensland and other States, large areas of the same type of country, and were doing nothing with it. As an Australian, taking part in the great experiment of endeavouring to settle the whole of this country of ours with people of the white races, I object to our subsidizing farmers in the New Hebrides to compete with our own farmers, who will have to be taxed to find the money for such subsidies.
– Two and a half crops of maize can be obtained there every ear.-
– There is no doubt that the soil of the islands of the Pacific is very rich, but we have in the coastal districts of Queensland very similar soil. Farmers who wish to advance the interests which the honorable member for Parramatta is so anxious to espouse - the interests of Empire - can obtain in Queensland large areas that will produce anything. We have a request from the honorable member that a concession, by way of reduced duties, shall be given to people who settle in the New Hebrides.
– I did not ask for such a concession.
– The honorable member suggested that consideration should He given to them. He said that we were taxing their products, and I imagined when he made that statement that he considered we were acting unfairly towards the British who go to settle in the New Hebrides. I shall, on all occasions, raise my voice against spending money to acquire any more territory than we have at present. Why should not France have the New Hebrides if she wants them?
– Does the honorable member include the Northern Territory in that prohibition?
– No; because the Northern Territory is part of Australia, and is in an entirely different position from that of the islands of the Pacific, which are now under the control of other nations. The Fiji islands, over which Great Britain has control, are going to give us a lot of trouble before long.
– In what way?
– Industrially. If we are going to allow the products of Fiji to come into Australia to compete, for example, with our white sugar farmers, there will be trouble. I ask honorable members to try to be reasonable; to look at the map, and, seeing the vast territory we already have, to try to encourage farmers to take possession of our tropical and semi-tropical lands instead of going to the New Hebrides, or anywhere else.
. - I wish to supplement what the honorable member for Parramatta has said in regard to the New Hebrides. About two and a half years ago, I had considerable correspondence with the Department of External Affairs on this very question. A number of Sydney merchants complained that whilst French exporters were exporting weapons and spirituous liquors to reach the New Hebrides through New Caledonia, by the Messageries’ steamers, British exporters were being placed at a very great disadvantage by our own Customs authorities in comparison with the French houses, even although they were not desiring to supply the natives with those goods. I should be glad if the Minister of External Affairswould look up that correspondence, in which he will find very circumstantial statements as to the disadvantages under which Australian exporters were labouring. If he will do so, he will relieve me of the necessity of going into the matter at greater length. I avail myself of the opportunity of replying briefly to the utterance which we have just heard from the honorable member for Capricornia. The honorable member posed as one anxious for the interests of the Empire. I know of no honorable member whose views upon Empire are so disjointed and questionable as his are. He is the last man in the House to impress it with his imperial ideas, because in all the speeches I have heard from him, he has not shown that he has an eye or a mind for anything outside Australia. Even with regard to Australia, his thoughts and interests, and even his imagination, are limited to Northern Queensland.
– The honorable member is wrong there.
– The honorable member has spoken of the New Hebrides, and of his anxiety about the coloured races there. But he is one of those who took part in bundling the unfortunate Pacific Islanders out of Australia ; and he was not satisfied with bundling the parents out of this country, but bundled out the unfortunate children of these people - children who had been born and bred and civilized and educated here, sent them away to islands where they met with, not only uneducated, but with barbarous companions. The honorable member is one of the last men in the world who should lecture the honorable member for Parramatta as to his interest in the Empire, or as to his interest in Australia. I think that we have now a distinct interest in the New Hebrides. T think, also, that the honorable member may in a lucid interval have been right in saying that we ought not to ‘ be so grasping with regard to the Pacific Islands. But we must remember that we have a responsibility there now. A considerable time has elapsed - probably three years or moresince the Australian Government arranged with the Imperial Government that three persons, supposed to’ be competent for the position, should preside over the affairs of the New Hebrides. They were to deal with the land question. I understand that, although the British and French Judges have been appointed for a considerable time, the adjudication is still awaiting the arrival of the nominee of the Spanish Crown. I should like the Minister of External Affairs to tell the Committee whether the whole of these judicial inquiries with regard to the land question in the New Hebrides have been in abeyance since the Commonwealth chose an Australian barrister as one of the Judges; or whether the French and the Australian judicial authorities have sat together and adjudicated upon the land question; or whether the whole matter is waiting until the arrival of the nominee of the Spanish Crown?
– All cases in dispute are waiting, and practically all the cases pending are in dispute.
– I understand, then, that the matter is still in abeyance. Can the Minister tell us when the Spanish nominee is likely to be appointed?
– I can, and I will do so presently.
– The French Judge has not been appointed yet, though the man who is to be appointed is known.
– It would be very useful to many people in Australia who are interested in the New Hebrides question if a statement could be made by the Minister, informing us how the matter stands at the present time. I have some sympathy with the honorable member for Capricornia in deprecating the expansion of British territory. But the honorable member must not forget that whilst the British Government paid very little heed in the past to what the Australian people were constantly pointing out to them, their neglect of the Pacific Islands, the Germans were taking them up very rapidly, and were obtaining numerous footholds in the Pacific, which we have now very good cause to regret.
– The Germans have no control over the New Hebrides.
– I did not say that they had. I was speaking of the Pacific Islands generally.
– Why did not the honorable member say what he meant?
– I did, but the honorable member was thinking of other things. My speech was perfectly clear. If we had not moved in regard to the Pacific Islands many more of them would have been taken up by Germany than are now in its possession; and if it had not been for the very active advocacy of the Australian people with regard to Papua, that very valuable possession would have gone very much further away from Imperial interests than has been the case. It was a lack of interest in the Pacific on the part of tne British Government which enabled the Germans to appropriate part of Papua. The Dutch, of course, were already in possession of a portion of the island ; but had it not been for laxity of Imperial interest in the Pacific, Australia to-day would have had control of two- thirds of Papua, instead of one-third. I think it is a very fortunate thing that Australia should have urged upon the Imperial Government, as it did, that we, or it, should have some say as to the New Hebrides. I do not for a moment contend that Australia can control possessions of that kind as well as can the Imperial Government, because they are a class of possession that can best be dealt with under Crown management. There may be very great mistakes in the government of these islands, as it is conducted to-day. I do not, for instance, think that Papua, under the Commonwealth, has been nearly so well managed as it was previously under the Crown of England. At the same time, one wants to distinguish the superior method of governing possessions of that kind from the laxity of the British Government, in consid ering the important bearing that the actual possession of the islands has upon this great continent of Australia. Now that we have the New Hebrides partly under our control, I think that the Minister of External Affairs ought - if he has not already done so - to take as active steps as he can to bring this matter to a head ; because I know that a great many Australian interests are involved in the New’ Hebrides, and that unless the Commission made up of three judicial officers is brought together, a great deal of trouble may be entailed. I therefore ask the Minister to make a statement as to what is being done, and to assure the Committee that he will avail himself of every opportunity to bring the question to a head, so that we may have some finality in regard to matters in which many Australian people are interested.
– I wish to draw the attention of the Committee to the fact that the honorable member for Parkes, speaking in an unctuous manner, which reminds one very much of turtle soup, has seen fit to suggest that a member of this House has only occasional lucid moments. If the honorable member himself were always lucid, he would at once see that in his very suggestion regarding the Land Commission, he has shown that instead of the natives being treated especially badly by the French people, they have been treated badly by all the so-called civilized peoples who have gone to the New Hebrides. How does the present land question arise, except from the fact that certain people have gone to the New Hebrides and have cheated the natives out of their possessions?
– That is what the Judges are for - to correct the cheating.
– The cheating nas been done by, I suppose, some Australians, some Britishers, some French, some Spaniards, and others. They have gone there, and in exchange for a few beads, a Bible or two, and one or two bottles of rum, have ‘got hold of the land of the natives. Now they want a Land Commission, and, with the real object of advancing their own peculiar trade interests, they try to persuade the Commonwealth Parliament and the people of Australia, that they are taking this interest in the New Hebrides from philanthropic motives and loyalty to the Empire. I think that plea is so much rubbish, and I am surprised that an honorable member, a person like the honorable member for Parkes, who professes to have such a great deal of wisdom, ana who knows all the economists from Ricardo, Bastiat and McCulloch, upward and downwards, and has such a superior manner, should try to impress this Committee in the fashion that he has done.
– I wish to discuss a matter of a different character - the interpretation of an item in the Tariff by the Customs authorities.
– It would be convenient to finish the discussion of matters affecting the External Affairs Department first.
– I have waited for some time for an opportunity to speak, and I remind the Minister that the schedule, as a whole, is before the Committee. When the Tariff was under consideration I brought under the notice of the Minister of Trade and Customs at the time, Sir William Lyne, the question of the duty on greyboard It affects a factory in my electorate. On my suggestion it was taken out of an item in which it would have been dutiable at 20 per cent, under the General Tariff and 15 per cent, under the Preference Tariff, and placed in an item in which it was dutiable at 5 per cent, under the General Tariff, and free under the Preference Tariff. I have with me a sample of the greyboard which I produced in this Chamber when the matter was dealt with. The present Minister of Trade and Customs supported me in the request I then made. I find that on the 9th December, 1907-
– The honorable member will not be in order in discussing Tariff items.
– I understand that the whole of the schedule is under consideration.
– This is a Supply Bill.
– I have a grievance against the administration of the Customs Department, and I understand that it is. when Supply is being voted that the grievances of honorable members are taken into consideration.
– That is the usual practice on the motion to go into Supply, and on the first item in the Estimates, but we have long passed that stage now in connexion with this Bill.
– I understand we are discussing the whole of the schedule.
– The honorable member must not argue with the Chair.
– Do you rule, sir, that I am not in order when we are being asked to vote money for the Trade and Customs Department in discussing the administration of that Department?
– I rule that the honorable member is not now in order in referring to particular items of the Tariff.
– My desire is to discuss the administration of the Customs Department in giving a decision which nullifies a decision of Parliament. Surely that is a matter which I should be at liberty to discuss before the Supply asked for in this Bill is granted.
– Can the honorable member point to any line in the schedule upon which the matter he wishes to raise can be discussed?
– Yes; the vote for the Department of Trade and Customs.
– That will not cover it.
– I submit that before we agree to pass the proposed vote of over £5°,°o° for tha Trade and Customs Department, I should, in common with every other member of the Committee, be at liberty to discuss the administration of that Department.
– The honorable member must see that if I permitted him to do what he desired it would be open to any member of the Committee to discuss the whole question of the Tariff and the subject of Free Trade or Protection.
– On the point of order I submit that when we are asked to vote Supply for a public Department it is a matter of urgent importance that we should know exactly the way in which it is being administered. It is possible to conceive that officers charged with the administration of the Tariff may have exceeded the instructions given them by Parliament. Such a departure from their instructions might expose them to the risk of Parliament refusing to vote their salaries for the period asked for in this Supply Bill. I think that unlessthe honorable member for Cook is allowed to discuss this question an important privilege of honorable members will be invaded.
– On the point of order, I think the honorable member for Cook would be in order if he attempted to discuss the question he desires to raise on the vote for the Department of Trade and Customs.
– But we are dealing with the schedule as a whole.
– I understood that we were dealing with it in Departments, and that we are now considering the vote for the Department of External Affairs.
– No; the schedule is being put to the Committee as a whole.
– I think it will be found most inconvenient to adopt that practice. One honorable member may address himself to an item appearing in the vote for the ‘last Department dealt with in the schedule, and the next may speak upon an item included in the vote for the second Department in the schedule. If it is not regarded as out of place for me to mention how we did things in another place, I may say that we were accustomed to take the schedule to a Supply Bill in Departments.
– So we do here whenever the Committee wishes it.
– Then the practice must have been departed from on this occasion. I suggest, sir, that it would be convenient for you to take the sense of the Committee. If honorable members desire to revert to the former practice which, I understand, was to deal with the schedule in Departments, it might be well to adopt that practice now. The Minister of External Affairs having heard what honorable members have had to say in connexion with the vote for his Department could reply to the debate which has taken place so far, and the honorable member for Cook might raise his question when the vote ‘for the Department of Trade and Customs is put to the Committee.
– I think it will simplify matters if I put the votes for the different Departments separately, and if it is the pleasure of the Committee I will do so.
– Apart from that, sir, I think that the honorable member for Cook is out of order, on quite another ground. It is undesirable to have irregularities in debate. This is a Bill dealing with expenditure, and the honorable member for Cook desires to raise a question affecting the raising of revenue from Customs. If the honorable member wished to refer to any irregularity of conduct on the part of an officer touching a question of expenditure he might be in order, but he proposes to deal with what he considers to be an error of judgment on the part of the Minister in the collection of Customs revenue at the present time. Such a question might be more appropriately discussed in connexion with a measure which will shortly be before us, but it is not, I submit, appropriate to a Bill such as this which deals only with items of expenditure.
– On the point of order I wish to submit that the schedule was put to the Committee as a whole. Discussion proceeded for some time upon various Departments, when I rose to discuss the administration of the Trade and Customs Department. I have no intention whatever of discussing the question of Free Trade or Protection. I have nothing to do now with the question of policy. It is only a question of whether the decision of Parliament is being carried out by the Department.
– When I interrupted the honorable member he was talking about duties of 5 per cent, and 20 per cent.
– Certainly, sir, and I want to show that, although the Parliament decided in favour of “5 per cent, and free.” the Department is administering the item <in such a way as to defeat that decision. I conferred with several honorable members as to the proper time to raise the question, and they agreed with me that this was the time. I submit, sir, that while I am addressing the Committee on a certain question, it is altogether irregular to now inquire whether it is its pleasure that the items should be taken seriatim or not.
– I think it would be better, sir, if the schedule were taken, not as a whole, but in Departments, so that matters of grievance relating to a Department could be brought to the notice of ite Minister and dealt with. So far as I can gather from his remarks, the honorable member for Cook does not wish to introduce any question of policy, because he contends that that was settled when the Tariff was framed. He merely desires to bring under the notice of the Committee a Ministerial interpretation under which the purpose of the Tariff in one particular is. being defeated. I think that under this particular heading he would be quite in order in dealing with the matter. It does, not involve the question of whether a particular line should be subject to a certain duty, but whether the Department is carrying out the intention of Parliament.
– I have already intimated that if it is the pleasure of theCommittee the items of the schedule will betaken seriatim, and when we reach the votefor the Department of Trade and Customs the honorable member for Cook will be able- to deal with the question of its administration, but certainly not with the question of percentages of duty. I take it that it is the sense of the Committee that I should put the votes for the Departments separately.
Honorable Members. - Hear, hear.
Divisions1 to 10 (The Parliament),
.- This vote raises the question of the location of the Parliament.
– There is no vote for the Parliament in that respect.
– I do not wish to make a speech, sir, but to ask the Minister in charge of the Bill a question as to the underlying motives of the Prime Minister’s statement the other day, that he was trying to arrive at some understanding with the Government of Victoria whereby a new building for Commonwealth purposes was to be erected near the Treasury building in Melbourne. I desire to know whether this action of the Prime Minister foreshadows any inclination on his part not to proceed to proclaim the site selected by this Parliament as the future centre of Federal administration.
– In this Bill there is no item for that.
– There is a vote required for the Parliament. Is it worth our while to vote supplies for the Parliament if we are not eventually to get to the Federal Territory? I ask the Minister of Home Affairs, who, I understand, is filled with a burning anxiety to add to the beauties of the Canberra neighbourhood-
– There is no item before the Chair in regard to Canberra, and therefore the honorable member is not in order in discussing it.
– In this Bill, sir, we are asked to vote for the Parliament an item under the head of contingencies. That, of course, covers the drainage and maintenance of this Parliament House. The question which should concern honorable members is whether, it is worth while to vote an amount to effect the drainage of this Parliament here, when, as a matter of fact, it has decided that it will meet elsewhere in the immediate future.
– This is disregarding the ruling of the Chair.
– Oh, no. The Chairman is the custodian of the liberties of honorable members, and he will recognise that we ought to consider most seriously the ques tion of expending a large sum on the maintenance of this building when, I understand, the Minister of Home Affairs has in his Department designs and plans of a building which is yet to be erected. That being the case, I wish to know whether the Prime Minister’s recent statement is an evidence of a desire on his part to depart from the honorable understanding with New South Wales in regard to the Federal Capital.
– There is no proposal to house the Parliament alongside the Treasury building here. The vote before the Committee simply relates to the Parliament.
– What I am pointing out is that where we”house our central administration there in all probability the Parliament is going to be housed.
– There is no item here for probabilities.
– I am talking of “contingencies,” and, under that head, we are asked to vote a sum for the Parliament. I ask the Minister of Home Affairs whether the Prime Minister and the Government have any intention to delay the establishment of this Parliament on the Capital Site by setting up extensive buildings in Melbourne for the housing of the central administration and so delaying compliance with a provision of the Constitution and the operation of an Act of Parliament ?
– We are going to do everything that is right and legitimate.
– Let the honorable member get up and say so.
– I desire to know whether some action cannot be taken to provide temporary accommodation for visitors in the Queen’s Hall, for which we are asked to vote a sum under the head of the Parliament. Honorable members, no doubt,. have all experienced very great disadvantage in not having a place to which they can invite a visitor for the purpose of having a conversation. No room is provided, and so honorable members have to talk to their visitors in the lobbies or in the Queen’s Hall, where they have to remain standing. A suggestion has been made that the Government should approach the Speaker, and perhaps also the President of the Senate, to see whether some arrangement could not be made, at a small expenditure, to partition off two corners of the Queen’s Hall with a temporary structure which, when necessary, could be taken to pieces in a few minutes, and which would provide a place of retirement where honorable members could interview constituents or visitors who come to see them on public matters.
– It would be better to provide accommodation elsewhere than to interfere with the Queen’s Hall.
– I do not suggest the erection in the Queen’s Hall of structures of a permanent character. What I think could be done is to make two rooms by means of panels of white fibrous plaster in the form really of a screen of two sides, say about 12 feet long by about 7 feet high, with a moulding at the top, which could be removed at pleasure. The cost would be small, but the convenience to honorable members and those who come to see them would be very great. I hope that the Government will consult with the President and Speaker so that something may be done.
– The matter referred to by the honorable member for Lang is wholly under the control of the President and Mr. Speaker and the Joint House Committee. Every honorable member has as much right as a Minister to approach those authorities.
– A private member has not the same standing as a Minister.
– I understand that the matter has been considered by the House Committee.
– As a member of the House Committee, I know that it has not” been brought before it.
– Then I am in error. I believe that the President and Speaker are strongly opposed to the suggestion of the honorable member, thinking that its adoption would result in the disfigurement of the building. Still, as a member of the House Committee, he is in a stronger position than is a Minister. In my opinion, it would be a mistake for the Government to make a request on this subject to the authorities who have charge of the building.
.- The remarks of the honorable member for Lang might seem to present him in a new light. I have never regarded him as a person burning with romantic anxiety to find some quiet place to take his visitors. Yet that it might seem is the direction in which his inclination lies ! But, lest it might appear that the House is in favour of taking part of the Queen’s Hall, for the accommodation of visi tors, and doing what might disfigure what is architecturally one of the finest monuments in the city of Melbourne, I ask that nothing may be done to detract from the aesthetic beauties of the building. I hope that my honorable friend will curb his extraordinary desire for privacy, and will remember that it is a duty we owe to the Parliament of Victoria not to impair the building which its generosity has placed at our disposal.
– I did not suggest that it should be impaired.
Proposed vote agreed to.
Divisions 11 to 16 (Department of External Affairs), ^15,120.
– While I would not suggest that the honorable member for Capricornia has lucid moments only at long intervals, I should be sorry to let it be thought that he has expressed my views relating to the control of the New Hebrides. I do not agree with him that we should limit our considerations to the Australian continent. I admit that Ave have not treated the Australian aborigines as well as they might have been treated ; but that is not a reason why we should allow the natives of adjacentislands to be ill-treated, or permit those islands to come wholly under the control of foreign Powers. Had the Home Government been more alive to the interests of the Empire, New Guinea and the adjacent islands would be now a part of Australia, to which they naturally belong. They were explored by Britishers before foreigners thought of going there, and most of the pioneering work that has been done there is the work of Britishers.
– Then the honorable member ought to annex the British islands.
– As they belong to the British people, they do not require to be annexed. It will be a bad day for the Commonwealth if ever they come under the control of other than Britishers. Australia, particularly the State which I represent, has interests in the Pacific.
– There is a Presbyterian interest there.
– That is so. A great mission work has been carried on there by the Presbyterian Church of Australia. It Avas controlled first by the Presbyterians of the Old Country and America, but it is passing into the hands of the Australian Presbyterian Church. Nothing can be said against the work of that and other Churches in the Christianising and civilising of the natives. But I understand that there is much trade rivalry and international jealousy, due to the desire of citizens of other countries to secure a footing there. At present there is an understanding among the Powers that they should try to obtain good government and to maintain justice among both the natives and the traders who have made the islands their home. The land question lies at the bottom of the present trouble, as it generally lies at the bottom of trouble. Some time ago a Commission, consisting of representatives of Great Britain and France, was appointed to provide for the government of the New Hebrides. One ground of complaint is that this body has not yet got to work, and the friction continues as a great disturbing factor. The Minister will do good work for the islands, the traders in legitimate business, and the missionaries, who are endeavouring to civilize and Christianize the natives by bringing all the influence he can command to bear on the different governing authorities so that this Court may be constituted, and set to work as speedily as possible. We in Australia should not allow the natives to be decimated as the natives elsewhere have been ; we should not allow, as in Fiji, numbers of coolies and other alien labourers to be imported, and thus expedite the extermination of the original possessors of the soil. We are part of the British Empire, and if we se° injustice in any part of that Empire, the duty devolves on us, and not on foreigners, to set matters right.
.- The honorable member for Parkes has certainly applied most exquisite terms to the honorable member for Capricornia. He ought to remember, when he refers in his wonderfully rounded phrases to others as displaying common sense only at long intervals, that such language is not pleasant. Had the honorable member stayed in his place, I think I could have answered him, as I know something of the New Hebrides, having taken the trouble to’ go and see where the kanakas from Queensland were landed. I may say that I had the honour of receiving a medal from Messrs. Burns, Philp and Co. for assistance rendered on board the ship that carried those natives, and that, from my knowledge of the colour trouble in the United States, I am proud of what the Commonwealth Parliament did in removing the black spot. from Australia. The captain of that vessel made as many as five separate visits to an island, going there even if he had onlyone kanaka to land.
– The honorable member is not in order in discussing the deportation of the kanakas.
– I am dealing with the remarks of the honorable member for Parramatta, the honorable member for Capricornia, and the honorable member for Parkes. I have an objection to too much being given to the New Hebrides. As an Australian, I know something of the wilds of Gippsland, where it is impossible to obtain such crops in five years as can be obtained in six months on the islands, where the vegetation is tropical, and can be cleared with a long knife, using only one hand. There it is not necessary to use a full sized axe, because a threequarter is sufficient; and in six months from starting on the dense undergrowth, there is a crop of maize, while the season averages two and a half crops as against one in Gippsland.
– There is nothing in the schedule about clearing in Gippsland or the Fiji islands.
– Then I suppose I must confine myself strictly to the schedule, in which I see a certain sum set down in connexion with the mail service to the Pacific Islands. I have not the slightest objection to this vote, because the mails carry letters and news, and I have many friends there, not only Australian, but British, French, and German. The honorable member for Calare has told us that the land question is at the bottom of most of our trouble, and I should like to make a few remarks in that connexion. I had the privilege of being surgeon on the Presbyterian mission ship, and, therefore, 1 know something of the splendid organization of that Church for the amelioration of the conditions of life of the natives. The Church of England, too, is also doing splendid work, and also the Church to which I belong. The missionaries of the Church of England and Presbyterian Church, with a vast amount of labour, are translating the New Testament into native languages that will be dead in a few years, owing to the disappearance of the natives. It is said that the Scriptures have been translated into no fewer than seven languages which there is not one native left to speak; and I have always thought, while admiring this work, that it would have been far better to teach the natives English from the very first. I think I need say no more now than that the honorable member for Parkes must allow honorable members on this side to know something which, with his superabundant wisdom, he has not learned - something which he cannot cover with a brilliancy resembling the aurora of an Australian sunset.
– I much regret the speech of the Honorable member for Capricornia, and must say that it would only be consistent on his part to move the omission of the item providing for the mail service to these islands, if he does not think we ought to set our unsanctified feet there. The honorable member’s remarks were really irrelevant to anything I had to say. He accused me of having a rapacious mind so far as the islands were concerned, and suggested that I was encouraging the grabbing of their lands,- and wanted to do away with the Tariff entirely so far as their products were concerned,I never suggested any one of those things. All I said with regard to the Tariff wasthat it was a sufficient bar between ourselves and the British planters who are doing pioneering work in the islands. I do not want to grab their lands. I do not want to interfere with the islands except to take care that we do not allow our interests to slip from our hands into’ the hands of other people there. All I urge is that diplomacy should be used to remove the disabilities of British traders. I should have thought that the honorable member, as a good Australian, would be with me, and not against me, in urging that line of action. I give the honorable member credit for wanting to preserve Australian interests, and for being an Australian in sentiment and every other respect; but if he is as strong an Australian as he has often told us he is, and I am willing to believe he is, he cannot shut his eyes to what is happening in the Pacific Islands. No Australian can do that with impunity. We are vitally concerned in all that makes for the good government of the islands, and especially in all that relates to British interests there. I pointed out to the Minister that two of the terms of the Convention were being violated to the detriment of British interests. Article 57 says that-
Subject to the specific exceptions hereafter enumerated no person shall from the date of the signature of the present Convention sell or sup ply arms or ammunition to the natives either directly or indirectly in the New Hebrides. . . .
I urged that that was being ignored, my information being that firearms were being supplied by the French residents to the natives. Article 59 provides that -
I pointed out that that was not carried out, as the French traders took a supply of grog with nearly every supply of goods which they furnished to the natives, and sold it to them ; and that the fact that they had this grog to sell gave them a preference or privilege over the British traders which was eagerly availed of by the natives themselves. I believe the natives of those islands are peculiarly susceptible to spirituous liquors, which are already working demoralization throughout the New Hebrides; and the sooner we stop it, in the name of our common humanity, the better for all concerned. Knowing the keen interest the Minister takes in the islands, I suggested that he should do something to put a stop to the things which are taking place, and which, while they do take place, are a disgrace to Australia. We have no right to permit this kind of thing to go on at our doors. In the interests of the natives themselves, and out of fair play to the Australian pioneers who are trying to develop the islands, and who have in some cases spent fortunes from purely patriotic motives to keep communication with them and preserve British interests there, something should be done in the way of remedy as speedily as possible.
– A sum of £6,000 appears in the schedule for advertising the resources of the Commonwealth”. Does that indicate an intention to increase the total amount for the year beyond the ordinary annual appropriation? At that rate, the sum for the year would be £36,000. Will the Minister, when replying, also tell us exactly the position in regard to the visit of the Commission of Scottish farmers. Is there any later information regarding the details of ‘their trio ?
– The £6,000 for the advertising vote is rather more than the ordinary two months’ supply. It all depends on the times at which the work is got out whether the amount asked for is large or small. The expenditure may be much greater at one period of the year than another. It is certain tobe greater during the first two months of this financial year, because some rather large items have been determined upon.
– How is the money expended ?
– In a number of ways which I hope the honorable member will not expect me to discuss to-night. Matters in connexion with the visit of the Scottish farmers are very well advanced. I endeavoured to obtain their consent to a proposal that they should start at Port Darwin, in the Northern Territory, and work down the Queensland coast, finally going back by way of Western Australia. It is found impossible to bring that about. They are coming by way of Western Australia, and will travel round by the Southern route.
– Will they reach Queensland by about October?
– They will reach Queensland before the end of September. The Premier of Queensland requested that they should go to Queensland by rail instead of by sea. If they did that they would gain only two days. The request that their visit to Queensland should be accelerated was urged on the ground of climate, and the climate of Queensland will not alter very much in two days, so that their travelling by sea will not make any real difference. We have the itinerary for each of the States except Queensland, which has not yet been fixed upon. The programme, so far as the rest of the States are concerned, is very full, and just about coincides, with what was mapped out in the External Affairs Department. The gentlemen coming are very representative, and thoroughly well qualified to express an opinion on agriculture, horticulture, and the allied interests, and will certainly advertise the Commonwealth when they have an opportunity of seeing our resources. In regard to the New Hebrides, the honorable memmember for Parramatta has raised a question which presents some difficulties. The New Hebrides are under divided control, and our intervention is more difficult and delicate when the persons alleged to have offended are directly under the control of the French Resident. Our intercessions can be made in only a roundabout way, and must, of course, be carefully conducted. I can assure the honorable member for Parramatta, however, that the matters which he has mentioned have not escaped the attention of the Department, and that we are taking every step possible to protect the interests of Australian and British residents generally in the islands. With regard to the Land Court, the British Commissioner has been appointed for some time, and the Australian Commissioner was appointed when I was last in office, some eighteen months ago. At that time I also took steps to have appointed a solicitor to represent Australian interests. Apart from the land held or claimed by the missionaries, our interests lie chiefly in the property of the Commonwealth Government which fell into our hands through Messrs. Burns, Philp and Co. In that respect we have a direct interest. The French hold a claim, not only to practically the whole of the lands, but, according to some authorities, to land beyond the borders. That may be an exaggeration, but in any case the matter has been so far advanced that the King of Spain has appointed a Commissioner who will be President of the Court. That gentleman was in Melbourne last Saturday, is now in Sydney, and will be leaving a day or two hence for the New Hebrides.
– What is his nationality?
– He is a Spaniard. There is a French and a British Commissioner, and the King of Spain has appointed a Spaniard to act as President of the Court. Although some delay has taken place in the appointment of a suitable President, the fact that one has been appointed, that he has visited Australia, and is now on his way to the New Hebrides, is eminently satisfactory. We hope for as speedy a settlement as possible of this question.
.- 1 wish to ask what period the item of £”4,250 “ towards expenses of” Administration, Papua,” will cover, and whether it relates to expenditure since the beginning of the present financial year? *
– It is the proper proportion for two months of the total vote of £25,000 for the year.
.-] should not ask the Minister a question bearing on this subject now but that we are voting, by these monthly Supply Bills, supply covering practically the first half of the financial year. The present Government, I know, has not initiated the system. It is one about which I have complained since I first took my seat in this House, and since it is being followed I think that this is an appropriate time for directing attention to certain matters. I understand that the proposed vote of £6,000 for advertising the resources of the Commonwealth is the proportionate amount of the £36,000 devoted annually to the purpose, and I venture to say that there is no vote of which the Committee knows so little as it does of this.
– All the details are given when the Estimates are before the Committee. When I was last in office I gave very full details regarding the item.
-£36,000 is a very large sum.
– Last year £8,000 was spent, but provision was made on the Estimates for an expenditure of £20,000.
– Some of this money is spent in a curious way. I do not wish to raise controversial questions at this hour, but last year I think that an amount was spent for the distribution in Southern Europe of a newspaper which was designed to attract “ desirable “ immigrants to Australia.
– Surely the honorable member is not going to raise that question again ? He dealt with it two years ago.
– I am not going to raise the question of the iniquity practised on that occasion, but I want to know whether there was any issue from it. . I do not know how many thousand copies of the newspaper in question were circulated in Southern Europe, or whether any emigrants from Southern Europe have arrived here in consequence. I wish to know whether we have had a tremendous influx of Southern Europeans as the result of this issue of the Melbourne Clarion which was authorized by the previous Fisher Administration. It was translated into Spanish, Italian, French, and Portuguese in order that we might have a substantial accession of a “suitable” character to the Australian population. We know that population from the British Isles was not to be encouraged until land had been made available for settlement here ; but, on the other hand, population from Southern Europe was to be encouraged at all hazards and at all times, whether land in Australia was or was not thrown open for settlement.
– The honorable member is barking up the wrong tree. It . was to advertise the resources of Australia in those countries. :
– That is the very answer I wanted: If this vote is purely to. advertise the resources of Australia, and is not intended to bring population to this country, for what purpose are we spending £36,000 a year? I took it that the main reason was to encourage settlement here. On a previous occasion the present Minister of External Affairs assured me that the issue in question of the Clarion was translated into foreign tongues, in order to encourage people from Southern Europe to come to Australia. ‘ I find that he has since corrected that opinion. Political exigencies have changed, and he now tells us that it was merely to advertise the resources of Australia.
– Does ‘ the honorable member think that we should have advertised in the Melbourne Punch?
– My honorable friend forgets that Melbourne Punch must never be taken too seriously. Indeed, I have found that no comic paper should be taken seriously, but the article in the Clarion was to be so regarded, because the Commonwealth Government paid some £50 or £100 more than they need have paid, in order to attract a population of a desirable character. I want to know whether there has been any result from this expenditure. It should be a lesson for future Administrations not. to trespass in these particular by-paths. We do not know what is happening to this advertising fund. Let us look at the matter in a broad light. A vote of this kind might be used to buy the support of newspapers in the Mother Country for an Australian Government. This factor is very important from a party political stand-point. The cables sent to the Australian newspapers every day are capable of shaping, to a considerable extent, the public opinion of the Commonwealth ; and if my honorable friends opposite had studied the life of Bismarck, they would realize how that statesman used the press to a. considerable extent in order to shape secretly public opinion in Germany. There is nothing to prevent consideration being offered to newspapers in England to be friendly to an Australian Government, by publishing information which would afterwards be cabled to Australia, and thus be capable of influencing Australian opinion. It is, therefore, our duty to inquire into the distribution and allocation of this grant of£36,000
Mr.Fisher. - It is only £7,000 for the three months,
– One of the difficulties in regard to voting Supply in this manner has been that we do not know how far we are aiding the Government in voting these instalments of expenditure. Undoubtedly, in the interests of economy in the public Departments, and of a reasonable scrutiny over expenditure, we ought to have the Estimates presented to Parliament early in the session. I do not blame the present Administration, because previous Governments have adopted the same iniquitous practice. I hope that whatever is done with this vote for the development of the resources of the Commonwealth, not a penny will be expended for the purpose of securing the good services, or the good opinion, of any particular class or type of journalists. In British communities we are justifiably proud of our press. But proud as we may be of the press in the abstract, no doubt there are individual instances where the press has been subject to certain influences. We ought to ‘be particularly careful to see that none of this fund is expended in such directions as I have suggested. By all means let us develop the resources of the Commonwealth and take the best steps possible to make known to the peoples of the world what a rich country we have here, and how worthy we are of their commercial and personal support. We shall thus secure our own advantage and do something to help along the good government of the Commonwealth.
Proposed vote agreed to.
Divisions 17 to 20 (Attorney-General’s Department), £3,925, agreed to.
Divisions 21 to 29 (Department of Home A fairs), £55,170.
– There is an item of £[2,000, “ Expenses in connexion with choosing the site of the Capital of the Commonwealth.” What does the word “choosing” mean? Does it mean that the Government are proceeding with the survey?
– The meaning of the word referred to by the honorable member for Parramatta is that we are spending a little money in keeping things moving on the Capital site. We hope soon to get a larger sum and to ‘ ‘ make her hum.”
– Does this mean that moneyis being spent on choosing the site within the Territory ?
– The Territory is fixed, and we are choosing the site within it?
– Then the Government are going straight ahead?
– Does this vote indicate that a similar amount will be required every two months?
– The £[2,000 will be for the next two months, but I hope we shall be spending more later on.
Proposed- vote agreed to.
Divisions 30 to 35 (Treasury), £[i5,43°> agreed to.
Divisions 41 to 51 (Department of Trade and Customs), £63,335.
.- I wish to discuss the administration of the Tariff in connexion with an item which is dutiable at 5’ per cent, on the general Tariff and free as regards imports from the United Kingdom, but which the Customs Department has classified under a heading making it dutiable at 20 per cent, and 15 per cent. On the 9th December, 1907, when the Tariff was under consideration and we were dealing with cardboard, millboard, pasteboard, and so forth, the goods were proposed to be made dutiable at 20 per cent, in the general Tariff and 15 per cent, in the Tariff applying to the United Kingdom. I moved an’ amendment to provide that millboard, greyboard, leatherboard, woodboard. &c, should be taken out of the list and made dutiable at a lower figure. Sir William Lyne, then Minister of Trade and Customs, accepted my suggestion, as will be seen by reference to page 7236 of Hansard, volume XLII. The present Minister of Trade and Customs supported my amendment. In doing so he informed the Committee that, when the Tariff was being discussed six years before, he received a letter from the Bookbinders and Paperrulers Union, which, at that time, was a Victorian institution, and had since become a federated union, making the same suggestion, with the addition that cardboard and pasteboard- should be admitted duty free. It was quite plain that when the amendment was carried making greyboard dutiable at 5 per cent, on the general Tariff and free in the case of imports from the United Kingdom, the intention was to give effect to that classification. I have here a sample of greyboard, which I produced at that time, and have shown to the present Minister of Trade and Customs. The Department now refuse to admit this greyboard at 5 per cent, under the general Tariff, and free from the United Kingdom, as intended by this Parliament.
– What is the reason given?
– It is very difficult to say, because the Department have wobbled so much in connexion with the matter. I understand that the article is not manufactured here, but that some manufacturers of strawboard believe that if this greyboard can be excluded, a greater demand will be created for the article which they produce.
– Victorian manufacturers say that they do make the same board, but I do not think that what they make is the same at all.
– This greyboard was made dutiable under the 1902 Tariff at 10 per cent. The Customs Department early in 1907 demanded that there should be a higher duty imposed upon it, but when the other point of view was pressed, the demand was withdrawn. After the passing of the revised Tariff, and up to 24th May, 1908, it was classed as 5 per cent., and free. From 25th May to 12th October, it was included in the articles dutiable at 20 per cent, and 15 per cent., then from 13th October to13th December, the same greyboard was classed as 5 per cent., and free, and since 14th December, it has again been included in the articles dutiable at 20 per cent, and15 per cent. During the consideration of the question, the Crown Solicitor of the Commonwealth wrote to a Sydney firm as follows, on the 12th October, 1909 : -
I am instructed to inform you that the Department will refund the amount of duty in dispute in this action, together with interest thereon at 5 per cent., and pay taxed costs as between party and party to this date.
Kindly advise your client to make the usual application for the refund..
Crown Solicitor for the Commonwealth.
That was confirmed in a subsequent letter. There is a large factory in my electorate employing a considerable number of workers who are interested in this matter. When the owner of that factory learned of the decision, as reported by the Crown Solicitor, he cabled to the United Kingdom an order for a considerable quantity of greyboard, but, by the time it reached Australia, the article had again been classified with those dutiable at 20 per cent, and 15 per cent., and honorable members will readily understand what the consequence was.
– The duty was increased by Ministerial decision.
– Yes. I understand that this question has been referred to some manufacturers in Victoria for their decision.
– Will the honorable member give any proof of that?
– I should not say that it was referred to them for decision, but’ for their opinion. The Department would not be likely to ask outside manufacturers for a decision upon such a question, but their opinion has been sought, and it is likely that the Department has been guided by it.
– As regards the quality of the material?
– No; as to the classification in the Tariff in which it should be included; as to whether it is greyboard or pulpboard.
– These persons are competitors of the Sydney factory.
– The honorable member has no evidence to support what he has said.
– I have deduced it from the statements which appear in a letter written by the Minister himself, and dated 24th May of this year. The honorable gentleman wrote -
In regard to the advice received from the Paper Traders’ Association of Victoria, reference to the Association is necessary since paper merchants in Melbourne refuse to advise the Department in regard to trade names of papers except through their Association.
The opinions of experts are, however, sought in other States, particularly New South Wales, but lately the paper merchants there have informed the Department that they do not intend to give further expert advice, as it has been decided to leave that in the hands of the Paper Traders’ Association in Victoria.
The Department is not bound to act in accordance with the advice of the Paper Traders’ Association of Victoria, and acts independently of it when evidence is available to show that the Association’s opinion is not in accordance with the law. Every effort is made to secure the most reliable evidence before a decision is given.
Frank G. Tudor.
I think it is apparent from that letter that the Paper Traders’ Association of Victoria has been consulted as to the item of the Tariff in which this greyboard should be included.
– They are not manufacturers.
– I should not have used the word “ manufacturers.”
– The honorable member did say so in opening.
– The honorable member said that the matter had been referred to Victorian manufacturers for decision.
– I do not know whether they are manufacturers or not.
– There is a great difference.
– Yes, but they are competitors of the firm to whom I have referred, and are interested parties. The statement is made by the Minister that the boxmakers are unanimous that greyboard is used only by them, whereas the paper merchants say that it is used only by bookbinders. I have here two extracts from The Boxmakers’ Journal, an English journal devoted entirely to the boxmaking industry. It includes advertisements by the Laurentide Paper Company Limited, Canada, and Becker and Company Limited, of Cannonstreet, London, offering to supply greyboards for boxmakers. So that the claim made by some local boxmakers that greyboards are used only by bookbinders is not borne out. I have a number of samples of greyboard here. One of these was at one time passed by the Customs Department, but they now refuse to pass it. I have here a sample of greyboard from the Thames Paper Company, which the Department refuse to pass. I have also a sample of greyboard in postcard form from a pulpboard manufacturing company of Liverpool, Canada, which the Department have also refused to pass. What I mean is that they refuse to admit these samples of greyboards at the rate which this Parliament decided should be imposed upon greyboards. They claim that they are samples of pulpboard
– What does the honorable member propose to do?
– I am submitting to the Committee a statement of facts, which goes to show that, under the administration of the Customs Department, an injustice is being done to the users of greyboards
– What is the effect?
– The effect is to decrease the manufacture of certain cardboard boxes, and, because of the increased price, manufacturers who put up their wares in cardboard boxes resort to very lightly made wooden boxes. Consequently the business of making greyboard boxes is lessened very much, and employes at factories are put out of work. I have mentioned the injustice which is being done to the manufac turer who ordered a large consignment of greyboard on the strength of the Crown Solicitor’s letter only to find that when it reached our shores it was made dutiable at 20 per cent., whereas it was the intention of Parliament that it should be admitted free. As I moved in the matter in the House at the time that I produced the samples and the factory is situated in my own electorate, I think that something ought to be done by the Minister to see that the intention of Parliament is given effect to.
– How many men are employed in this industry?
– I do not know . exactly, but it cannot be charged against me that I am seeking to have a Free Trade decision given, because I voted for Protection very consistently throughout the Tariff discussion. It was only because this greyboard could not be manufactured in Australia that it was made dutiable under the classification I mentioned, namely, 5 per cent, arid free. It is not now a question of whether it can be manufactured here or not, but a question of carrying out a decision of Parliament. I hope the Minister will take up the matter and see that redress is given to the manufacturer in question, and that until Parliament alters the classification of greyboard it shall be admitted as provided in the schedule, namely, at 5 per cent, and free.
– The honorable member informed me that he intended to bring forward this matter to-night. It is by no means new. I think that many honorable members from New South Wales have addressed communications to the Department about it. The difficulty is that the experts disagree as to what is pulpboard and what is greyboard. It is not the manufacturers who are consulted, but the paper traders of Victoria, simply because they are the most get-at-able. The paper traders of New South Wales say that they do not desire to have samples sent to them, as they prefer the Melbourne men to deal with them. Most of the manufacturers who are represented here are also represented in Sydney. No Customs Department has a body of trained experts, particularly on paper. It is the most difficult section of the Tariff to interpret, and when any difficulty or doubt arises and importers desire to bring in lines which the Department thinks should not be classified under an item it has to deal with outside experts, because it is their evidence that would have to be given and taken in a court of law. I can assure the honorable member for Cook that I would be the last person in the House to allow an injustice to be done to an Australian manufacturer, and if it is possible to classify as greyboard the article which the Department has classified as pulpboard, I shall be delighted to do so.
– But the Department has done so previously.
– I do not think that the honorable member is accurate. There is such a small difference between pulpboard and greyboard that even experts, unless they submit the boards to certain tests, are unable to tell it.
– The honorable member for Cook has pointed out that in a certain ‘case a refund of duty was made.
– That was in regard to certain shipments, and that shows distinctly that when the Department finds that it has made an error it is willing to recompense the importer. This decision was not given in my time. If it is a right decision I am prepared to see that it stands. In view of all the evidence which has been submitted I shall certainly look into the case. I can assure the honorable member for Cook that I did vote with him on the item, because I knew then, as I know today, that these articles are not being made here. It was against my vote that pulpboard was made dutiable. Had it been free there is no doubt that this article would be coming in at a lower rate today.
– I understand that some persons connected with the association to which the matter has been referred are interested in the manufacture of strawboard.
– I certainly did not know that. I should object to any interested persons acting as the judges of another man’s material.
.- I wish to ask the Minister of Trade and Customs a question. Some time ago there was another question of a Ministerial decision raised. It involved a loss to the revenue, and it is, therefore, a matter of some urgency to the people as a whole. I refer to the matter of supercalendered paper. The Minister, if he will look at the records, will find that, under a previous Administration, an order was given that supercalendered paper similar to that used by the Sydney Bulletin, should be deemed to be newspaper, and admitted free, instead of paying 15 and 20 per cent., as the Tariff laid down. I do not know whether the Minister has satisfied himself on this point. Tomy mind, and I think to the minds of those in the trade generally, there is as much difference between chalk and cheese as there is between ordinary newspaper and supercalendered paper. I ask the Minister if he will look into the question and see whether revenue is being sacrificed by the Ministerial decision, and, if so, rectify the matter.
– I promise the honorable member that I shall look into the matter.
– I do not know if it is a question as to whether this is greyboard or not, but assuming that it is, and I think that there is little doubt that it is, because in paragraph n of item 356 are included millboard, greyboard, leatherboard, woodboard, and manillaboard, at 5 per cent, and free. I have always protested against the Department attempting in any way to go behind the back of Parliament and imposing duties on articles which Parliament intended should not have as high duties imposed upon them as the Department very often, in my opinion, has imposed contrary to the spirit and intention of the Act. In this case it is clearly provided that, the article shall be admitted at 5 per cent,, and free. Unless there is some serious fraud being perpetrated and some very sound reason for the Department raising the duty, I think that the practice ought to be very severely condemned.
Proposed vote agreed to.
Divisions 52 to 210 (Department of Defence), , £183,217, agreed to.
Divisions 211 to 217 (PostmasterGeneral’s Department), . £569,059.
– I wish to briefly direct the attention of the Postmaster-General to a complaint made by the people of Cronulla about their inability to obtain the construction of a telephone line from Cronulla to Kogarah, which has been recommended. Some time ago it was found impossible to get telephone messages through from Cronulla viâ Sutherland without protracted delays, and an inspector reported in favour of a direct line to Kogarah. In reply to a letter which I wrote to the Department on the subject, I received the following communication : -
Referring to that portion of your letter of the 8th instant relative to the Cronulla-Kogarah direct telephone service, I have the honour to. intimate that from the reports received it is seen that action is urgently required in order to relieve the traffic on the Cronulla line. It is considered that the best method of providing the service is by the erection, of an additional wire between Sutherland and Cronulla, viâ Port. Hacking, in order to carry the telephone traffic, the present line to be used for telegraphic business. If this were done, the existing lines between Sutherland and Kogarah would carry the telephonic traffic. Approval has accordingly been given for the erection of this additional wire viâ Por.t Hacking, but owing to the Metropolitan Construction Staff being engaged on other urgent works, it will probably be a month or two before it can be placed in hand. The matter will, however, be attended to at the first opportunity.
That was written on the 14th March last, but I have since been informed by the Sutherland Shire Council that, although the congestion is more acute and is growing increasingly so, the promised direct line has not been commenced. The council asks me to bring the matter again under the notice of the Department, so that relief may be afforded. The residents and others who visit the district should be able to transact telephone business in a more satisfactory way. The people of Cronulla have been very patient, but it is time that the Department did something to carry out its promise to construct a direct line to Kogarah.
– For the past three years we have been informed by the Department that works wnich have been approved as necessary could not be carried out for want of funds. Now conditions have changed. Parliament has voted money liberally for telephone construction, but the Department replies to all inquiries that work cannot be taken in hand, not for want of money, but because there is not the staff necessary to cope with it. There is something wrong in that position. At first money was lacking; now the staff Ls insufficient. I hope that the Postmaster-General will see whether it is not possible to create a staff strong enough to do the work.
– I shall look into both matters which have been mentioned.
Proposed vote agreed to.
Division 39 (Refunds of Revenue), £20,000, agreed to.
Division 40 (Advance to the Treasurer), £350,000.
. -I should like to make my final protest against the action of the Government. They have repealed the Act which gave authority for the building of the naval unit, and have not substituted1 anything for it. At the same time, they ask Parliament to vote money to pay for the ships that are building. There is no legal sanction for this expenditure. The proper course would have been to introduce a Bill repealing the Naval Loan Act 1909, and authorizing the construction of the ships, and providing that the . payment for them should be made out of the Consolidated Revenue. Why has that course not been taken? Instead of that having been done, the money is asked for as if it were to be expended for the ordinary services of the year. That certainly is not right. I wish also to remind the Treasurer that within a few weeks the Works and Buildings Estimates, and the covering Appropriation Bill, will bc passed. They will include the appropriations for the building of these ships, and the Treasurer’s Advance will then be relieved of about £400,000, so that the Treasurer will then have £600,000 to do as he likes wilh, whereas no previous Treasurer had more than £200,000.
– I promise the right honorable member that that will be adjusted. I shall not have £600,000 to spend as I like.
Proposed vote agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
Bill read a thirdtime.
House adjourned at 11.26 p.m.
Cite as: Australia, House of Representatives, Debates, 9 August 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100809_reps_4_55/>.