10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 2.30 p.m., and read prayers.
– In view of the widespread interest in the recent purchase of radium by the Government, will the Minister for Health make a statement on the subject?
-With the permission of honorable members I intend to make a full statement regarding the purchase and distribution of radium.
– I rise to a point of order. Is it customary, Mr. Speaker, when a motion of want of confidence is before the House, for Ministers to answer questions ?
– The usual practice is for Ministers not to answer questions while a motion of want of confidence is before the House. That matter, however, is within the discretion of Ministers. Mr. HURRY. - When will the Minister for Health make his promised statement ?
– As early as possible.
– On the 6th October I asked the Prime Minister if, having regard to the great assistance they have rendered to the cotton industry in Africa, he would try to arrange for Sir James Currie and Sir William Himbury, leading authorities on cotton, to visit Queensland and advise as to the possibilities of the cotton industry there? A month has elapsed since the question was asked, and I have been informed that the Government has communicated on the subject with the Government of Queensland. I now ask the right honorable gentleman if he has yet received any reply to that communication ?
– In accordance with the promise made on a previous occasion I communicated with the Government of Queensland on this subject, but have not yet received a reply.
Motion of Want of Confidence
Debate resumed from 8 th November (vide page 1052), on motion by Mr. Charlton -
That, owing to its attitude towards the Commonwealth Shipping Line, the Government has forfeited the confidence of this House. The surrender of Government ownership of the Commonwealth Line will act to the serious detriment of Australian producers and will subject the whole community to exploitation by the Shipping Combine ‘ against which the Government Line is at present the only effective safeguard.
.- I feel under a direct obligation to speak on this motion because I was a member of the Public Accounts Committee which reported upon the Commonwealth Shipping Line and also because I claim to represent directly the primary producers. The final paragraph of the motion says that “ the surrender of Government ownership of the Commonwealth Line will act to the serious detriment of Australian producers . “ For that reason I feel it incumbent upon me to explain my reasons for signing the majority report. I, and other members of the committee entered upon the inquiry with unbiased minds; indeed, prior to the investigation I was of opinion that the Commonwealth Line had been and was still of assistance to primary producers- at all events, to a certain number of exporters. Very many questions were asked, and much evidence and statistical matter was gathered, and the conclusion at which the majority of the committee arrived was inevitable. The members of the committee were like a jury pledged to bring in a verdict in accordance with the weight of evidence, and I claim that we did so, and the fact that majority and minority reports were presented shows that members of the committee viewed the evidence according to their lights. I say nothing against those honorable members who signed the minority report, and I claim that those who signed the majority report should not be traduced and subjected to the accusation that they were influenced by considerations other than the weight of evidence. The committee had to consider the value of the Line (1) as a national safeguard, and as an aid to the establishment of an Australian mercantile marine; (2) as a commercial proposition; and (3) as a safeguard against increased fares and freights. I shall deal with those points in that order. Honorable members opposite have said that the vessels of the Commonwealth Line were built to admiralty plans and are convertible for use as cruisers in time of war. As such they would be, we are told, of great advantage to Australia, constituting with our warships a nucleus fleet for the defence of our shores and seagoing commerce. It seems very questionable whether those boats would be available for our defence if war broke out. In 1914 war was declared with startling suddenness and if the experience were to be repeated, our vessels at the declaration of war would be strung out over 13,000 miles of ocean between Australia and Great Britain. Perhaps one or two of them would be in Australian waters. For that reason I do not think that the Australian Commonwealth Line would be a cogent factor of defence in the event of an outbreak of war in which Australia was Concerned. In any case, an arrangement would be made, as was made during the last war, between Great Britain and Australia regarding the use of merchant vessels as auxiliary cruisers. The need for building up an Australian mercantile marine has been mentioned, but I do not think that the Australian is a seafaring man. I do not say that he is not efficient while employed at sea, but in the main Australia does not possess the class of man who looks to the sea for his livelihood. Both Australia and the United States of America are vast continents, and their inhabitants are not in the main seagoing, while those of Scandinavia and Great Britain are. If we try to build up a mercantile marine in Australia, we shall find a great deal of difficulty in obtaining the personnel to man our vessels. The honorable member for Cook (Mr. C. Riley) last night stated that the reason why the personnel of the Australian Commonwealth Line was domiciled more largely in Great Britain than Australia, was that the vessels were in the ports o’f the United Kingdom longer than in those of Australia.
– Also because the Line has no certain tenure of life.
– The figures contained in the report of the Public Accounts Committee show that there are 149 officers domiciled in Australia, as against 48 in the United Kingdom. Taking the crews, including the victualling and engine room staffs, we find that 365 are domiciled in Australia and 472 in the United Kingdom. If the officers are prepared to make their homes in Australia, surely the men should be prepared to do likewise. I do. not think that the uncertainty of the continuance of the Line has any bearing on the subject. It seems to me that in trying, to build up an Australian, mercantile marine, we are assisting Great Britain rather than our own country. I do not cavil at that in the slightest, but a loss of £12,000,000 to maintain a personnel of 1,034, which approximately is £11,000 per man is far too high a price to pay for the admiralty. The Australian Commonwealth Line cannot be regarded as a commercial proposition. British vessels are running at a cost of at least 60 per cent, less than Australian registered vessels. As the Prime Minister said yesterday, the additional cost of maintaining the Line as against that of a similar British line is £220,000 a year, and that precludes any prospect of making a profit. From the point of view of world’s competition,, taking the Australian cost as £100, the American cost would be £42, the British cost £32, the Swedish cost £24, and the Danish cost £15. Therefore the prospects of the Line are not very bright for the taxpayers of Australia. Then we come to the earnings of the Line. In 1925-26, the “Bay” vessels made a voyage profit of £94,000, and the “ Dale “ vessels a voyage loss of £56,000. It must be remembered that during that year British vessels were held up, many of them in Australian waters, by a strike in which certain Australian union officials played a prominent part. In 1926-27 the voyage, loss on the “Bay” vessels waa £10,000, and on the “Dale” vessels £20,000. The loss was really more than that, because the figures placed before the committee were partly estimated. The Prime Minister yesterday supplied the final figures from the balance-sheet of the Australian Commonwealth Line. The trade loss for 1926-27 was estimated at £575,000; but the actual loss was £590,000. Since the Commonwealth Shipping Board has been established, the losses have steadily ascended. From the 1st September, 1923, to the 31st March, 1924, a period of seven months, the total loss was £245,474. From the 1st April, 1924, to the 31st March, 1925, the total loss was £593,879. In the ensuing year, the loss was not so great, being £503,076; but, as I have explained that was due to many British ships being held up by a strike. From the 1st April, 1926, to 31st March, 1927, the total loss was £590,000. The honable member , for Cook stated last night that the Line had turned the corner, and I could not help wondering what road it is to follow in the future. To me it seems that the only road that it can take leads straight to a financial morass. A great deal of harm has been done to the Line by the men who have been employed and have benefited by it. It is common knowledge that for years it has been a losing proposition from a commercial stand-point; yet in their last log the seamen asked for a further increase in wages, which would, of course, mean increased running costs and further losses to the Line. It seems to me that the seamen expect the taxpayers to carry them on their backs for an indefinite period.
– They were not examined by the committee.
– They refused to give evidence. The following article appeared in the Melbourne Argus, of the 16th August last, under the heading, “ Seamen’s New Claims. Large Increase in Wages. Forty-four HourWeek Wanted “ : -
Copies of the proposed new log of wages and conditions for seamen employed on interstate vessels were delivered to individual ship-owners yesterday, and will be considered by them before a conference is held between the interested parties. Meanwhile the agree ment entered into by the Federated Seamen’s Union of Australia and the Commonwealth Steamship Owners’ Association, to date from 6th August, 1925, remains in force. This agreement was to remain for two years, and thereafter until three months’ notice of termination had been given in writing by either party.
Last year the average rates of pay for able seamen in the French mercantile marine were the equivalent of £4 10s. a month, in Germany £46s. 9d., in Italy £4 14s. 3d., in Belgium £511s. 3d., in Norway £5 116s., and British sailors received £9 a month, these amounts in all cases being exclusive of keep. The present rate for Australian able seamen is £16 2s.6d. a month and keep. Following is a comparison of the rates under the present agreement and those claimed by the Seamen’s Union. The rates under the agreement are subject to quarterly adjustments according to variations in the cost of living: -
Demands are made also for a 44-hour week, with Saturday afternoon and all day Sunday free while the vessel is in port.
That clearly shows the Line to be a financial failure. It employs 1,034 men at rates 60 per cent. higher than those received by British seamen. Still, the members of the Seamen’s Union are determined to hound the Line down until it will be impossible to do anything with it. The Leader of the Opposition gave no hope that it would ever pay. He said it provided a safeguard in the matter of fares and freights, a contention with which I shall now deal. That seems to be the last resort of the supporters of the Line. They do not seriously consider the financial side of the subject. They say that that does not matter so long as a saving to the primary producers is effected by reductions in freights and fares. According to the evidence submitted to the committee, I should say that the benefit derived by the primary producer on this account is entirely problematical. It is impossible to estimate the effect of the Line in the reduction of fares and freights between Australia and the United Kingdom. The committee was informed that it carried 7 per cent. of that freight; but the Prime Minister, armed with later figures than those furnished to the committee, remarked yesterday that the Line now handled only 2 per cent. of it. The remaining 98 per cent., therefore, must be borne by foreign and British ships.
– The Statistician indicates that 7 per cent. of the outward freight is carried in Australian bottoms. The suggestion is that the analysis of the figures shows that the Line carries only about 2.78 per cent, of it, the remainder of the 7 per cent, being chartered or conveyed in other ways.
– Apparently, the Line carries only 2 per cent, at the present time. The greatest factor in the reduction of freights and fares is competition, and the competition that counts is not that coming from the Inchcape Combine - to employ a term frequently used by honorable members opposite - but from foreign shipowners, who run their vessels at a much lower cost than British companies. Foreign competition is what the British ship-owners principally fear. In my opinion, they welcomed the advent of the Australian Commonwealth Line, because its effect was to assist in keeping up fares and freights; they could run their ships at a profit, while the Line was losing many thousands of pounds a year. But competition will be much keener in future than it has been in the past, because of the operations of Scandinavian motor ships in the Australian, United Kingdom, and Continental trade. So long as Scandinavian companies can operate their vessels at the present low rate, the effect of their competition will be to keep freights down. Assuming that the Line would reduce freights, and that its vessels would be largely availed of, it could only carry freight to the amount of 7 per cent. as the committee was informed, between Australia and the United Kingdom. It would not matter to the Inchcape organization if the Line took cargo free, because the Conference ships would still have at least 93 per cent, of the freight to lift. I have not heard honorable members opposite advocate the introduction of loan bills for large sums to provide more Commonwealth ships, and to recoup the Line for the losses sustained. The Prime Minister (Mr. Bruce) has rightly said that the taxpayers of Australia have not realized what the Line has been costing the Commonwealth. Since the formation of the board its working capital has been raised by the sale of certain units of the fleet. The Line has now come to the end of its tether, and if it is to continue it will have to be financed by this Parliament. Under the circumstances I believe that the people would answer with a resounding “ No “ if they were asked whether it should be retained. The proportion which freight bears to the value of goods carried is infinitesimal, and has practically no bearing upon the price which the primary producer obtains for his products. I am not betraying any confidence when I say that the Conference is not a very happy group, and that the competition between the different companies which comprise it is so keen that there is no likelihood of a universal raising of fares and freights. The majority of the primary producers will be considerably amazed to learn that the CommonwealthLine carries only 1 per cent, of the wheat that is exported from Australia to the United Kingdom. Wheat is a commodity that we export more largely than any other primary product. Therefore, what advantage can the retention of the Line confer on the primary producer? The argument that it should be retained on the ground that it keeps down freights is thus seen to be not quite tenable. Nothing of a concrete nature was placed before the Public Accounts Committee to prove that it had exercised such an influence in the last few years. Some of the directors of the Line appear to have had the happy knack of announcing a reduction of freight a day or two before it was announced by the Conference, notwithstanding the fact that it was the. result of a mutual agreement. In my opinion that was not quite correct. Seeing that the Line does not carry from Australia a sufficient quantity of primary produce to make it a factor in the fixation of rates, the claim that it has been instrumental in keeping down freights must be largely bluff. I am not acquainted with any of the British shipowners, but I do not think that they are the type of men who can be bluffed.
– Why did the honorable member append his signature to the interim report of the committee, which stated that the Line had kept down freights ?
– I shall deal with that matter in a moment. In the light of the fact that the Line carries only 2 per cent, of Australia’s exports, those who claim that it is a factor in keeping down freights occupy a position similar to that of a man who holds only a pair of deuces whilst his opponent has a full hand. The result of a showdown is liable to be both humiliating and expensive. Honorable members of the Opposition argue that the Line must be retained at all costs. Their use of the word “ costs “ is peculiarly appropriate. They do not suggest any method by which the necessary finance may be provided. It is undoubted that additional tonnage must be built to relieve the strain on the existing fleet, which is running day and night without an opportunity to lay up for overhaul, and on that account has already lost a considerable degree of its usefulness.What would the taxpayer say when he realized that he had to pay additional taxation to finance such a project? I have watched the career of the Commonwealth Line since its reconstruction in 1923. I and other members of the Country party then hoped that it would make a profit, which would be utilized in the construction of additional tonnage, and the provision of more refrigerated space. “We have been forced to realize that there is no chance ofits making a profit, and instead of being a benefit to the primary producers it has become an additional burden.
– Since that time the Line has built an additional 340,000 cubic feet of insulated space.
– The line has failed. I do not say that that failure has been due to inefficiency. I was impressed with the efficiency and the alertness of its officials. They are performing their duties in an excellent manner; but the burden of expense has been too much for any Line to carry. The cause of its failure has been the hopeless attempt to compete in the trade of the World under Australian navigation conditions. The establishment of the Line in 1916 was a stroke of genius; but at the termination of the war there was such a surplus of tonnage, and the competition by other countries whose costs were not so great as ours was so keen, that its usefulness was destroyed. The present Government is to be commended for having done everything possible to make it a success. As it has not succeeded after the writing down of the value of the fleet, there can be no hope of future operations showing a profit. I was impressed with the “ Dale “ boats, but amazed at their prodigious cost. They represent a constructional expenditure of nearly £1,000,000 apiece. The honorable member for Cook (Mr. C.Riley) last night referred to the launching by LadyRyrie of a 20,000-ton Orient liner. That steamer has every convenience for both passengers and cargo, yet it cost very little more than each of the “ Dales,” the tonnage of which is only 10,000. It is impossible for them to pay their way.
Mr.Watkins. -Would it not be fair to say that they were built during the war ?
– -The second”Dale” was built after the war. I wish to say a few words regarding the interim report of the Public Accounts Committtee, that has been so extensively quoted by the honorable member for Cook and other honorable members. “ Interim “ means meanwhile, or temporary. ‘ That report was made while the inquiry was proceeding, and it had no influence on the final report. A principle of British justice is that no man is to be treated as guilty until the case against him is proved, and that is not done until the conclusion of the taking of the evidence. For this reason I do not place a great deal of value on the interim report; but it was considered that, if it Were possible to assist anybody, that report should be issued. I admit now that our hearts were bigger than our heads. The honorable member for Cook knows why that report was submitted, and it ill behoves him to endeavour now adversely to influence the views of honorable members as to the action of the committee. As the proceedings were held in camera, I am unable to divulge to this House the reasons why the report was put in, but the honorable member could clear the position.
– I mean what I subscribed to. The others did not.
– The honorable member for Cook stated that the ex-chairman of the committee, Sir Granville Eyrie, in course of conversation said that he was in favour of maintaining the Line.
– That was not merely in course of conversation with me. The honorable member and others were present.
– I entirely contradict the honorable member as to the tenor of Sir Granville Ryrie’s remarks, and I hold that the statements made in England later by that gentleman support my contention. I consider it very paltry to say that the High Commissioner for Australia, whom we all know, and I feel sure esteem, has changed his opinions since assuming his highly responsible position. It was pointed out by honorable members opposite that the committee examined 29 witnesses, and that it entirely altered its mind after hearing the thirtieth. I have not counted the witnesses, but I remember those who gave evidence of moment, and, undoubtedly, the most important of those was the present chairman of the Line, Mr. Larkin, who was absent for some time in England. It is unfair to attempt to disparage Mr. Larkin by saying that he was not absent when the committee desired to hear him. At that time he was in England, negotiating the sale of surplus tonnage to euable the Line to carry on and to pay the seamen it employed. To illustrate the relative importance of Mr. Larkin’s evidence, I mention that, during the course of the inquiry, the committee of Public Accounts put to witnesses 5,,S74 questions, which were answered. Four thousand two hundred and eighty-two of those questions and answers had been taken before Mr. Larkin gave his evidence. That gentleman was asked, and answered, 1,592 questions,, which represents onethird of the whole of the questions asked. It was necessary that the’ committee should not arrive at any deter.mination until it had* heard the evidence of Mr. Larkin.. I hold’ no brief for that gentleman^, but I feel impelled! to> pay a tribute to* the ability and brains he- has shown himself” to possess since- he has been ian charge of the lime. Had the committee, not heard his evidence it would “have been parallel to staging “ Hamlet “ without the Prince of Denmark. His evidence was most valuable and,. I consider, impartial. It was exceedingly “helpful to the committee,, and resulted iki a. great many witnesses being recalled, who furnished to the committee further figures and balance-sheets which undoubtedly assisted it in arriving at its decision.
Honorable members opposite are very loquacious on the subject of economy, and in a number of debates this session I have heard them stress the need for economy in Australia. Now, when the continuance of the Australian Commonwealth Line of Steamers would involve the expenditure of millions of pounds, honorable members opposite are quite silent on the subject of economy. It appears to me that they preach economy only when it suits them. The honorable member for Cook intimated that Australian shippers did not use the Line because of certain compulsion which was brought to bear on them. If Australian shippers do not make full use of the Line it indicates that they have not much concern as to its continuance. The honorable member for Darling (Mr. Blakeley) dealt with the carriage of wool. We are all aware that a great quantity of wool is sold by auction in our different capitals, and is bought by British and foreign buyers. The foreign buyers^ naturally, ship their purchases on foreign bottoms. English buyers do not care on what Line the wool is despatched, provided it is by the earliest steamer that is leaving. I am confident that no compulsion is applied by the firms concerned. I waa amused by the remark of the honorable- member to the effect that he- was looking forward to the day when everything would be run by the Government, and there would be no private- enterprise. I believe that, as it is, 0[me out of every twelve persons in Australia is employed in the service of various governments. Such a state of affairs would- mean, the revival of governmental enterprises^, such as stations, butcher shops, trawlers, &c.,. schemes which, advanced by Labour governments, ultimately proved to- be a nightmare to succeeding Treasurers when they endeavoured to- balance their accounts. The speech of the honorable member contained a very telling indictment of government enterprise.. He contended, that no private: company would do the things that a government- dad, and contrasted actions taken under the respective control of private a-nd government enterprise, much to the advantage of the former. I admit that the gentlemen who started many of the government trading enterprises did so in what they conceived to be the best interests of the people. I have in mind particularly the State cattle stations, established by the Ryan government in Queensland. No doubt Mr. Ryan was actuated by a desire to provide cheap meat for the people in the cities. His idea was right, but in practice it proved all wrong, because there are certain factors in government enterprises which prevent them from ever being successful. I was impressed by hearing the honorable member for Dalley (Mr. Theodore) say at Goondiwindi in answer to a question during the last federal election, that the Queensland Labour Government had acted in what it believed to be the interest of the people when it established the stations, but they had proved a failure and the Government was trying to get rid of them. Anybody is liable to make a mistake, and the perpetuation of the Commonwealth Line beyond a certain point is recognized by the great majority of the people to have been a mistake, and should be so acknowledged by honorable members opposite. In justification of the Commonwealth Line, its supporters quote the losses incurred by other government shipping enterprises, but two wrongs do not make a right, and it is our duty to profit by the errors made by other governments. Honorable members opposite have not mentioned that the Tasmanian Government, recognizing that its shipping enterprise had been a ghastly failure, disposed of all but two of its vessels. T remember hearing a discussion in the Tasmanian Parliament regarding the services rendered to King Island by those two government ships, and the Minister in charge of them said that the Government would gladly give the vessels to the residents of King Island if they would operate them. The example of the United State of America has been cited, and the Prime Minister, properly retorted that that country lost £600,000,000 over the purchase and running of ships, and is frantically trying to get out of that field of enterprise. Honorable members opposite need riot concentrate all their fears upon the Inchcape group overseas. There are combines closer at hand. The two monopolies that are hindering the development of this country and almost crushing some of the smaller States are the Interstate Shipowners and the Seamen’s Union. An illustration of their influence is provided by the fact that the cost of sending timber from Tasmania to the mainland is 10s. per 100 super, feet, as against only, 3s. from Puget Sound to Australia. I repudiate the charge that the members of the Public Accounts Committee who signed the majority report were improperly influenced. I have never known the slightest pressure to be put upon members of the committee by the Government. When honorable members opposite make’ that charge they speak with their tongues in their cheek. They could not with equal truth refute a similar charge against themselves, for during the last few months we have seen shocking instances of pressure being put upon members of the Labour party to do things which their common sense and instinct prompted them not to do. In this regard the old adage that “those who live in glass houses should not throw stones “ has a particular application to them. The speech made by the honorable member for Cook (Mr. C. Riley) last night was very good in patches. One of the bad patches was his concluding statement that if the representatives of the primary producers assisted to abolish the Commonwealth Line, his party, when it attained power, would see that that section of the.community received no help in future.
– I did not say that.
– That was the effect of the honorable member’s words. Su’ch threats leave me entirely cold. All that the primary producers ask is to be left alone. If they had not been interfered with by State Governments, of which the majority are Labour, their present position would be much better than it is. They are carrying far too great a load, and much of it has been put upon them in order to assist other industries. Let it not be forgotten that the primary producer is providing a great deal of the taxation, both direct and indirect, that is imposed .to give protection to secondary industries in the cities. I consider that the proposal to discontinue the Commonwealth Line is entirely sound, and that the conditions upon which the Government proposes to sell it will secure the approbation of the people in the country and elsewhere. Government trading has been one of the greatest curses of Australia during the last few years. The responsibility of a government is to govern. Trade can be safely left to private enterprise, with an assurance of more economical operating and a more satisfactory deal for all sections of the community. If the Government confines its attention to governing and sound finance, and prunes away the dead-wood enterprises that are no longer of use to the community, this country will go ahead as we all believe it should.
.- The motion raises a much bigger issue than the mere sale of seven ships. It involves the question whether Australia is to be equipped with one of the essentials of a virile nation, namely, a local mercantile marine for overseas trading. My contention that this is a big issue was confirmed by the Prime Minister’s opening declaration yesterday that overseas transport is vital to Australia. He then opened his attack upon the Commonwealth Shipping Line with almost the same arguments as those used by the honorable member for Gwydir (Mr. Abbott) at the conclusion of his speech. Both honorable members affirmed their preference for private enterprise as against government control. The honorable member for Gwydir has what the Prime Minister would call a fetish for private enterprise. The Prime Minister denied that he had’ any obsession on the subject, but in the course of his speech proved that he had. He declared that private enterprise is more _ efficient than government control. “Well, he has been in office for some years and he condemns himself when he says that government control is inefficient. Government enterprises handle the same material as private enterprises, and properly controlled can be equally efficient. One honorable member on the Ministerial side interjected that when private enterprise fails it loses only its own money. That statement has so often been repeated by some honorable members that they believe it. When private enterprise fails, and pays ls. in the £1, is it only the money of the directors that is lost? Are not the insolvency records filled with instances in which the hard-won earnings of the people have been sacrificed by incompetent or unscrupulous directors? When banks and other commercial institutions fail, is not the money of large numbers of the public lost ? When private enterprise succeeds it does so very often by profiteering and exploiting at the expense of the community? But after the Prime Minister had declared that Government enterprise was not efficient, and private enterprise was, he made the astounding admission that the Commonwealth Shipping Line had stimulated private companies to improve their services. Surely that was proof that the government enterprise was the more efficient. It is undeniable that the “Bay” boats were the pioneer users of oil fuel in the Australian trade. They cut down the passage from England from 33 days to 29 days, and shamed the private companies into adopting oil fuel two years later. Yet, according to the Prime Minister, government enterprise is less efficient than private enterprise! The Public Accounts Committee, in its final report, made the affirmation that government enterprise is not inefficient. It said that the modern “ Bay “ and “ Dale “ liners impelled the other lines to improve their ships and services, and made experiments in refrigerated space which rendered possible the successful marketing of Australian soft and citrus fruits overseas. These boats that were so “ inefficient “ showed the way of progress to private enterprise, and the committee’s report states that unless the government steamers landed the fruit in good condition freight was not charged. Would private enterprise do that? The Prime Minister was not content to argue his case on the facts relating to the Line. He looked about Australia for an illustration, and, jumping to the far north, said, “Look at the cattle stations of Queensland.” I smiled, because I remembered at once that when we were indicting the Government for having sold the woollen mills at Geelong, the first argument advanced by the responsible Minister was, “ Look at the Queensland cattle stations!” Of course the Prime
Minister did not refer to the droughts that have afflicted Queensland, or to the fact that private station owners had gone to the Federal Treasurer cap in hand for subsidies, and got them. Not one word was said about the fact that eternally the Treasurer is approached by private individuals who have failed, and who want the hardships board or some other authority to give them relief from taxation - which, when they deserve it, they should get. Past failures of governments are instanced, but no mention is made of successful government enterprise and of our efficient Public Service, which is second to none in the world. I regret to hear such prejudiced condemnation of government enterprise. The Prime Minister used the illustration that the honorable member for Gwydir (Mr. Abbott) used. He said, in effect, “Look at Tasmania. A non-Labour Government purchased two boats which eventually had to be sold by a Labour Government.” Did he quote the facts ? He Avas careful to quote from a minority report of a royal commission, but he did not quote that portion of it which had relation to the very issue that he raised in this House yesterday. When the right honorable gentleman pretends to be fair, he should give the whole story. The following is a condensation of the facts as elicited by the royal commission and presented in a minority report by the honorable member for Bourke (Mr. Anstey) : -
In 1018-10-20, Tasmania complained of its poor shipping service. An official report’ states: - “Valuable cargoes had lain upon the wharfs until they became worthless. The Combine ship Melbourne was purchased by the Government for £62,500, and also the Poolta. For a year the trade waa profitably conducted. The Combine then despatched two and three and up to four ships in advance of Government ships.”
The very persons who had received relief from the Government boats, turned their backs upon them when the Combine vessels were available. They were made available deliberately by the Combine to destroy the Government service. Although that happened in Tasmania, the history of the Australian Commonwealth. Line has shown that Australia could not be treated in that way. The honorable member for Gwydir made a pitiful attempt t.to explain the marvellous somersaults of the Accounts Committee. I am not going to take the committee to task, although many things have been and will be said about it. I shall restrict my remarks absolutely to the main issue. Never before have two reports from the same body of men been so entirely contradictory. The committee consists of Labour members, Nationalists and Country party members, and on the 10th of August, .1926, they submitted an interim report in which they said that the Commonwealth Shipping Line had been directly responsible for reductions in freight and had also exerted a material restraining influence against proposed freight increases. That committee further stated that the shippers and primary producers of Australia had derived much benefit from the Line. I ask the honorable member for Gwydir one simple question, whether that opinion was merely for the time being?
– I regard the interim report as purely temporary.
– Then the very definite assertion in that report was a temporary aberration by the honorable member ?
– I should say so.
– The honorable member has excused his temporary aberration by the fact that the evidence was taken in camera. What difference does that make? The unanimous recommendation of the committee was that, in the interests of Australia, the Line be continued. Subsequently the committee examined one witness, and he was asked one-third of the total questions put to the witnesses that were examined.
– He was the principal witness.
– Will the members of, the committee who signed the majority report give this House some indication of the evidence submitted by Mr. Larkin that caused them to somersault?
– It was not so much the evidence of Mr. Larkin, as the final balancesheet, that influenced the committee.
– The final balancesheet differed very little from the one that preceded it. The majority report of the committee now recommends the sale of the Line. The minority report, signed by Labour members, stands by the original recommendation-. Why did the Nationalists and Country party members somersault? That question should be answered for their own good name. The committee, so we are told in the final report, recognizes the invaluable service rendered to Australia by the Commonwealth Line during the war years, and the influence it has since exercised in reducing and restraining freight rates. I ask the honorable member for Gwydir whether the committee came to that conclusion on the evidence submitted to it? The honorable member completed another somersault by saying that the contention that the Line has kept down freights is untenable; yet in a report that he signed he said that the Line reduced and restrained freight rates and rendered an invaluable service.
– Would the honorable member read the whole sentence?
– The committee added, “ The -benefits now are outweighed by the losses.” I submit that the honorable member gets cold comfort from that. Although he admits the benefit, he says to-day that the contention that the Line has kept down freights is untenable. That shows that in fighting the political battle he is prepared to go back on his own opinions expressed in a printed report. I ask whether the committee considered the evidence to see if the’ losses outweighed the benefits; and, if so, where that is shown in the report, and what evidence was produced to influence the committee to come to that decision. I cannot discover one word of .such evidence in the report. The responsibility is now forced upon this Parliament to consider whether the losses of the Line do outweigh the benefits. The loss is the only thing that has been emphasized in this debate, and if that is to be the only reason for selling the Line, then quite a lot of other activities should be sold. Our Commonwealth railways, the Northern Territory, and even this Federal Capital should be sold. Our Australian Navy should also be sold, because it is not showing a profit. That is only logical if activities are to be sold when their operation show financial losses. The Prime Minister made a speech yesterday, and I should like him to explain some of his figures in respect of the early history of the Australian
Commonwealth Line. He said that at the date of the transfer to the board the profit on the Commonwealth’s shipping activities was £2,448,000; and that had to be taken into account as against the amount which had been written off. He pointed out that the value of the ships had been written down by £8,000,000. That amount he described as deferred depreciation, from which, he said, the profits of £2,448,000, should be deducted. The only inference is that up to 1923 the actual loss was £5,500,000. There is no other inference. That is the impression left upon the minds of honorable members. But ‘the Prime Minister did not give the facts. They were presented to this Parliament in 1923 by the right honorable gentleman himself, when he showed that the voyage profits of the Line were not £2,448,000, but £6,166,943, and when they are deducted from the depreciation and other charges, the net loss over the seven years is £2,645,761. I have with me the paper that was presented to this House by the right honorable gentleman on the 11th May, 1923. It is a statement’ of the position of the Commonwealth Line in connexion with the shipping and ship-building activities to the 30th June, 1923. The following are the true facts concerning the financial history ,of the Line up to that time.
Deducting .from total capital cost, £1,994,000, representing capital realization and reserves, we have the sum of £13,562,054. The market value on 30th June, 1923, was then written down to £4,479,350, showing a depreciation of £8,812,604. If we deduct from that the voyage profits, £6,166,943, we arrive at a net loss for the seven years of £2,645,761. The honorable member for Gippsland (Mr. Paterson), in reviewing that statement, arrived at exactly the same result. He spoke in opposition to honorable members who contended that the Line had lost £9,000,000, since it had been written down to that extent. He said : -
Profits have been sufficient to cover well over two-thirds of that £9,000,000 total depreciation, with the result that the actual net loss is only £2,046,000.
The operations of the Line from September, 1923, to March, 1927, a period of 3 years 7 months, resulted in voyage losses of £379,878, but, with the addition of depreciation, interest and administration charges, the losses increased by £l,i:37,937, giving a total loss of £1,917,810. Those are the figures found in the report, although, I understand, that slight alterations appear in the audited balance-sheet. It is well to examine the reasons for some of these losses. One given in the report of the committee was that unsuitable ships had been transferred to the’ board. Another was that the cost of running the vessels was excessive owing to the fact that there had been maximum use and minimum maintenance during that period. At that time, of course, the vessels had to be run to a standstill. The total value of the vessels transferred to the board was £4,718,150, and those still in commission are valued at £3,400,000, a difference of £1,318,150. The vessels sold brought £1,103,172, showing a loss on the sale of £214,978. When the war was over they were practically useless; they were certainly valueless when they were handed over at a value of £1,318,000. The loss on their sale, as I have already said, was £214,978, and the cost of sale amounted to £286,135. Thus the board was loaded with a cost of over £500,000. In addition to that, the Government, after obtaining an expert valuation of the “ Bay “ steamers, added £100,000 for each boat, or £500,000 for the five vessels. That, together with the transfer of unsuitable tonnage, meant that the board had to find interest and depreciation on £1,000,000 that earned nothing. To this must be added the actual loss on the sale of these Government ships. In other words, during the term of three and a half years, three-quarters of a million sterling, with which the board should not have been saddled, was added to the cost of the Line. Another reason given for the loss was that, owing to the Australian wages and working conditions, the operating cost was about £220,000 per annum more than in the case of its competitors in Great Britain. It was also stated in the report of the committee, and presumably the opinion was expressed by witnesses, that the announcement of the intended sale of vessels created uncertainty in the minds of shippers, and had an adverse effect on the business of the Line. Dealing with the unsuitable tonnage transferred, I find that the total profits made by the ex-enemy ships to 1923 amounted to £3,673,494. In addition to that, the sum of £211,333 was earned by those vessels being employed as transports to carry cargo for the Navy. They also conveyed a considerable number of troops and horses to the front, and for that no payment was received. Speaking from memory, I think that with the exception of nine, those vessels were obtained free. They were run to a standstill. There was a general belief that they would be handed back to Germany after the war, and yet they were taken into account at a valuation of £964,000. That was not giving the board a fair chance to carry on successfully.
– Is that an example of government management ?
– I am not complaining about the management. Honorable members know that in war time it is necessary to obtain the maximum service from ships, just as the maximum was got from the men who were sent to the trenches. The committee stated in its report -
The attempt made to dispose of the Line in 1925 had had, it was stated in evidence, a detrimental effect on its business, and had tended to shake the confidence of regular shippers in the Line, and this had taken some considerable time to overcome.
No strong argument is necessary to prove that assertion. If the. life of a business is uncertain it cannot do as much trade as it would otherwise do, and that is particularly the case with shipping. Prior to the advent of the Line, the Conference ships had introduced a rebate system, and the rebate spirit was still operating in connexion with the Conference Line. Many shippers were naturally afraid to send their cargoes by vessels of the Australian Commonwealth Line. .For years the sword of Damocles was hanging over its head.
On looking up the debate that took place in 1923, I find that the honorable member for Echuca (Mr. Hill) said -
The platform of the Country party declared for an extension of the Commonwealth Shipping Line by the inclusion of large and fast steamers with plentiful insulated space for the purposes of carrying perishable products to the markets of the world at reasonable rates. The main reason is that we believe that in days gone by we have been exploited and probably will bc exploited again.
Since then two “Dale” boats have been built with an aggregate refrigerated space of 320,000 cubic feet. That was in the Country party’s platform prior to the pact between the Country party and the party that is chiefly concerned with the big financial interests of this country. In the same speech, the honorable member for Echuca complained that the boats were not carrying the farmers’ wheat. The Prime Minister rebuked him severely and said that that was not a fair statement. According to Hansard of the 10th July, 1923. page 868, the Prime Minister said -
Shortly after the Line was established it was carrying Australian wheat to London at £7 10s. per ton, at a time when British ship-owners were charging £13 and more, and foreign charters were as high as £15 per ton. The Commonwealth Line’s rates were a considerable benefit to the Australian farmer at that time.
Much lias been said to the effect that the Line can have no influence on freights; but if it could obtain such good cargoes as it did, should it not ordinarily show a profit? There is one good explanation, apart from the fact that the standard of wages is higher in Australia than in any other country. A fact that stands out prominently in the shipping world is that after the war, when tonnage depreciated almost to zero, British and foreign shipowners, cut their losses. They wrote them down to practically nothing. But they did it out of the large profits made during the war, when they were charging £13 and £15 a ton for wheat, as against £7 10s. charged by the Australian
Commonwealth Line. They built up huge reserves, which were largely invested in government bonds at high rates of interest. But the Australian Commonwealth Line, cutting its freights down lower than those of any other line, still made a profit, although it was required to pay its receipts into revenue, and could not reap the benefit of accumulative profits. It has been said that the 7 per cent, of the trade carried by the Australian Commonwealth Line is a puny quantity. Now an attempt is being made to suggest that the Line only carries 3 per cent, of the trade. J was astonished at that suggestion coming from the Prime Minister. Nothing could be more deceiving than percentages. The right honorable gentleman’s argument reminds me of the story of a man who had been drowned in a creek. It was said that his death under such circumstances was impossible, because the average depth of the water in the creek was only six inches, As a matter of fact there was a hole in the creek ten feet deep! The total tonnage for export includes bulk tonnage, such as that taken in tramp ships. I have reliable figures to show that the Line carries, on the average, 18.3 per cent, of the regular overseas trade. Honorable members have spoken of what the Line did during the war, and have said that its establishment was a stroke of genius on the part’ of the ex-Prime Minister, the right honorable member for North Sydney (Mr. Hughes). The Prime Minister said that it was the act of a statesman. I am sorry that I cannot say the same of his suggestion to dispose of the Line. If the establishment of the Line was justified during the war period, let us examine its benefits and the influence that it has since exerted.
In November, 1920, the Shipping Combine suggested that freights on general cargo should be increased; but Mr. Larkin refused. Freights were increased on the North Atlantic lines bv over 25 per cent, in that year, and on the South African lines by 10s. per ton, but no increase was made in the freights charged to or from Australian ports. This proves the beneficial influence of the Line in 1920. On the 7th February, 1921, the combine fixed the rate on refrigerated cargo as follows: - Beef, 1 15-16d. per lb.; mutton, 2£d. per lb.; lamb, 2 5-16d. per lb.; rabbits, 184s. per ton. On the 21st March, 1921, the Australian Commonwealth Line fixed lower rates, namely: - Beef, lid. per lb.; mutton, l&d. per lb.; lamb, 2d. per lb.; rabbits, 140s. per ton. That was a reduction of id. per lb. on mutton, equal to £2 6s. 8d. per ton, and on rabbits the reduction was £2 4s. a ton. Those facts are on record, and cannot be disputed.
– Can the honorable member say on what principle the Commonwealth Line fixed those rates?
– On the principle that the goods could, and ought to, be carried for those rates. The Combine was compelled to descend to the same level as the Commonwealth Line, although it had fixed its rates in February. The following announcement appeared in the Argus of 30th March, 1921, nine days after the Commonwealth Line had instituted reduced rates : -
It is understood that the rates for refrigerated meat and rabbit cargoes have been reduced to the same level as those recently announced by the Commonwealth Line.
Yet the Prime Minister told us yesterday that with one exception the reductions were made simultaneously! On 22nd January, 1923, there ‘ were further reductions to give relief to Australian producers. The freight on beef, mutton, lamb, pork, and veal was reduced by $d. per lb. ; on butter by 6d. a box, from 5s. to 4s. 6d. ; on rabbits by 10s. a ton ; and on fruit by ls. a case, from 5s. to 4s. General cargo rates were reduced 10s. a ton. For some weeks the Combine refused to reduce, but eventually was compelled to come down to the same basis as the Commonwealth Line. The estimated saving because of those reductions alone is £2,000,000 a year. In 1925 there was a large surplus of canned fruit, the freight on which was at that time 70s. a ton. The Commonwealth Line agreed to carry a large quantity of the surplus at the rate of 50s. a ton. Although the other lines were very annoyed and loudly protested, they reduced their rate to the same level, and it has remained there ever since. The saving to the exporters of canned fruit was over £20,000 a year.
Again, in July, 1926, the Commonwealth Line announced a further drastic reduction. Refrigerated cargo was reduced hy id. per lb, butter and fruit by 6d. a box, and general cargo from Australia by 10 per cent. The announcement of the reduction was published in the Argus of the 12th July, 1926. It said, inter alia -
For some time past the Australian Shipping Board has recognized that rates of freight were capable of reduction and communicated their views to the chairman of the board in London. It has now been decided that reductions will be made from Monday the 12th, but retrospective as regards the Esperance Bay.
Can any honorable member imagine the Combine making a reduction retrospective? The Age on 13th July, 1926, published the following comment -
Exporters of primary products expressed gratification yesterday; with the announced reductions of ocean freights by the Commonwealth Government Line.
The Argus of the 13th July, 1926, published a very interesting and illuminating statement by the Prime Minister. I direct particular attention to it. Referring to the reduction, he said - lt is presumed that the reductions made by the Australian Commonwealth Line will also be put in force by the Combine Steamship Lines. The effect of the lower freights may bc ganged from the following figures relating to the exports of main products.
He gave a very interesting table of figures showing the estimated annual saving. Yesterday he told us. that in relation to freight, wool was out of the picture. I invite honorable members to compare that statement with the table which he published in July, 1926, setting out the estimated annual saving. It is as follows: -
The right honorable gentleman further said-
In addition, freight concessions equalling about £33,000 a year have already been obtained by the Dried Fruits Export Control Board and the Australian Fruit Canners’ Association.
That was when the Line had only seven ships, and, when according to the opinion he expressed yesterday its influence was negligible. The Shipping and Commerce of Australia, a journal which is a strong believer in private enterprise in the shipping industry, published the following comment upon these reductions in its issue of October, 1926:-
It is some years since such a drastic cut was made’ in the general freight rates from Australian ports. This will be a direct loss to the shipping companies concerned.
Further on it said -
Freights to Java and Singapore have not changed.
Of course they had not ; the Combine had not to face the competition of the Commonwealth Line in the trade to and from those ports. The journal went on to say-
Bates to South Africa, and to Manila, Hong Kong, and Japan, underwent conside’rable alteration. Last year, the Yamashita Line entered the trade. Rates were cut to a minimum. Early this year the Yamashita com”bination joined the Conference Lines, and rates were increased. “That increase took place simultaneously with the .decrease with respect to Australian ports. At the end of October, 1926, the British and foreign shipowners conferred and made to the Commonwealth Line a proposition to increase the rates of freight between the United Kingdom, the Continent, and Australia, by 15 per cent. The Commonwealth Chipping Board absolutely declined to agree to such a proposal, and it was defeated, although the Commonwealth Fleet at that time comprised only seven ships. The increase, if it had been made, would have swelled the earnings of the Line by approximately £100,000 a year; but the difference to the shippers from Australia would have been £1,000,000 a year! An honorable member yesterday made a most ungenerous remark regarding officers of the Line who had given evidence before the Public Accounts Committee. He said that they were interested parties, and were there to hold down their jobs. If that had been true, their first consideration would have been to show a profit so as to justify the continuance of the Line. They inter*,,eted their responsibility in a broader spirit - that they were in their positions to assist the people of Australia, and primary producers in particular. Their work along those lines has been performed wonderfully well. The final report of the Public Accounts Committee contains the following statement : -
Confidential details placed before the committee indicated that the efforts of the board had led to substantial reductions in freight, and that on other occasions its refusal to agree to increases proposed - in one instance by both British and foreign ship-owners - had been successful.
Yet we have been told that such an argument is not tenable, that the Line is a negligible quantity, and that it has no influence in the fixing of freights! I commend to those honorable members who hold that view the opinion of the Public Accounts Committee which I have read. It is supported by the statement made by the Prime Minister respecting the reduction in 1926. when the Combine followed the lead that was given by the Commonwealth Line. The right honorable gentleman said in that statement that the shippers of this country had been saved a sum of £522,896 on ten main products, and that on dried fruits there had been a saving of £33,000.
From the rates which were quoted at the time I have prepared a comparison of the freights, for exports only, which ruled in February, 1921 and 1927. I give them in detail”, because they are important. They are the products upon which Australia largely depends for her prosperity. The figures are as follow: -
The annual saving on those items is as follows : -
The honorable member for Gwydir (Mr. Abbott) said to-day that the effect of freight on the prices obtained for primary products is infinitesimal. Such a statement is absurd, and would not be made seriously by any honorable member who possessed a knowledge of primary production. On the average Australian fleece -8 lb. - a reduction of a id. a lb. on wool would amount to 4d. a sheep, or 33s. 4d. a 100, which is almost equal to the cost of shearing. Does the honorable member say that the rates paid for shearing are infinitesimal?
– Will the honorable member say that the primary producer gets the net result of a decrease in freight?
– Will the honorable member say that the primary producer does not pay any increase? I say that the primary producer does get the benefit of a reduction.
– The honorable member does not know much about the matter.
– The honorable member for Gwydir is advertising his ignorance. If any rise in freight is paid by the primary producer, any reduction must benefit him. I ask thehonorable member for Franklin why does he want the Navigation Act repealed, if not to reduce freights? Why does the honorable member want black labour to carry his fruit, if it is not to bring about a reduction of freights? He cannot have things both ways. The honorable member cannot fulminate against the high wages paid to Australian seamen, advocating that we should go back to the days of coloured labour, and should ship our produce by boats so manned, and at the same time tell us that when freights are reduced as the result of the activities of the Line, the producers do not benefit. If½d. per lb. is saved on the carriage of wool, that means that nearly the cost of shearing is saved.
The “ Bay “ boats were the pioneers of oil fuel, and cut down the journey from Australia to Great Britain from 33 to 29 days. The Leader of the Opposition (Mr. Charlton) raised a most important question when he asked how our primary producers are to dispose of their beef. Frozen beef is a drug on the market. The people in the Old Country prefer chilled beef, which they can secure from the Argentine. It is possible for us to get a share in the trade in chilled beef. The Leader of the Opposition quoted an expert, who was also interviewed by the Minister for Markets and Migration (Mr. Paterson) and by myself, and who knows what he is talking about. That gentleman said definitely that the “ Bay “ boats are the finest ships afloat for adaptation to the chilled beef trade. He has travelled on them and on other boats, and he said that it would not cost more than about £1,000 for each boat to convert it for the chilled beef trade. He stated that their ‘tween decks were exactly right, that they were fitted up with a brinecirculating system and were installed with fans, and were admirably suited for the conversion. In addition, their times of sailing are fixed, which advantage does not apply to other lines. The honorable member for Macquarie (Mr. Manning) said that private companies had competed for the trade. They certainly carried shipments of chilled beef; but an essential condition, if we are to establish a profitable Australian trade, is that the sailings of the boats must be regular. I venture to say that the profits that would then accrue to our beef industry would more than cover any losses that have previously been experienced. The committee, in its report, stated -
Communications from merchants, placed before the committee in evidence, confirmed the statement that the Line enjoyed a good reputation for its efficient handling of cargo.
The committee was forced to make that statement by the praise that has been showered upon the Line. I shall quote an opinion of one of the leading nationalists of this country, the
Leader of the Nationalist party in Victoria, Sir William McPherson, whose remarks appeared in The Scot of the 1st September, 1927. The report of his speech reads -
At the luncheon tendered the committee of the Scottish delegation, on the occasion of their inspection of the chartered ship, the Hobson’s Bay, Sir William McPherson, M,.L.A., in the course of his remarks in response to the toast of his health, said that it gave him much pleasure to be able to express his high opinion of the Commonwealth Line and the service which it rendered to Australians in so many different ways. He spoke as a business man, rather than as a member of Parliament. His firm had big interests, both exporting and importing, and, whenever possible, almost entirely booked all freights by the Commonwealth Line, and had found them most satisfactory, receiving better consideration than from any other line. As a man with big business interests in Australia, he considered the Commonwealth Line an undoubted asset to the Commonwealth.
The Committee of Public Accounts expressed a doubt as to whether it was possible to retain both the Australian mercantile marine and Australian seafaring conditions, and, if not, which should be dispensed with. The Government has decided to dispense with both. What would be the result if that test were applied to every other industry in Australia? Is there a manufacturing industry in Australia which would stand if it had to compete with the goods produced in labour-sweated countries overseas? The Government imposes duties, or grants subsidies, to protect those industries from the competition of the sweaters. Why should the shipping industry be refused similar assistance? Almost every country in the world subsidizes shipping; even the f reetrade countries do so. France, Italy, Holland, Denmark, and Germany all subsidize their shipping industries, while the United States of America, South Africa, and Canada have government lines. The British Government subsidizes shipping to America and to the East. One line, trading between the East and the Atlantic ports, was guaranteed to the extent of £1,800,000 by the British Government. The Cunard Line, to America, has for many years been heavily subsidized. In order to assist our industries successfully to compete with cheap labour conditions overseas, this Government has not only imposed Customs duties on imports, but has also granted bounties. For the financial year 1926-27, the Commonwealth Government subsidized the following industries to this extent: -
During the last four years the Commonwealth Government has paid over £2,000,000 in bounties. I do not complain about that; but we should reconsider the wine bounty, and determine whether greater assistance could not be given to the growers of Doradillo grapes. The honorable member for Gwydir (Mr. Abbott) misrepresented the honorable member for Cook (Mr. C.Riley). The latter did not say that he was unwilling to grant one penny more in bounties, but that, if the country representatives agreed to sell this Line, thereby sacrificing the primary producers of Australia, he doubted whether they were consistent in supporting the granting of bounties. The Commonwealth and State governments construct and maintain railways and arterial roads at a loss, solely with the desire to develop the country. There may be a direct financial loss, but there is also a definite indirect gain. Bounties are paid, co-operative societies are assisted, marketing organizations are established, all to achieve the commendable national purpose of assisting our producers, and developing Australia. Now this Government asks us to sanction the sacrifice of the Australian Commonwealth Line of Steamers, and to hand our producers over to the tender mercy of rapacious Shipping Combines. Those Shipping Combines include a formidable group of ship-owners, amongst whom are Lord Inchcape, Chairman of the Peninsula and Oriental Line and the BritishIndia Steam Navigation Company, who controls 370 ships, aggregating over 2,000,000 tons; and Sir John Ellerman, of the Ellerman Line, who controls 208 ships, aggregating 740,700 tons. The Committee of Public Accounts, when speaking of such Combines, was constrained to say -
Shipping combines of world-wide activities, whose underlying motives are often far from altruistic, occasionally fail to be even patriotic…..
Are we to leave our producers to the tender mercies of the Inchcape group ? The name Inchcape reminds me of the sinister Inchcape Rock. This is to be the rock on which the producers of Australia are ‘to be smashed. On the 11th and the 12th January, 1927, British and continental ship-owners met in London and decided that, in order to prevent a serious reduction in freight rates, a division of the wool trade should be made. At a later meeting it was decided that two-thirds of the wool trade was to be allocated to British
Line3, and. one-third to continental Lines. The Commonwealth Line refused to join in the arrangement. That arrangement was not in the interests of the producers of wool, but in the interests of the Shipping Combine. Are profits or losses the only consideration in a national concern of this nature? If so, the Australian Commonwealth Line of Steamers should have acceded immediately to the repeated requests to raise freights, made by the Shipping Combine. The loss on our railways could be met in the same way, but it would be done at the expense of Australian producers.
The right honorable the Prime Minister (Mr. Bruce), aware that he had not an adequate case to present, became, like Autolycus, “ A snapper-up of unconsidered trifles.” One of the trifles which the right honorable gentleman dangled before honorable members was that, if the Line were sold, the present yearly deficit of £500,000 could be utilized to safeguard the position in regard to our refrigerated tonnage. The selling of that Line will not represent such a saving to the country. When I asked the right honorable gentleman what he meant by his vague statement, he indicated that he would subsidize refrigerated tonnage; but he did not believe that such a step would be necessary. If we find, when we have parted with this competitor to the Shipping Combine, that Australia is to be exploited in the matter of refrigerated space, we are to pay a subsidy to the exploiter. We are to allow the trade to be taken by robbers, and pay a ransom for
Mr. Soullin. the privilege! It is wiser to preserve an armed guard; to be insured against the robbers. What a noble and national spirit actuates the right honorable the Prime Minister! Another petty argument advanced by the right honorable gentleman was that half the crews are domiciled in the United Kingdom. This from a perfervid imperialist. If this Line is granted a permanent existence, that objection could be met by granting preference to Australians. These boats are under Australian control, and fly the Australian flag, and there is noexcuse for having half the crews domiciled in the United Kingdom. This bigimperialist stated that there is no necessity for Australia to build up its fleet, and then proceeded to give his reasons. I was amazed to hear the proof that he offered. “ Others are doing it “ he said, and then he quoted an increase of 55 Norwegian, Dutch and German boats. There is no need for an Australian fleet, because the Norwegians, Dutch, and Germans are coming into the trade! Sell the Australian fleet to make room for Norwegians, Dutchmen, and Germans!
The honorable member for Gwydir argued that the Commonwealth ships would be of no value for defence purposes. I do not believe that every possible effort has been made to bring about disarmament, but the endeavour should be persevered with. I hold, however, that while the world is armed we should beable to defend this country, but at the least possible cost to the people. For that reason the Labour party has advocated the establishment of factories for the making of machinery and implements, mining explosives, and chemicals - establishments which, while serving the purposes of peace will be convertible for the manufacture of armaments and munitions in time of war. We advocate the provision of fleets of aeroplanes to carry mails and parcels into the interior, subsidized by the Government if need be, because they can be used for defence in war time. For the same reason we advocated convertible cruisers, and the five “Bays” and the two “Dales” were structurally strengthened under the supervision of the British Admiralty, to mount eight guns each of heavy calibre, as well as light anti-aircraft and other guns. Those vessels can be converted into strong auxiliary cruisers. The Government is spending millions of pounds upon the construction of two cruisers abroad, “which to be effective must be supported by auxiliaries. Yet this patriotic Government that talks so loudly of defence, proposes to sell our seven auxiliary cruisers ! The Daily Commercial News and Shipping List, Melbourne edition, of the 26th July, 1926, said in the course of a leading article : -
Although the ships of the famous White Star Line are registered in Britain, the control of the fleet is in the hands of the International Mercantile Marine Company of New Jersey, United States of America. This company was & creation of Mr. Pierpont Morgan. . . . British interests have always felt regret that the control of this famous line has passed out of British hands.
That regret at the loss of British control of mercantile steamers reveals a proper pride of nationhood. In Australia we could have no overseas fleet unless it be a national one. Private companies will not register fleets in the Commonwealth, because they prefer to register in countries where the wage and working conditions are lower than in Australia. Our only chance to establish an Australian Mercantile Marine is to build it for ourselves, and subsidize it, at least to the extent of our higher standard of wages and working conditions. The British people regret that the “White Star Line is no longer controlled in Great Britain. Is there no national spirit in Australia? Ours is a sea-girt continent, and is it to own no commercial shipping except that engaged in the coastal trade? What hope is there for the development of om- resources and the expansion of our commerce- if transport is to be controlled by our competitors ? Is this country to be for ever at the mercy of foreign private companies? Parliament provides tariffs and subsidies to build up our factories and develop our lands. It has constructed roads and railways, and incurred immense expenditure upon water storage; it has converted the black sugar industry into a white man’s industry. The ideal of a white Australia has spurred our nation builders of the past to great endeavours and great sacrifices. Is not our white Australia worthy of its own shipping fleet, working under white Australian conditions, and flying the Australian flag?
– When the Leader of’ the Opposition gave notice of this motion, I was inclined to think that he had committed an error of tactics, and that he would have been better advised had he allowed matters to take their course. But since the discussion has drawn from the Government, as, apparently, nothing else could do, a declaration of its policy, the honorable member need make no apology for the action he has taken. In any case, as the House has done practically nothing since it reassembled six weeks ago, this discussion can hardly be said to be a waste of time. Naturally I am very much interested in the subject matter of the motion. Some honorable members have been good enough to say that, viewed in retrospect, the establishment of this Line was a wise action. Others have ventured into the garden of eulogy, and spoken of statesmanship and rare qualities of a like kind, but they made haste to add that this exotic, this flower of the desert, watered and tended by my watchful care, once so cherished, had long since faded, and should now be thrown into the industrial dust-bin. But I can hardly be expected to accept their verdict in silence. The Line is my progeny, and whether it be unique or a monstrosity, I, like most parents, am still attached to the poor thing. Now, however, to apply Mark Anthony’s phrase, “ I come to bury Caesar, not to praise him.” I am present at the obsequies of the Line, as I was at its birth. For a long time past evidences have not been lacking that the Government was not enamoured of this enterprise. I- do not censure Ministers for any opinions they may hold in regard to it, but it may be fairly said that the day when they looked upon it with tolerance - to say nothing of affection - has long since passed away, and the report of the Public Accounts Committee afforded an opportunity for the Government to deal it a death blow. For what reason does the Government propose to sell the Line?- Before we examine this, let me very briefly review the history of the Line.’ I need not weary honorable members by relating the circumstances under which it was established; but I shall deal with the position as it was five years after the purchase of the original fifteen “Australs.” In November, 1921, 1 made a statement to the House that lacked nothing in fullness and detail, and in the course of it, I presented several balance-sheets, which, as they had been prepared by the Treasury, were not open to question. So far as I know they have -never been questioned. The first statement of accounts showed a net gain on the sale of the bought ships of £3,290,965, or, after writing down the whole capital cost of £1,669,387. In other words, the Commonwealth then owned eleven ships written down to a capital cost of nil, and had in hand a profit of £1,669,387. After interest had been paid on the capital of £2,252,000 originally invested, to which must be added £S1,000 for three sailers, we had earned in five years £2,190,000 and were able to wipe out the capital cost of the fleet and still show a balance in hand of £1,669,000. Now I come to a fuller balance-sheet which takes in the ex-enemy ships and those of the “ D “ and “ E “ class. Summarized, it shows that without taking into consideration the savings to the Commonwealth, through the carrying of very large numbers of soldiers overseas, the net result of the operation of the “Australs” for five years, together with the ex-enemy ships and the “ D “ and “ E “ vessels so far as they were in commission at that time, was a profit of £7,357,231. After allowing for the repayment of the whole of the capital invested in the “ Australs.,” and the amount paid in respect of the “D” and “E” class vessels then in commission and the ex-enemy ships charging at a capital value of £909,000 there was a net gain of £4,826,338. That is to say, we had all these ships - “ Australs,” ex-enemy and the “ D’s “ and “ E’s “-all paid for, and had made £4,S26,338 profit besides. My Government went out of office in February, 1923, and some time in that year the Shipping Board ‘was established as a result of legislation submitted to this House and approved by Parliament. Since then the board has managed the Australian Commonwealth Line. The operations of the board since its inception to the 31st March last showed the following results: -
An analysis of those voyage losses shows that the “ Bay “ steamers, of which there are five, made a profit of £119,867, and the “ Dale “ steamers, of which there are two, a loss of £173,118. The other steamers, including lay-up expenses, &c, made a loss of £357,766; making a total loss of £411,017. The proportion of the voyage losses is, “ Bay “ and “ Dale “ boats 13 per cent., and the other 47 steamers 87 per cent. ‘ Those 47 steamers having been sold by the board, now disappear from our calculations, and we are dealing solely with the five “ Bay “ steamers and two “ Dale “ steamers. It is admitted by the right honorable gentleman that it was proper to dispose of these 47 vessels, although in war-time they had served their purpose. At that time we had no choice. In regard to the ex-enemy vessels, we simply took what the gods gave. We also built ships which turned out to be unsuited for our purpose. The Commonwealth Line as a business concern should not have to carry that burden, so we are now dealing with the “Bay” and “Dale” boats alone. From 1923 to 1927 inclusive, the “ Bay “ boats made a profit of £119,867, and the “ Dale “ boats a loss of £173,118. There was, therefore, a net voyage loss on the operations of those seven vessels of £53,251. The “ Bay “ boats made a profit for the first three years, but for the year 1926-27 they lost £32,910, due to industrial trouble and the shortage of homeward cargo, which latter may be fairly attributed to drought conditions. The “ Dale “ vessels made a loss because they were engaged in an unprofitable trade with the west coast of Britain, but they have since been diverted to London, and in their present trade they are now in as good a position as the “ Bay “ steamers. . As I have pointed out, one of the causes for the loss of £411,577 was the maintenance of the 47 vessels, and they have been disposed of. Another cause was the unprofitable trade in which the “Dale” vessels were operating, and that has been stopped. A further cause of loss was and is the application of Australian conditions. It has been estimated that the cost of running those vessels on the Australian register is £163,470 more than the cost of running similar vessels under British articles. But despite this handicap and the unprofitable trade in which the “ Dales “ were engaged, had the “ Bay “ and “Dale” vessels been operating on British articles, the voyage results for the last three years, instead of showing a loss of £23.477, would have shown a profit of £140,000, from which amount would have to be deducted £90,000 for administrative expenses, leaving a profit of £50,000. But these conditions, of course, must remain, for they are a permanent factor in Australian enterprise. The fact that it costs more to do certain things in Australia because of the high cost of labour is perfectly well known to any person who embarks in any enterprise whatever. It is known to the people who constructed this Parliament House ; to those who wish to construct golf links ; to those who wish to hire gardeners by the day, and to those i who wish to have their sheep shorn. Everybody knows that, it costs more to do certain things in Australia than in China or some other terrestrial or industrial paradise. This higher cost is the price we pay for the Australian standard of civilization, yet despite the unprofitable trade to north-west Britain, had we been able to run the “ Bay “ and the “ Dale “ steamers under British rates and conditions, we should have made a profit, not after paying debenture interest and depreciation, but after paying administrative expenses and, of course, running costs. I shall later discuss whether all these losses are inevitable; but broadly, one may say that there is no prospect whatever of running this Line as a profitable business concern if we are to give the primary producer lower freights than he would get if the Line were not operating. The reason given by the Government for proposing to sell the Line is that it is cost ing too much, and giving too little. Ministers are greatly concerned about the annual loss, which has been stated in figures ranging from £575,000 to £595,000. I venture to say that it is late in the day to measure the worth of a national enterprise like this solely by the standard of expense. Although £595,000 is a considerable sum, had we been permitted to discuss the budget in reasonable time, we might have been able to show clearly that the Government, which now strains at a gnat, has swallowed many camels. When Ministers are in the mood to expend money, half a milIon pounds is nothing to them. However, I shall not wander further along this alluring though unprofitable by-path. Admittedly the Line has made a loss, but part of that loss was due to conditions that no longer exist. The Line does not pay. But if free of Australian rates and conditions, which, however, are permanent factors in all Australian enterprise, the Line would pay. Taking the case as put forward by the right honorable gentleman, we have to ask ourselves whether the Line is in a position to control freight, and whether it gives a quid pro quo for the annual loss of £595,000? I do not think there is one honorable member who would not be prepared to lose that sum if he knew that the producers of this country would recover it in increased returns from their products. Assuming the Line loses half a million a year: are the producers, shippers, and the country generally better off because of the Line? On that point the discussion must pivot. I shall prove that the Line is well worth the expenditure; that we get very good value indeed for our money. We must look at the f acts, fairly, and in a non-partizan spirit. I deprecate altogether the talk about government trading, socialism, and various other “isms,” which have nothing to do with this subject. It is late in the day for Australians, especially in this building, to declaim against government enterprise. Here, in Canberra, one cannot walk a yard without meeting a Government servant, nor travel save in Government trains; here everything is run, by the Government. Furthermore, whenever, any one in’ this country, however he may have denounced
Government enterprise, strikes a bad patch, he arranges a deputation to ask for Government assistance. The position may be set out in a series of questions. We are not concerned with government trading or enterprise in general but with the Commonwealth Line of Steamers. Is the Line in a position to control freight? If so, and it does control freight, what is the saving in freight compared with the loss, and what would be the probable result if the Line were sold and the competition which the outside interests are now experiencing were eliminated? I think those questions cover the ground. At any rate, they will enable us to deal with the position as it is. The Prime Minister said some kind things, but many unkind things, about the Line. He damned it with faint praise. I do not blame him, because he has never pretended for a moment to regard an enterprise such as this with any degree of enthusiasm. But he certainly led one to believe, indeed he said in so many words, that the benefits which the Line was able to confer were very small. The honorable member for Gwydir regards it as problematical whether the Line did, or could, control freights. I gather from the speech of the Prime Minister that the Line has handled only 2.7 per cent, of the total Australian trade, and about 1 per cent, of all wheat cargoes. Moulding this clay with their very capable hands, these honorable members have produced a figure which represents the Line as a pathetic and pitiable object, a thing beneath contempt. They affect to regard it as the toy of a fractious child which cannot have any value for grown-up people. The right honorable gentleman said yesterday that only on one occasion had the Line acted on its own initiative; that on every other occasion it had acted in conjunction with the Conference Line. They have gone hand in hand, like a band of brothers, saying, “ Now we’ll raise freights ; now we’ll lower them.” The right honorable gentleman sought to create the impression that these powerful interests are from time to time stirred to their depths with a passion for helping their fellow men by reducing freights. It is, we are to believe, by such ingenuous expedients that they have piled up their reserves. I ven- ture to say that at the last election the honorable member for Gwydir (Mr. Abbott) said nothing of the Commonwealth Line carrying only 1 per cent, of our wheat. At that time we heard nothing but eulogies of the Line. . Had any elector dared to say that the Line was carrying only 1 per cent, of our wheat cargo and 2.7 of cargo generally, at one of the honorable member’s meetings, out he would have gone. Now let me speak plainly. Instead of the influence of the Line being problematical, it is definite and dominant, as I shall show. In 1923 the Line forced a reduction of inward rates by 10 per cent. The Conference Line might say that that was a case in which two hearts beat as one ; but there are cablegrams which substantiate my statement. Not only is the Commonwealth Line responsible for reductions; it has also prevented increases. Since 1923 the Line has twice been approached by British and foreign interests with, a request to increase the rates. In 1925 the Shipping Board refused a proposal to increase rates by approximately 10 per cent. Again, in November, 1926, the board was approached by both British and foreign owners with the suggestion that rates be increased by 15 per cent, on practically all cargo from the United Kingdom to Australia. The Line also forced a similar reduction in outward rates of 10 per cent. In July last year the Line brought about a further reduction of 10 per cent, on all outward rates. In order that these statements may be supported by evidence, I quote from a cablegram dated London, the 7 th December, 1925, which reads: -
It is proposed to increase outward freight rates (i.e., from the United Kingdom to Australia), subject to merchants’ consent as per agreement on the following basis: - £5 measurement, to £5 10s., £3 15s. to £4. Lower measurement rates by half-a-crown, objectionable cargoes £1, leaving iron and steel rates, paper and most weight rates untouched.
To that cable the board replied on the 7th December as follows : -
Outward freight rates. Board of Directors has decided at meeting to-day cannot agree to any increase rates, considering such course fatal to interests of Line as being opposed to purpose for which it exists.
Another cablegram was received on the 9th December, stating’ that it was thought that the proposed increase formed a good basis for the commencement of discussions with merchants. To that the board replied on the 10th December -
Result of recent strike clearly indicates enormous excess tonnage on Australian berth, as notwithstanding large numbers ships idle, no serious congestion experienced. We are agreeable to await result of conference with merchants, but cannot agree to pledge ourselves support increase.
Therefore the suggested increases of 10 per cent. and 15 per cent. did not take place. I shall show what this really meant. The saving in freight was not merely 10 or15 per cent. on the 1 per cent. of wheat or the 2.7 per cent. of general cargo said to be carried by the Australian Commonwealth Line; but it was a saving on 100 per cent. of cargoes carried by all the lines. Again, on the 23rd December, 1926, the following cable was received : -
In view of coal position, Conference propose immediately advance outward freights by approximately15 per cent. Foreigners agree. It is proposed to exclude items such as rough weights. British owners ask your earnest consideration and agreement. Atlantic lines increased from 15 per cent. to 25 per cent.. Understand other trades also considering. Reply.
To that the board replied -
Referring to your telegram of the 23rd instant, regret we cannot agree. Consider it would beequally impolitic from both British owners and our point of view. To refrain from advancing rates may encourage reduction berth tonnage, which is desirable. In any case oil-burning tonnage could not justify. Coal trouble is only temporary and in our opinion increase likely to reduce volume of traffic.
In that instance, the suggested increase was not made. On the 5th August, 1926, the board had to deal with a number of suggestions for increased rates on inward cargo, and the matter was settled by the following cablegram sent by the board on the 9th July, 1926:-
Inform conference that this Line cannot further-
– May I interrupt the right honorable gentleman? Between whom were those cables exchanged?
– They were sent from the board to the manager or chairman in London, and from London to the head office of the board in Australia.
– How do those cables come to be in the right honorable gentleman’s possession ? I presume they have beenbefore the Public Accounts Committee, and a cross-examination has taken place regarding them, but other honorable members have not had the advantage of seeing them, or of knowing all the circumstances connected with them.
– It is useless to try to discuss this business in the dark. The charge is that the Australian Commonwealth Line is not, and has not been, effective in influencing freights by preventing increases and forcing reductions. I am reading cablegrams sent by the board in Sydney to its manager or chairman in London, and they support the statement I made a short while ago, that the Line has on several occasions prevented increases of 10 and 15 per cent. Their authenticity is unquestioned. The way to settle the matter is to place all the documents on the table. The cablegram that I was proceeding to quote when interrupted states: -
Inform Conference that this Line cannot further countenance the penalizing of Australian shippers in order to maintain excess tonnage on the Australia-United Kingdom berth. Negotiations with view to bring tonnage down to economic minimum having failed, board has decided to abandon west coast service forthwith, and as from Monday, 12th July, to make following reductions on present freight rates from Australia: - Wool (scoured and greasy), frozen meat (all classes), cheese, hides and skins, alld. per lb.; ordinary cased goods, 10 per cent., with the exception of dried fruits, canned fruits, which already dealt with, apples 6d. box, rabbits 10s., general cargo, 10 per cent. Wool via the Cape as per chairman’s telegram 7th July. Present primage 5 per cent. less 10 per cent. on wool still remains. You are directed to cancel all arrangements west coast loading after Ferndale, to lay up Bulla with view of sale and repatriate crew. “ Dales “ will in future load London. You will be advised later as to itinerary. Meantime forward by first mail your suggestions as to dates, allowing ample time to effect repairs either Sydney or United Kingdom, and allowing for these steamers proceeding via the Cape if necessary.
There is a further definite statement of what happened not as long ago as 1921, but on the 9th July, 1926. We may say, then, that there is no substance in the suggestion that this Line has not been successful in keeping down freights. What has it meant to the primary producer of Australia to have kept freights from being increased? On the quantity of cargo handled the saving has amounted to something like £1,000,000 per annum. The freight on 1,250,000 tons of inward cargo, at £3 10s. a ton, amounts to £4,375,000. A 15 ner cent, increase would mean that all shipping interests would collect an additional £656,250 per annum. It has been estimated that the Commonwealth Line carries from 1 to 10 per cent, of the total imports. On the basis of the latter figure its, additional revenue would amount to £65,000, whilst the remaining £591,000 would go into the pockets of British and foreign shipowners. In regard to cargo taken from Australia, it has been estimated that the reduction in rates which was made in July of last year was practically equivalent to 10s. a ton, and therefore the saving effected was approximately £500,000 per annum. There again, on the quantity of exports carried to the United Kingdom and the Continent, the reduction in the revenue of the Commonwealth Line was approximately £50,000, the balance of £450,000 being’ borne by British and foreign interests. In that case also the saving per annum is practically equal to the annual loss -made by the Line. For the purnoses of this argument it does not matter whether the Commonwealth Line carries 1 per cent, or 55 per cent, of the total freight. The question to be answered is, Does it keep down freights? If it does, the saving to the producer is determined by the turnover. I have shown that that saving is approximately £1,000,090 per annum. I invite my honorable friends to consider the matter from that angle and to discharge from their minds considerations relating to 1 per cent, of wheat or 2.7 per cent, of the total cargo handled. I have quoted cables proving that the Commonwealth Line has prevented the Conference from increasing rates. But there is a further proof, far more convincing even than these cables; proof strong as Holy Writ. It is not to be found in any document. Nothing we can say, not all the efforts of those who assail and seek to destroy the Line, can wipe out one word of it. It is to be found in the attitude of the Conference Lines towards the Commonwealth Line. From the day that the Commonwealth Line was purchased, the Conference Lines have not spared any effort to destroy it. Did I not, in 1921, read in this House the following cable that I had received from Lord Inchcape ? -
Prospects of shipping all over the world for several years to come are extremely bad. Americans have over-built themselves at high costs,’ while tonnage at present laid up is more than can profitably be utilized for some years. The Conference Lines to Australia must keep their ships running even at serious loss, utilizing their accumulated reserves to make up deficiencies.. I recognize and admit quite freely that Australian Government with taxpayers behind it can go on indefinitely, and that Conference Lines may eventually be ruined. I am prepared to recommend Conference to come to an agreement with Australian Government, either to buy its ships on reasonable terms, or to suggest they should sell their ships to Australian Government and leave latter a free field. If you decide to adopt the first alternative, I feel sure an arrangement satisfactory to you could be arrived at, and I may say the same if you decide to adopt the latter.
I then informed honorable members that I had no doubt whatever that the Conference Line would buy out the Commonwealth Line. The cable which I have read is but additional evidence of a fact which is generally accepted in the shipping world. The Commonwealth Line has always been recognized as a powerful and dominant factor in the Australian trade, and the Conference Lines, realizing it could not be crushed, have sought to buy it, or by some means to remove it from their path. Now, what are the Conference Lines? They are a combination of great shipping interests. Great Britain has recognized that her way to world Empire and world trade lay across the ocean, and that at all hazards she must keep those highways open. She has made herself what she is to-day by becoming a great maritime nation. Her ships sail every sea: they are in every port in the world. Therefore, the shipping interests of Great Britain are necessarily the paramount interests of the first nation in the world. Those interests are combined, and very properly so, to protect themselves against the low-priced labour of other maritime nations. I have never said one word against this combination from the stand-point of British shipowners or even of Great Britain herself. It is a natural and proper thing for men in such circumstances to combine. But I say it is also natural and inevitable that when those possessing such power have the opportunity to levy toll, that toll will be levied. The Conference is not in business merely for the sake of its health ? Yesterday it was suggested that the Conference would lower its rates without compulsion. Why does not the trader reduce the price of his goods, the farmer the price of his wheat or butter, or the workman the price of his labour, without being compelled to do so? Is a ship-owner different from everybody else? Is Lord Inchcape a bigger ‘fool than any workman ? The Conference possesses great power, and being composed of live men with a great breadth of vision, great capacity and courage, it is in this business to make it pay. The ocean highways to Australia form a part of the vast domain over which it spreads its almost innumerable argosies. When the Commonwealth Line was bought the influence of the Conference Line was brought to bear to have ihe ships requisitioned as they came in. At that time I happened to have some influence, and I frustrated the attempt. We cannot expect the Conference to regard this Line as a friendly institution; it is taking the bread out of its mouth. We ought not to blame the Conference Lines, but we ought to protect ourselves. Previous proposals by the Government for the sale of the Line have contained the condition that it could not be purchased by the Conference, or anybody connected with the Conference. Why was the Conference barred from tendering? If it is willing to reduce freights without compulsion, -why should it not be allowed to buy the Line? Why has the Government ruled it out? The reason is that it knows, as every nian in this country does, that once the Commonwealth Line was removed the Conference would come into its own. What is its own? Everything that we would stand for. I do not suggest that there are no limits to what we will stand for. But that is the only point at which the Conference would come to a halt. Every person is perfectly well acquainted with these things; they are the A B C of trade. The cardinal fact that emerges from all this is that no private company can stand against the Conference Line. What did Lord Inchcape say? He said, “I know that you can go on; you have 6,000,000 shareholders behind you.” But supposing we were to adopt the recommendation of the Public Accounts Committee, what sort of a chance would a cooperative company have? Would it be able to regulate freights ? In his anxiety to prove that the Commonwealth Line wields no influence, the Prime Minister showed conclusively that such a small company would not have the power to accomplish anything. If the right honorable gentleman is correct, and this great Commonwealth of Australia is unable to compel reductions of freight by the Conference Line, what could a little company do? Nothing. If this Commonwealth cannot prevail against the Conference Line, then certainly no private firm can hope to do so. What is an outlay of £50,000,000 to the Commonwealth? We are a great and wealthy people. Millions are nothing to us. What “are millions and millions a year for 58 years? Nothing. The States agreement proves that. The Conference realizes that. It says, “ This Commonwealth has at its command all the money in the world ; we cannot oppose it.” But what a different story it would be if the opposition consisted of only a tuppennyha’penny company ! We are a people who must either send their goods across the ocean or perish. There is only one thing between us and the gentleman who stands at the toll-gate, and that is the Commonwealth LineWe are a country remote from the markets of the world; a. western nation at the gateway to the East. Our markets are mostly in Europe. Without a mercantile marine we are like a man living in a wooden house, who neglects to take any precaution against fire. How are we to exist, how progress without a mercantile marine? What is the use of talking about Australian labour conditions making it« impossible to maintain a mercantile marine. If Australian conditions were a thousand times worse than they are we should have to possess a mercantile marine - or perish. One reason advanced in favour of discarding the Australian Commonwealth Line of Steamers is that half of it is manned by Englishmen. I fail to appreciate why that is considered to be a disaster. I am not aware that it is. a disgrace to be an Englishman. I do contend that there would be no difference had those people been Australians instead of Englishmen. It is imperative that Australia should have at its disposal a mercantile marine. From time to time we he.ar a great deal about defending our country. Doe3 the right honorable the Prime Minister know that the “ Dale “ and “Bay3’ liners are able to carry, should the need- arise, a heavier armament than did the Sydney, which destroyed the Emden. Each “ Bay “ liner will carry, and is intended to carry, eight 6-in. guns, and one 4-in. gun, and each “ Dale “ liner seven 6-in guns. The Sydney mounted eight 6-in. guns and four 3-pounders, thi Melbourne having a similar complement. The “ Bay “ and “ Dale “ liners are part of our auxiliary navy. But they are to be sold; they will pass from our control. “We are informed that they are to be placed on an “ Empire “ register, whatever that means. Perhaps it is a British register. The Empire is wide, and it is difficult to know where they will be registered.
I regret exceedingly that the Line is to be sold, merely because it is losing money, and because it “has no influence.” If it followed a policy similar to that pursued by the Conference Shipping Lines it need not lose one penny. When it was suggested that freights should be raised by 10 per cent, to 15 per cent., why did not the Australian Commonwealth Line of Steamers adopt the suggestion, and make a profit? Because the Shipping Board said, “ We were established to help the producer.” I agree that that is the purpose for which the Line was created. The Line is the only means of protection that the producer has against the Conference Line, in enforcing reductions and preventing increases in freights. To talk of a private company being an efficient - a more efficient - substitute is idle. Without the prestige and power and influence of the Commonwealth, no company can compete against the Conference Lines. It does not matter whether the new Line will be English or Australian, it will have no chance, because it will be “ blanketed “ on the berths’ by the opposition1 companies’. They ‘are not able to do that with a government-owned line, because such tactics would not be tolerated. The Australian Commonwealth Line of Steamers was created to meet a great emergency, and it was continued because that was found to be necessary in the interests of Australia. It is contended that the Line is to be sold because it is losing £500,000 a year. That £500,000 a year loss will not occur in future, because the “ Dale” ships will be more profitably employed. In order to show how profitably they are now employed, I shall quote the number of freight tons carried each month by the six steamers which sailed during the period from 12th August to 24th October, 1927. They were -
Those ships were filled almost to their hatches by cargo coming to Australia. It is not the fault of the Australian Commonwealth Line of Steamers if they have not full cargoes on the return journey. This is due partly to the fact that there is twice as much tonnage as the trade can compete with on the United Kingdom bertha. There is another reason for the loss, over which the Government may ponder at its leisure. During the last four years the imports into Australia have exceeded the exports by many millions of pounds. Full ships are coming to Australia and empty ships are going away, merely because we have insufficient Australian exports with which to fill them.
As yet a definite proposal has not been laid before us, but we are told that the Line is to be sold. I remind the Government that, while it is proposing to sell this Line, Canada and the United States of America - two countries that certainly cannot be regarded as being infected with the bolshevic virus, America being the most individualistic country in the world - are extending their shipping activities. Canada now has 47 passenger and cargo steamers, owned and controlled by the Government, with an aggregate gross tonnage of 200,000 tons, and it has under construction five additional passenger steamers, each of 10,000 tons, which are fitted with the latest highpressure turbines. The result of the operations of the Canadian mercantile fleet for the year ended 1924 showed a loss of $8,836,609; for the year ended 31st December, 1925, a loss of $7,698,446; and for the year ended 31st December, 1926, $6,687,221. The total interest due to the Canadian Government by the Canadian Government Mercantile Marine Limited -for the year ended 31st December, 1926, was $20,636,109. But the Canadian Government instead of selling their ships are building many more. The United States of America have in operation 261 ships, having a total dead, weight of 2,328,806 tons, and producing a total revenue of $81,937,882 for the year ended 31st December, 1926. The total operating expenses amounted to $101,544,491, and the deficit for the year, excluding depreciation, was $19,606,609. The appropriation for the year was $24,000,000. Those vessels are used by the greatest capitalistic country in the world, a country where private enterprise has taken up its abode and built for itself a spacious and magnificent palace. The United States of America favours Government-owned lines, because it ‘wants to protect its citizens, and give private enterprise a chance. While private enterprise has to pay a toll on everything brought into and everything taken out of the country, it has not a chance of success. Can it he seriously contended for one moment that, if the Australian Commonwealth Line of Steamers is abolished, the Conference Line will not increase freight? We are told of a hocus-pocus agreement to be made with some little company, which is to give a guarantee. That guarantee will be worthless. At present the Line holds its own merely because it has behind it the Australian nation, with its six millions of people, and a Government which is amenable to public opinion. Had the Conference Lines endeavoured to raise the rates of freight in the face of adverse public opinion, the whole population ofthe Commonwealth would have been up in arms.
The Government proposes to sell the Line. It says that the interests of the people will not be prejudiced by their policy. But other nations are showing what they think of the Conference Line methods. During an interlude in the “Flag” debate in South Africa the Government compelled the Conference Lines to abolish the rebate system which it had established. The Conference had been engaged in its great philanthropic work of gathering all into its own net and penalizing all who dared to ship outside. The South African Government, a. coalition of Boer and Labour parties now in power, decided that the rebate should not be permitted, an opinion that was shared by the previous South African Government. The influence of the Conference is very great. It took all the powers of the Imperial Cabinet and the appointment of an Imperial Shipping Committee to compel the Conference to abolish the rebate in the Australian trade run. The only reason advanced as an excuse for the sale of the Australian Commonwealth Line of Steamers is that it is losing money, and the Government have endeavoured to show that there is not a proportionate benefit to set off that loss. I have demonstrated that there is such a set off, and that one-third of the present loss will not recur, as it is due to unprofitable trading. The loss on the “‘Dale “ ships was due to the unprofitable voyages to the west coast of England. That will not recur. In order that more outward cargo should be available it is necessary that a healthy balance of trade should be established, and that our exports should equal our imports. We should send out more aud bring in less. The existing monumental excess of import over export trade makes the adverse trade balance that previously existed look like a mole-hill. It is one of the results of the Government’s policy.
The Australian Commonwealth Line of Steamers has kept down freights, and so helped the consumer, which is an ample set-off to any financial loss. The honorable member for Gwydir (Mr. Abbott) stated that the producer will be glad if the line is sold. The producer will not be glad when he hears the facts.
He will be extremely sorry. The Com.monwealth Government is taking this step with its eyes open. Once it is done it cannot be undone. Once the Line is out of commission it will be impossible to create another line without the expenditure of vast sums of money. We have carved for ourselves a niche in the shipping trade of the world, and have successfully fought the good fight. The Conference Line knows that, so long as the Australian Commonwealth Line of steamers exists, it cannot do what it likes. When that Line withdraws from the field the Conference Line will move heaven and earth to prevent the new line from taking its place. It was contended that the “ Dale “ and “ Bay “ steamers have practically outlived their usefulness, and that this is the day of the Diesel engine, to be followed later by a superheated steam system. I am not an engineer; but I know that 90 per cent, of cargo steamers of the world are not as efficient as the “ Dale “ and “ Bay “ steamers, which are incomparably better than a number of tramp steamers. Our Line is in a position to carry refrigerated cargo not only more cheaply, but faster, than competitors. The present cheap and expedited service is due to the efforts of the Commonwealth Line. Speed is the essence of the contract when carrying refrigerated cargo, and the saving of a few days may make a vast difference in the price. I contend that the reasons advanced as an excuse for the sale of the Line will not bear examination. It is true it is a socialistic venture ; so are the railways. It is true that it is losing money, but it is not losing more than are the federal railways, which had a total deficit for the year 1926-27 of £425,000. Not a word is said about that; nobody wants to sell the Commonwealth railways, yet the Government is proposing to dispose of the Shipping Line which is Australia’s protection against the allpowerful Conference. Canada and America are increasing their State-owned lines. The Commonwealth Government affects to believe that a little company, a sort of family party, will serve our purpose, and that its guarantee will be Sufficient. Have we not proved by our acts that some combinations are so powerful that nobody but governments can withstand them? What was the genesis of the Commonwealth Oil Refineries?
The Commonwealth established an oil refining plant at considerable cost because the Americans were exploiting us. The refinery lost money, but did the right honorable the Prime Minister abandon it? No, he increased its capital by £200,000 or £300,000 in order to prevent the oil companies of ‘ America from tightening their grip upon our people. He was not frightened by losses in that direct Lon, but in connexion with the Commonwealth ships he and the Treasurer - despite the latter’s record - are scared by a loss of £500,000. I thought better than that of the Treasurer, and I urge him to take his courage in both hands and stand by this Line.
There is little further that I can usefully say. The Government is determined to sell this Line. As an earnest of its intention it has declared that it will put aside those childish things that have embarrassed its movements hitherto; it will no longer insist upon the conditions it previously imposed, but will sell the ships anywhere, at any time, to any person that will take them. True, it will insist upon some guarantee; it will insist for instance, that the refrigerated space shall be not less extensive and efficient than it is at present. But how will it enforce such guarantees? To-day the Government can deliver the goods ; it can say to the producer, “We shall send your produce to the European market at such and such a price, we shall protect you; we are your directors, you are our shareholders, and as you direct, so we shall do.” But in a little time the Government will say to the exporters, “Gentlemen, we did all we could, but these bold, bad men from England have been too many for us; we had an excellent guarantee, signed and sealed, under which you were to get a service not less efficient than the Commonwealth Line gives to you to-day, but, alas, the guarantors have fallen by the wayside. In short, we cannot deliver the goods.” I regret bitterly the proposed sale. A great national enterprise, which has served this country well, is to be destroyed. That which the Government proposes to put in its place is but a scarecrow, an inflated bladder, made to look as if it were something of substance. The people who have lain for many years in the shelter of this great Australian
Shipping Line are to find themselves exposed to the rude buffeting of the Shipping Conference - a combine which is able to, and does, control not only British shipping, but also foreign shipping. The Prime Minister read to the House a portentous list of foreign tonnage entering the Australian trade, and said that it would compete with British shipping. There is conclusive evidence in these cables, from which “I have received, that the foreign and British companies had agreed to increase the freights, and that such competition as takes place between them is only for the cargo that is offering, and does not affect freights. All that stands between us and their demands is the Commonwealth Shipping Line. The Government has decided that this enterprise, which has been the only protection of the producers of this island continent, whose industries are dependent upon ocean transport, shall die!
– The honorable the AttorneyGeneral !
– I rise to a point of order. I understand that the usual custom is for the Chairman to give the call to members from each side of the House alternately. I rose to catch your eye, and as the last speaker was on the Government side of the House, I naturally expected to receive the call.
-It is the practice of this Parliament, as well as of the House of Commons, to give pre-audience to Ministers.
– I desire to say by way of personal explanation that I was not aware hitherto that Ministers took precedence of private members. I think it is a” very bad practice to give preaudience to Ministers, especially in an important debate of this character.
– My duty is to follow the precedents laid down by my predecessors.
– On a point of order, I submit, Sir, in support of your ruling, that on the subject now under discussion the Attorney-General is not likely to be entirely iu agreement with the right honorable gentleman who has just resumed his seat.
– There is no point of order in the honorable member’s remark.
– The House is about to hear a second speech from the same side of the House, but, as the honorable member for Batman has said, not on the same side of the subject. This question should be considered without regard to general statements, such as, that a locally-owned mercantile marine is essential to Australia and that without it we shall perish. Honorable members know perfectly well that there was no government-controlled mercantile marine on the Australian register until 1916,’ and yet Australia then was not perishing. Nor should the settlement of the question be effected by a general denunciation of combinations in commerce. It is more or less recognized that in all modern industry, some degree of co-ordination and regulation is essential for the preservation of efficiency. Combinations are not always directed against the consumer or the utilizer of the services provided. Let us debate this matter on the basis of known facts viewed in the light of past experience, more particularly Australian experience. While references to the United State of America and Canada are interesting, I have yet to learn that this Parliament is bound to follow the example of either country. It would be equally easy to refer to a much greater number of countries in which there is no government-owned mercantile marine. The right honorable member for North Sydney referred to Great Britain as the greatest nation in the world of shipping; but is the mercantile shipping of Great Britain owned by its government? No; it is controlled by private enterprise - probably the most efficient, successful, and serviceable in the world.
The right honorable member has shown, with the general agreement of the House, that up to 1921 the Commonwealth Shipping Line rendered valuable service to Australia. That has not been disputed by any speaker; all have admitted that the> original purchase of the Line was a wise and far-sighted act. But the House has now to deal with facts as they are to-day.
I shall begin with one fact, although I do not say that it is in any way decisive. Judged by .ordinary commercial, standards, the Australian Commonwealth Line is a failure. There are, as some honorable members have said, some failures that are worth paying for, but we must consider the extent to which this Line is a failure, the price that we are paying for it, and whether we could obtain the benefits alleged to flow from the existence of the Line without it being a governmentcontrolled, agency. There is an annual loss of nearly £600,000 on its operations. The loss last year was £595,000. The right honorable member for North Sydney (Mr. Hughes), has described that amount as a gnat. To me it appears to be a gnat of almost elephantine dimensions. If this House takes seriously its responsibility for the finances of the country, and recognizes that the expenditure on the Line is from money earned by the people and contributed by the people in taxation, Ave shall not regard lightly a loss of nearly £600,000 per annum. It is true that up to the present time this loss has not been met out of the public exchequer, because the Line has been meeting its losses by selling its assets. That cannot continue indefinitely. Australia is paying interest on debt represent ing money sunk in this Line, and, therefore, the people are finding the money which is enabling it to carry on. Although the amount appears only in the board’s accounts, it is nevertheless an annual public loss.
I now come to the question whether this loss can be avoided if the Line is continued under Government control. I submit that its avoidance is most unlikely, having regard to all the facts as we know them. The right honorable member for North Sydney contended that the financial position of the Line was improving, because the adverse causes had ceased to operate. He referred in particular to the disposal of the old vessels that were unprofitable and unsuitable to present-day conditions, and to the fact that the west coast of England Avas not now within the trade of the Line. I would remind him that those causes had been removed before the beginning of the last financial year, which shows the worst result of all. That is borne out by the report of the Public Accounts Committee, and the figures which the Prime Minister quoted last night. There appears to be no probability of substantially reducing this loss, continued under government control. I because the overhead expenses - on which some saving could be made - are, as pointed out by the Prime Minister, small compared Avith the amount of money involved in the annual accounts of the Line.
– That loss is on the written-down value, and not on the original cost.
– - That is so. It is important to remember that if Ave retain the’ Line it will be essential to provide new ships, and accordingly honorable members must consider this problem as involving not merely a loss of £500,000 per annum, but also a serious financial . responsibility in the future The expenditure on extending the Line would have to be made from loan moneys. It is hopeless, on the facts before us, to expect the Line to make a profit, and therefore the Government has to consider whether it is prepared to .bring before Parliament loan proposals, the result of which would be not only to increase the public liability for capital and interest, but also the annual loss on the Line. The greater the extent to which the Line is increased, upon its present basis, the greater will be the loss; and that loss would shortly materialize in the budget of the Commonwealth. The consideration of this question has been postponed from time to time, only because this Parliament has not directly provided the money. I suggest that many honorable members would have regarded the Line from an entirely different point of view had they been called upon to take the responsibility of voting money .year by year to meet the loss on the Line.
We begin with these ascertained losses, and, as far as one can judge, certain losses in the future. Although the Line, from a commercial point of view, may be an uneconomic venture, the benefits to be obtained from its existence may justify its retention. Therefore Ave must com pare ‘the admitted losses with the more or less speculative benefits which it is said the Line has conferred upon Australian primary producers, and the community as a whole. I propose to examine these alleged benefits, and to endeavour to discover to what extent they are real, and to what extent speculative. The right honorable member for North Sydney (Mr. Hughes) has, as I think rightly, submitted that this question involves a comparison of benefits and disadvantages; but the Opposition has put an entirely different view, which has been best expressed by the honorable member for Yarra (Mr. Scullin). He wishes to maintain the Line simply because it is a form of government enterprise.
– That was not the only reason advanced by him.
– I do not wish to misrepresent the honorable member for Yarra. He gave that as one reason for retaining the Line. He took the view of the doctrinaire. He said that government enterprises are as efficient as private enterprises with the not unimportant proviso that there is good government. I have sometimes heard the honorable member suggest that there are such things as bad governments. He has even suggested that this Government has not attained the degree of perfection that he desired to see in a Commonwealth Government. It is difficult, therefore, for me to understand his argument. He upholds government enterprise as such, but, unfortunately, because of the position in which he finds himself, he has to spend his time in criticizing, if not abusing, the government of the day.
Silting suspended from 6.15 to 8 p.m.
– According to the honorable member for Yarra, prima facie, a. government enterprise is a good thing, and is superior to private enterprise. I suggest that such a problem as that now before us is not be solved by the enunciation of any such general principle as that government enterprise is desirable in itself. The problem should be dealt with on the facts of the case. The honorable member went out of his way to speak on the distinction between government and private enterprise. Another honorable member had said that, when private enterprise failed, private persons merely lost their own money, if it were lost; but the honorable member for Yarra replied that private enterprise often failed at the expense of the public. There is, however, an essential difference. In a private enterprise those managing it are dealing with their own money, or money which other persons have voluntarily, and with a knowledge of the risk, placed under their control. Whether it be a business conducted by an individual or bv a company, no one need enter the business, or take up shares or subscribe for debentures, unless he so desires, and no supplier is compelled to give credit to a company or individual. But a government does not trade with its own money. The money used in a government enterprise is earned by the people, and is compulsorily extracted from them by taxation. That imposes upon a government greater responsibilities than those placed on persons engaged in private enterprise. This House, I think, regards itself as standing in the position of a trustee in relation to public, moneys. The honorable member for Yarra went so far as to say not only that if private enterprise failed the failure was on the same basis as the failure of a government enterprise, but also that if a private employer succeeded it was at the cost of the community by profiteering and exploitation. I submit that that is a primitive view of the nature of modem industry and modern commerce. The more successful enterprise in Australia is in all its forms, whether in primary or secondary production, or in the provision of services which do not fall under either head, as a general rule the better it is for the community. Wages and profits alike come from the category of the products of industry, and there is no product of industry- to pay wages and profits in this Country unless private enterprise succeeds. Which would honorable members prefer to see. Waste land along the river front at Newcastle, or the great steel works of the Broken Hill Proprietary Company? Which is better, that we should have open paddocks at Sunshine or the harvester works, which are a monument to private enterprise? Successful private enterprise is the lifeblood of the community, and makes for development and progress. I was astonished to hear honorable members who support this motion refer to the Geelong Woollen Mills. I thought, after the result of the last election, that we had heard the last on that subject.
Government enterprise is necessary in certain activities; but whether it is warranted depends entirely on the circumstances of the case. It is an argument to which this House can attach no weight to say that because the Government considers it wise, paving regard to all the facts and circumstances, and the interests of all sections of the community, to sell the Australian Commonwealth Shipping Line, the railways, and perhaps also the navy, should be sold. It might as well be said that, because the Government of Queensland had by experience learned ways of wisdom, it ought to farm out the Public Service of that State. This matter should be determined not according to any doctrinaire opinions as to the relative merits of government and private enterprise, but according to the necessities of the case.
One of the considerations in running a business enterprise is the necessity for efficient management, and that depends on efficient managers who are able to devote their attention to the development and conduct of the business. In a private enterprise the managers are able to give their whole attention to the business. I think that a distinction can be drawn between ordinary business affairs and the governmental activities of a community, because they are founded on essentially different principles. Business is a profit-making enterprise. Unless it is profitable it cannot maintain itself on an economic basis, and it should be on such a basis, because it is essentially an economic activity. But those conducting a government business enterprise find much of their time taken up, and their energies dissipated, by attention to political considerations which sometimes have very little to do with the well-being of the business itself. The manager of a private business looks after Ms own job; but, when a business enterprise is under government control, the managers concerned are constantly liable to misunderstanding, and even to misrepresentation, for political purposes. Such a concern cannot be conducted on ordinary business lines. Take an example from what has happened in this House this afternoon. The Joint Committee of Public Accounts heard evidence from many witnesses. One of the matters which it considered was the effect, if any) of the existence and activities of the Shipping Line upon freights, and the committee, to quote from page 22 of the minority report, reported in these terms - Confidential documents placed before the committee prove that this all-round reduction was not a spontaneous action by the other shinowners, but was forced by the determined action of the members of the Shipping Board in Sydney.
The members of the committee had before them all the evidence, not merely a portion of it. That evidence was plainly placed before them by representatives of the Shipping Board with a request that in the interests of the Line it should be regarded as confidential. Accordingly, the committee thought it unwise to publish either the whole or part of that evidence. This afternoon we have had read in this House a number of communications of a confidential nature that passed between the board and its manager in London. I do not suggest that a member of the committee has revealed evidence which was given on a confidential basis. Nor do I suggest that the right honorable gentleman who used that information obtained it in an improper manner; nor do I say that some one has not recognized the obligation which attaches to the possession of, or access to, confidential documents. The committee, after considering all the evidence decided that the request of the board that documents should be treated as confidential in the interests of the Line should be acceded to. The honorable member for Cook (Mr. C. Riley), who is a member of the committee, asked the Prime Minister yesterday or the day before whether he would make the documents available to the House. Up to that time the Government knew nothing of them. This afternoon, in response to a query addressed to the board, consequent upon the question asked by the honorable member for Cook, copies of the documents have been received by the Government, and the Prime Minister is considering whether they may, all of them, be made available in the interests of the Line and the community as a whole. Those documents are described in their terms as secret and confidential. This is an example of the difficulties associated with the management of an enterprise that is apt to be affected by political considerations. No private concern, such as those competing with the Line, would dream of making available its business communications to be torn to pieces on the floor of a parliament. It is difficult, indeed, for a government enterprise to be conducted on sound lines when things such as this take place. The matter has been determined by the wisdom of the committee.
I have said something about the dogma of the Opposition that everything should be run by the government, whatever kind of government it may be, and I now come to the consideration of what I regard as the real issue. That requires a balancing of opposing considerations. On the one hand there is the very heavy financial loss, which must increase, and which will have to be borne by the people of the Commonwealth. I have submitted to the House reasons in support of that proposition. What are the opposing considerations? I can state them best by quoting from the minority report. It says that they are these -
The questions that arise upon those contentions are - first, are they real, and, if so, to what extent ; and secondly, can similar benefits be derived in any way other than by retaining the Line as a Government enterprise; subject to the consideration that if the Line is to continue it must be extended and maintained at very considerable expense and an increasing loss? I shall deal first with the effect of the Line in controlling freight rates. We have heard a good deal about the Conference and the Combine, which, I understand, is composed of a committee of shipowners that meets at intervals for the purpose of determining freight and pas senger rates. We have been told that the Line has been in and out of the Conference at different times. If, therefore, the activities of the Conference are wholly bad, as one would suppose from some of the speeches that have been made, the Line must bear its share of the odium. We have been informed that credit has been claimed by the Line for having forced reductions in freight rates when in fact it has merely announced in advance what had already been generally agreed upon. It is difficult to say what credit is due to it on account of the reductions that have been made. There have been many allegations, and a certain amount of information has been made available to the House, but very little evidence has been put forward regarding the effect of the Line’s actions throughout the whole period of its history. To arrive at a conclusion on that matter it would be necessary to become acquainted with the history of the operations of the Conference. That information is not in our possession; but we have some facts to guide us. One is that the Line handles only 7 per cent. of the inward and outward overseas trade of Australia. Therefore those who control the remaining 93 per cent. are in a position to alter, either up or down, the rates that are chargeable in respect of that 93 per cent. It is all very well to say that the refusal of the Line to increase freights has forced them down. Seven per cent. cannot force 93 per cent., and as that 93 per cent. has to be carried, it is obvious that the Line cannot force freights down. It is quite possible, however, that it has helped to keep them up. I have in mind the butchers’ shops in Queensland, which are so expensively run that they keep up the price of meat in every shop in that State. As these seven ships are expensively run, it is fairly plain that on the whole the effect of the existence of the Line must be in the direction of keeping freights up rather than of forcing them down. We also learn from the report of the Public Accounts Committee that on the Australian run the tonnage is more than double what is required. The owners’ of private vessels want to earn profits. With an oversupply of tonnage such as that which exists at the present time, there is every reason to believe that it would be very difficult to maintain freights above a reasonable level. All the evidence is in the opposite direction. There is an increasing foreign competition from Scandinavia, Italy, France, and Germany, which will have a tendency to keep down freights. Our wool and our wheat are catered for by vessels outside the Line, and they are the most important of our primary products. It has not been suggested, I, think, that there is any difficulty in procuring space for general cargo. It is in the direction of providing refrigerated space that the Line has rendered a real service to Australia. Accordingly, the Government proposes that tenders shall be invited for the purchase of the Line, upon the condition that it remains on a shipping register within the Empire, and that the tenderers submit proposals for the maintenance of an equivalent service in relation to passengers, cargo, and particularly refrigerated space; not, as the right honorable member for North Sydney (Mr. W. M. Hughes) has suggested, to sell the Line anywhere, to any body, upon any conditions or even without conditions. So far as one is able to form an opinion, there is every reason for supposing that, if the proposals of the Government are adopted and an equivalent service is provided, the commercial result will not only not be worse than that which exists at the present time, but, on the contrary, something better may be provided. In New Zealand there is not a government-owned line of steamers; yet in some cases the freights on primary produce are lower than those that rule in Australian waters.
– In some cases they are higher.
– They are lower in respect of meat, and, with the rebate, of butter, also.
The third point mentioned in the minority report is that the men employed in the Line did not go on strike during the industrial disturbance that occurred in the ranks of the British seamen in 1925. I read recently some remarks that were made by the right honorable member for North Sydney, in which he complained of the attitude of the Australian Seamen’s Union towards the Line. He said that here was a Line which gave the seamen better conditions than they had had at any time in the history of mankind, yet it was treated by them as if it were - to use the right honorable gentleman’s own words - an industrial leper. If that is the way in which the Seamen’s Union has treated the Line it is rather a daring act to refer to it as having assisted the development of the Line. When the Socmen’s Union discriminated against the ships of the Line and allowed foreign vessels to trade as they willed it might havebeen better if our honorable friends opposite had endeavoured to restrain the union. They are vocal now; they were silent then.
The last point mentioned in the minority report relates to interstate trade. We are all aware that the Line takes very little part in that trade. It cannot engage in it to any extent, because it is not a payable proposition for an overseas line. The Prime. Minister (Mr. Bruce) has read from the minority report of another committee, the opinion of the honorable member for Bourke (Mr. Anstey) which sets out the facts in a conciseand satisfactory form, but one which is highly inconvenient for my honorable friends opposite.
The Government asks the House to say that, while the Line has rendered a service under exceptional conditions, those conditions no longer obtain; and that, balancing the advantages and the disadvantages, the proper thing is to approve the proposal to dispose of the Line and get out of the shipping business, subject to safeguards which will protect the Australian people and continue to secure for them all the advantages which it is said that the Line has hitherto conferred.
.- Those honorable members who have spoken in favour of the motion of censure have gone to the very heart of the question, and have dealt with the real issues that are involved. Those who have spoken against the motion have evaded the issues, and failed to answer the case, and none more signally than the AttorneyGeneral. We had assumed that the honorable gentleman rose to reply to the indictment presented by the right honorable gentleman, the member for North Sydney (Mr. Hughes) ; instead, he merely made a very passing reference to that indictment. The vital questions raised by the right honorable member remain unanswered, presumably because the Government cannot answer them. The Attorney-General merely misrepresented the issues put forward by honorable members supporting the motion. With regard to the cables which created so much consternation on the Treasury front bench when read by the right honorable member for North Sydney, the honorable member for Cook (Mr. C. Riley) asked last week that those allegedly confidential documents should be made available to the House. The AttorneyGeneral stated that the Prime Minister had been asked that question only yesterday, that he first had cognizance of the cables to-day, and was considering the advisability of making the information available. That is a complete misrepresentation of the case. Surely the right honorable the Prime Minister will not deny that the request was made to him as long ago as last week.
– I was wrong in my statement as to the time when the question was asked.
– Then the honorable gentleman will surely realize that his statement is calculated to mislead the House. I do not say it was made wittingly, but it must have that effect.
– I said that the cables were received from the Shipping Board only to-day.
– The honorable gentleman led the House to believe that the Prime Minister was favourably considering making the documents available.
– When the question was asked, I sent it to the Shipping Board, not having heard of the cables before. This morning I saw the cables for the first time. The reply is the substance of the documents that were read by the right honorable member for North Sydney.
– Is the Prime Minister considering the advisability of making the cables available to honorable members ?
– The matter has gone beyond that stage, because the right honorable member for North Sydney has already read them. I do not know where he got them.
– Would the Prime Minister have made them available?
– Yes, because they have been made available.
– Then where is the point of the Attorney-General’s action in condemning the right honorable the member for North Sydney for making them public? The Prime Minister evidently sees nothing wrong in making the documents available. Why, then, were they withheld so long?
– Unfortunately the matter has become subject to general discussion. The Attorney-General was considering the propriety of ever making the cables available. I should have considered it for a very long time, had the right honorable the member for North Sydney not anticipated me by producing the cables.
– I do not wish to pursue the subject further. Honorable members who have heard those cables must feel that there was nothing in the messages that should not have been made available to the House. The Attorney-General said that the committee had placed an embargo on those documents, and had decided that they should not be made public. The honorable member for Cook assures me that the committee came to no such decision, but that the proceedings, at the time those documents were before the committee, were held in camera. For that reason only were the documents not available.
– They were marked “ confidential.”
– Those documents were marked confidential, but not by the committee. No doubt that was done by the Shipping Board. The business was confidential at the time the cables were being exchanged; but that could not be the case twelve months later. The honorable member for Gwydir (Mr. Abbott), as well as the Attorney-General (Mr. Latham) questioned whether the Australian Commonwealth Line of Steamers had any influence in keeping down freight charges upon Australian cargoes, both gentlemen inclining to the opinion that the reverse was the position. These cables show that prior to the 9th July negotiations were being conducted, at the instance of the Conference, to obtain an increase in the rates of freight. The Australian Commonwealth Line of Steamers refused to be a party to that discussion. On the 9th July the Line cabled definitely that it would not be a party to any increase. Three days, later the Conference decided that there should not be any increase. Surely that has a distinct bearing on the issues at stake, and throws some light upon the influence exerted by the Line on freight reduction. The AttorneyGeneral, in further support of his claim that the Line had done nothing to keep down freights and fares, drew a species of analogy between the Line and the State butcher shops of Queensland, which, he said, had the effect of inflating the price of meat in Queensland.
– The honorable gentleman was perfectly correct.
– I do not wish to enter into a controversy on the subject, but I shall refer to it in passing. The Queensland Commissioner of Trade controls the. State butcher shops, and State stations, and issues a report on them yearly. In his report for the year 1926, he gives the relative prices charged in the private and State butcher shops of Queensland, and the prices charged in the southern States. That report shows clearly that the charges made in the State meat shops of Queensland are a great deal lower than those made by private concerns, the prices for the most popular joints ranging from ltd. to 3d. per lb. less in the State butcher shops than in the private shops. So much for that. When speaking a few day ago, the Prime Minister alluded to the State enterprises of Queensland, and pointed to the losses incurred on State cattle stations. I do not deny that there were losses, but I cannot agree that that justifies the argument developed by the right honorable gentleman. The Prime Minister stated that he did not make a fetish of private enterprise as against government enterprise, but he charged the Labour party with making a fetish of government ownership. His very allusion to Queensland State stations disproves his state? ment about the alleged fetish of the Labour party. It is true that that party stands for nationalization, but it is also true that it is prepared to recognize the difficulties in the way of the practical application of the policy of nationalization. The Queensland State stations were established in 1917, under circumstances similar to those which caused the establishment of the Australian Commonwealth Line of Steamers. They were established, in conjunction with a series of State butcher shops, to restrict profiteering by the retail meat traders of Queensland. That was under the regime of my predecessor, and it had my concurrence. The Queensland Government came into the field, as did the Commonwealth Government, when prices were high. Those stations were bought at the very peak of the market, at a time when considerable difficulties were being experienced by the purchasers. After’ the Government had been in the business for four or five years, there was a general slump in values that affected not only State enterprises, but private enterprise also. I do not deny that the Queensland Government lost about £800,000 on its cattle stations, but private enterprise also lost, in the aggregate, millions of pounds in the same industry.
– Whose money was it that the State lost ?
– The funds of the State of Queensland. No State stations have been acquired since 1918, as the Queensland Government recognizes quite frankly that the venture was not a sound commercial one. But that does not prove that all State enterprises are failures, and that nationalization cannot be justified. The Commissioner for Trade in his report for the year 1923 mentioned that although the losses up to that time amounted to £500,000, the consumers throughout the State had gained an advantage in respect of the reduced price of meat exceeding £3,000,000 We must discriminate between different classes of government activities. Although all of us may agree that incursion of the Government into certain avenues of trading is unwise, government interference in other directions may be not only wise but necessary for the proper protection of the interest and rights of the community. Certain public utilities and services by their very nature should be under the control of the Government. Everybody acknowledges that the railways and postal and telegraph services come within that category. No one would think of handing over the public telephone to private enterprise. The railways and the postal, telegraphic and telephone services are all trading enterprises.
– They are monopolies.
– Am I to infer that the honorable member would approve of government ownership of the Shipping Line if that were a monopoly ? No. When the honorable member for Gwydir (Mr. Abbott) quoted Gladstone’s hackneyed phrase that the business of governments is to govern and not to trade, he was using it, as many Nationalists do, merely as a catch phrase. They have not examined the phrase to see what it means. If they applied it logically they must oppose government ownership of the railways, post offices, telegraphs, and telephones, than which there is no greater trading organization. In America the telephone services are controlled mainly by private companies. Do honorable members opposite advocate that Australia should follow that example? They recognize in theory and in practice that there are certain classes of public utilities and services which the Government is well justified in controlling, even at the risk of incurring losses, in order to protect the paramount interests of the community. The operations of all Australian railway systems show losses. Last year the Commonwealth Railways were not earning even working expenses. For many years the Post and Telegraph Department was operated at a loss, but would that have been sufficient justification for calling for tenders from private companies for the purchase of the business? No one can deny that cheap ocean freights are vital to our national life. Australia is an insular country dependent upon ocean transport for access to its principal markets. . It must utilize ocean-going vessels. The honorable member for Gwydir said that freights were an infinitesimal economic factor.
Nobody will agree with him. The meat export trade has reached as high a value as £5,000,000 a year, but shortly after the present Prime Minister took office he was urged to use his influence to bring about a reduction of freights as one of the principal means by which the meat export industry might be saved. Such reductions were made. For the information of honorable members I shall quote an article by a competent authority who merely reiterates the opinion of 90 out of every 100 people who have given any thought to the subject. This is an extract from an article contributed to the Pastoral Review of 16th February, 1926, by Mr. A. M. Pooley: -
Australia is a country which depends for existence on being able to export overseas its primary products. It is essential that the cost of placing those’ products upon the world markets be as low as possible, in order that they may compete successfully with the products of other countries. Further, the countries with which the Australian producer has to compete are all much nearer to the home and European consumer than is Australia, wherefore the cost of ocean carriage is proportionately larger. The distance from Sydney to London is 11,324 miles, from Montreal to London 3,240 miles, from Buenos Ayres 6,294, from Odessa 3,457, and from Copenhagen 587.
That paragraph shows that in regard to ocean freights Australia is in a very dis-‘ advantageous position, and therefore freight charges arc of vital concern to all producers who are partly or wholly dependent upon overseas markets. In the absence of a government-owned shipping line, can our exporters be assured of fair and just treatment? The Prime Minister asserts that they can; he was very disingenuous in his speech yesterday. He was ready to place implicit faith in the tender mercies of the Shipping Combine. Of course he did not refer to the overseas shipping company as a combine; in fact, I do not think he mentioned the words “conference” or “ combine “ during his speech. He displayed an innocent faith in the magnanimity and philanthropy of the Inchcapes, Andersons, and the other influential persons who control the destinies and policies of the great shipping lines trading to Australia. Has that always been his attitude? Has he never recognized that Australia is in danger from these British and foreign controlled shipping lines? I remember reading a speech he made before the Chamber of Shipping when he was in London last year. Speaking in the presence of Viscount Inchcape, and probably other shipping magnates, he is reported to have said -
I do not know whether you are giving Australia the best services. I am told you are not.I am told you can accelerate the time of reaching Australia from London by ten days to Fremantle and fourteen days to Sydney. We maybe at your mercy, but I hope to heaven you will exercise your power mercifully.
If the right honorable gentleman recognized at that time that Australia might be at the mercy of the great shipping corporations, and because of that was moved to make a piteous appeal to them for mercy, what change has come over the scene that he is now prepared to wipe out the Commonwealth Shipping Line and leave our producers entirely under the heel of the overseas combines? Let us examine briefly the character of those combines. Viscount Inchcape, to whom frequent reference has been made, looms very large in the shipping world, and is, I suppose, the dominant personality in the “ conference.” He wields enormous power over the shipping business of many countries. Anyone who has read his life cannot but admire his wonderful capacity, industry, and enterprise. I had the privilege of meeting him in London in 1924, and having also heard a great deal about him, I would be the last to detract from his great qualities and vast knowledge; but the power that he wields in shipping makes him a menace to Australia. He has a predominating influence in the Peninsular and Oriental Company. If he is not a director of the Orient Line, he has a very big interest in it. He is a director and determines the policy of the British India Line, the Australian United Steamship Navigation Company, and Burns, Philp & Company. He has colossal interests in British and Continental railways. He and his business associates own wharves, docks and lighterage plants in hundreds of different ports throughout the world, he owns coal mines, and is the virtual owner of large banking organizations, plantations and factories. These possessions are the secret of his great power in the confer ence. He does not control every shipping line that is included in the Combine, but as the dominant figure he no doubt determines its policy. The conference comprised in 1924 the following twenty large shipping lines that trade to every port in the world: -
The Peninsular and Oriental S.N. Company
The Orient Line (Orient S.N. Company Limited)
White Star Line . (Oceanic S.N. Company Limited)
Alfred Holt and Company
British India S.N. Company Limited
Commonwealth and Dominion Line Limited
George Thompson and Company Limited
Anderson, Green and Company Limited
Birt, Potter and Hughes, Limited
Aitken, Lilburn and Company
Gracie, Beazley and Company
Thomas Law and Company
Bethell, Gwn and Company
Trinder, Anderson’ and Company
McIlwraith, McEacharn’s Line Proprietary Limited.
Mar wood and Robertson.
West Australian S.N. Company Limited (via Singapore ) .
Staley, Radford and Company. 1 understand that since 1924 the conference has widened its scope and has more intimate relations with Continental shipping companies. It and the continental companies have an honorable understanding regarding the freights to be charged by Dutch, French, and German lines trading to Australia.
– I do not suggest that it can dictate to the colossus, but we have abundant proof that it has exercised an influence which we would be foolish to ignore. The report of the Public Accounts Committee acknowledges that fact.
– How does the honorable member suggest that the Commonwealth Line does that?
– To start with, the Commonwealth Line handles not a mere 2 per cent. of the freights that matter. The freights with which Australia is vitally concerned are those on inward general merchandise, and on exports of perishable products, especially those carried in the refrigerated chambers. Of that class of business, the Commonwealth Line has been handling approximately 18 per cent. But it is not alone the volume of freights that matters. Does not the honorable member recognize the significance of the hesitancy on the part of the Conference as disclosed, by the cablegrams read this afternoon, to proceed with any increase of freights without the concurrence of the Commonwealth Line ? How is it that on two occasions the Commonwealth Line was able to prevent increases of 15 per cent, and 10 per cent., respectively? One must recognize that because the Line is owned by the Government, and because the machinations of the Conference may provoke the indignation of the people and Parliament and action by the Government, the Conference has to proceed warily.
– Then it is not such a colossus after all.
– It is a very great capitalistic colossus, but its power to do mischief can. be restricted if the Government will do its duty. The combine is not all powerful in matters of that kind. It cannot ignore the existence of the Government nor the power of the people as a whole. It has to recognize that its tyranny can be resisted by a government.
– Viscount Inchcape in his cable clearly stated that.
– The right honorable member for North Sydney (Mr. Hughes) read a very significant message sent to him by Viscount Inchcape in 1921. Its purport was that as the Conference Line was in competition with the Australian Commonwealth Line, one should sell out to the other, otherwise the position would be intolerable.
– Did Viscount Inchcape wish to sell the twenty lines of the combine?
– He wished the combine to be relieved of the Australian trade. The Prime Minister has great faith in the magnanimity of the combine which, although composed of British shipowners, is an international organization. It owes no allegiance to any country and professes no patriotism. It worships no god except the’ almighty dollar; and yet the Prime Minister says that we can depend upon it to reduce freights and. to furnish us with an adequate service. Had the combine brought about a high degree of efficiency in its shipping organization, making it of value to the whole world, even if it were receiving an adequate return on its capital, there would be a better argument in favour of it than there is to-day. But the combine has not brought about that high efficiency. The combine has twentyseparate lines, each under separate control. They agree on freights and the extent of exploitation to be carried out. They combine for the purpose, not of reducing overhead expenditure, of eliminating useless tonnage, or of supplying the world with an up-to-date shipping organization, but of bringing about intense exploitation. It is an international organization; it is not inspired by sentiments of patriotism or philanthrophyThe Prime Minister has stated that he intends to ear-mark the halfmillion pounds a year that would otherwise be expended if the Line were continued, in order to compensate the primary producers for any consequent losses.
– The Prime Minister said not that he would do that, but that he could do it.
– That is a smaller modicum of assistance than we understood that he was willing to give. The producers will suffer grievously as a result of the discontinuance of the Australian Commonwealth Line. Some honorable members supporting the Government have stubbornly refused to recognize the real character of the Shipping Combine. They fondly believe that the various shipping companies that make up the combine are ordinary ship-owners who trade in good faith and will give. a fair deal to a country like Australia, by means of legitimate competition. The Conference Lines have already brought to bear an atrocious pressure against those who attempt to resist it, and South Africa is taking measures to safeguard itself against the brutal powers of the combine. I have with me a copy of a memorandum of agreement that was placed before the principal shippers of
Australia in 1924 and earlier. They were compelled to sign it and to agree to ship only by the Conference Lines, or else suffer a penalty.
– Was that agreement confidential ?
– No. It was placed before me as Premier of Queensland. At that time the Queensland Government was a shipper, and was compelled to sign this agreement, otherwise it would have been mulcted under the penalties imposed by the Conference, which is controlled by Viscount Inchcape.
Mr.Foster. - That is not peculiar to Viscount Inchcape.
– It is peculiar to private enterprise only, and not to governmentowned lines. The Conference Line adopted two classes of freight charges. One was termed the deferred rebate system, and shippers who did not sign the agreement came under that higher rate. The agreement is ingeniously worded as follows: -
In the event of any breach of this agreement by the shippers, or in the event of the shippers failing to carry out their obligations to confine their shipments in the manner specified, they shall pay to Messrs……….. on behalf of the ship-owners and brokers as liquidated damages a sum equal to the amount which they would have forfeited if their shipments made under this agreement had been madeunder the deferred rebate system.
That imposed upon recalcitrant shippers a heavy penalty, calculated upon retrospective charges.
– Did Queensland sign the agreement?
– Yes, at the instance of the Australian Commonwealth Line acting apparently under the instructions of the Commonwealth Government in 1924.
– The Commonwealth Government has issued no instructions to the Shipping Board in respect of Queensland.
– It is strange that the Australian Commonwealth Line had nothing at all to do with the Conference Line until the Bruce-Page administration came into existence. Since then the Line has had a good deal to do with the Conference Line.
– That is not so.
– For nearly two years I refused to sign the agreement, but eventually I had no alternative but to do so, otherwise Queensland would have had to pay25 per cent. more in freight on its shipments to and from Australia. The Prime Minister pretends to be at a loss to know what harm can accrue to Australia from the Conference Line if the Australian Commonwealth Line is discontinued. He is quite satisfied that we shall receive good treatment at the hands of the privately- owned lines. He referred tothe merchant shipping activities of Canada and the United States of America. Surely he must acknowledge that those countries as States would not engage in the merchant shipping business unless there was some justification for so doing. They have not engaged in that business out of mere caprice.
– Geographically they are not so vitally concerned as in Australia.
– The United States of America should be in an infinitely better position to allow its commerce to be handled by private enterprise, because there must be keener competition there than there is in Australia. I wish to quote an extract from a shipping newspaper called the Syren, published in London on 7th September of this year, because it throws some light on the attitude of the Government of the United States of America on the question of shipping. It is a statement by General A. C. Dalton, the President of the Merchant Fleet Corporation, which is controlled by the Shipping Board of the United States of America, and is a government enterprise. General Dalton was recently in London, and was the guest of honour at a dinner given by the European representative of the Shipping Board of the United States of America. The dinner was held on the 30th August, at the Savoy Hotel, and among those present were Viscount Inchcape, Lord Kylsant, Sir Ernest Glover, Sir Allen Anderson, Sir George Higgins, and many other leading shipping magnates. Notwithstanding the presence of those representatives of shipping combines and corporations, General Dalton uttered some straightforward truths in regard to the Merchant Elect Corporation of the United States of America. The news.paper report reads as follows: -
In tlie course of his speech, General Dalton remarked that past experience had definitely established the fact that private American ship-owners could not maintain and operate merchant vessels under the American flag on certain essential trade routes in competition with other more experienced nations. The Shipping Act of 191G, as amended in 1920, clearly recognized this fact, and to meet this condition the American people, through Congress, mandated that there should be established an American Merchant Marine, commensurate with the volume of its foreign commerce. The Shipping Board, in the foundation and maintenance of a merchant service to all parts of the world, clearly had in mind from its very inception the basic policy and principle as laid down in the act that individual enterprises should be given full and free opportunity and a just reward for its accomplishment. There had been in America much criticism of the Government for engaging in a commercial shipping enterprise, but the Shipping Board would have failed in its plain duty to the people if it did not carry out the full intent and will of that people, by continuing those services that were essential to their foreign trade.
The United States of America has had the same experience as Australia.
– Can the honorable member inform me why out of the world’s tonnage of 5,000,000, 4,000,000 tons of American shipping, most of it. under government control, is lying idle?
– I cannot give the Treasurer that information off hand, but whatever shipping depression has overtaken America, there is clearly an expressed determination to continue its fleet in the interests of its people. That country has had colossal losses in respect of its government- owned merchant marine, and has been subjected to a great great deal of criticism, but notwithstanding that, its representative, in the presence of the shipping magnates of the world, expressed the intention of the Merchant Fleet Corporation not only to continue, but also to expand the Line in the interests of the national existence and development of America. Canada has also a government merchant marine, and its vessels trade in Australia and many other countries. The Line is losing heavily, but the indirect advantage to that nation is infinitely greater than the monetary loss year by year in the conduct of that. Line, and as far as I am aware, there is no intention to discontinue it. Yet simply because the Commonwealth Line shows a loss on paper, it is to be sacrificed.
– A loss of £12,000,000.
– No. Whatever the aggregate loss has been, taking into account the losses on the ex-enemy ships, and the unsuitable vessels run during the war for special purposes, the current losses are about £600,000 per annum. Is there no advantage accruing to Australia to be set off against that loss? The committee itself has referred to many advantages derived from the Line. The saving to the producers of the extra charges that would have been made, if the Combine had had its way on two occasions, amounts to £1,250,000 a year. The loss of £600,000 is a mere circumstance compared with the amount that Australia would be mulct in at the end of five years under unrestrained control by the Shipping Combine.
– What about foreign competition ?
– Where is that competition? All privately-owned lines trading to Australia mutually agree upon freight charges through the instrumentality of the Conference; there is no competition in that matter. When the Conference Line considers the freight schedule for Australia, it has the concurrence of the Dutch, Germany, and Norwegian lines, and every other shipping company trading to this country. The fact that some of our shipping is being captured by the foreign trader is an extra justification for continuing and strengthening the Australian Line. Do we never want a merchant marine? Are we always to be dependent on overseas powers, or on foreign companies to supply essential shipping services? Is there no virtue in building up our own merchant marine? The honorable member for Gwydir (Mr. Abbott) advances the quaint notion that Australians have no leanings towards a seafaring life, and, therefore, we should have difficulty in establishing a merchant marine.
– The majority of the seamen employed are domiciled in Great Britain.
– The Australian ships were built in England, and to a large extent manned there. It was impossible, in the first instance, to bring out a fleet and secure a trained personnel in Australia. We had to start with British crews. I understand that the board decided to give preference to Australians; but they had difficulty in carrying out that decision. In the first place, the time-table of the five “ Bay “ steamers enabled them to remain only a week in Sydney, and even shorter periods in Melbourne, Adelaide, and Fremantle. But in London they berthed for three weeks, and, therefore, the crew find an advantage in being domiciled in England. There is a natural disinclination on the part of seamen to serve on ships of the Australian Line, because of the uncertainty as to its future. That information, I think, was tendered to the committee by the Shipping Board.
– But the officers make their homes in Australia.
– Yes ; and all honour to them for doing so. The Prime Minister referred to the fact that 100 per cent, of the apprentices were Australians. He also said that they were the least valuable section of the crews ; but in <that he is wrong. The board laid it down that Australian apprentices only should be engaged. They are apprenticed to the profession of mariner, and in due course, no doubt, they would become officers, and subsequently masters, if the Line were continued and extended. Eventually all the personnel, so far as officers are concerned, would be Australian, and probably trained in the Australian merchant marine. So long as the Line was regarded as a permanent institution, and recognized as such, there would be no difficulty in obtaining entirely Australian crews. Australians are as adaptable as any people on the face of the earth, and they would be as good seamen as they have proved soldiers and expert industrial workers. A merchant marine would immensely strengthen the nation; but the Prime Minister belittled the suggestion. He said that it would cost £220,000 more to operate the’ Line under Australian articles than to conduct a similar line under British articles. That is because this country insists on a high wage scale. We do not condemn the Shipping Board because it has paid higher wages than those obtaining on British ships. Our Arbitration Courts have awarded the improved industrial conditions enjoyed by Australian seamen, in common with all other industrial workers. If we abolish the Line on that account it would be equally logical to close down our iron and steel works, and to abandon our sugar industry, a.nd many of the other industries that are operated at infinitely higher cost ‘ than obtains in any other country, because of the high standards of living laid down by the tribunals of Australia. It would be illogical to observe the high standard of living adopted in Australia, and be content with lascars and coolies for the manning of our ships. If we have done right in insisting on a higher industrial standard than is found in Europe and other parts of the world, we have a right to expect the same standard to be observed in the manning of our merchant marine, whether publicly or privately owned.
– That is another line of argument.
– But it is a consistent one. The men on our ships should not have conditions inferior to those of the employees in other industries. If the seamen should be compelled to accept inferior conditions, instead of continuing to receive the Australian rate of £16 a month, why should we be content even with the British rate of £9 a month ? It would be just as logical to employ coolies at one- third that sum. There is justification for the high operating costs of our Shipping Line, and the nation ought to be prepared to. meet the extra annual outlay because of the advantage of the safeguards provided against exploitation. I have dealt with one or two salient points. I am convinced that the Government is making a first-class blunder by surrendering the ownership of the Line. It would have been wise not only to continue, but to supplement it.
– -How would the honorable member propose to continue it ?
– In the way that it has been conducted in the past. I admit that it may be impossible under the Australian articles to show a credit balance on a profit and loss account ; but the justification of such a line from that point of view is not necessary. The general conditions have to be taken into consideration. When the “Dale” and “Bay” steamers were being ordered, what inspired the Government to adopt a design that would enable the vessels to be converted into cruisers ? That was not an accident. That could not have been the decision merely of Mr. Larkin or of the Shipping Board. It was, no doubt, the result of a carefully-considered policy. If the ordering of additional vessels was justified then, it is better justified to-day. We have to defend ourselves, not only against a possible foreign aggressor, but also against capitalistic enterprise that would exploit this country. The honorable member for Gwydir ridiculed the suggestion that provision should be made for the conversion of the vessels into cruisers. He pointed out that not more than one or two of them would be available to Australia at any time, because they would be strung out over the route between Australia and the other side of the world. That may be true ; but surely the ships would not necessarily be lost to us in the event of an outbreak of hostilities. I do not advocate launching upon a break-neck construction policy. If the “Bay” steamers were supplemented immediately- by three other vessels, and the “ Dale “ steamers were increased to the same extent, and after that the fleet were gradually extended, even if it meant a proportionate increase in the annual loss, the country would get an advantage which would more than compensate for the additional outlay.
.- I was delighted to hear the references that have- been made to the part which was played in 1916 by the right honorable member for North Sydney (Mr. Hughes), when, as Prime Minister, with a stroke of the pen he established the Australian Commonwealth Line of Steamers. I have always held the opinion that but for that stroke of the pen Australia might have approached very close to the edge of bankruptcy. On sentimental grounds - and sentiment enters largely into all of our lives - I shall feel sorry for the right honorable gentleman if the Government should dispose of the Line. Like the honorable member for Newcastle (Mr. Watkins), I am an amateur sailor. I wish to correct the statement that was made by the honorable member for Gwydir (Mr. Abbott) that Australians are not a sea-going race. That was the only “ miss in baulk “ - if I may use that simile - that occurred in an otherwise excellent speech. I am afraid that the honorable member has never been on Sydney Harbour or Lake Macquarie on a Saturday afternoon. On Sydney Harbour alone one could get 5,000 men who in time of war would furnish the finest possible material for a volunteer Royal Naval Reserve. I discussed this matter with Earl Beatty some years ago. He said to me “ I should like you people in Australia to try to get me from the ranks of your yachtsmen, 5,000 men to form a Naval Reserve.” But apart from the yachting side I am convinced that the Australian people are no different from their British cousins. Lying dormant within us all is a love of the sea, which has come down to us from the generations that have preceded us. During the war many illustrations of that fact came to my notice. In the North’ Sea one night my steersman was maintaining such a wonderful course that I was impelled to ask him “ Where did you learn to steer ?” He replied “ This is the first night that I have been at sea.” I said “ Where are you located in peace time ?” He replied “I am a commercial traveller in Fleet Street.” I then asked him. “How did you learn the compass?” and he said “ I had a fortnight at Southampton.” That man was the finest helmsman I have had during the course of my life. I am absolutely certain that when the occasion demands it the dormant love of the sea which is in us all will manifest itself. That has a bearing on the point which has been made by the honorable member for Dalley (Mr. Theodore), and the Deputy Leader of the Opposition (Mr. Scullin), but more especially by the right honorable member for North Sydney when he emphatically struck his desk and said “We must have a mercantile marine.” We were all in agreement with him on that point, and he was cheered by honorable members of the Opposition when he said it. Apparently they overlooked the plank which was inserted in their’ platform at the convention of the Australian Labour party that was held in Canberra last year, to the effect that Australia should have no cruisers. If we had no cruisers our “ Dales “ and “ Bays “ could not escape being sunk. Nothing larger than a 6-inch gun can be mounted on a merchant vessel, and according to the terms of the Washington Treaty cruisers are allowed to have 8-inch guns. Yet there is a plank in the platform of the Labour party that Australia is to have no cruisers.
– It was inserted by the convention which sat in Canberra last year.
– I challenge the honorable member to produce evidence which will support that statement.
– Every newspaper in Australia published the decision of that convention, “ We want no cruisers ; we want submarines and aeroplanes.” That point was stressed by the Leader of the Opposition (Mr. Charlton) at Yass during the last New South Wales election campaign.
– The honorable member ought to accept the absolute denial of a statement of which he has no proof.
– It was published in the Sydney Morning Herald.
– I ask the honorable member to show in what way the defence policy referred to is connected with the motion before the House.
– I have no wish to continue along those lines. I have followed them because the right honorable member for North Sydney argued that the Line should be retained as the basis of a mercantile marine. In 1916, to meet the wishes of the British Government, Australia increased its acreage under wheat. A great portion of that wheat was carried home in the vessels that were purchased by the right honorable member for North Sydney. Several honorable members who have spoken stated the position incorrectly when they said that the Public Accounts
Committee had reported that the Line had kept down freights. Referring to the reduction in freights, the report says, “ It was stated before the committee.” It is not the opinion of the Committee. Prom my own knowledge of the matter, I admit that the Line did at certain times keep down freights. Every week-end I come in contact with the masters of overseas ships. Last week I was informed that it was Holt’s Line, and not the Commonwealth Line, which in 1926 fought the Conference and succeeded in having freights reduced. The Commonwealth Line was the first to announce it to the press, and since that time it has been given the credit for the reduction.
– That is not the evidence.
– That is the information I have received from the skippers themselves. It is undoubted that, since the Navigation Act came into operation, the Commonwealth Line has been very popular on our coast. Since 1922 it has carried 1,450,000 tons of cargo, and 76,000 overseas and 54,000 coastwise passengers, without accident or the loss of one life. That shows wonderful handling by the men who are in charge of those vessels. To what can we ascribe the wrecking of the Line? Let us look at the matter calmly and consider it from all angles. The responsibility upon honorable members ‘is a very grave one. I wish to present a case which will lead me to a certain conclusion. The first handicap under which the Line has suffered is the heavy running costs, which, in the case of the five “ Bays “ is £126,268 greater than that of five similar British vessels, and, in the case of the seven units of the Commonwealth fleet, £220,000 greater than that of seven similar British vessels. On the question of wages, I entirely agree with the honorable member for Dalley that we must pay our men as much as possible and give them the best conditions. Any person who says that a man who receives £16 a month is overpaid can never have been to sea. I should like to see them get much more than that. But it is a factor that must not be overlooked when we are considering whether the Line is to continue. If we decide that it shall continue, there is the possibility of an augmented wages sheet as the result of the demand that has been made by the Australian Seamen’s Union for increases amounting to from 25 to 33 per cent., which, the interstate shipowners inform us, if granted, would mean an additional £1,000,000 a year imposed upon all concerned. I cannot say what would be the share of the Commonwealth Line; but I am informed that it would be about £200,000. The second handicap under which the Line has suffered is unquestionably lack of unity among the members of the board of management. I could not understand the reasoning of the right honorable member for North Sydney when he said that the withdrawal of the “ Dales “ from the trade on the west coast of England had considerably improved the position, and cut down the loss. The reverse is the case. Mr. Larkin wanted the ships to continue in that trade. Clarkson and Farquhar did not want them on the west coast. Two years ago I visited Bristol, Birmingham, Bradford, “Wolverhampton, and the Channel ports, going later to Hull with the PostmasterGeneral. We discussed the position thoroughly. I discovered that the Australian Commonwealth Line of Steamers had built up a reputation on the west coast of England that was second to none ; that, trip after trip, although it took aboard the cream of the cargo, it had to leave behind thousands of tons of good cargo because it lacked space in which to store it. Farquhar and his associate then determined to withdraw the ships, and that really wrecked the line. The route of those ships embraced the whole manufacturing portion of England, right up to Glasgow, Scotland. The manufacturers of Glasgow and Leeds failed to see why they should send their goods by Inchcape’s boats to London merely for the privilege of linking up there with the Australian Commonwealth Line of Steamers” About that time the Prime Minister of Australia made a speech at Bristol, and he put forward an argument embodying the converse of the contention of the manufacturers. The right honorable gentleman asked, “ Why send all of our refrigerated cargo through the bottleneck of London ?” That idea was quite all right, but to carry it out it would be necessary to have “ Bay “ liners serving the east, and “ Dale “ liners the west coast. The only solution to the problem would be to build three additional “ Dale “ liners, capable of fifteen knots, and with accommodation for 500 passengers. That idea is the result of repeated conferences with the captains and officers of our own and foreign ships. The next important point is the granting of a mail subsidy. What is the use of owning a Commonwealth Line if it is not given the mail contract? It is parallel to owning a Rolls-Royce motor car and hiring a taxi. I shall tell the House what the mail contract did for the Orient Line. In 1908 the mail contract expired, and an extension of eighteen months was granted to the Orient Company. During that period the Orient Company built the Otway, Otranto and Orvieto. Mail steamers have a glamour that always attracts passengers, and those liners were so successful that the Orient Line was able to build the magnificent Orama- which was lost at the Falkland Islands during the war - and her sister ships. The company to-day pays 12£ per cent, dividends, and is piling up huge reserve funds, practically “all made from Australian trade. I have some interesting figures which illustrate how the journey between Australia and England could be shortened by our Line by one and a half days. The journey via Colombo is as follows : - 1
which, if divided by 15 knots, gives 535 hours, which equals 22 days. By eliminating Colombo, one and a half days is saved, as follows : -
which, if divided by 15, gives a total of 515f hours, or 2l£ days. To carry out the mail contract it would be necessary to build at least two more “ Bays “ and three more “ Dale “ steamers, at an expenditure of about £6,000,000. That additional service would necessitate the expenditure of £25,000 that could be saved under the present administration. One has only to look at page 17 of the report of the committee to realize the comparative magnitude of the .present administrative expenses of the Line. For the year 1926-27 they were -
And that to manage a line of only seven ships! I do not wish to weary the House now that the Prime Minister has decided that the Line should be sold. I could advance schemes under which it could be taken over by Australians and prove an asset to the country, but that is now of little use. What I term my list of “ decapitations “ reads -
Are we to relinquish the Line and face a problematical rise in freights, or are we to continue it, and face the difficulties that must then present themselves? Some of them are - excessive running costs, the demand of the Australian Seamen’s Union for a 25 per cent, to a 33 per cent, increase on existing rates, and the additional outlay of £6,000,000 for three more “ Dales “ and two or three more “ Bay “ steamers. We should need a further supply of working capital, the current account of which, the Prime Minister -has informed the House, is exhausted. If we dispensed with the Line we should have the service to Australia of ships belonging to the Conference and other British Lines, also those owned by other nations. The figures given by the Prime Minister and the report indicate that the Australian Com- monwealth Line of Steamers carries only 20 per cent, of our passenger trade, and 2 per cent, of the freight offering. -Even if we increase that 2 per cent, to 7 per cent., it leaves 93 per cent, still going to other companies. We are 13,000 miles from the Motherland, isolated in the Pacific. Can it be contended that no credit should be given to the British and foreign shipping companies that have assisted to develop and bring thiscountry to its present state of prosperity ? Those concerns have had to contend with excessively high port dues. Time after time masters have come to my office and complained bitterly about those excessive charges, urging me to endeavour to . persuade the Governments to reduce them. The second factor was the delay caused by strikes. We all are aware of that. Then there are the Customs duties on the stores carried by the vessels. Immediately they arrive at Fremantle the Customs officer goes abroad and nuts a label on their stores, a cause of irritation, apart from the cost. In addition, there is the embargo under the appalling Navigation Act against the carrying of interstate passengers. Honorable members may say that the companies can get - remission certificates from the Minister for Trade and Customs to carry passengers to Hobart; but they have refused those certificates because of the trouble they might cause among the seamen. All these points have to be scored to their credit. Another factor to be remembered is the competition between the vessels controlled bv Inchcape and those outside the Combine. Freights are governed by the average prevailingthroughout the world. I do not say thai Viscount Inchcape is an angel with extra large wings, although I understand that the right honorable member for North Sydney (Mr. Hughes) has certain reasons for “ swatting “ him at every opportunity. But we must give the overseas companies credit for what they have done to develop our trade. If the Commonwealth Line disappears, is Lord Inchcape^ - a Britisher whom the King has honoured with the title of Viscount - likely to go out of his way to throttlethe Empire’s greatest possession? If heshould do so, if the Combine should; throw down the gauntlet, we would pick it un, and start operations afresh with new ships equipped with Diesel engines and the most modern refrigerating plant The House has to decide whether the Line shall be continued under Government control or disposed of. On the facts I have presented to the House very briefly to-night, I have come to the conclusion that, in view of the huge capital expenditure that would be required to build new ships for trade and passenger expansion, in view of the recommendation contained in the majority report of the Public Accounts Committee to the same effect, and because on general principles I prefer private enterprise to Government control, except in circumstances of oppression or when unusual conditions obtain, the Line should bie sold upon the conditions laid down by the Prime Minister.
.- The Prime Minister said that the matter before the House does not relate merely to the seamen or the primary producers, or any section of the community, however large or small, and that in considering it we must rise to a height and take a broad national view. I am quite prepared to follow the right honorable gentleman, and, regardless of the seamen or the primary producers, consider the shipping Line from a broad national point of view. But I am struck, first of all, by the fact that this proposal to sell the Commonwealth Line is a very noor reward for the seamen and their leaders .who furnished the Government with a battlecry ~t the last general election, and who, by their utterances and actions, contributed very largely to the triumph of the Ministerial parties. That gentleman in the industrial world who. weeks before the polling, said that if the Nationalists triumphed the shipping strike would be discontinued, and if the Labour party won it would be continued, can now see the result of his good work. He will have the satisfaction of knowing that any log served by the seamen upon the Commonwealth Line will be served, upon a corpse, and that over a thousand seamen in Australian ports are to be thrown out of work. Those workers who believe in direct action and believe that out of political action nothing good can come to them may now see that by political action the workers may be very adversely affected, and that the triumph of the opponents of the Labour party at the polls may mean to the working classes, or at any rate a section of them, a more disastrous blow than could come from any conflict in the industrial world.
– Why were not their leaders deported?
– The honorable member must address that question to his leader. The gentleman who prior to the last election was held up to the community as a foreign agitator, and whose name was spelt and pronounced in a foreign way, now has his name spelt in an English way. Industrial peace prevails within our borders, and this individual is not to be deported. No longer is he an object of reprobation, for his power and influence, which previously were confined to one State, now extends to all States!
But the subject-matter of the motion rises above the ‘ seamen and their interests, and I have to take the broad national view. We are told that the subject of the primary producer does . not arise, and when we on this side of the House do mention that gentleman, we are told that we do so only for purposes of political propaganda. Having regard to the delay that must take place in the transfer of the Commonwealth ships to other owners - and the Combine will not be so ungrateful to this Government as to raise the freights before the next general election - this transaction will not serve us on the hustings. But when the freights are increased, the primary producers will know, without being able to get a remedy, that the increased burden has been put upon them, not by the Labour party, but by the people for whom they vote.
The Prime Minister has asked us to look at the facts. What else can we look at? The facts are that £400,000 has been lost in respect of depreciation and interest, £90,000 upon administration, and £60,000 in excess of running costs over earnings, a total of £550,000. The problem before this Parliament is whether the country shall continue to pay £550,000 per annum to keep the Commonwealth fleet in being. To that problem the Government answers “ No.” We of the Labour party answer “Yes.”
Honorable members opposite ask why, and we reply that an investment of £550,000 per annum yields to this country compensating rewards and savings. Honorable members on this side say that according to the evidence before the Public Accounts Committee, the documents produced by the honorable member for Yarra, and the admissions by the Prime Minister, this Line has prevented the raising of freights and brought about their reduction, and on those two counts may be fairly said to have reduced our freight bill by from 20 to 25 per cent. That is denied by supporters of the Government. Let us suppose that the saving is only 10 per cent. We say that the Commonwealth ships carry 7 per cent, of the total inward and outward cargo between Great Britain and Australia. The Prime Minister says that the proportion is less than 3 per cent. He referred, not to the tonnage between Great Britain and Australia, but to the whole mass of. tonnage passing from all parts of the world into our ports, and from our ports to all parts of the world.
It is evident that no fleet that the Commonwealth Government could establish could affect the, freights between Australia and all parts of the world ; but the existing fleet does have an influence upon the 42 per cent, of shipping that plies between British and Australian ports. Of the total of 10,000,000 tons of inward and outward shipping between Australia and all parts of the world, 4,200,000 tons represents vessels trading between this country and the ports of Great Britain. The freights inward and outward vary from £2 2s. up to £10, £12, and £15. The average is £4 6s. per ton, and 10 per cent. of. that is 8s. 6d. per ton. The freights levied by our large shipping companies are taxation as absolute as any ever levied by the Government. That reduction of 8s. 6d. per ton upon 4,000,000 tons of cargo annually represents a total saving to our people of nearly £2,000j000 each year. The problem before us is, whether it is worth while to keep the fleet in being at a cost of £550,000 in order to save to the people of this country - not only the primary producers and exporters, but all the consumers of goods from abroad - at least £2,000,000 per annum. To that the Prime Minister says, “ The facts may be as stated; I do not dispute them; but those benefits can be gained without the expenditure.” And he proceeds to show how the rapacity of the British combines can be restrained. He said that there is competition between the companies, and that there had been an enormous increase in the tonnage of shipping from Norway, Germany, and Holland to Australian ports. So that we are to be saved from the rapacity of the British combine, not by our own efforts, but by the mercantile marine of Germany, Holland, ‘and Scandinavia! That is the Prime Minister’s solution of the problem.
But I am not bound by the affirmation or denials of either one side or the other. The answer to the problem is to be found, not in our own prejudices or the interests we are supporting, whether they be Labour or antiLabour, but in one outstanding and verifiable fact, namely, that the freights between Great Britain and Australia are lower than between Great Britain and other countries equally distant. A reference to the freights between Great Britain and the west coast of America - Valparaiso, Callao, and other ports - will prove that Australia enjoys a decided ‘ advantage. But the Prime Minister says to us, “ Gentlemen,, you are obsessed by a fetish.” The Prime Minister has accused us of being wrapped up in the idea of national ownership, whereas he stands for what he alleges to be the glorious principle of private enterprise and the benefits that it confers. He carefully refrained from mentioning any successes of public ownership and any failures of private capitalism. . It is true that men build upon experiments and gain knowledge from failures, but that applies not only to public ownership, but also in every direction of human endeavour. Success can be shown in public ownership and in innumerable other activities. Had the Australian Commonwealth Line been a success, would this Government have kept it in existence? The argument today for its discontinuance is not that ic is making a loss, but that it is costing too much.
Even had the Line earned sufficient to pay for working expenses, depreciation and interest on capital, as did the woollen mills, the Government would not change its attitude. It is carrying out its policy of discouraging public-owned enterprise and encouraging private enterprise. The Prime Minister in n.n endeavour to make us believe that’1 he is an advocate of public-owned enterprise has referred to the Government’s action in establishing the Commonwealth Oil Refineries Limited, but I tell him that that company was not established to protect the people from exploitation. The right honorable member for North Sydney (Mr. Hughes) has shown us that it was established to encourage, not so much public enterprise as British, interests in this country as against American interests. I do not say that the Government was wrong in doing that ; in fact, it did quite right, but I object to the Prime Minister mentioning the establishment of that institution as an instance of his departure from the principle of private enterprise.
The right honorable member for North Sydney, when Leader of the Government, established the Australian Commonwealth Line as a war necessity. He gave instructions to buy vessels. He had the Commonwealth Bank behind him, and working in secret he was able to obtain fifteen ships, although he required 30, before the Conference Line blocked any further purchase. That Line was sending its ships to the United States of America, the Argentine, and other countries. They were loading goods from neutral countries that were not paying one penny towards the cost of the war, while our own products were rotting on the wharves. Vessels were taking men, but not products out of our harbours. The Government then acquired eighteen ex-enemy vessels and twenty vessels of the “D” and “E” classes, making 53 in all. The Prime Minister quoted the earnings of the ex-enemy vessels as £3,600,000, but in arriving at that figure he took different periods into consideration. Actually the net earnings of those vessels were £3,300,000. The earnings of the “ Austral “ vessels amounted to £2,700,000. The “ D “ and “ E “ vessels lost £700,000, making the total earn ings £5,300,000. The vessels were sold on the markets of the world for £1,700,000, bringing the total receipts to £7,000,000. They cost this country £6,400,000, so that we realized a profit of £600,000 after re-paying the capital invested in them. I want to draw this comparison for the benefit of those who measure everything by pounds, shillings and pence. There was in this country a battleship named Australia. One day it was taken out to sea and sunk. That vessel cost us millions of pounds. Its upkeep, depreciation, and -interest on capital must have amounted to £3,000,000 or £4,000,000. Did we measure the value of that vessel by a balance-sheet. We took a higher stand-point. We took the view that it had rendered good service and during the war had helped us to achieve victory. Had the 47 odd vessels of the Australian Commonwealth Line also has taken to sea and honorably sunk there, it might have been said that our merchant marine well deserved such ‘an end. Our victory was achieved not only by battleships, but also by the vessels that transported our men and materials overseas. Those vessels were sold at a profit. There now remain to us five “ Bay “ steamers and two “ Dale “ steamers, and the cost of their construction was seven and a half millions. They have carried our products overseas, and have constituted the basis of our mercantile marine.
What is desired in this country particularly is the development of a mercantile marine, which, if possible, should be owned by the Government, with the people generally as shareholders, and failing that, it should be placed under the control of a private company in Australia. It is essential for defence that we should have a mercantile marine as well as a navy. We have spent £17,000,000 on the naval defence of this country, and our expenditure on the maintenance of our naval services has amounted to millions of pounds, but in no case do we measure the value of those activities with a balance-sheet. No nation can effectively defend itself unless it has behind its naval unit a powerful mercantile marine. The Public Accounts Committee recognized that, because it dared not recommend the sale of the Australian Commonwealth Line overseas. I go further and say that no nation has ever successfully maintained itself upon the seas without the assistance of a mercantile marine. Every modern country has recognized that a merchant marine is necessary in order to protect its citizens, producers, and commercial interests from the rapacity of any transport combine. The United States of America, Japan, Canada, Germany, and other nations, are establishing their own mercantile marine, either under government control or under private control assisted by subsidy.
The Government has asked us to consider whether the Australian Commonwealth Line is paying, but we are not asked to do that in respect of activities such as railways and postal facilities. In their case the question is, not will it pay, but by what means can the people be called upon to contribute taxation in order to extend the blessings of civilization to the more remote parts of this country. We have constructed thousands of miles of non-paying lines in order to encourage development in the outback parts of Australia. We did not raise the question of cost when we constructed the East-West railway. We considered only the best means of linking the east with the west so as to bring the people more closely togeherSimilarly the construction of the northsouth railway would never have been authorized if it had been considered purely as a paying proposition. From the steps of the edifice in which honorable members are assembled one catches a glimpse of hostels furnished with all the conveniences of modern civilization, not because it is thought that they will pay, but because they will ultimately benefit the community. We have laid the foundations of the City Beautiful, and large sums are being spent in the provision of parks and gardens. No suggestion has been made that hostels in Canberra should be closed because they are not returning interest on the money invested. This and other government expenditure is incurred because it is considered that it will ultimately serve a great national purpose. It should be the object of any government to maintain also a national shipping line. Industrial peace has prevailed between the seamen and the shipping companies since the last election, and it could be maintained for all time if there were a general desire for it. The cost of conducting a mercantile marine should not be regarded as a lossIt has been more than recouped because of the indirect advantages derived from it by the people.
.. - I do not expect the Prime Minister to be present in the chamber at all times, but I regret that he is not here at the moment. I propose to make observations regarding certain information supplied to him, out which he has not disclosed to the House. The supporters of the Government had not been provided with full information when they decided, to support the Ministry in its proposal to dispose of the Line.’ Not until this afternoon did they receive the information disclosed in the cables read by the right honorable member for North Sydney (Mr. Hughes). I have before me a series of figures which, to the best of my belief, were in the hands of the Prime Minister before he delivered his speech yesterday, and by withholding the information it seems to me that he deliberately deceived the House. I shall quote the figures because the fight will not end in this chamber. If the Prime Minister can prove to the satisfaction of honorable members that I am wrong in my assertion, I shall be prepared to withdraw. Although the figures deal with the subject of shipments by the Australian Commonwealth Line from a Victorian stand-point, they conflict with the percentages mentioned by the Prime Minister. If honorable members are to come to an accurate conclusion, all the cards must be placed on the table. The vessels ordinarily trading to Australia do not play an important part in the transport of our wheat and wool overseas. When Australia enjoys a fair wheat season, no less than 50 tramp ships visit the various States, and they come here on«.e a year for the particular purpose of loading grain. Therefore, they supply, to a considerable extent, the bottoms in which our wheat is transported to the markets of the world. The following table gives the quantities of products carried by the Commonwealth Line from Melbourne to United Kingdom ports for the twelve months ended the 30th June, 1927, and the percentage of the total exports : -
Skins - 1,664 bales, 8.2 per cent.
Tailor’s clippings - 790 bales, 34 per cent.
Leather - 100 bales, 8 per cent.
Merchandise - 1,837 packages, 22 per cent.
Dried fruits - 117,540 boxes, 16 per cent.
Canned fruits - 15,433 cases, 16.7 per cent.
Wheat. - 8,152 tons, 12 per cent.
Flour. - 8,259 tons, 23 per cent.
Wine. - 1,183 hogsheads, 17 per cent.
Tallow. - 146 tons, 3 per cent.
Frozen Sundries. - 1,092 boxes, 15.6 per cent.
Frozen Beef. - 786 packages, 2.7 per cent.
Hares and Rabbits. - 3,834 crates, 12 per cent.
Butter. - 41,505 boxes, 9 per cent.
Fresh Fruit. - 5,051 cases, 57 per cent.
Eggs. - 9,260 boxes, 46 per cent.
Those may he termed items of general produce. I shall now read another list, which also was supplied to the Prime Minister. It is as follows : -
The total for that three months was 34,762 tons.
– What is the object of this recital?
– Portion of that 34,762 tons was carried by boats which are the real competitors of the Commonwealth Line between the United Kingdom and Australia. The Commonwealth Line carried 10,808 tons, or 31 per cent., whilst the other vessels carried 23,954 tons. Before the Prime Minister made his speech yesterday he was in possession of these facts: Taken either singly or in the aggregate, they prove conclusively that his statement was misleading. In all fairness these additional facts ought to have been disclosed.
– Does the honorable member suggest that they are inconsistent with the Prime Minister’s statement?
– I do. Those percentages are far and away above the 3 per cent. quoted by the right honorable gentleman.
– His figures applied to Australia.
– What is more, they applied to cargo which was taken from Australia to every port in the world and brought from all of those ports to Australia. That was most unfair. The right honorable gentleman knows that the Commonwealth Line trades only between Australia and the United Kingdom.
– I have not seen the figures that the honorable member has read.
– I have been informed that the right honorable gentleman has received them.
– I assure the honorable member that I have not.
– They have been supplied by the Melbourne office of the Australian Commonwealth Line of Steamers. Certain figures that were quoted last night by the right honorable gentleman were obtained from that source. Why did he not quote these, also?
– I assume that the honorable member will accept my word that I have neither received nor seen those figures.
– To the best of my belief they are in the possession of the Government. I do not wish to appear unduly suspicious, but when I find that certain items are suppressed by the Government, I am justified in becoming suspicious. I remind the honorable member for Franklin (Mr. Seabrook), who is so keen to get rid of this Line, that 57 per cent. of the fresh fruits exported from Victoria for the twelve months ended 30th June last was carried by the Australian Commonwealth Line of Steamers. I am prepared to go with the honorable member to the applegrowing districts of Victoria and Tasmania and debate with him, before those fruit-growers, the pros and cons of this question. I have no fear as to what would be their decision. I live in the electorate of the Prime Minister, in which there are a considerable number of fruitgrowers, and I know the opinions they hold. Last year 16.7 per cent, of the canned fruits exported from Australia were carried by the Australian Commonwealth Line of Steamers. That, in view of the way in which our vessels are outnumbered by competing lines, is highly creditable.
– Last year the Linecarried only 10 per cent, of the apples from Tasmania, where a boat called monthly.
– A boycott must have existed.
– Victoria did not export any apples this year.
– I have quoted official figures. I suppose that, because we had a small apple season in Victoria this year, the Minister imagines that no apples were produced in Australia. I know of one man who made £3,000 profit from the purchase and disposal in Victoria of Western ‘ Australian apples. The honorable gentleman may consult the officers of the Line if he is anxious to prove their figures to be incorrect. The majority report of the’ Committee of Public Accounts was really a political one. I have sat on that committee, and know the attitude of some members with regard to State industrial activities. I do not desire to make an attack upon the Chairman of that committee, as he is not in this House, but Senator Kingsmill never has, and never will have, any support for Stateconducted industries. That gentleman wielded a very big influence on members of the committee when he brought them to heel and caused them to sign the report. I know the honorable members for Robertson (Mr. Gardner), Corio (Mr. Lister), and Gwydir (Mr. Abbott) will protest that they were not subjected to the influence of the Government, but Governments may act more forcibly through an agency than directly.
– You do not say too much about what honorable members of your own party said.
– They were consistent throughout the business. When they instructed their Chairman, the, present High Commissioner for Australia, to issue an interim report, he did so, and it was signed very definitely by every member of the committee. I have never read a more definite report than that. Afterwards. a change was effected in the personnel of the committee, and, apparently, such influence was brought to bear on the members that they changed their minds, without hearing further evidence.
– It is not in order to suggest that honorable members on any committee, when acting in the performance of their duties, are susceptible to outside influence.
– I have made the statement, and it will remain in Hansard. To-day I inspected the latest budget issued by the United States of America. In it is allocated a very big sum for the promotion, regulation, and operation of marine transportation; £14,250,000. Out of that sum the Shipping Board receives £3,750,000. True, the Prime Minister and other honorable members have stated that the American Government Shipping Department has lost about £600,000,000. The information may, or may not, be correct: my experience has taught me to regard with suspicion much that appears in our newspapers. The fact remains, however, that the people of the United States of America are aware that heavy losses have been incurred in connexion with their government-owned vessels. Notwithstanding those losses, there is no mention in President Coolidge’s message to Congress of any intention on the part of the Government of the United States of America to retire from the shipping business. Do honorable members think that the shrewd, business-like people who comprise a large proportion of the population of the United States of America would remain _ quiet if they did not think that the losses incurred in connexion with their Government’s shipping activities were compensated for in other directions. In connexion with the federal grant to American States for road construction, President Coolidge has sounded a note of warning, but he has not done so in connexion with the Government’s shipping activities. If that great nation, with a population of 117,000,000 persons, and controlling 3,000,000 square miles of country better situated geographically than is Australia, is prepared for losses on its ships, we in Australia should hesitate before we dispose of the Australian Commonwealth Line of Steamers. In Canada also heavy losses have been incurred in connexion with State-owned vessels. Notwithstanding a loss of ?2,250,000 per annum between 1923 and 1925, there has been no agitation on the part of the people in our great sister dominion for the disposal of their ships. In the face of those two examples, we should not be too eager to dispose of our vessels. A few years ago anything German was regarded as anathema now the Prime Minister is prepared to go to German, Norwegian, Dutch, French, or Italian shipping companies for protection, should Lord Inchcape and his combine seek to impose upon the Australian people excessive freight rates. Where would the British mercantile marine be to-day had that policy been adopted by the British people in past years? The Prime Minister, in an endeavour to convince us that his Government would not sit idly by and allow the people, of Australia to be exploited by the Shipping Combine, referred to the action taken by it some time ago in connexion with the American oil companies. He then said that the Government would use the C.O.R. Limited to thwart any attempt by the American oil companies to exploit Australian users of motor spirit. Although the Commonwealth Oil Refineries Limited, which supplies only 6,000,000 gallons out of the 135,000,000 gallons of petrol consumed annually in Australia, was evidently regarded as an effective means of combating the American oil monopoly, the Australian Commonwealth Line of Steamers is not to be used to combat the Shipping Combine. The Prime Minister is inconsistent. I desire to direct the attention of honorable members to Sir Leo Chiozza Money’s book The Triumph of Nationalisation, the statements in which are based on facts which came under his personal observation. As evidence of the calibre of the writer I quote from the preface -
In the first week of the war he became a member of the Restriction of Enemy Supplies Committee (afterwards merged in the War Trade Advisory Committee), which was charged with the duty of examining the question of the blockade and of advising the Government upon it. In 1915 he was Parliamentary Private Secretary to the Minister of Munitions. He then became Parliamentary Secretary to the Ministry of Shipping, in which office he was Chairman ofthe Tonnage Priority Committee and of the National Maritime Board, and an ex-officio member of the Shipping Control Committee.
There is no doubt of the qualifications of Sir Leo Chiozza-Money, because, although he was not a member of the British Cabinet, Mr. Lloyd George made him practically controller of shipping during the war period. I propose to read from his book an extract which will indicate what the shipping companies did to Great Britain and, incidentally, to the Dominions during the early period of the war.
On this head Mr. Bonar Law, in his budget statement of May 2, 1917, said - “In connexion with the Excess Profits Tax there is one particular branch of industry of which I must say something - that is, the shipping trade. Public opinion, opinion in this House, an opinion which I share, is that there is no trade probably which has made such big profits during the war, profits which have been so directly due to the war.For that reason this trade is now being treated in a special way. It is easy to be wise after the event, and, in my opinion, we delayed too long in taking over the control of the shipping.”
The following statement is also apropos of, the subject we are discussing -
Mr. Bonar Law, on 24th May, 1917, on the Second Reading of the Finance Bill, gave his own experience of shipping profits in a very interesting passage, which I quote from the official report- “I do not think there is anyone who knows anything about ships who would question this: that shipowners have been allowed to make profit directly arising out of the war which we ought not to have allowed them to make….. As a rule, during the three years which have elapsed since the war began, ship-owners have made the whole of their capital; they have made the equivalent of 33 1/3 per cent. : and that after paying Excess Profits.”
Honorable Members- “Oh! Oh! “
Mr. Bonar Law. “Well, my honorable friends opposite ought to know better than I do for they are ship-owners; but I am going to give to the House what I did not intend to do, and what will, perhaps, interest honorable members. It so happens that when I was in business in Glasgow, I myself had certain small investments in ships. When I mention the rate per cent. of profit, the House will think that I must be a rich man. Perhaps I had better disabuse them of that idea. The total amount of the investment was only a few hundred pounds in each ship. I was a shareholder in fourteen ships. Taking the average of those ships, all of them paying well, the rate of dividend I received last year was 47 per cent., after paying the Excess Profits Tax. I do not say that that is typical of the whole shipping community….. For every £100 I put in I received £47 last year after Excess Profits had been paid.”
Here is a further extract -
On February 17, 1919, the representative of the Ministry of Shipping in the House of Commons said that £104,000,000 had been paid to ship-owners between August 4, 1914, and the Armistice, as compensation for the loss of fully’ requisitioned ships which had cost £51,000,000, but which had, of course suffered heavy depreciation. These great gains were never taxed.
In illustration of that I quote the following instance -
Lot us say that it was a ship of 8,000 tons deadweight “(equal to about 5,000 gross registered tons). If it was built a few years before the war it cost about £40,000. If it was sunk in 1917, the Government had to pay the owner about £150,000.
As Mr. Bonar Law said, not all shipping investments yielded this rate of profit. On the other hand, some yielded much more. Excessive profits indeed became the rule. Down to the time when, early in 1917, the Ministry of Shipping took over the entire mercantile marine and made it serve national purposes, the shipowners had made a profit of about £350,000,000 in the thirty -one months since the beginning of the war.
It is from men of that class that this Government expects our people to receive sympathy. Lord Inchcape and those associated with him are the dominant figures in the British shipping world. During the first 19 months of the war, which was the most critical period for Great Britain, particularly in regard to food supplies, these men made great profits. If when the nation was in distress they consistently and persistently robbed their fellowmen, what will they do to the Australian people when we are at their mercy? It is quite possible, as the honorable member for Bourke suggested, that if a purchaser of the Line is found within the next few months, any serious rise in price will, for political purposes, be’ delayed until after the general election. Some honorable members may regard the offer made by Lord Inchcape on behalf of the Combine as a double-barrelled one; he was prepared to buy the Commonwealth Line alternatively he was ready to negotiate for the sale to the Commonwealth of some of the Conference ships. Of course, the Australian people would not sanction such a transaction, but they did sanction the creation of the Commonwealth Line, and they would be decidedly in favour of its continuance. The Prime Minister said that the Line has had ‘ little influence on freights. We do not agree with him. Some years ago, when he was a private member, he complained of the absence of information in regard to shipping matters. Mr. Poynton, who was then administering the Line suggested that he should seek information at the shipping office, and the honorable member properly replied that it was the duty of the Minister to furnish full information to the House. This is the position we take up to-day. The attitude of the Labour party towards the Government’s proposal to sell the Line is not influenced by the party considerations. Several Nationalists are also in line with the Labour party in this matter. Sir William McPherson, a prominent Nationalist in Victoria and Leader of the Opposition in the State Parliament, recently declared that he was strongly in favour of the Commonwealth Government’s shipping activities. When the Line was established by the Hughes Government he expressed regret that a sum of £4,000,000 or £5,000,000 could not also be set aside for the establishment of a good interstate fleet to compete with companies trading between Australian ports. No one will accuse Sir William McPherson of sympathy with Labour ideals, and yet he favours a Government-owned shipping service. Another leading Nationalist in the person of the Hon. William Angliss, is of the same opinion. I understand that, in his evidence before the committee, he declared in the most emphatic terms, that he was in favour of the continuance of the Line. Why has there been so much secrecy about the evidence? The committee was not justified in making a recommendation affecting Government policy. The majority of its members were prejudiced against the Line; but I will give the honorable member for Forrest credit for consistency. I believe he has always been opposed to it; but I cannot understand why he authorized the then chairman (Sir GranvilleRyrie), to present the interim report favouring the retention of the Line.
– That is not correct.
– Has any evidence been tendered since then to justify an alteration of that view? “What has been the influence at work? I may not be allowed to say in this House what I think, but I shall have no hesitation in stating my views from the public platform.
– £ s. d.
– I do not make that suggestion, but I believe the honorable member for Forrest will agree with me that the chairman of the committee dominated it. However, this is but the commencement of the fight. It will not end within the walls of this building. I am not anxious to go into the constituency of other members, but certainly I shall have something to say to the people about the attitude of one or two members of the committee. I challenge the honorable member for Corio or any other member to discuss this subject with me before meetings of the primary producers in any part of their constituencies. I question whether any of them will accept the challenge. We exercised Government control during war time, and surely it is just as necessary in times of peace. The book, The Triumph of Nationalization, continues:
Mr. Lloyd George, who fortunately has a sense of humour, was not perturbed by this interruption. Very handsomely he said, “ That is a point my honorable friend is quite entitled to make.” “ And “ he went on, “I will give him another point. When the national projectile factories were afterwards set up, we effected a further reduction of 10 per cent. Take the Ministry of Shipping. By its organization, by its reduction of rates, the control of shipping saved hundreds of millions to the country.”
Those statements are made by responsible men, members of the Government, and Under-Secretaries to the Government. The Ministry is determined to hand over the export of our products to a Shipping Combine which has left no stone unturned to exploit the people. If it is capable of robbing a nation in times of dire distress when it is fighting for its very existence, what would it be capable of in times of peace if our export trade is left in its hands? In 1921 the PrimeMinister used practically the same argument that he used last night. He also said, when discussing the shipping balancesheet -
The position with regard to information about enemy ships is even worse. I have done my very best to get at the facts. I have hunted through the budget papers for information, but cannot get a figure. It is hopeless to expect honorable members to express their views about this adventure when there is no possible way of getting at the facts.
We also have asked for the facts, but until to-day we have received no information. The right honorable member for North Sydney (Mr. Hughes) was good enough to read cablegrams that had passed between the Commonwealth Shipping Board and its officials in London. The Prime Minister said that he knew nothing of that matter. I contend that it was his business to approach the Shipping Board for information. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
The following papers were presented . -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No.58 of 1927 - Postal Overseers’ Union of Australia.
Lands Acquisition Act - Land acquired at -
Tuggeranong, Federal Capital Territory - For Federal Capital purposes.
Urayarra, New South Wales - For Federal Capital purposes.
Motion (by Mr. Bruce), agreed to -
That the House, at its rising, adjourn until to-morrow at 11 o’clock a.m.
Mr. C.RILEY presented the report of the Joint Committee of Public Accounts concerning communications between Tasmania and the Mainland.
Ordered to be printed.
House adjourned at 11.38 p.m.
Cite as: Australia, House of Representatives, Debates, 9 November 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271109_reps_10_116/>.