House of Representatives
4 July 1930

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1930

Mr. Speaker (Hon. Norman Makin) took the chair at 11 a.m., and offered prayers.

page 3717

QUESTION

LEAGUE OF NATIONS ASSEMBLY

Mr D CAMERON:
BRISBANE. QLD · NAT

– I ask the Prime Minister whether the House will be afforded an opportunity to discuss the report of the Australian Delegation to the 10th Assembly of the League of Nations before the Attorney-General leaves to attend the 11th Assembly i

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– The Government proposes to provide that opportunity before the departure of the AttorneyGeneral.

page 3718

QUESTION

UNEMPLOYMENT OF EXSERVICE MEN

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Does the Minister for Defence propose to take any action upon a petition presented to him by exservice men who are out of employment, requesting that he will inquire of the Imperial authorities whether they are prepared to enlist, in Australia, men for service in the Imperial Army, the Indian Army, or the Indian police?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– A deputation interviewed me on this subject, and when I have considered the matter and have replied to the deputation I shall advise the honorable member.

page 3718

QUESTION

ANTARCTICA

Australia’sTerritorialRights.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Is the Prime Minister aware that a motion has been introduced into the Senate of the United States of America authorizing the Secretary of State to claim for America Antarctic lands which Rear Admiral Byrd and other American explorers have discovered ? Are any steps being taken to claim on behalf of Australia those portions of Antarctica, and the valuable whaling grounds adjacent to them, discovered by the Mawson Expedition ?

Mr SCULLIN:
ALP

– It would appear from the newspaper reports that although the resolution of the Senate of the United States of America refers to lands discovered by Rear Admiral Byrd “ and other American explorers”, the intention is to lay claim only to the area to the east of and outside theRoss Dependency which is administered by New Zealand, and this has no significance in regard to any claim by Australia or Great Britain. No Antarctic areas are under the administration of the Governor-General of Australia as is suggested in the newspaper report ; but the last Imperial Conference emphasized that to certain areas in the Antarctic regions sputh of Australia, a British title already exists by virtue of discovery, namely Enderby Land, Kemp Land, Queen Mary Land, the area which lies to the west of Adelie Land, and which, on its discovery by the Australian Antarctic Expedition in 1912, was denominated Wilkes Land, King George V. Land, and Oates Land. Last season the expedition, led by Sir Douglas Maw son, considerably increased our knowledge of the area between. Enderby Land and Kemp Land, and placed on the map a new area east of Kemp Land which it called MacRobertson Land.

page 3718

TARIFF

Pandan Hoods

Mr.C. RILEY. - In reference to the admission of Pandan hoods under departmental by-law, I ask the Assistant Minister for Trade and Customs (Mr. Forde) whether a by-law which has been in existence for some months has been cancelled, and if so, whether the usual procedure in regard to the admission of goods in transit has been departed from?

Mr FORDE:
Assistant Minister assisting the Minister for Customs · CAPRICORNIA, QUEENSLAND · ALP

– Certain statements have been made by various parties regarding the admission of pandan hoods into Australia, and I would like to make the facts clear. Under the 1921-28 tariff pandan and exotic hoods were liable to 45 per cent. duty underthe general tariff; as this class of hood comes only from foreign countries, only the general tariff rate need be mentioned. When the November schedule was tabled the duty on these hoods was increased to 60s. per dozen, or 60 per cent., whichever might be the higher. Immediately afterwards representations were made by members of the straw hat and millinery manufacturers’ section of the Chamber of Manufactures of New South Wales that they did not desire the duty on exotic hoods - pandan and others - to be increased. As there was no time to examine the merits of the claim before the tabling of the December schedule on the 11th of that month, Item 114g was inserted providing for the admission of hand-woven and handplaited hoods under departmental by-law at 45 per cent. general tariff - the old rate of duty. As honorable members know, goods are admitted under by-law only at the discretion of the Minister, and thus exotic hoods can be imported only under the conditions laid down. After a conference with representatives of the millinery hat section of the New South Wales Chamber of Manufactures and certain union officials, the department, with the approval of the Minister, decided to issue a by-law admitting this class of hood at 45 per cent. for the manufacture of men’s hats only. This by-law was published in the Tariff Decisions issued on the 21st December, 1929. The Tariff Board’s report on this subject is dated the 23rd December, 1929, and it is very significant that the hat manufacturers specially requested the board not to recommend any increase in duty on hand-woven hoods. The Tariff Board in its recommendation also suggested that there should be no increase on hand-woven hoods; so it is clear that the action taken by the department, insofar as hoods for men’s hats are concerned, is in accord with the request made by the Straw Hat and Millinery Manufacturers’ Association of New South Wales before the Tariff Board and the board’s recommendation.

Dr Earle Page:

– On a point of order, I ask you, Mr. Speaker, whether, in view of the length of the Minister’s reply, this question can by any stretch of imagination be regarded as one without notice ?

Mr SPEAKER:

– The Minister is certainly answering the question addressed to him by the honorable member for Cook. The length of the reply is a matter to be determined by the Minister.

Dr EARLE Page:

– On a further point of order, I ask you, Mr. Speaker, to define a question without notice. Is there any time limit to a Minister’s answer?

Mr SPEAKER:

– It is not within the province of the Chair to limit either the length of the question or the answer to it. Nor can the Chair determine when a question is asked without notice. I assume that when an honorable member says that he is asking a question without notice he is telling the truth.

Mr FORDE:

– Representations were made to me by members of the association referred to and union officials to cancel the by-law. I approved of the cancellation of the by-law, but in accordance with the usual practice when goods are withdrawn from by-laws, those goods which have already arrived and those in transit to Australia are admitted under the terms of the by-law. That action was taken on the recommendation of the responsible officers of the department, who communicated the decision to the parties concerned in the usual way in the name of the Acting Minister. Exception is being taken to this by certain millinery manufacturers, but it is very interesting to note that two prominent manufacturers now desire that woven hoods for both men’s hats and women’s hats should be admitted at 45 per cent. I have given this statement in order to make it clear that the Government has endeavoured to act in the best interests of the industry, and it has been supported by the Tariff Board’s recommendation, which is in accord with the request made before the Tariff Board by the very people who are to-day complaining of the Government’s action. I wish to make it clear that any action approved by me was done on the recommendation of the responsible officers of my department, and not without their knowledge, as has been suggested by one millinery manufacturer. /

page 3719

QUESTION

PARLIAMENTARY LOBBYING

Wheat Marketing and Arbitration Bills

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Has the Minister for Markets and Transport noticed the lobbying by agents of the wheat merchants during the consideration of the Wheat Marketing Bill in another place, and is he aware that these agents have openly boasted that another place will reject the bill?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I am aware that certain interests have been lobbying in order to influence the votes of this chamber and another place against the proposed wheat pool. Those agents have openly boasted that they have secured sufficient votes in another place to defeat the Wheat Marketing Bill, but I am reluctant to believe that members of this Parliament would allow themselves to be influenced to defeat a measure for which the great majority of the farmers are clamouring.

Mr HAWKER:

– I ask the Minister for Markets and Transport whether it is not true that while the Wheat Marketing Bill was before the chamber, lobbying occurred on behalf of those interested in the pool, and that special consideration was given to one of their representatives, who was accorded a seat in this chamber in the enclosure usually reserved for civil servants, and from that position advised the Minister during the passage of the bill.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member seems surprisingly anxious to say or do something that will help to defeat the proposals to establish a Commonwealth wheat pool.

Mr Latham:

– I rise to a point of order. I submit that a Minister when answering a question is not entitled to reflect on the motives of the questioner.

Mr SPEAKER:

– Reflections on the honorable member asking the question would be most improper, but I have not discerned anything in the remarks of the Minister that can be regarded as a reflection on the honorable member for Wakefield. Beyond seeing that questions and replies do not transgress the Standing Orders, I have no control over them. The Minister is entitled to phrase his answer as be thinks fit.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– If any motive was imputed the imputation came from the honorable gentleman who asked the question. He imputed certain motives to supporters of the pool. I am not aware of any lobbying having been done by them. The case for the pool is strong enough to enable the pool to stand on its own merits without any lobbying. If there has been lobbying in the shameful way suggested by the honorable member for South Sydney (Mr. E. Riley), it has been done by representatives of the opponents of the pool.

Mr LATHAM:

– Has the attention of the Attorney-General been called to a statement in the Sydney press of yesterday that a number of representatives of the trade union movement were about to leave Sydney for Canberra to lobby on the Arbitration Bill? If they have come, or if they do come, is. the Minister prepared to express condemnation of such action?

Mr BRENNAN:
Attorney-General · BATMAN, VICTORIA · ALP

– My attention has not been called to such a paragraph in the Sydney press, nor have I seen it myself. I may add that I have not seen any of the gentlemen who are said to have come from Sydney.

page 3720

QUESTION

TIMBER INDUSTRY AND TARIFF

Mr JONES:
INDI, VICTORIA

– With a view to asking the Minister for Trade and Customs a question, I make the following brief quotation from an article in the Melbourne Age of yesterday’s date -

Mr. P. V. Christensen, of Christensen and Saxon, saw-millers at Erica, stated yesterday thathe was very much surprised - -

Mr SPEAKER:

– Order ! The honorable member must recognize that he is anticipating a discussion upon the tariff schedule, which is an item on the business agenda. In asking a question in order to elicit information he will be in order, but not otherwise.

Mr JONES:

– I shall proceed with a quotation at another paragraph -

At least 80 per cent. of the Victorian country mills wore now closed, mostly owing to importations of Baltic and Oregon timbers. Most of the remaining mills which were at present cutting timber would also have to cease operations shortly, as it was impossible to carry on under the present depressed conditions. This would, of course, mean an extension of unemployment. Hundreds of families were living at the mills, hoping that a tariff would give them back employment. Failing this, they would have to pack up their belongings and move to the city.

With a view to saving a great Australian industry and obviating further unemployment, so far as possible, will the Minister give every consideration to this matter ?

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– It is receiving the serious consideration of my department.

page 3720

NEW TARIFF DUTIES

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– I draw the attention of the Assistant Minister for Trade and Customs (Mr. Forde) to a paragraph published in the Canberra ‘Times a couple of days ago giving a “ striking instance of the effect of the new tariff.”

Mr SPEAKER:

– I again point out that it is in order to ask a question only with the object of eliciting information. An honorable member may not anticipate discussion upon an item of business tobe considered by the House.

Mr GREGORY:

– I am asking for information. I desire to know if the Assistant Minister can give us any further instances-

Mr SPEAKER:

– I cannot allow the honorable member to use the form of a question to introduce an argument which might anticipate discussion.

Mr GREGORY:

– I am not the only member who submits questions in this form. Time after time-

Mr SPEAKER:

– Order ! The Standing Orders are very clear on this point, and I shall enforce their observance.

Mr GREGORY:

– An instance of the effect of the tariff is given by a statement published in the press, and I want to ask the Minister a question in regard to it.

Mr SPEAKER:

– If the honorable member will submit his question I shall determine, when I have heard it, whether it is in order.

Mr GREGORY:

– Can the Minister furnish any further striking instances of the effect of the new duties?

Mr FORDE:
ALP

– When the tariff debate comes on I shall give the honorable member many striking instances of it. There will probably be a hundred. There are sufficient to give the honorable member a headache.

page 3721

QUESTION

DUNTROON MILITARY COLLEGE

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Minister for Defence, upon notice -

  1. The cost per year of Duntroon Military College since its inauguration?
  2. The number of cadets or students each year ?
  3. The number of instructors, tutors, officials, &c, employed there each year?
  4. The number of cadets who have graduated through the full course?
  5. The number of graduates in the employment of the Commonwealth?
  6. The number of graduates who were killed during the late war?
  7. The total cost of the college including all charges, to date?
  8. The number of years a cadet takes to complete the course?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions are as follow : - (a)

(c)

  1. 330 Australian,60 New Zealand.
    1. (g)
  1. Four years.

page 3721

QUESTION

IMPORTS AND EXPORTS TO AND FROM UNITED STATES OF AMERICA

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

  1. Will he supply the following information in connexion with imports from the United States of America for each of the last ten years: - (a) The number of motor cars and the value of same; (b) the number of other motor vehicles and the value of same?
  2. What was the total value of Australian exports to the United States of America for each of last ten years?
Mr.FENTON. - The answers to the honorable members questions are as follow : - {: .page-start } page 3722 {:#debate-9} ### QUESTION {:#subdebate-9-0} #### LOANS Amounts held by New South Wales Residents. {: #subdebate-9-0-s0 .speaker-KDJ} ##### Mr ELDRIDGE:
MARTIN, NEW SOUTH WALES asked the Treasurer, *upon notice -* {: type="1" start="1"} 0. What is the total amount of Commonwealth Government securities held by residents of New South Wales? 1. What amount of interest was distributed amongst New South Wales holders of Commonwealth Government securities during the last financial year? 2. What is the total amount of New South Wales Government securities, free of income tax, held by residents of New South Wales? 3. What was the amount of interest paid to owners of New South Wales Government securities, free of income tax, for the last financial year? {: #subdebate-9-0-s1 .speaker-KVS} ##### Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP -- The answers to the honorable member's questions are as follow : - {: type="1" start="1"} 0. Exact information cannot be furnished, as it is not known what bonds are held by bond- owners personally. It is estimated, however, that the amount is approximately £100,000,000. 1. Approximately £5,275,000. 2. It is not known what amount of these securities is held by residents of New South Wales. The amount of securities issued by New South Wales in Australia, and outstanding at 30th June, 1929, was £74,815,000. 3. The information is not available, but the annual interest payment on the debt of £74,815,000 outstanding on 30th June, 1929, is £3,888,000. {: .page-start } page 3722 {:#debate-10} ### QUESTION {:#subdebate-10-0} #### BRITISH PREFERENTIAL TARIFF {: #subdebate-10-0-s0 .speaker-C7E} ##### Dr EARLE PAGE: asked the Minister for Trade and Customs, *upon notice -* >On how many items in the existing customs tariff does the British preferential duty amount to (a) 5 per cent., (b) 7½ per cent., (c) 10 per cent., (d) 12½ per cent., (e) 15 per cent., (f) 20 per cent., and (g) over 20 per cent.? {: #subdebate-10-0-s1 .speaker-KEV} ##### Mr FENTON:
ALP -- The information will be obtained as far as possible. {: .speaker-C7E} ##### Dr EARLE PAGE: asked the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. How many items in the existing customs tariff arc admitted free under the British preferential section ? 1. What is the average rate of duty on (a) all imports into Australia, and (6) all dutiable imports ? {: .speaker-KEV} ##### Mr FENTON: -- The information will he obtained as far as possible. {: .page-start } page 3723 {:#debate-11} ### QUESTION {:#subdebate-11-0} #### DARWIN DISTURBANCE {: #subdebate-11-0-s0 .speaker-KIT} ##### Mr MACKAY:
LILLEY, QUEENSLAND asked the Minister for Home Affairs, *upon notice -* >Whether lie is prepared to state the circumstances under which he ordered or recommended the release of certain persons convicted of an assault on the Government Resident at Darwin ? {: #subdebate-11-0-s1 .speaker-JPV} ##### Mr BLAKELEY:
DARLING, NEW SOUTH WALES -- The prisoners were released by order of the Governor-General in the exercise of the King's prerogative power to pardon offenders. The GovernorGeneral exercises the prerogative on the advice of one or more Ministers ; but it is not usual to make public the terms of such advice. {: .page-start } page 3723 {:#debate-12} ### QUESTION {:#subdebate-12-0} #### GOVERNOR-GENERAL {: #subdebate-12-0-s0 .speaker-KE4} ##### Mr KEANE:
BENDIGO, VICTORIA asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. How many days has the Governor-General spent at Canberra during the past two years? 1. How long has he been in receipt of the additional £2,000 allowance, paid to him on account of having to reside at Canberra? {: #subdebate-12-0-s1 .speaker-F4Q} ##### Mr SCULLIN:
ALP -- The information is being obtained. {: .page-start } page 3723 {:#debate-13} ### QUESTION {:#subdebate-13-0} #### CINEMATOGRAPH FILMS Censorship op Advertising Mattes. {: #subdebate-13-0-s0 .speaker-KVU} ##### Mr THOMPSON:
through Mr. R. GREEN asked the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. Whether the words "for general exhibition ", which have now to be added to advertisements of film pictures, convey a sufficient indication to parents that such pictures are suitable for children; and, if so, in what way will it be clear to parents that such films contain no objectionable features unfit for children to hear and witness? 1. Will he explain the actual terms. of the agreement made with the film interests and the Chief Censor concerning the labelling of advertisements ? 2. Will he indicate if any action can be taken by the Chief Censor against individual exhibitors who fail to insert the words "for general exhibition" in their local advertisements ? {: #subdebate-13-0-s1 .speaker-KEV} ##### Mr FENTON:
ALP -- The information will be obtained. {: .page-start } page 3723 {:#debate-14} ### QUESTION {:#subdebate-14-0} #### FEDERAL CAPITAL Cmo Administrator's Cab Expenses {: #subdebate-14-0-s0 .speaker-JPV} ##### Mr BLAKELEY: -- Yesterday the honorable . member for Ballarat **(Mr. McGrath),** asked me the following questions, *upon notice -* {: type="1" start="1"} 0. Is it a fact that the Civic Administrator of the Federal Capital Territory has the exclusive use of one government motor car? 1. If so, what has been the cost of the upkeep and running expenses of this car since the present Civic Administrator succeeded **Sir John** Butters as Chief Commissioner? I am now in a position to advise him as follows : - {: type="1" start="1"} 0. No. Of the two government cars previously used by **Sir John** Butters and the Commissioners, one is still stationed at Acton and is used for general service, both for branches at Acton and for the central garage. It is also used, if available, by the Civic Administrator when he requires transport. The second car was returned to the central garage towards the end of last year for general service. 1. From 7th October, 1929 to 20th April, 1930- {: .page-start } page 3723 {:#debate-15} ### INCOME TAX ASSESSMENT BILL {:#subdebate-15-0} #### Second Reading {: #subdebate-15-0-s0 .speaker-KVS} ##### Mr THEODORE:
Treasurer · Dalley · ALP .- I move- >That the bill be now read a second time. Honorable members will no doubt appreciate the fact that the income tax laws are very complex, and have become highly technical. Amendments of a comprehensive character have become difficult to follow, and extremely difficult to understand. {: .speaker-C7E} ##### Dr EARLE Page: -- Difficult to explain, too. {: .speaker-KVS} ##### Mr THEODORE: -- As my predecessor, the right honorable member for Cowper **(Dr. Earle Page)** remarks, it is difficult to explain them. I have endeavoured to assist honorable members by circulating, in addition to the bill, a printed memorandum, showing, in black type, the proposed amendments to the original law, and also giving explanatory notes that are very extensive. {: .speaker-KV8} ##### Mr Stewart: -- A most welcome innovation ! {: .speaker-KVS} ##### Mr THEODORE: -- I think that they will be welcomed, although the notes themselves make somewhat tedious reading because of the technical terminology that must be employed. The circulation of the explanatory memorandum will, perhaps, make it unnecessary for me to traverse the whole bill, and to deal with every provision in detail. This is more a measure for consideration at the committee stage than in a general debate. {: .speaker-KYI} ##### Mr Prowse: -- Let us have the fundamental principles. {: .speaker-KVS} ##### Mr THEODORE: -- I shall refer to the salient features of the measure. It provides, for the first time in the history of Australia, for the taxation of exAustralian income. To that portion of the incomes of residents of Australia which is derived from sources outside Australia, a tax will now be applicable. The tax will not apply to that portion of ex-Australian incomes that is subject to taxation in other countries, whether the tax in other countries is termed income tax, or whether it is chargeable against income by way of royalties or special charges of that kind. But, except for the qualification that I have mentioned, ex-Australian incomes will bc subject to taxation after the passage of this bill. {: .speaker-C7E} ##### Dr Earle Page: -- Does that apply whether the taxation overseas is as heavy as the Australian tax or not? {: .speaker-KVS} ##### Mr THEODORE: -- No matter what may be the incidence of the tax, or the progressive amount of tax applicable to an Australian income, .the fact that an income is subject to income tax overseas will exempt the Australian resident who enjoys it from paying taxation on it. {: .speaker-KYI} ##### Mr Prowse: -- Will the income earned outside Australia be added to the Australianearned income in calculating the rate of tax? {: .speaker-KVS} ##### Mr THEODORE: -- Yes. Income derived by the Australian resident from external sources not now taxable will have to be included in his return, and the rate of tax will be assessed upon the total taxable income. The nontaxable external income will not have to be included as part of the taxable income of the Australian resident. Quite a number of provisions in the bill are consequent upon this fundamental alteration. There are alterations in definitions, as well as in other sections of the act, which deal with the income of individuals and companies. I do not intend to refer to all the sections that are affected; the explanatory memorandum, I think, sufficiently covers the matter. The Australian resident who is a shareholder of a company which derives income from Australian sources, and also from sources outside Australia which is to be chargeable with income tax in Australia, is to be liable for tax on that part of his dividend which is distributed out of the profits from external sources. {: .speaker-DQC} ##### Mr Hughes: -- Is a considerable amount of income derived by Australian residents from sources overseas? {: .speaker-KVS} ##### Mr THEODORE: -- The amount of income from abroad that is enjoyed by Australian residents is hard to estimate. It is, no doubt, considerable in the aggregate, though perhaps not so great us some people imagine; but the amount that will be taxable under this measure will not be considerable, for most of such income is already subject to taxation in the countries where it is earned, and therefore will be exempt from taxation here. It is necessary to use somewhat lengthy terminology in this bill, because we must distinguish between shareholders resident in Australia and those not resident here; but this is fully explained and illustrated by certain examples in the memorandum which has been circulated. Certain provisions in the bill relate to the taxation of isolated transactions which have been undertaken for profit-making. Several judgments of individual members of the High Court have declared that such profits are taxable; but a recent judgment of the House of Lords decided that they are not the proceeds of a trade or business, and therefore not taxable under the income tax law of the United Kingdom. Although that judgment is not binding upon our High Court, it might be followed upon appeal, with considerable disadvantage to the revenue. To obviate such a change in the interpretation of our law, we are making it clear that the profits from such isolated transactions shall continue to he taxable here. It is proposed to apply the new provision to all past assessments owing to the existence of disputes on assessments for past years back to 1922-23. {: .speaker-KNP} ##### Mr Maxwell: -- Will the profits from these isolated transactions bc subject to a special rate of taxation? {: .speaker-KVS} ##### Mr THEODORE: -- The proceeds would come within the rate applicable to income from personal exertion in all cases. Certain anomalies have arisen from the averaging provisions of the present law. A person assessed under these provisions may transfer some of his investments to a class of tax-free investment, and claim that the taxable income which remained bad been permanently reduced to an amount less than two-thirds of his average taxable income, and that therefore he is entitled to commence a new averaging period. A number of instances of that kind have occurred, and a benefit has thus been derived by certain taxpayers which was not intended. This anomaly will be corrected. An anomaly has also arisen in the operation of the provision in the act which relates to the granting of rebates of taxation on dividends received by individuals upon which companies are taxable. The amount of such taxation payable by the company is rebated to the individual, who includes the dividend in his return. But it frequently happens that the shareholder's rate of taxation is less than the company's rate, and he therefore receives a rebate of an amount in excess of the amount payable by the company on the dividend. The proposed amendment in this bill will fix the maximum rebate in such cases as the amount of tax payable by the shareholder on the dividend, in his own assessment. Certain alterations of the law are also being made with respect to co-operative companies and their assets, some of which are designed to prevent certain institutions from securing advantages which were intended only for legitimate cooperative organizations and others to extend the concessions now being granted to legitimate co-operative concerns. Certain co-operative organizations, mOStly of an agricultural character, have acquired, by government assistance, sugar mills, butter factories, bacon factories and the like to aid primary producers in marketing their products. Heretofore the repayment of moneys loaned by the government for acquiring these premises have been made from the earnings of the companies, and there has been no abatement of taxation in respect of them; but it is provided in the bill that in the. future they shall be exempt from taxation. {: .speaker-KXT} ##### Mr Paterson: -- Is that in connexion with the repayment of principal? {: .speaker-KVS} ##### Mr THEODORE: -- That is what it amounts to. If I instance a typical case of a co-operative company of canegrowers which owns a sugar mill, honorable members will perhaps better appreciate the point. A co-operative company which has acquired a mill, with government assistance, at a cost of £300,000, may be paying a fixed sum of £30,000 annually off the loan. In order to do so it must, of course, earn that sum, and hitherto the sum so paid has been taxable as income. It is now being provided that taxation shall not be levied on money used for the repayment of loans in such circumstances. Certain other co-operative trading societies and distributing companies have hitherto not been able to take advantage of the provision in the law which entitles them to certain exemptions from income taxation, because they have failed specifically to prohibit the quotation of their shares on the stock exchange. This has rendered them liable to taxation. My predecessor in office, the right honorable member for Cowper **(Dr. Earle Page),** received a number of deputations upon this subject, and I have also been interviewed in relation to it. It has been decided by the Government to give such co-operative companies until the 31st December next to alter the: articles of association to conform witu the requirements of the law so that they may become entitled to this exemption from taxation. {: .speaker-KJQ} ##### Mr James: -- I understand that such companies have been taxed irrespective of the fact that they never have sold any of their shares on the exchange. {: .speaker-KVS} ##### Mr THEODORE: -- The fact that they have not specifically prohibited the selling of their shares on the exchange has deprived them of the right to exemption. At present the law technically excludes from exemption from taxation cooperative companies which carry on both purchases and sales of goods in the interest of their members. This anomaly is also being corrected. Some co-operative building societies at present obtain funds from their members to make loans to other members for the purpose of buying or erecting homes, or homes and business premises combined. Such organizations have hitherto been taxed on their full profits on such transactions. It is proposed to allow the deduction of interest or dividends paid on shares to members of such societies if 90 per cent. of the total loans are made to members. That 90 per cent. is a conventional provision in order to make possible a discrimination between truly co-operative societies and other societies. The act at present makes provision for certain rebates to members of cooperative societies, and advantage is being taken of this by members of certain merchant buying organizations. It was never intended that a merchant carrying on the business of buying and selling goods for profit, and belonging to a merchant's buying association, should be allowed to escape income taxation on that part of his profits which was earned through the association. He invariably joins such an association because it can buy on better terms than he could do individually. A number of these organizations claim that they are co-operative concerns because they are associations of persons who are acting in co-operation for their mutual advantage; but the vital difference between such organizations and true co-operative societies is that in one case the members purchase goods which they consume themselves and in the other they purchase goods for resale at a profit. An alteration is being made in the definition of " income " to meet the cases to which I have referred. {: .speaker-DQC} ##### Mr Hughes: -- I suppose the members of the merchants' buying associations will not be taxed twice? {: .speaker-KVS} ##### Mr THEODORE: -- No ; but at present they claim to escape entirely taxation on the profits they make as members of the associa tion. Honorable members will be able to inform themselves fully on this point by referring to paragraph *d* of clause 2 of the bill, and to the explanatory memorandum. Clause 13 makes an alteration in the provisions relating to the setting off of exempt income against unrecouped loss carried forward from previous years, the effect of which will be to require that in all cases, instead of in the limited number of cases now provided for, the total amount which would be allowable as a deduction, whether of a current or a carried forward loss, shall he first set off against any exempt income derived by the taxpayer in the relevant year. Honorable members will agree that any exemptions claimed should first be set off against unrecouped loss from the previous year. The Government is also providing in the bill for the taxation of the income of the American Film Distributing Companies. Honorable Members. - Hear, hear ! {: .speaker-KVS} ##### Mr THEODORE: -- This taxation will apply to film producers outside of Australia who sell or lease their products in Australia. The taxable income will be assumed to be 30 per cent. of the amount derived from distributioncontracts in Australia; but any producer will be entitled to satisfy the Commissioner, or a board of review upon appeal, that the taxable income is not 30 per cent. and that an assessment made at that rate should be reduced. {: .speaker-KMU} ##### Mr MARKS:
WENTWORTH, NEW SOUTH WALES · NAT; IND NAT from 1929 -- That means that this percentage of their income will be subject to the ordinary rate of tax ? {: .speaker-KVS} ##### Mr THEODORE: -- Yes. . The ordinary rate of tax will be applied to 30 per cent. of the gross income derived in Australia. The Australian person or company through which the films are sold will be regarded as the agent of the film producer. {: .speaker-KMU} ##### Mr Marks: -- It appeared at first as though the rate of taxation would be 30 per cent., but that is not so. {: .speaker-KVS} ##### Mr THEODORE: -- No. If the company rate is 14.4d. in the £, as it is at present, that rate will be applied to 30 per cent. of the gross earnings of these companies in Australia. It may be claimed, perhaps, with reason, that the assumed profit of 30 per cent. is too high, but opportunity will be given to the companies to demonstrate to the Commissioner of Taxation that their profits are less than 30 per cent, of the total income received. It is difficult for any one to ascertain what profit is being made by these companies unless they themselves disclose it. It cannot be discovered, for instance, what is the cost of producing films distributed in Australia. We can only ascertain the amount of money remitted from Australia. {: .speaker-KMU} ##### Mr Marks: -- Will this apply also to British companies? {: .speaker-KVS} ##### Mr THEODORE: -- It will apply to all companies producing films overseas, and distributing them within Australia. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Will it apply also to Australian film companies ? {: .speaker-KVS} ##### Mr THEODORE: -- No. Companies registered in Australia will make the ordinary return of income, and be subject to the ordinary company taxation. Their costs of production can be shown, and their taxation returns made out in full detail. Honorable members must recognize that this is a difficult matter to deal with. No Treasurer wishes to injure those who trade in Australia, and yet every Treasurer desires that companies trading in Australia shall contribute a fair proportion to the country's revenue for the maintenance of services from which they benefit. . The difficulty has always been to prevent taxation from being passed on to the Australian public. The method adopted in the bill to meet this difficulty will, I trust, be successful, and ensure that the film distributing companies operating in Australia shall pay a reasonable amount of taxation. Clause 14 of the bill contains a somewhat similar provision directed against Lloyds Insurance Association. This company, though it does a very large business in Australia, has no head office here, nor any agency with which the department could deal for the purpose of taxing profits made here. Naturally, the Australian insurance companies, and those British companies which have offices here and make income tax returns, object to a large insurance business being done by a concern which pays no State or Common wealth taxation. The bill provides that income tax shall be payable by or on behalf of Lloyds Insurance Association, of London, upon an assumed profit of 10 per cent, on all premiums for insurances effected in Australia. {: .speaker-KMU} ##### Mr Marks: -- How is it proposed to deal with those cases in which insurance is taken out at Lloyds by cable? No local agent is employed at all. {: .speaker-KVS} ##### Mr THEODORE: -- I cannot answer that question offhand, but I shall have inquiries made. No doubt it would be possible to learn the total amount of premiums paid in respect of business done in Australia, and taxation could be assessed on that. However, I shall be able to answer the point raised by the honorable member more fully in committee. {: .speaker-K7U} ##### Mr Crouch: -- An assumed profit of 10 per cent, is very low. {: .speaker-KVS} ##### Mr THEODORE: -- We have followed very closely the New Zealand law, which has been found effective. Absentee shipowners are taxed on an assumed income of *1* per cent, of the amount received in freights, passage money, &c. Clause 18 of the bill extends the powers of the commissioner to make alterations in or additions to assessments to ensure their completeness. , This power is already absolute with respect to assessments not three years old, but if an .assess: ment is more than three years old the commissioner may at present make alterations only if, in his opinion, there has been fraud or evasion. Sometimes understatements of income are made through entire absence or incompleteness of business accounts. In such cases short-paid tax cannot be recovered if assessments are more than three years old. The experience of the department is that at least SO per cent, of taxpayers make correct returns. Of the balance, a considerable number avoid tax through ignorance and muddled business accounts, fraud, and others by evasion. Clauses 19 and 20 are designed to reduce departmental expenditure in connexion with litigation by omitting all appeals to a State Supreme Court, and causing appeals to be made direct to the High Court. {: .speaker-K7U} ##### Mr Crouch: -- Will appeals still be admitted to the Appeal Board? It has been shown to have no jurisdiction. {: .speaker-KVS} ##### Mr THEODORE: -- The Board of Review, which deals with applications for review by taxpayers, will still continue to function. If this clause will in any way entrench upon the right of taxpayers to appeal to the board, I hope that the honorable member will bring the matter up again in committee. It is not the intention of the Government to restrict the functions of the Board of Review in any way. It is believed that much time will be saved by making appeals direct to the High Court. A great many appeals are listed for hearing in the State Supreme Courts - particularly in South Australia - but owing to congestion of court business some cases have awaited hearing for over twelve months. Then the decisions of the State courts are frequently carried to the Full High Court, and further delay and great expense is incurred. Clause21 provides more effective means of collecting taxation from persons who are about to leave Australia. At present, passports are withheld until the applicant shows a clearance from the Income Tax Department; but this does not enable the Commonwealth to withhold passports issued in Great Britain or other countries, which merely require to be vised. The new proposals will require all shipowners to refrain from issuing a passage ticket until the passenger producesa clearance from the Taxation Department. It is desirable to make the law uniform in its application, so as to apply to every one travelling overseas. Of course, it is not desired to administer the law in such a way as to cause irritation to those legitimately leaving Australia on business or for other purposes. Several other sections of the bill are designed to prevent loss of revenue. For instance, clause 10 tightens up the law with respect to certain classes of companies which have come into existence for the purpose of avoiding taxation. One method employed to avoid taxation is for several private companies to be formed by the same individual who, directly or indirectly, holds virtually all the shares. As the law now stands, each company is entitled to separate treatment, and each company is entitled to retain one-third of its profits without liability to additional taxation. In cases of that kind the entire operations of all the companies should be treated as one. There is a widespread practice among individuals carrying on businesses, the profits of which render them liable to high rates of taxation, to form companies, the shareholders sometimes being members of one family. The profits are distributed in the form of large directors' fees to husbands, wives, and even, in some cases, to infants. Under the amendment the profits of such businesses will be treated as the income of one person. Another method of evading taxation is for two persons carrying on a partnership in property owned by themselves to form a company to buy the property, the partners owning all the shares; and the partnership then takes a lease of the property. The rent received by the company is taxable at the company rate, not at the rate applied to incomes obtained from personal exertions, which would have been applicable if the company had not been formed. Another practice is for privately-owned companies to make loans to the principal shareholder without interest, thus avoiding a considerable amount of taxation. For instance, a man may make his business into a company and then make large loans to himself. These methods are no doubt considered legitimate in the present state of the law, but in order to secure uniformity, and the proper distribution of the burdens of taxation, some amendment of the law is considered desirable. Tlie act was amended in 1927 and 1928 in regard to family partnerships, but loss of revenue still continues. A conferenceof deputy commissioners in 1929 strongly urged that the existing provisions relating to partnerships between husband and wife, which were, in the opinion of the commissioner, formed for the purpose of the avoidance of taxation should be extended to partnerships formed between members of a family, and to private companies in which the whole or a great proportion of the shares were held by some or all the members of the family. The present " husband and wife " provision has been exploited by two or more husbands and their respective wives joining in one partnership. Some husband and wife partnerships were, abandoned recently, as a result of amendments that were made to the law in 1927 and 1928. Now, the wife " owns " the business, and " employs " the husband at a remuneration equal to his former interest in the partnership. This practice will be checked in future by the provision that is being made in clause 12d of the bill. {: .speaker-K7U} ##### Mr Crouch: -- Why limit this taxation to companies that have been formed since 1915? {: .speaker-KVS} ##### Mr THEODORE: -- Because the Commonwealth income tax law came into operation only in 1915. A number of other provisions are set out in particular detail in the explanatory memorandum. Those honorable members who are interested will obtain from that memorandum more information than I could furnish by an explanation of the provisions in detail. In some cases, the deductions are extended; in others, they are modified or limited, as a result of the experience that has been gained in the administration of the law. Provision has been made to exempt the incomes of the representatives in Australia of foreign governments, and certain other like representatives. There is an exemption from liability to pay tax of British cricket teams that visit Australia for the purpose of engaging in test cricket matches, and other similar sporting bodies. I recognize that the bill is very important and complex, and one the significance of which is not easily realized by a mere perusal of it. As many interests, naturally, are affected, adequate time must be given to enable them to become acquainted with what is intended. Although the bill contains some alterations of principle in regard to taxation, it does not give effect to any specific party policy or principle. Therefore, I think that it can very well be discussed hy both sides with the object of making it the best possible measure. The Government will not feel itself bound to adhere to any provision if it can be shown in committee that it is susceptible to improvement Debate (on motion by **Dr. Earle** Page) adjourned. {: .page-start } page 3729 {:#debate-16} ### PERMANENT COURT OF INTERNATIONAL JUSTICE Optional Clause: Approval or Commonwealthgovernment'sdeclaration of Acceptance - Revision of Statute - Accession of the United States of America to Protocol of Signature. Debate resumed from18th June *(vide* page 2835), on motion by **Mr. Scullin** - >Thatthis House approves of the declaration under Article 36 of the Statute of the Permanent Court of International Justice, signed at Geneva on 20th September, 1929, in respect of the Commonwealth of Australia. {: #debate-16-s0 .speaker-KLL} ##### Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA -I desire to inform honorable members that on the discussion of this Order of the Day it will be permissible for them to debate also the next two Orders of the Day, namely, "Permanent Court of International Justice - Protocol for Revision of Statue", and "Permanent Court, of International Justice, Protocol for Accession of the United States of America to Protocol of Signature of Statute." {: #debate-16-s1 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- This motion invites the House to approve the action of the Commonwealth Government in accepting the jurisdiction of the Permanent Court of International Justice, under what is known as the Optional Clause of the Statute of the court, that is, the second paragraph of Article 36 of the Statute. The actual signature to the protocol was affixed by a representative of the Commonwealth at Geneva on the 20th September last, under the authority of the Bruce-Page Government. I have no objection whatever to offer to the motion. I desire, however, to indicate my attitude towards the matter, as this step, which has been taken on behalf of the Commonwealth as a whole, is a most important one. The Covenant of the League of Nations provides in Article 14 that - >The Council shall formulate and submit to the members of the League for adoption, plana for the establishment of a Permanent Court of International Justice. > >The court shall be competent to hear and determine any dispute of an international character which the partiesthereto submit to it. > >The court may also give an advisory opinion upon any dispute or question referred to it by the Council or by the Assembly. The court was constituted in 1920. A great deal of discussion took place at the time upon the question of the compulsory jurisdiction of the court. It was urged, particularly by the representatives of the smaller nations, that the Statute of the court should be in such a form that the States which adhered to it should be compelled to accept the jurisdiction of the court in relation to certain questions and matters. The result of the discussion is to be found in Article 36 of the Statute of the court. This article, in the first paragraph, provides - >The jurisdiction of the court comprises all cases which the parties refer to it, and all natters specially provided for in treaties and conventions in force. The first part of the jurisdiction of the court, it will he observed, depends upon the act of the parties in referring a matter to it. The second part of the jurisdiction of the court depends upon provision being made in treaties and conventions for the reference of certain matters to the court. The Commonwealth of Australia is already subject to the jurisdiction of the court under the terms of the mandate affecting New Guinea. The declaration now made proposes to extend the liability of the Commonwealth to be summoned before the court. The second clause of Article 36 is what is generally referred to as the optional clause. It is called the optional clause because the States which adhere to the Statute may, or may not, declare that they accept its terms. The optional clause is worded as follows : - >The members of the League of Nations and the States mentioned in the annex to the Covenant may, either when signing or when ratifying tie protocol to which the present Statute is adjoined or at a later moment, declare that they recognize as compulsory *ipso facto* and without special agreement, in relation to any other member or State accepting the same obligation, the jurisdiction of the court in all or any of the classes of legal disputes concerning - > >the interpretation of a treaty; > >any question of international law; > >the existence of any fact which, if established, would constitute a breach of an international obligation; > >the nature or extent of the reparation to be made for the breach of an international obligation. > >The declaration referred to above may be made unconditionally or on condition of reciprocity on the part of several or certain members or States or for a certain time. > >In the event of a dispute as to whether the court has jurisdiction, the mattershall be settled by the decision of the court. Acceptance of the optional clause, as is now proposed, will therefore add four cases in which the Commonwealth will be subject to the jurisdiction of the. court. Those four cases refer to disputes that are regarded as suitable for judicial settlement, because they depend upon either a conflict of rights or a question as to the existence of a duty. There is a profound and a very real difference between legal and political disputes. In this Parliament we deal with political disputes. The matters that we handle are not such as can be determined by judges by reason of their knowledge of law. The decision of questions upon the floor of this House depends very largely upon the opinions that honorable members entertain, not only as to the facts of a particular case, but also as to the constitution of society and the measures that are most calculated to promote the well-being of the community. Those questions could not possibly be settled by judges, as judges. A legal dispute, on the other hand, generally speaking can be settled by the application of legal principles. The courts do not make the. law that they apply. It is true that much law has grown up under the decision of judges, and is to be found recorded in those decisions. But they are subject to the control of Parliament. The law that the courts administer is either directly prescribed to them and to the people by a parliament, or is permitted to exist as a part of the common law with which Parliament does not desire to interfere. Speaking generally, parliaments make laws, and courts apply laws that they do not make. A court has first to ascertain the facts ; then to determine and interpret the relative law by which it is bound; and, finally, to apply the law to the facts. Those functions can be discharged quite independently of political opinion. For example, take a member of the legal profession who is also a member of this House. He may debate such a measure as that which, has been introduced this morning - the Income Tax Assessment Bill. He may hold a very strong view as to the wisdom of enacting a particular provision. If, however, the hill becomes law, and he is asked for an opinion as to the meaning of the section that he has so ardently debated, his opinion will be quite unaffected by any view that he may have expressed on the floor of the House as to the wisdom of enacting it. Accordingly, legal functions can be discharged quite independently of political opinion. Political disputes, however, are fundamentally different in character from legal disputes; though occasionally it becomes difficult to draw the line, the principle is clear. There is a very important distinction between an international court and other courts. National courts administer the law which their legislatures enact, or by acquiescence allow to exist. In the case of an international court, no law is prescribed by a legislature. There is no international law-making body, and an international court can have no law prescribed for it. If a national court gives a decision that is out of harmony with the views of the people, as interpreted by their representatives, the law can be altered by taking the appropriate steps. No such provision exists for the alteration of the law in the case of international matters. In the optional clause, however, the attempt has been made to define legal questions of an international character. There are four heads: First, the interpretation of a treaty; secondly, any question of international law; thirdly, the existence of any fact which, if established, would constitute a breach of an international obligation; and, fourthly, the nature or extent of the reparation to be made for the breach of an international obligation. The question of the interpretation of a treaty is plainly legal in character, and, as a treaty is an interna)tional instrument, it is fair and proper that there should be an international body for its interpretation. Rules of interpretation vary in the different countries of the world, as I found out when at Geneva. The point of view from which some continental lawyers regard the interpretation and construction of a document is entirely different from that adopted by a British lawyer. It is improper to construe an international document absolutely according to the law of one party or of the other, and, therefore, it is proper that there should be an international body, with the function of laying down rules for international interpretation. The second heading relates to " any question of international law." That is a very vague and possibly far-reaching description of potential disputes, and, in some cases, it is still questionable whether a particular matter is a question of international law or of purely domestic law. The International Court has jurisdiction to determine whether it has jurisdiction, and, accordingly, it will be able to determine whether a particular matter is a question of international law and falls within this second heading. International law consists largely of the opinions of jurists, and of principles which have to be deduced from the practices and customs of the nations of the world. There is, therefore, a con.siderable degree of uncertainty about international law. The third and fourth headings - the existence of facts which, if established, would constitute a breach of international obligation and the degree of reparation to be made for such a breach - also involve the determination of the nature and extent of an international obligation. There is, accordingly, a considerable measure of uncertainty as to the extent to which States will be involved when they accept the optional clause and submit themselves to the court. But, in view of the advantages to be gained, not only by Australia, but by the world as a whole, by a general acceptance of the optional clause, I cordially agree with the Prime Minister that the objections which I have mentioned are outweighed by the advantages. There are, in many nations of the world, people who regard with the greatest enthusiasm the progress of the International Court of Justice, and it would be very unfortunate if a dominion of the British Empire were to stand out - unless there were overwhelming reasons for doing so - against the general desire of civilized nations that the jurisdiction of the court should be extended and made effective. The reservations which have been made answer objections, which otherwise might have been raised against the submission of the Commonwealth to the jurisdiction of the court. The reservations are four in form, but, in fact, there may fairly be said to be seven limitations upon the acceptance of the jurisdiction. The first is a condition of reciprocity in the acceptance of the jurisdiction. The second limitation is the acceptance of the jurisdiction for a period of only ten years. The third limitation is that it relates only to future and not to past disputes. The fourth limitation is that there are excluded disputes in regard to which the parties have agreed to have recourse to some other method of settlement. The fifth limitation is that inter-imperial disputes are excluded. It is provided that disputes with the Government of any other member of the League which is a member of the British Commonwealth of Nations, are not to be included in the submission to the court. That, I think, is a desirable provision indeed. We are able to devise, within the British Empire, our own means of settling disputes should they unhappily occur. The sixth limitation is expressed in the reservation which excludes disputes with regard to questions which by international law fall exclusively within the jurisdiction of the Commonwealth of Australia. That is an exclusion not, as is sometimes said, of matters of domestic jurisdiction, but matters which, according to international law, are matters of domestic jurisdiction. It appears to be generally accepted that immigration, in spite of its obvious international aspect, is one of such matters, and that, perhaps, is the most important aspect of this subject from the point of view of Australia. Finally, under the seventh limitation, disputes which are under the consideration of the Council are excluded for a period from the jurisdiction of the court by a suspensive provision. It appears to me, therefore, that, subject to these limitations, there can be no reasonable objection from any quarter to the acceptance of the jurisdiction of the court. I have read with interest an article, in the *Sydney Morning Herald,* written bv Professor Charteris, of the Sydney University, in which he suggests that there may be some difficulty about prize law. He asks what the Government has to say with respect to the effect of submitting questions of prize law to the Permanent Court. On that subject let me say that the jurisdiction of the court applies only as between States which accept the Statute. Jurisdiction does not exist as between individuals .and individuals, or as between individuals and States. No ordinary person is able to invoke the jurisdiction of the court. Prize cases are generally against a ship itself, and the proper officer of the Crown institutes proceedings against the ship. Then, further questions may arise between the owner, the charterer, the consignee, the consignor, and the like. Those appear to bo all questions between individuals and not between States, or proceedings *in rem,* and therefore, I am unable at present to see how the danger feared by Professor Charteris can arise. There is one other aspect to which I should like to refer. I think that sometimes many people expect far too much from law and from courts in international affairs. There are profound international problems, problems which really agitate and affect the minds of men and women, which cannot be settled by law or lawyers. There are, however, real limitations to the utility of law and courts in dealing with international matters. {: .speaker-KNP} ##### Mr Maxwell: -- -And all other matters. {: .speaker-KZO} ##### Mr LATHAM: -- That is so. The law under which we live is cither statute law or common law. Statute law is made by Parliament. Common law represents the wisdom of our ancestors, as developed through the ages, and recognized by the courts, and not interfered with by Parliament. {: .speaker-KZA} ##### Mr West: -- It is law that ha3 grown. {: .speaker-KZO} ##### Mr LATHAM: -- That is so. In international affairs there is no statute law. There is not at present an international legislature, and I think that the peoples of the world would be profoundly distrustful of any proposal for an international legislature. There is no inter- national law in the ordinary every day sense of law. There is a body of principles deducted largely, as I have already said, from the opinions of jurists and the customs of the nations of the world, which constitute the *corpus* of international law. {: .speaker-JUR} ##### Mr McTiernan: -- Morality rather than law. {: .speaker-KZO} ##### Mr LATHAM: -- It is nearer to morality than to law in the sense that a professional lawyer speaks of law. From time to time the scope of international law is extended in- effect by treaties and conventions between nations. By agreement, rules are drawn up to guide the conduct of nations. In the years between 1864. and 1914, there were no fewer than 228 agreements which placed certain matters, - postal, health, quarantine, and other - on a more or less international footing. Between 1919 and 1927, there were no fewer than 166 similar agreements. Even when such agreements exist difficulties arise because of the lack of organization for their enforcement and interpretation. The International Court will be able to do good service in dealing with these agreements and conferences when difficulties arise under them. I invite honorable members who are interested in this subject to read an article on the function of law in international relations by Professor Brierly, which appeared in the Third Series,of *The Problems of Peace* published by the Oxford University Press. Professor Brierly there points out that law comes, not out of a vacuum, but out of the life of the people; out of not only its material life but also its spiritual life. Law cannot be imposed upon a community by lawyers. It can be formulated and become effective only when a community which already ha3 law-abiding sentiments is ready for its operation. Law is in the nature of a general compact which exists only in a community which has learned self-control, and has real consideration for the interests of others. It is quite impossible to introduce a system of law into a community of savages or of purely selfregarding people. I am aware that intricate systems of law are in operation among many tribes of so-called savages, and, to that extent, they are not lawless. But law rests really upon a spiritual foundation. The willingness to submit to law is really the foundation of the possibility of law. Take this country. Unless we were a law-abiding people it would bc quite impossible for the law to be administered and executed by the Police Force, because that. _ body could be rendered impotent in five minutes by the community as a whole. "When wc are thinking of the scope of law in international affairs we must remember that the mere writing of words on paper does not make a law; there must be a great deal behind the written word before a law can be a real influence in the life of the community to which it relates. Law is not. an alternative to war, although it is often considered in that way. Professor Brierley points out that law and war are not merely different ways of settling disputes. Nations go to war, not because they want a dispute settled, but because they want it settled in a particular way, and not necessarily in what an impartial person would regard as the just and reasonable way. In the domain of law a State gets, not necessarily what it desires, but the solution to which impartial arbiters hold it to be entitled. Any legal settlement of a dispute is on a basis of existing rights. The lawyer merely ascertains the law and applies it upon the basis of the existing rights of the individuals concerned. Some international disputes are often caused by dissatisfaction with existing rights, and often what the world most needs is a change in existing rights and obligations. A change in the future is certain, and if war is the only alternative to the acceptance of things as they are, the future is indeed unpromising. The supreme problem of statesmanship is to discover means of effecting peaceful changes in international relations. Law cannot keep its vitality unless legal means are provided to override and change existing legal rights. Within a well ordered State such changes are effected by legislation, but in international affairs there is no such means of arriving at a solution. So, side by side with the development of international law and courts for the settlement of disputes, we need means of consultation between the nations which will make possible changes of existing rights upon a basis of peaceful agreement. The ideal to be aimed at is well expressed by Professor Brierley. After referring to the organizations and machinery associated with the League of Nations, he says - >But behind all these lies the need for a new and more spiritual conception of the meaning of law, not as a system of existing rights, but as a great and developing moral force attempting always to formulate what is just and true, and never resting content with its own handiwork. Only if we can come to look upon law in some such spirit as that shall we ever succeed in making of law an Alternative to war. Law, as I have already suggested to you, is not a code of rules, but a way of life that has the incidental advantage of making disputes fairly easy to settle when they arise, as they inevitably always will; but this advantage of law is not something which we can have except at a price, and the price is the resolution, on the part of all our States, not invariably to expect to get their own way. A developing international organization can make it possible for States to have their own way, where that way is reasonable and just; and in the end we shall have to rely on a developing international morality to ensure that when a State's own way is neither reasonable nor just, it shall not expect to get it. Law is part, but it can never be the whole of that process. The second motion deals with the Protocol for the revision of the Statute of the Permanent Court of International Justice. At the conference which dealt with this matter Australia had the benefit of being represented by **Sir William** Harrison Moore, a distinguished scholar, who has for many years rendered very great service to Australia both at home and abroad. The alterations made in the Statute relate to the number of the judges and their salaries, the sessions of the court, and the procedure for giving advisory opinion. All are worthy of approval. The third motion relates to the accession of the United States of America to the Protocol of signatories to the Statute of the Permanent Court of International Justice. By this document the United States of America accedes to the court subject to certain reservations. In 1926 I was a member of a committee of jurists which considered this matter at Geneva. The United States of America was at that time prepared to adhere to the Protocol, subject to five reservations - {: type="1" start="1"} 0. That such adherence shall not be taken to involve any legal relation on the part of the United States of America to the League of Nations or the assumption of any obligations by the United States of America under the Treaty of Versailles. 1. That the United States of America shall be permitted to participate, through representatives designated for the purpose and upon an equality with the other States' members respectively, of the Council and Assembly of the League of Nations, in any and all proceedings of either the Council or the Assembly for the election of judges or deputy-judges of the Permanent Court of International Justice, or for the filling of vacancies. 2. That the United States of America will pay a fair share of the expenses of the court as determined and appropriated from time to time by the Congress of the United States of America. 3. That the United States of America may, at any time, withdraw its adherence to the said Protocol, and that the Statute for the Permanent Court of International Justice adjoined to the Protocol shall not be amended without the consent of the United States of America. 4. That the court' shall not render any advisory opinion except publicly after due notice to all States adhering to the court and to all interested States, and after public hearing or opportunity for hearing, given to any State concerned; nor shall it, without the consent of the United States of America, entertain any request for an advisory opinion touching any dispute or question in which the United States of America has or claims an interest. A difficulty arose as to the fifth reservation. A question not yet solved is whether a request for an advisory opinion belongs to those matters which require unanimity in the Council or Assembly, or to those on which a majority vote is sufficient. In 1926 the proposal made at Geneva on behalf of the countries represented there was, that in this respect the United States of America should be placed upon an equality with other nations which were members of the League, so that if unanimity were required and the United States of America objected, such objection would prevent an advisory opinion being given; but, if on the other hand, unanimity were not necessary, the United States of America would still be in the same position as other countries. That was not satisfactory to the United States of America, and in 1929 the matter was revived. In reply to statements made on behalf of the United States of America, two suggestions were made and considered by a committee of jurists. The first was that the taking of advisory opinions should be abandoned. That proposal was rejected. The second was that a rule should be laid down that in all cases a decision by the Council or Assembly to ask for an advisory opinion must be unanimous. That also was rejected as unwise. The result of the discussion is to be seen in the Protocol now before the House. For all purposes affecting the Court of International Justice the fifth Article places the United States of America in the same position as if it had a permanent seat . on the Council of the League. It provides machinery by which the United States of America will be made aware of any proposal before the Council or the Assembly for obtaining an advisory opinion, and that country will have an opportunity to state whether its interests are affected so that the Council or the Assembly may decide its course of action with full knowledge of the position. If the United States of America is not prepared to forgo its objection, it may withdraw from the court without any imputation of unfriendliness or unwillingness to co-operate generally for peace and goodwill. The draft Protocol was approved by the Council at its June session, and by the Assembly in September, and was adopted by a conference of States Signatories of the Court Statute which met at Geneva. It is now submitted for the consideration of this House ; and on every ground I think that it should be approved. *Sitting suspended from 12.45 to 2.15 p.m.* {: #debate-16-s2 .speaker-K7U} ##### Mr CROUCH:
Corangamite .- I listened with interest to the speech just delivered by the Leader of the Opposition, although he discussed the authority and reign of law rather than the immediate issues raised by the Protocol. I have also read with interest the volume containing the Macrossan lectures delivered some time ago by the honorable gentleman, and the book on, imperial relations, published recently by the right honorable member for North Sydney **(Mr. Hughes).** It is gratifying that two members of this House are able to speak with such authority on these important subjects. Usually the time of this Parliament is occupied in considering financial and industrial subjects, but I am glad that at last we have been given the opportunity, which a national parliament should have, of considering wider national and international subjects. It is satisfactory to observe that, in connexion with the signing of international documents of the character now before us, a good deal of progress has been made in acknowledging the full national status of Australia and the other self-governing dominions of Great Britain. The signing of the optional clause in the new form is an indication that the Australian Government will in future be recognized as having equal status with the British Government in these matters.When the Balfour Treaty and previous treaties were signed the British Government signed "for and on behalf of all parts of the British Empire," but the last three Protocols of the Permanent Court of International Justice have been signed by the British Government only for Great Britain, the North of Ireland, and the parts of the British Empire which are not separate members of the League. Australia will no longer be bound by the general signature of the British Government, but will have the right to determine her own attitude in relation to these matters. By the way, two notices in the *Gazette* of yesterday surprised me very much. The first of thesewas as follows: - >It is notified, for general information, that an Order in Council has been issued for ratification in respect of the Commonwealth of Australia of the Protocol, signed at Paris on the 11th December, 1929, on behalf of the Commonwealth of Australia, relative to amendments to Articles 34 and 40 of the International Air Navigation Convention of the 13th October, 1910. > >H. Scullin, {:#subdebate-16-0} #### Prime Minister and Minister for External Affairs But the second took us back twenty years. It read - >It is notified, for general information, that an Order in Council has been issued for accession in respect of the Commonwealth of Australia to the International Convention for the Unification of certain Rules of Law respecting Collisions between Vessels and Assistance, and Salvage at Sea, signed at Brussels on the 23rd September, 1910. {: type="A" start="J"} 0. H. Scullin, {:#subdebate-16-1} #### Prime Minister and Minister for External Affairs I should like the Prime Minister to explain why the issuing of an Order in Council in this connexion has been delayed for so long. I was surprised also that this Parliament was not given an adequate opportunity to discuss the Kellogg Pact for the outlawry of war. The honorable member for Brisbane **(Mr. D. Cameron)** asked the last Prime Minister **(Mr. Bruce),** on one occasion, whether it was proposed to ask the House to ratify the pact, and the right honorable gentleman replied in the affirmative; but about two months afterwards, when another question relating to the same subject was asked, the right honorable gentleman said that the signing of the pact had become an urgent matter, and that the Government had taken the responsibility of signing it. It is true that the pact was the subject of a speech in Parliament by the Prime Minister of the day **(Mr. Bruce),** and the then Leader of the Opposition **(Mr. Scullin),** but it was not approved by Parliament. In my opinion, there was a good reason for that. The notification of acceptance of the pact forwarded to the authorities overseas by **Mr. Bruce** contained a reservation which took away any value that the pact might have had as an instrument for the outlawry of war. I am certain that, if Parliament had had the opportunity of discussing the matter, it would have accepted the pact without any reservation or limitation. The optional clause, the signing of which we are now asked to approve, was signed at Geneva on behalf of Australia on the 20th September, 1929. It seems to me, therefore, that the attitude that we adopt in relation to this motion will set a precedent which may be followed in future international negotiations. The business-paper of another place contains a motion which reads as follows: - >That the Senate approves of the Declaration under Article 36 of the Statute of the Permanent Court of International Justice, signed at Geneva on 20th September, 1929, in respect of the Commonwealth of Australia. This motion is in accordance with a practice that has not been followed in other parts of the British dominions. In support of this view, I shall quote certain extracts from *Journals of the Parliaments of the Empire,* Volume XI., for April, 1930, to show what has been done in Great Britain, Canada, South Africa, and the Irish Free State. Although the optional clause has been accepted by the British House of Commons, it has not been accepted by the House of Lords. A debate took place in that chamber on this subject on the 29th January last, which was referred to as follows in the periodical which I have mentioned: - >The Earl of Midleton asked whether it was the intention of the Government to introduce a motion in that House respecting Article 36 of the Statute of the Permanent Court of International Justice in the same terms as that submitted to the House of Commons. He inquired if the Government laid down the axiom, when they pledged themselves and signed on behalf of His Majesty a treaty with a foreign power subject to ratification, that ratification involved the House of Commons alone. > >Lord Carson said that in all these documents, unless the context showed otherwise, " Parliament " meant the two Houses of Parliament, equally the one and equally the other. There was no power in one that there was not in the other. He could find no authority for saying that the executive were not controlled as well by that House as by the House of Commons. > >The Lord President of the Council (Lord Parmoor) remarked that it would be impracticable, with the House of Lords as at present constituted, for a government such as the Labour Government, to submit to that House the question of the approval or disapproval of a particular treaty before it was presented to the king for ratification. If the particular treaty with which they were dealing could not be carried into immediate execution without parliamentary powers, then the treaty was generally put into a bill in parliamentary form. In such a case things were to be done outside the ordinary treaty-making power, which required the assent and authority of Parliament. In the present case there was no such thing as that. There was nothing in the ratification of the Government's signature of the " optional clause," which necessitated any statutory power affecting the rights of the Government in Great Britain. > >The Marquess of Salisbury said that the Government assented atGeneva to the clause subject to ratification. When they came to describe the effect of the reservations, they said - > >The signature is also subject to ratification. This will enable the question to be raised in Parliament. > >One would have assumed that " Parliament " meant both Houses, but the Attorney-General had given the opinion that, in an agreement with a foreign power, it was right to use the word " Parliament " when they only meant the House of Commons. It was the view of the Opposition side, however, that the Government were not entitled to use the word " Parliament " in an agreement, or even in reference to a Protocol or clause agreed to with a foreign power, and to mean only the House of Commons. > >Earl Beauchamp said that, in general parlance, the word "Parliament" included the House of Lords as well as the House of Commons. He regretted that it had not been thought necessary to have a discussion on the optional clause " in that House, whether that discussion had any legal justification or not. > >The subject afterwards dropped. The debate in the Canadian Parliament on the ratification of the clause occurred on the 9 th April last. I quote the following report of it which was published in the same periodical from which I have just quoted: - ' The Speaker of the Senate **(Senator the Hon. H. Bostock),** referring to the motion for the approval of the Protocol for the revision of the Statute, pointed but that it referred to the approval of Parliament, but if it passed it would express the approval only of the Senate. He understood that, if the motion was agreed to, the Leader of the Senate purposed to make another motion for an address to the House of Commons, informing that House of what had been done by the Senate. This was a form of procedure that had been followed only once before in that House - in 1919, in connexion with the Versailles Treaty. His view of the situation was that, if the motion was agreed to, they would be doing nothing more than passing a resolution of approval by the Senate; that would not amount to an approval by Parliament, and would not really bo a ratification of the Treaty. **Senator the Hon.** N. A. Belcourt (Ontario) entirely agreed. The ratification of a treaty was a matter for Parliament, and not merely for one House; there must be joint action by the two Houses. Ratification by the Senate alone would not be a ratification of a treaty; and in the same way a ratification by the other House would not be a ratification. If the Senate' approved of the Protocol, and if the other House, after having been advised of the action of the Senate, took exactly the same action, the Protocol would be ratified. **Senator** Casgrain said that they had a Parliament of three branches - the GovernorGeneral, the Senate, and the House of Commons. He had always understood that nothing was finally approved until the approval had been signified by those three branches. The Leader of the Senate stated that the procedure followed in submitting these three Protocols to the Senate was the same as that followed when the Versailles Treaty was submitted. On the adoption of the resolution by the Senate there , was no message sent to the other House, nor did the other House, when it approved of the treaty, communicate in any way with the Senate. Parliament was not ratifying these Protocols. They had been adhered to at the instance of the Government, and it was the Government that would ask His Majesty to ratify. **Senator** Belcourt Ratification and approval are here synonymous terms. The Leader of the Senate. - No. The ratification was effected by an instrument emanating from His Majesty. In Great Britain treaties were not submitted to Parliament. The Treaty of Versailles was submitted, but it was expressly declared that that was not to be taken as a precedent. The signing of a treaty was considered- to be a ministerial act. The policy of the present Government had been to submit all treaties to Parliament for endorsation. The Government now came to both Houses and asked for their approval of the signing of the Protocol. The adoption of the resolution would not even be an authorization to ratify. If the Senate refused to approve, but the 'other House, by separate resolution, did approve, the Government might well decide to advise His Majesty to ratify. It was not necessary that approval should be given by the two Houses. **Senator** Belcourt. Suppose both Houses refused to approve, what then? The Leader of the Senate replied that, if both Houses refused to approve, then the Government would be bound by the opinion of the two Houses. But, if the Senate approved and the other House rejected, he would take it for granted that the Government, which was but the executive of Parliament, and especially of the other House - in fact, the Government's very life depended upon securing the confidence of the majority of the other House - would refrain from following the advice of the Senate. South Africa had a most interesting discussion on the subject. The same publication contains the following account of the proceedings in that Parliament: - > **Mr.** Krige asked the Prime Minister whether he proposed to send the resolution to the Senate for its concurrence, and, if not, the reasons for such refusal. > >The Prime Minister said the declaration had been laid on the table of both Houses, but he did not intend to ask the Senate to approve it. He was not prepared to create the bad precedent of going to the Senate for approval of the Government's action. It would be unconstitutional. The Assembly was the only House the Government would consider, whether in respect of approval or disapproval of the measures it took in its administrative capacity. This did not prevent any one in the Senate, not a member of the Government, moving that the Senate approved or disapproved of the motion or the declaration. The Government was not prejudiced. When any such motion was debated in the Senate, he would be there to supply information just as he had done in the House of Assembly. > >Honorable P. Duncan (South African party, Yeoville, Transvaal) asked if they could have an opportunity of discussing the matter, and if the Prime Minister would tell them what part the Senate played in the Union if it was no longer entitled to express its views upon questions of administrative action? > >The Prime Minister said the Senate had its constitutional functions, but it was not its function to demand that the Government should come to it for its approval or disapproval in so far as administrative acts of the Government, which were left to the discretion of the Government, were concerned. It was. not even necessary to come to the > >House of Assembly, except that the Government followed the line of coming to it with all the important treaties, to give it an opportunity of debating them; and, if then the House disapproved, it amounted to a motion of "no confidence" in the Government. " As for the Senate," the Prime Minister added, "it may disapprove of it a hundred times, and I would still take no notice, because we in this House represent the people." Honorable members will remember that in 1911 the British Government agreed to what is known as the Declaration of London, and for the first time in the history of the British Empire the assent of 'the British self-governing dominions was invited. The declaration was approved, by the British House of Commons, but was not accepted by the House of Lords. It had to do with the right to seize contraband goods in transit between one neutral nation and another, and between a neutral country and a country with which Great Britain was at war. The Australian Labour Government, represented by **Mr. Fisher** and **Mr. Batchelor,** opposed the declaration, and principles for which the Australian representatives stood, finally put into effect during the war, did more than anything else to give victory to Great Britain and her allies. The blockade of Germany, preventing as it did the entry, not only of military necessities, but of wool and food for the German nation, finally resulted in its defeat. {: #subdebate-16-1-s0 .speaker-K7U} ##### Mr CROUCH: -- That is so. If honorable members opposite were familiar with the 1911 negotiations regarding the Declaration of London, and the part played therein by the Australian Labour Government, they would not be so ready to criticize the attitude of the Labour party during the Great War. The Labour party's policy ended the war, even if it didn't win it. I suppose even our opponents will admit that but for the blockade of Germany the war would have continued indefinitely. And this was made possible in international law, because the Declaration of London, which was agreed to by the British Government in 1911, was never finally adopted. At the Imperial Conference of 1911, the first time : Labour had been represented at such a conference, and the only Labour -representatives being the Australian Ministers, this declaration was brought forward for the condemnation by Australian Labour delegates. **Mr. Fisher,** for Australia, had placed the matter on the notice-paper and stated: "We as a Labour Government, disapprove of the Declaration." He moved : - " That it is regretted that the dominions were not consulted prior to the acceptance by the British delegates of the terms of the Declaration of London, and it is not desirable that Great Britain should adopt the inclusion of its articles 24, 48 to 52." Speaking to this motion, **Sir Edward** Grey, the British Foreign Minister, said : "We have agreed under the declaration of London that we would not seize goods which are conditional contraband when they are consigned to a neutral power, even when destined for an enemy, though heretofore we have claimed the right to seize those goods. Therefore, that is a restriction upon our power of bringing pressure to bear upon an enemy when we are at war." In spite of the vigorous protests of **Mr. Batchelor,** also an Australian Labour delegate, all the other Governments at the conference approved a resolution accepting the Declaration, whilst Australia refrained from voting. It was the non-operation of the Declaration of London allowing the blockade of enemy coasts, which finished the war. When it finally became evident that the war could not be won unless a strict blockade was enforced, the British Government adopted what I can only describe as a subterfuge to evade the provisions of the Declaration of London. Although the declaration had been approved by the British Government and by the House of Commons, the Government said that it was not bound by the declaration because the House of Lords had not approved of it. The Government, therefore, held that it had the right to enforce a blockadein the same manner as it would have been able to do had the declaration never been agreed to, although now, apparently, it is held that the approval of the House of Lords is not necessary for ratification. Perhaps the Prime Minister will be able to learn when he is in London exactly what ratification is necessary to make an agreement or treaty binding. I Have just quoted an instance in which the ratification was not regarded as binding because it had not been agreed to by the House of Lords. Yet, in regard to the optional clause, Lord Parmoor has stated that the consent of the House of Lords is unnecessary. In Canada it has been held that the Senate may pass resolutions, but the House of Commons alone possesses authority. In South Africa it has been declared that the Government alone can decide such matters, and that if the Upper House refuses to accept decisions of the Government and the Assembly of the people, it can be interpreted only as a vote of want of confidence. It is stated in the Protocol that Brazil is a party, although that country is not a member of the League of Nations. Another extraordinary feature is that the United States of America has been permitted to join, but may withdraw at any time. Authority for the establishment of the court is derived from article 14 of the Treaty of Versailles, which is as follows : - >The Council shall formulate and submit to the members of the League for adoption plans for the establishment of a Permanent Court of International Justice. The court shall be competent to hear and determine any dispute of an international character which the parties thereto submit to it. The court may also give an advisory opinion upon any dispute or question referred to it by the council or by the assembly. Acceptance of this Protocol by Australia will involve the country in a large amount of additional expense. Recently the Treasurer **(Mr. Theodore),** in answer to a question, stated that Australia's average annual contribution to the cost of the League of Nations was £28,000. That, of course, is insignificant to what would be our expenditure in time of war, and the investment is an excellent one if it will prevent future wars. Before the amended Protocol was agreed to there were eleven judges and four deputy judges chosen by the nations who are parties to the agreement. Those judges were not permanent, but it is now proposed to appoint fifteen permanent judges, who will be continuously in session, and, in addition, there is to be a president and a vice-president. All these persons are to receive special annual allowances. One clause of the Protocol is to the effect that any nation may nominate a judge. I am not aware of the intention of the Prime Minister **(Mr. Scullin)** in this regard, but I think that it is very desirable that this Labour Government should take some action under the clause. Article 26 has been re-drafted to enable labour matters to come before the court. It now reads as follows : - >Labour cases, particularly referred to in Part XIII. (Labour) of the Treaty of Versailles and the corresponding portions of the other Treaties of Peace, shall be heard and determined by the court under the following conditions: - > >The court will appoint every three years a special chamber of Ave judges, selected, so far as possible, with due regard to the provisions of article 9. In addition, two judges shall be selected for the purpose of replacing a judge who finds it impossible to sit. If the parties so demand, cases will be heard, and determined by this chamber. > >In the absence of any such demand, the Pull Court will sit. In both cases, the judges will be assisted by four technical assessors sitting with them, but without the right to vote, and chosen with a view to ensuring a just representation of the competing interests. > >The technical assessors shall be chosen for each particular case in accordance with the rules of procedure under Article 30 from a list of .Assessors for Labour Cases " composed of two persons nominated by each member of the League of Nations, and an equivalent number nominated by- the governing body of the Labour Office. One would expect a Labour government to appoint to a body of men such as this, which is to be an assessor in labour cases, two persons to represent Australia. The article goes on to say - >The governing , body will nominate, as to one-half, representatives of the -workers, and, as to one-half, representatives of employers from the list referred to in Article 412 of the Treaty of Versailles and the corresponding Articles of the other treaties of peace. > >Recourse may always be had to the summary procedure provided for in Article 29, in the cases referred to in the first paragraph of the present Article, if the parties so request. > >In labour cases, the International Office shall be at liberty to furnish the court with all relevant information, and for this purpose, the director of that office shall receive copies of all the written proceedings. When I turn to section 412 of the Treaty of Versailles I find that there is a matter which apparently has been overlooked by previous governments. I assume that honorable members know that every year we send to the International Labour Convention at Geneva three delegates; one representing the employers, one the employees, and the third the Government. The latter is supposed to be impartial. They comprise a commission of inquiry. Article 412 reads - >The Commission of Inquiry shall he constituted in accordance with the following provisions. > >Each of the members agrees to nominate within six months of the date on which the present Treaty comes into force three persons of industrial experience, of whom one shall be a representative of employers, one a representative of workers, and one a person of independent standing, who shall together form a panel from which the members of the Commission of Inquiry shall be drawn. About three weeks ago I asked the Prime Minister whether any appointments had been made under that section. We have attached our signature as a nation to the Treaty of Versailles, and we have authority to make such appointments. I believe that the right honorable member for North Sydney **(Mr. Hughes)** was in power for a longer period than six months from the date upon which the treaty came into force. The reply which the Prime Minister made to me was that these representatives had to be nominated within six months from the date of the treaty, and that as no nomination had been made within that period, Australia's right to be represented upon the panel of assessors ceased to exist. I cannot agree with that. I believe that if we made application for representation it would be granted. The Prime Minister has advised this House to accept the whole Protocol, with three reservations. The honorable member for Kooyong **(Mr. Latham)** this morning referred to a much greater number of reservations; but I have read most of the discussions that have taken place in the Parliaments of the British Commonwealth, and only three reservations have been referred to. {: .speaker-F4Q} ##### Mr Scullin: -- The Leader of the Opposition referred to seven limitations that are embodied in four reservations. {: .speaker-K7U} ##### Mr CROUCH: -- The Irish Free State would not agree to those reservations; it wanted the InternationalCourt to decide issues between nations composing the British Commonwealth of Nations. The three reservations are - >Disputes in regard to which the parties to the dispute have agreed or shall agree to have recourse to some other method of peaceful settlement; and > >Disputes with the Government of any other member of the League which is a member of the British Commonwealth of Nations, all of which disputes shallbe settled in such manner as the parties have agreed or shall agree; and > >Disputes with regard to questions which by international law fall exclusively within the jurisdiction of the United Kingdom. The Irish Free State takes up the attitude that disputes may arise between the Governments of the British Commonwealth. It has use for the optional clause only so far as that clause will enable it to have disputes settled with what it used to call its hereditary enemy, England. I am glad to say that lately England has come to be regarded by the Irish Free State more as a friend. But the Irish Free State asks, What is the use of signing the optional clause when the only disputes that are likely to arise are not between her and any other nation, but between her and England, on the question of boundaries, debts and one or two small matters? {: .speaker-KNP} ##### Mr Maxwell: -- That is a matter for them, but how does it affect us? {: .speaker-K7U} ##### Mr CROUCH: -- The Irish Free State still wishes to retain the right to have any disputes with England settled by the International Court. Under the reservation, any dispute that may occur between members of the British Commonwealth of Nations is to be settled " in such manner as the parties have agreed or shall agree". It really amounts to the setting up of an inter-dominions court in addition to this International Court. {: .speaker-F4Q} ##### Mr Scullin: -- I do not agree with that interpretation. {: .speaker-K7U} ##### Mr CROUCH: -- It reads- >Disputes with the government or any other member of the League which is a member of the British Commonwealth of Nations, all of which disputes shall be settled in such manner as the parties have agreed or shall agree. {: .speaker-F4Q} ##### Mr Scullin: -- But that does not necessarily mean the setting up of another court. {: .speaker-K7U} ##### Mr CROUCH: -- I do not call it a court, an authority, or anything else. It has been suggested that the Privy Council should decide such disputes. But when that body gave a decision in the dispute between Canada and Newfoundland, it was purely an *obiter dictum* and not in any sense a legal decision. Time after time Canada has raised the question whether it is bound to comply with it. It was not a question of any legal rights between the parties, but merely a case referred to the Privy Council, which decided that Newfoundland should be given in Labrador a large part of what was formerly Canadian territory. Then the question arises whether wo can make any reservations, if we agree to accept in full the authority of the International Court. There is a great deal of doubt upon that point. The *American Quarterly Review of Foreign Affairs* for April, 1930, states that this reservation caused **Mr. Eric** Louw, then High Commissioner for the Union of South Africa in London, and now Minister to the' United States of America, to draw up a further explanation, as follows : - >With regard to the reservation as to disputes between members of the British commonwealth of nations, I wish to state that, although in the view of my Government such disputes are justiciable by the International Court of Justice, my Government prefers to settle them by other means - hence the reservation. **Senator** Dandurand, according to this journal, added an interpretative explanation of the greatest interest, in the following terms : - >The Dominion of Canada has excluded from the purview of 'the court legal disputes with other members of the British commonwealth, for the sole reason that it is its expressed policy to settle these matters by some other method. And it has deemed opportune to include its will as a reservation, although a doubt may exist as to such a reservation being consistent with article 36 of the Statute of the court. **Mr. MacDonald,** the British Prime Minister, in the memorandum that he issued to the British Government, said - >The terms of Article 36 have been regarded as admitting the making of a reserve or exception of any kind when accepting the compulsory jurisdiction of the court, because the jurisdiction of the court may be accepted ' in all or any " of the classes of legal disputes enumerated. Foreign nations object very strongly to the members of the British Com monwealth of Nations having their own little group ana also appearing as separate and independent parties in the greater League of Nations. They say that we must have either one thing or the other ; we cannot join together as a kind of internal British league of nations, and afterwards appear as independent nations, not even as allied nations, at the League of Nations. The article from which I have already quoted goes on to say - >If the validity of the Balfour formula goes unchallenged by foreign powers, it will probably have curious repercussions on the position of the members of the British Commonwealth in the World Court and in the League Council, and possibly elsewhere. This became apparent when **Sir Cecil** Hurst attempted, at a meeting of the Fourteenth Session of the Committee, of Jurists on 1 0th March, 1029, to get a recognition of the right of the dominions to have judges of their own nationality on the court when they were interested parties. I suppose that the Prime Minister definitely assumes that if we go before the court we shall have the right to appoint an Australian judge and an Australian assessor to sit with the other members of it. Surely our acceptance of these reservations does not imply that we give up that right! Apparently, however, when **Sir Cecil** Hurst attempted to get a recognition of the right of the dominions to have judges of their own nationality on the court when they were interested parties, objection was raised to that course. The paragraph continues - >He argued that the presence of a judge of British nationality already on the court should not preclude the presence of dominion judges, since " an Englishman did not possess Canadian nationality and vice versa." Therefore Articles 26, 27 and 31 of the Court's Statute should permit the addition of dominion judges, as those privileges of separate nationality were already enjoyed under Articles 4 and 10. He might have added, too, that a Canadian national now sits on the council at the same time with n British representative. > >The reception which this request obtained showed that other nations were not prepared to allow the members of the British Commonwealth to have their cake and eat it too. M. Politis led ofl with a counter-attack to protect the smaller States from what he feared would mean a packing of the court by " combinations of States such as the BritishEmpire . . . the members of which were bound together by certain ties, the nature of which it would be-' difficult to define." Instead of considering each dominion as entitled to a judge where their common interests might be involved, he proposed to complete Article 17 of the Statute " to make possible- for the parties to a case to object to the presence of, for example, an English or a Canadian judge when they were in dispute with a dominion." That raises a vital issue, and I trust that the Prime Minister -will insist that when an Australian case is before this court it will be heard before an Australian judge. The difficulty that we experience because of being part of the Commonwealth of British nations, is that there is too much assumption on the part of the Motherland. It insists upon making the appointments of judges even in respect of Australian and Canadian disputes. When a dispute took place between the United States of America and Canada respecting Alaskan and northern boundaries, an English judge was appointed, and he gave away completely the Canadian rights, on the principle that Great Britain desired to have no bother with the United States of America. Great Britain's interest in the United States of America was far greater than its interest in Canada, and when there was the possibility of trouble arising with the United States of America, the English adjudicator - as is freely shown in Cecil Spring Rice's biography - received definite instructions not to cause any rupture with the United States of America. If any thing similar happens in connexion with cases before the International Court, it might seriously interfere with the Australian mandates. Therefore, any cases affecting Australia should be heard by an Australian judge. {: .speaker-KNP} ##### Mr Maxwell: -- Does the honorable member suggest that the judges of the International Court of Justice receive instructions beforehand as to what they must decide? {: .speaker-K7U} ##### Mr CROUCH: -- I have not suggested that. I have referred only to the action of an English adjudicator in connexion with a dispute between the United States of America and Canada. I do not say that the Court of International Justice would receive similar instructions; but we should safeguard Australian interests as much as possible. Immigration and emigration raise questions which are daily becoming more international in character. The White Australia policy is the lifeblood of this country. It is supported by every section of the community. A tentative decision has already been given by the Court of International Justice in respect of the right of Japan to bring the question of inter-migration before the League of Nations. Under the Treaty of Versailles that question was referred to the International Court, which decided that it was a domestic matter and could not be dealt with by it. To that extent our White Australia policy is safe. Since then a movement has been started in the League of Nations in the direction of freetrade, and the subject of migration is daily being regarded as one of international concern. It is contended that peace is not possible when large nations are bottled up in small territories and small nations have vast empty spaces awaiting population. It is, therefore, quite possible that the International Court may later decide that migration is not purely a domestic matter. We have to watch this question carefully, because, despite any decision of the International Court, we cannot allow the White Australia policy to be adjudicated upon by anybody but an Australian, and cannot permit it to be any but a domestic issue. I certainly approve of these three proposals being ratified. The Prime Minister, in bringing them forward, has given us an opportunity to discuss international affairs. Anything done in the direction of bringing about peace must have our approval. We delayed too long in signing the Kellogg Pact, and complaints were made in England that **Mr. Bruce,** then Prime Minister of Australia, could not come to a definite decision regarding it. It is stated in *Foreign Affairs -* >Even Australia, which has, on occasion, been suspected of being almost as much a British stalking horse as India, helped Nan sen in the vain attempt to force League intervention after the Chanak episode. The reference to Australia as a stalking horse resulted, of course, from the attitude of the happily departed **Mr. Bruce.** As our ratification of these proposals may lead to the elimination of a tremendous amount of unnecessary military armament, I hope that the House will support them. {: #subdebate-16-1-s1 .speaker-DQC} ##### Mr HUGHES:
North Sydney .- The three motions to which reference has been made in this debate, and which are grouped together on the notice-paper, are all of far-reaching importance. I shall confine my remarks to the first of them, which reads - >That this House approves of the declaration under Article 36 of the Statute of. the Permanent Court of International Justice, signed at Geneva on the 20th September, 1929, in respect of the Commonwealth of Australia. Under Article 36 Australia accepts the jurisdiction of the court for a period of ten years, and thereafter until notice of termination has been duly given, for the settlement of all disputes, excepting those in regard to matters which by international law fall exclusively within the jurisdiction of the Commonwealth, and those which are to be settled peacefully by other means. By this motion, therefore, we commit the Commonwealth to refer all disputes, excepting those which by international law come exclusively within its own exclusive jurisdiction, to the Permanent Court of International Justice, to the Council of the League of Nations, or to some other body for peaceful settlement. In the memorandum circulated by the Prime Minister it is stated that under Article 36 of the Statute of the Permanent Court it is provided that disputes that are to be referred to that court fall into the following classes: - Interpretation of a treaty; any question of international law ; the existence of any fact which, if established, would constitute a breach of international obligation; and the nature or extent of the reparation to be made for the breach of an international obligation. From this it emerges that to all intents and purposes what is proposed, and, indeed, what has been done, by the Commonwealth of British Nations other than the Commonwealth of Australia, and is to be done by this Commonwealth this afternoon, is to place the destinies of Australia and of the Empire in the hands of the Permanent Court of International Justice. All disputes are to be referred to that court, except those with regard to questions which by international law fall exclusively within the jurisdiction of the Commonwealth ; and the court is to interpret international law; to delimit its scope; to say what questions are within its purview. I do not know whether honorable members quite realize the effect of this. We are taking a step, not only revolutionary in its nature, but opposed to the practice of civilized nations from time immemorial: Honorable members talk lightly about referring matters to the Permanent Court of International Justice. They do not seem to appreciate the fact that they are handing over the destinies of Australia *in esse* and *in posse* to a court of whose constitution they are entirely ignorant, the personnel of which will alter from time to time; a court guided by no fixed and definite principles, which is to evolve its own procedure and, in effect, the code of law which it is to interpret. And to the arbitrament of such a tribunal we are committing, by our own act - or, perhaps, it would be fairer to say, by the act of the British Commonwealth of Nations, we have already committed - our fortunes. Hitherto nations have sought to adjust their differences by peaceful means when that has been possible. That it has not always been possible is unhappily only too true. But we must remember this - it is of vital importance that we should remember it - that everything that we value, our liberty and that mighty inheritance in which we participate, the Empire itself, has come to us because the British peoples have asserted and insisted upon the world recognizing their concept of civilization. To-day we are turning our backs on this principle by which we and our ancestors have been guided throughout the ages. Honorable members talk of international law as if its code were comparable with that of municipal law. As has been pointed out by the Leader of the Opposition **(Mr. Latham),** there is but the slightest analogy between them. International law is but a name given to a nebulous body of rules, treaties, understandings, between nations, lacking adequate sanctions and based upon no definite and fixed principles ; to-day it may mean one thing, to-morrow quite another. At the present moment we are free, except for our obligations to the Empire, and our obligations under the Treaty of Versailles as a member of the League of Nations. We are, of course, limited by inexorable circumstances, but these we may hope to modify and perhaps, in some cases, to control. Insofar as any nation can be said to be master of its own destiny Australia is in a position to be so. Yet we now propose to hand ourselves over for a period of ten years, or indeed in perpetuity so far as any present act of ours can do it, to a court whose ideals and concepts of civilization arc entirely different from ours. From its decisions there is no appeal. It is to decide all disputes according to its own concept of justice. It is to interpret international law and to make it. When we talk of the rule of law in society - that is municipal law - we refer to a body of regulations which have been gradually evolved, some by Parliamentary Statute and others by courts through the incorporation of traditions, customs, and ideals. Law, as we understand it, is the will of the people made manifest. It is part of the warp and woof of the nation, an instrument which we ourselves have created and which is in entire harmony with the body politic; where it is not in harmony the people can make it so. This body of law has been evolved for one purpose only, the benefit of the community as a whole. The basic principle upon which municipal law rests is the good of society, and what we call justice is nothing more or less than such an adjustment of the clashing interests of individuals as is compatible at once with their rights and the well-being of the community in general. The courts will not enforce a contract which is opposed to public interest. The rights of individuals are subordinate to those of the community. These laws are the handiwork of the people to whom they apply ; they represent their ideals and traditions, and are based upon the principle that the great object of law is to promote and maintain the well-being of the society of which they are an emanation. The rule of law is the hallmark of civilization. The individual commits hi.3 fortunes with perfect confidence to the courts of municipal law. He has indeed no option but to do so. The strength of the individual, when opposed to society, is puny; he is part of a homogeneous organism, and obedience is demanded of him, not as by an alien authority of a slave, but for the benefit of himself and the community as a whole. Our national courts are the guardians of our liberties. They protect his rights as well as his safety, and that of the community of which he is a part. The position of this international court and the principles upon which it acts are entirely different. There is no fixed principle to guide it. In the very nature of things it is confronted with a conflict of rights and of ideals. That test which all municipal courts apply when in doubt cannot be applied to disputes coming before it. In a conflict between nations there must be conflicting conceptions of right and justice. Justice, even as applied to the individual, is not easily defined, for what is just to one may be unjust to another; but all doubts may be resolved by the touchstone of justice to society as a whole. But international law is in a different category. The court is composed of judges, representative of different nations, and it is to interpret international law and decide disputes between nations. Upon what principle will it decide them? We have been reminded this afternoon that the White Australia policy and migration have been recognized by international law as clearly within the jurisdiction of the Commonwealth. That is true; but such recognition is not final. When the Covenant of the League of Nations was under consideration at Versailles, Article 13 on which is based Article 36 of the Statute of the Permanent Court of International Justice, naturally attracted a great deal of attention. Article 13 provides - {: type="1" start="1"} 0. The members of the League agree that whenever any dispute shall arise between them which they recognize to be suitable for submission to arbitration and which cannot be. satisfactorily settled by diplomacy, they will submit the whole subject-matter to arbitration. The words "which they recognize to be suitable for submission to arbitration " are very wide and general, and we can accept them without committing ourselves too deeply. Article 13 continues - >Disputes as to the interpretation of a treaty, as to any question of international law, as to the existence of any pact which is established, would constitute a breach, of any national obligation, or as to the extent and nature of the reparation to be made for any such breach, are declared to be among those which are generally suitable for submission to arbitration. To that article, unqualified by the preceding paragraph, we are setting our seal this afternoon. I may remind the House that when the covenant was before the Versailles Conference, and its application to the practical work of a complete treaty of peace was discussed, the subject of mandates arose. Vast slices of territory in different parts of the -world had been taken from Germany, and as these were not to be assigned in perpetuity amongst the allies, a system of mandates was evolved. Under the C class mandates the power of the mandatory nation over the territory committed to its charge was, for all practical purposes, that which it exercised over its own sovereign territory. While this matter Was before the conference the position of Australia in relation to New Guinea was in very serious suspense. The question of migration arose, and, if to-day migration is formally recognized as being within the domestic jurisdiction of States, it is only because at that time the power of the British Empire was such as to make any other decision impossible. Britain was mistress of the seas. The German fleet had been sunk beneath the waves and the massed fleets of the rest of the world were unable successfully to challenge British supremacy; therefore, what Great Britain said went. That day has gone, first, for the material reason that Britain no longer has an immense fleet, and, secondly, because it has subscribed to this Protocol, The position of Australia should be understood by our people, even if they are not willing to face the facts. We are now exercising an authority, which we cannot successfully maintain' if ever it is challenged. What will happen if at any time a dispute occurs between Australia and some other country regarding the occupation of our unsettled lands? Suppose the question should arise as to whether our migration laws constitute a casus *belli.* The dispute will be referred to the Permanent Court of Justice by virtue of this motion now before the House. Upon what principle will that court decide between Australia and the foreign nation? If it is to have regard to what are termed moral rights, it must consider the moral rights of the world as well as those of Australia. Which right will prevail? In the over crowded East, and in parts of Europe, a thousand millions of people jostle one another for want of room, their numbers vastly in excess of the power of those countries to maintain them in a decent standard of comfort, while in Australia wc have a continent almost unpeopled. In these circumstances, what will happen if a reference is made to the court? We shall plead, of course, that this is a matter of domestic jurisdiction ; but this will be for the court to determine. If it decides that it is not so, the dispute will come before the court for decision upon its merits. Because, in 1919, migration was declared, in relation to Australia, to be a domestic matter, will it still be so considered ten yeai'3 hence? Inevitably as there is evolved what has been called world opinion or world consciousness, there will be new interpretations in what, for want of a better term, we call international law. It has been plainly stated that there is actually no such thing as international law, though there might be such a thing if it had behind it sanctions. But such sanctions are to be looked for from the powers that stand behind thi.< declaration. If the decisions of the Permanent Court of International Justice are to be enforced^ - and apparently they are enforceable - it must necessarily follow that this court will, henceforth, determine our destiny. If it decides that migration is not outside the jurisdiction of the court what will our position be? We have long believed ourselves to be perfectly safe, because we have had behind us the mighty power of the British fleet, and have enjoyed the tremendous advantages that accrue from membership of the British Empire; hut these things upon which we have relied have been whittled away during the last few years. I have been everlastingly insistent upon Australia asserting herself within the British Commonwealth of Nations, and have asserted, emphatically, that, as the Empire is not Great Britain, but all the nations which compose it, Great Britain should not commit us in questions of foreign policy without giving us that ample opportunity of being heard to which equality of status entitles us. But. to-day we look around and ask ourselves, " Where is the power that will enable us to enforce our White Australia or migration policy?" There is none, nor are we able, from our resources, to marshal sufficient power to enforce them. We see Britain day by day stripping herself of all that made, and kept, her great. When I spoke for Australia at the Peace Conference and said that I would not agree, in any circumstances, to accept a mandate over any Pacific Island territory unless the Commonwealth were given complete control over it, my words would have been written in water had it not been for the fact that behind me was the British Empire, then the greatest power in the world. But, to-day, her power has departed from her. Her main anxiety to-day seems to be to pose as the leader of a great world crusade for peace. All honour to her for this, but I notice that those who are anxious for her to accept the leadership of this crusade are not following her. They are lagging so far behind that I cannot see them. I remember very well that at the Peace Conference I drew attention, with some acerbity, to the following article in the covenant of the League of Nations : - >Nothing in this covenant shall be deemed to affect the validity of international engagements, such as treaties of arbitration or regional understandings like the Monroe doctrine, for securing the maintenance of peace. There is something about the association of the Monroe doctrine with the maintenance of peace that is a little humorous. The Monroe doctrine, put in plain words, is a notice posted on continents of North and South America, the greatest expanse of habitable land in the world, warning other nations off. Of course, peace may be obtained in that way; it is the way in which the old Romans secured it. They made a desert and called it peace. If you can keep everybody away from a country you can maintain peace in it. There is no substantial difference between the Monroe doctrine and the White Australia policy, yet the White Australia policy may be challenged in the Permanent Court of International Justice,, and the Monroe doctrine may not be challenged, because for one thing it is expressly excluded in the covenant from its jurisdiction, and .because there is behind it the armed force of 130 millions of people. We must look at this matter as it really is and not as some would have it. Although I admit that the Commonwealth, as a Commonwealth, can do little else than it is doing, since Great Britain has led the way, I say emphatically that what we are doing is entirely wrong, for we are turning our back on principles and practices which have served us well and have brought us where we are. We are where we are because we have fought our way to it. Now we are proposing that certain persons sitting as an International Court of Justice, whose ideals may not, will not, be our ideals, and whose concepts may be as different from our own as night is from day, shall tell us what is right and compel us to accept their decision. We may not have any say in the matter. In any event we shall be in a hopeless minority. I do not know how this business will work out, but I am certain that although we are lightly stepping this way to-day, the time will come when we shall find it necessary to retrace our steps at all costs. There are gentlemen who talk about the peace of the world as though there was ever a time when peace could not be obtained. Peace has always been within reach; all that was necessary to ensure it was submission - and this is submission. Whether you get peace by submission to the decree of a court or to armed force is not material. I sincerely regret, that we have been forced into the position in which we find ourselves to-day. I do not lay the blame for it upon the shoulders of this Government, which is simply following a practice that has been laid down. It is, however, a most unfortunate thing, as I have pointed out on many occasions, that in matters of foreign policy Australia seems to have no will of her own. If **Mr. Baldwin** had remained in power in Great Britain this would not have happened, 'for Australia would have followed Baldwin. Yesterday she followed Baldwin, to-day she is following MacDonald, and to-morrow she will follow some one else. She does not even seem to have the courage to attempt to- impress her will upon the British Commonwealth of Nations. When I had the honour of sitting at the Imperial Cabinet table I endeavoured to mould the foreign policy of the Empire on lines compatible with Australian ideals. At that time Ramsay MacDonald was anathema, and all the nations in the British Commonwealth spat at the mention of his name; but to-day he is in office and has turned the foreign policy of the previous Government upside down, yet the very people who then anathematized- him are now singing hosannas to his name. Whither are we drifting? It is high time that the Empire had a foreign policy compatible with its interests and its ideals. Britain has seen fit to strip herself of her power; but those who urged her to take the lead in the crusade for world peace have failed to follow her. Unless we retrace our steps we shall be undone. I hope that I have made it perfectly clear that, in my opinion, the Government has no option but to do what it is doing. I most bitterly regret that our race seems to be losing its clear insight into the future, its spirit of self-reliance, its faith in its destiny, and is letting go those principles by which it achieved greatness. To-day we seem to be content to worship at other shrines. We are not now imbued with the belief that we are a great people with a great mission in the world; but are satisfied to. submit ourselves to the jurisdiction of a Court of International Justice composed of we know not whom, guided by principles of which we know nothing, and animated by desires and impelled by forces incompatible with the security of Australia and the Empire. {: #subdebate-16-1-s2 .speaker-KOC} ##### Mr HAWKER:
lakefield .- I much appreciate the courtesy which the Government has shown in offering to extend the sitting to-day for a few minutes to enable honorable members who are not catching the Sydney train to express their mind on this subject. I hope that I shall not abuse that courtesy by speaking at unnecessary length. Of the many points which demand attention in considering this momentous step which the Parliament of the Commonwealth is taking to-day, there is one which will bear some discussion,, even after being dealt with as it was by the right honorable member for North Sydney **(Mr. Hughes)** this afternoon. As he said, there seems to be in the Australian people no appreciation of external danger or external responsibility. To-day Parliament has been discussing what is probably the most important subject it will be called upon to consider during the year, something which will affect the lives of every Australian citizen long after the wheat pool, the arbitration bill and other matters which have been attracting the fervent interest of every honorable member both here and in another place have been forgotten. As the right honorable member for North Sydney pointed out, we have practically no option but to take the step we are considering now. Those who pay the piper call the tune, and those who have the power to enforce what they decide are those whose decisions count. Australia is a very small unit in the world to-day, and unless we have behind us the might of the British Empire our decisions and our wishes will not count for very much. Ever since the war there has been an important section of opinion in the British Empire, which has viewed with apprehension the signing by the members of the British Commonwealth of Nations of this so-called optional clause. It is true that even before the clause was signed nations which were members of the League of Nations were, by article 13 of the Peace Treaty, bound to settle their disputes with other League members by peaceful means, but no definite means were defined. It left to mutual arrangement between the nations in dispute the decision as to what authority should settle the matter. This gave considerable power of passive resistance to any country which was not satisfied with the form of tribunal offered. By signing this clause a nation relinquishes the right to refuse to be cited before the Court of International Justice. **Mr. Henderson,** the present British Foreign Secretary, puts the matter very clearly, thus - >Ratification means that we pledge our word that in any disputes with any foreign power, which has also signed the clause, we will accept the jurisdiction and the verdict of the Permanent Court of International Justice, provided always that the dispute is one which can he settled by that court on the basis of the rules of law. Moreover it means that, in respect of what are called justiciable disputes, we shall bc no longer free to refuse to go to the permanent court if another party to the dispute, which has also signed the optional clause, desires to obtain a legal verdict. The constitution and powers of that court have been explained fully by the Leader of the Opposition **(Mr. Latham),** and the right honorable member for North Sydney, in terms of international law. Under the optional clause, in the event of any dispute as to whether the court has jurisdiction, the matter shall be settled by the decision of the court. There are only two classes of disputes regarding which apprehension has been felt within the British Empire. One class involves the question of belligerent rights at sea. I do not propose to deal with that at length, because it is more intimately a mattor for the Imperial Parliament; but there exists an influential section of opinion in Great Britain which is fearful that the signing of this clause may prevent Britain from exercising some of her legitimate rights at sea in time of war. Apprehension has been expressed also in regard to other matters which chiefly concern Australia. I do not think that I am committing any indiscretion in mentioning this matter, because it has been already publicly referred to in England. During a debate in the House of Lords last year Lord Cecil, who had been a member of the Baldwin Government, and who was a strong advocate of the League of Nations, and the signing of this clause, quoted as follows from a Canadian authority - >The Premier of Canada **(Mr. King)** has revealed the truth that Canada and all the other dominions, with the exception of Australia, have been ready for years to sign the Optional Clause, which would hind them to abide by the results of the court's adjudications in such cases. The doubts which have been raised in Australia have had chiefly to do with questions of nationality and immigration. Some time ago there was a change of Government in Great Britain, and a government assumed office which was prepared to forgo what were possibly hypersensitive safeguards of the rights of belligerent nations at sea. There still remained the issue of the rights of Australia in regard to her internal juris- diction. It was decided to exclude from the jurisdiction of the court disputes in connexion with matters which by international law fall exclusively within the jurisdiction of the Commonwealth. It is generally believed that that condition amply safeguards Australia's position,, but international law is, in many respects, rather vague. This aspect of the matterwas discussed by **Dr. Burgin** during a debate in the House of Commons. **Dr. Burgin** is a lawyer, and a member of theGeneral Council of the League of Nations Union. He was supporting the signingof the clause by - Great Britain, but heindicated that there was a good deal of uncertainty regarding what was meant by matters within the internal jurisdiction of a State. He pointed out that the international court itself in the Tunisnationality case found as follows : - >The court finds that, in the present state of international law, questions of nationality are in' principle within the domestic jurisdiction, but it may well happen that in a matter which, like nationality, is not in principle international law, the right of a State to use its discretion may be restricted by obligations undertaken towards other States. To show how this may affect Australia, I quote the following which appeared in the *Sunday Pictorial,* on the 22nd June : - >The secretary of the Ayr branch of the British Preference League has received a letter from the Premier of Queensland **(Mr A. E. Moore)** stating that neither the State nor Federal Government has power to pass any law that would discriminate against Italians, as there is a treaty, between British and Italian Governments. That indicates the uncertainty that exists to-day; at the time, too, when we are taking this momentous step. I do not suggest that there is the least chance of our doing anything except to ratify the signature given last year, or that we can do anything except to try and cultivate in this country a greater sense of responsibility in regard to external risks. I well remember the visit to Australia, about two years ago, of a distinguished lecturer, whose mission was to formulate public opinion in support of the League of Nations.' In the course of one of his lectures he referred with regret to the fact that the British Empire had not signed the optional clause. He went on to point out that this question of belligerent rights and other matters affecting the Commonwealth were responsible for the reluctance of the British Empire to accept the optional clause, but said it was up to us to take a sporting risk. However small that sporting risk may be to-day, I for one, feel reluctant to take it, and I am thankful that, in addition to the reservations incorporated in the document of adherence, there is fixed a time limit of ten years, and that thereafter, upon due notice being given, we may withdraw our acceptance of the optional clause. It seems to me most unlikely that the issues to which I have alluded will be raised during the ten-year period. If they are, the way is open to us to escape from our difficulties. In the meantime, I hope that honorable members will take more interest in the external affairs of the Commonwealth, and thereby safeguard the racial ideals of the Commonwealth. Question resolved in the affirmative. Motions (by **Mr. Scullin** - movedon 30th May, *vide* page 2357) agreed to - >That this House approves the Protocol for the revision of the Statute of the Permanent Court of International Justice, dated Geneva, 14th September,1929. > >That this House approves the Protocol for the Accession of the United States of America to the Protocol of Signature of the Statute of the Permanent Court of International Justice, dated Geneva, 14th September, 1929. {: .page-start } page 3749 {:#debate-17} ### PAPERS The following papers were presented : - >Navigation Act - Regulations amended - Statutory Rules 1930, No. 59. > >Public Service Act - Regulationsamended - Statutory Rules 1930. No.69. House adjourned at 3.59 p.m.

Cite as: Australia, House of Representatives, Debates, 4 July 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19300704_reps_12_125/>.

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