House of Representatives
16 March 1933

13^th Parliament · 1^st Session

1. House of Representatives
2. 13^th Parliament
3. 1933

---

• QUESTION
  • ABSENCE OF MINISTERS
• AUSTRALIAN COMMONWEALTH LINE OF STEAMERS
• QUESTION
  • CIVIL AVIATION CONFERENCE
• QUESTION
  • COMMUNIST ACTIVITIES IN AUSTRALIA
• QUESTION
  • THE CENSUS
• QUESTION
  • TRADE WITH THE EAST
• QUESTION
  • PUBLIC SERVICE
• TARIFF BOARD REPORTS
  • Fruit Essences, Ethers, Aromas, Flavours, &c
  • Hats, Hoods, &c
• PETROL INDUSTRY
  • Formal Motion for Adjournment
• PAPERS
• QUESTION
  • TARIFF PROPOSALS (1932-1933.)
• POLICY ADOPTED
• TARIFF
  • Washington, Wednesday
• ADJOURNMENT
• ANSWERS TO QUESTIONS
  • Buffaloes on Melville Island
  • Galvanized Iron
  • Sales Tax

---

Mr. Speaker (Hon. G. H. Mackay) took the chair at 2.30 p.m., and read prayers.

page 302

QUESTION

ABSENCE OF MINISTERS

distributionofparliamentaryduties.

Mr LYONS:
Prime Minister · Wilmot · UAP

– by leave - As honorable members are aware, I shall he leaving this month to participate in the secession referendum campaign in Western Australia. During my absence, the Attorney-General (Mr. Latham)will lead this House, and in addition to the matters normally com- ing under the Prime Minister’s control, will reply to questions and deal with business affecting the treasury. The Assistant Treasurer (Senator Massy Greene), being in New Zealand on public business, the Vice-President of the Executive Council (Senator McLachlan) will attend to treasury matters until my return.

page 303

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Mr LYONS:
Prime Minister · Wilmot · UAP

– by leave - For a considerable time the Commonwealth Government, has been conducting negotiations in London to protect its interest in the balance of purchase money outstanding on the sale of the Commonwealth Line of Steamers to theWhite Star Line. The ships, consisting of five “ Bay “ and two “ Dale “ steamers, were sold in 1928 for £1,900,000, and the conditions of sale provided for a cash payment of £250,000 and ten annual instalments of £165,000. For the balance outstanding, the Commonwealth held a security giving a floating charge on the ships themselves. In August, 1931, when an instalment was due, the company was in difficulties, and the Scullin Government agreed to postpone the payment of interest until September, 1931, and of principal until December, 1931. The interest was paid, but the principal was not paid.

In the negotiations, the Government has been actuated by a desire to adopt the best method to protect the interest of’ the Commonwealth in respect of the indebtedness outstanding. In February, 1932, the financial adviser to the High Commissioner informed us that the “White Star Line was insolvent, and that if we forced the company into liquidation, there would be no assets available to us beyond our own ships. The position of the Commonwealth was further complicated by reason of the fact that the White Star Line was linked up with the Royal Mail Group of steamship companies, which became financially embarrassed. The affairs of this group were taken charge of by voting trustees, and a scheme of reconstruction involving a conditional moratorium by creditors for three years tothe end of December, 1934, was formulated.

The Commonwealth was faced with two practical alternatives -

1. To accept an offer of the voting trustees of the Royal Mail Group, conforming to the principles of the plan of reconstruction of that group, which would have involved a conditional moratorium for three years ; or
2. To exercise its rights under the debenture deed with a view to the resale or operation of the ships.

With regard to the first alternative, an important consideration was that the ships were already ten years eld, and at the end of three years their already reduced value would have further depreciated. The prospects of profits were uncertain, and, on the other hand, there was the danger of financial responsibility for possible losses. Moreover, the scheme was somewhat complex. After full consideration of all the factors, the Government decided not to accept the offer of the trustees, but to rely upon its rights under the debenture deed.

Consideration was then given to the practicability of the Commonwealth appointing a receiver to take possession of the ships with a view to their resale or operation. This would have involved legal procedure, and the receiver would have eventually been faced with the control of the ships, but with no organization for handling them, no connexion either in cargo trade or passenger service, and no loading rights. In such circumstances, the Commonwealth would have had to provide capital to set up an establishment, and would have been faced with almost certain losses in view of the condition of the shipping industry generally.

After much negotiation and careful consideration of the whole position, arrangements have now been made, whereby the ships consisting of five “Bay” boats and one “Dale” boat - the Ferndale having been lost in the meantime - have been sold to a new company for £500,000 sterling in cash, the purchase money to be paid to the Commonwealth and applied in reduction of the outstanding liability. The new company is to be formed by a group of British shipping companies, and Lord Essendon of Furness Withy and Company will be the chairman. It is anticipated that the formation of the company will be completed and the purchase money paid over to the Commonwealth within a month. The price to be paid by the new company represents the present full market value of the ships, and conforms to an independent valuation which was obtained by the Government last June.

Some time ago, the Ferndale was lost. As part of the negotiations, satisfactory arrangements were concluded for the insurance money, amounting to £205,128, to be paid to the Commonwealth in part settlement of the outstanding liability. This amount has already been received by the Commonwealth. Allowing for this payment and for the further payment of £500,000, the amount outstanding on principal account will be £614,872. Towards outstanding interest, £25,000 has been received, and the balance outstanding is now about £47,000. Under the arrangement which has been concluded, our rights to this balance against the “White Star Line will be fully preserved.

The Government has given much consideration to this subject, and after weighing all the facts, and taking into account the precarious position of shipping generally, which has suffered materially by the depression, it is convinced that the course it has followed is the wisest that could have been taken in order to protect the interest of the Commonwealth in respect of the outstanding indebtedness.

page 304

QUESTION

CIVIL AVIATION CONFERENCE

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– In regard to the Civil Aviation Conference to be held in Melbourne on Friday evening, I have received the following telegram from the President of the Rockhampton Aero Club

Kindly protest Queensland aero clubs’ behalf short notice to attend Civil Aviation Conference this Friday. ls the Assistant Minister for Defence aware of the short notice given to the aero clubs? The Rockhampton Aero Club was not notified until Tuesday,, and its delegate could not possibly be in Melbourne by Friday night. Will ..the Minister consider the’ postponement of the conference in order to afford aero clubs in North Queensland an opportunity to be represented!

Mr FRANCIS:
Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

– I shall sympathetically consider the request, and advise the honorable member later to-day.

page 304

QUESTION

COMMUNIST ACTIVITIES IN AUSTRALIA

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Has the attention of the Attorney-General been drawn to recent press reports of the arrest of British citizens in Russia by the. A.O.G.P.U., on what is alleged to be a trumped-up charge of sabotage? As the Soviet authorities have no compunction about arresting British citizens, on trumped-up charges, will the Attorney-General issue instructions that all Communist agitators who are sabotaging law and order in Australia shall be arrested with a view to deportation ?

Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · UAP

– The laws of Australia, which the honorable member assists in making, effectively prevent the arrest and detention of anybody in Australia on trumped-up charges, and we are to be congratulated on the difference in that respect between Australia and the country to which the question refers. I am, however, aware of some of the activities which have been mentioned. The difficulty is to secure actual evidence of breaches of the law as distinct from evidence of extremist statements, and there is no’ provision in the law which prevents even very extreme political propoganda from being indulged in in the Commonwealth. There are, however, provisions in the law which penalize incitement to revolution and the like, and if evidence of such statements is brought before the Government, action will be unhesitatingly and gladly taken.

page 304

QUESTION

THE CENSUS

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– There is a notice in to-day’s Gazette stating that examinations will be held in the capital cities for the purpose of selecting clerks to assist in the taking of the census, the wage offered being £3 14s. 7d. a week. Candidates will have to pay their own expenses to and from the capital cities. I ask the Prime Minister whether, in view of the low wage offered, arrangements could not be made to defray the expenses of successful candidates?

Mr LYONS:
UAP

– When it was first announced that examinations would be held for the selection of a staff to assist in taking the census, it was clearly stated in this House that the Government would not be prepared to pay the expenses of successful candidates from their homes to the capital cities.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– Will the Government give consideration to a suggestion that examinations for clerks should be held in large centres other than the capital cities?

Mr LYONS:

– It would be impossible to hold examinations in so many centres that inconvenience would not be caused to some. Therefore, it was decided that the examinations should be held only in the various capital cities, and we cannot go beyond that.

Mr MARTENS:
HERBERT, QUEENSLAND

– To-day I received a letter from the secretary of the Returned Sailors and Soldiers Imperial League of Australia at Townsville, signed by W. G. Starr-Nolan in which the following statement occurs: -

The General Secretary of the Returned Sailors and Soldiers Imperial League of Australia residing in Melbourne has made arrangements for the examinations to be held outside the capital cities.

I do not know whether the statement is true, but if it is, I suggest that examinations be held at Townsville, which is a large centre, 850 miles north of Brisbane.

Mr LYONS:

– I regret that I cannot accede to the honorable member’s request. I know how great is the distance that separates many important centres from the capital cities, but if we granted some requests, we should be immediately confronted with similar ones from other parts of the country. Honorable members must recognize that if examinations were held in the very distant centres, the cost to the successful candidates of travelling to Canberra would be prohibitve.

Mr MARTENS:

-Is it a fact, however, that arrangements have been made, as stated in the letter, for examinations to be held in centres other than capital cities ?

Mr LYONS:

– I have no knowledge of any such arrangements. I shall make inquiries; but I think it will be found that nothing of the sort has been done.

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– In view of the fact that married men will be given this work, and that they will probably have to maintain their families in the centre from which they come, does the Prime Minister think that the wage offered for the work is adequate?

Mr LYONS:

– I take it that the wages fixed are those applicable to work of this description in the Public Service. There is no justification for making any special allowance in this case.

page 305

QUESTION

TRADE WITH THE EAST

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Recently a conference was held in Sydney for the purpose of exploring avenues for the promotion of trade between Australia and the East. Will the Minister for Commerce state what is the Government’s policy in regard to this matter?

Mr STEWART:
Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– Arrangements are already in hand for the setting up of committees as recommended by the conference.

page 305

QUESTION

PUBLIC SERVICE

Cost of Inefficient Staffing

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Last year I asked several questions in regard to the falling off in the efficiency of the Commonwealth Public Service owing to no recruiting having taken place for fifteen years. I asked for information regarding the probable cost to the Commonwealth for which this lack of efficiency was responsible, the amount having been estimated at £100,000 a year, and the Prime Minister promised to obtain a report from the Public Service Commissioners. Will he state whether the report has yet come to hand ; and, if so, whether it will be tabled in the House or in the Library?

Mr LYONS:
UAP

-On two or three occasions the honorable member made inquiries on this subject, and I promised to obtain a report from the Public Service Commissioners. They have now prepared the report, and submitted proposals which are being considered by Cabinet. As soon as Cabinet has had time to consider the recommendations a statement will be made.

page 306

TARIFF BOARD REPORTS

Mr. WHITE laid on the Table reports and recommendations of the Tariff Board on the following subjects: -

Fruit Essences, Ethers, Aromas, Flavours, &c

Hats, Hoods, &c

Socks and Stockings tor human attire.

Ordered to be printed.

page 306

PETROL INDUSTRY

Formal Motion for Adjournment

Mr SPEAKER:

– I have received from the honorable member for West Sydney (Mr. Beasley) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The necessity for the appointment of a royal commission to inquire into the petrol industry in Australia.”

Five honorable members having risen in support of the motion,

Question proposed.

Mr BEASLEY:
West’ Sydney

– I have been prompted to ‘ move this motion because during the last few days I have had an opportunity to peruse the files in connexion with the termination of the agreement entered into between Messrs. Chambers and Treganowan, and the Commonwealth Government with the object of developing the Newnes shale oil deposits, ‘ It will be remembered that last year; after a good deal of publicity and a fanfare of many trumpets’, an agreement was entered into for the development of these deposits. The persons who undertook to do the work received a great deal of support from the Commonwealth. A dinner was given at the works to those interested, and numerous copies of the company’s prospectus were distributed, which indicated that the work, of developing these fields was “being undertaken with the strong support of the Commonwealth Government, and on the advice of its consultant, Sir Herbert Gepp. We were told that the developmental work would provide a good deal of employment, but nothing tangible has resulted. It is well, therefore, that the public should be informed of the facts of the situation, and particularly, of the reason why no practical results have followed the efforts to develop these leases. In the agreement that was’ drawn up- between the Commonwealth and Messrs. Chambers and Treganowan, it was -provided that within a month from the date of the granting of the leases, an order would be placed for a cracking plant to cost about £60,000, and that, after plans had been approved by the Government, work would be commenced on the construction of a tunnel at Capertee Valley. It was also provided in the agreement that a guarantee should be given by the English, Scottish and Australian Bank that these conditions would be complied with, in default of which- an amount of £5,000 should ‘be payable to the Commonwealth Government. This bond, it was further provided, “shall not be waived for any reason whatsoever, whether for granting of time or otherwise.” When this arrangement was made, we decided to watch proceedings carefully to ascertain in what way the Gorvernment would- test the bona fides of these persons. Whenever arrangement’s of this kind are made, people who are out of employment are attracted to the centre where work is likely to be obtainable. If such work is not put in hand, considerable inconvenience and, in many cases, a good deal of hardship is necessarily occasioned to the workers. We have been told often enough that this is a Government of business men, and that it has a greater business capacity than is usually found in governments. It is interesting, therefore, to consider how the Government handled this whole proposition. On the 31st of January, a document was’ signed by Senator McLachlan Robert Ambrose Treganowan, and C. W. Wren, attorney for the English, Scottish and Australian Bank Limited, setting out that Treganowan had failed to perform and’ observe the stipulations of an agreement made on the 12th of May, 1932 between ‘ “ the Commonwealth Government, the Shale Oil Development Committee Limited, and R. A. Treganowan and Cecil Osborne Chambers, to exploit the Newnes shale’ oil fields by the flotation of a company.”

Subsequently, Mr. Treganowan approached the Government and asked it to relieve .him of his liability to meet his bond. Iti a letter to the Government on this subject, he wrote as follows: -

The failure to carry out the terms of the agreement of the 12th May has been due ‘to” manycauses beyond my control, and I am now reluctantly compelled to appeal to you regarding my bond of£ 5,000, and expenses amounting to £3,000, and sincerely hope that same will receive your favorable consideration. In my efforts to establish the shale oil industry I have been confronted with problems which I did not contemplate, and in general the propagandahas been far too strong for me to combat. In addition to this, the action of the Shell Company in cutting off supplies of crude fuel oil has placed me in a very embarrassing position regarding my finance.

It is apparent that the main reason why Mr. Treganowan asked to be relieved of his liability to meet his bond was that the Shell Oil Company had cut off his supply of crude fuel oil, and so embarrassed his financial standing in Melbourne. This action indicates the power of the Shell Oil Company. Its power was exercised in spite of all that the Commonwealth Government could do to boost the efforts of Messrs. Chambers and Treganowan. It appears that the Shell Oil Company exercises a stronger influence than even the Government.

The Government has agreed to relieve Mr. Treganowan of his obligation to pay over £5,000; but it has stipulated that, upon the request being made to him by the Commonwealth Government, he shall invest £5,000 in the purchase of shares in any public company named by the Commonwealth Government for the purpose of exploiting the Newnes shale oil deposits. This is a nebulous sort of provision. It is left to the Commonwealth Government to name the company.

Mr Riley:

– What information is available about this company?

Mr BEASLEY:

– We know nothing at all about it. I have asked several questions on this subject in the House, but the Prime Minister (Mr. Lyons) has said, as he says regarding all matters of national importance designed to develop industry and exploit our national assets, that no information can be given, because it may prejudice the negotiations. We are, therefore, left to speculate as to what is actually going on.

It is just as well that the workers who are looking for employment in the Newnes district and elsewhere should know that the Shell Oil Company can exercise such a powerful influence. We have to assume that it has actually exercised this influence, for apparently the

Government has accepted as genuine Mr. Treganowan’s reason for requesting relief from the fulfilment of his bond. What chance is there of any new company or syndicate exploiting the Newnes proposition while such power of sabotage remains in the hands of the Shell Oil Company and the other major oil companies of Australia? It appears to me that the prospects of development are very black for Newnes. I cannot see any chance of anything effective being done. The Government has been in office for fourteen months. In the districts interested in the development of Newnes a good deal was made during the election campaign of the intention of the United Australia Party, if it were returned to power, to do something effective to develop this project; but I am quite satisfied that it is useless for us to hope that anything useful will be accomplished. Why is it that the Government has done nothing to curb the power of the Shell Oil Company, seeing that it has accepted Mr. Treganowan’s statement that this company was the main factor in preventing him from proceeding with his enterprise? This subject is of great importance, not only to our commercial interests, but also to our primary producers, who are using petrol very extensively at the moment. Do the major oil companies exercise the same influence over the Government that they are exerting over the smaller companies? There is something sinister about the whole position, and an explanation by the Government is called for. We claim that the situation calls for a most searching inquiry by a commission that would have means at its disposal to investigate all the ramifications of the major oil companies, both here and abroad, so that the public would know that while those companies continue to exercise their present power, there is no hope of the shale deposits being exploited. It has been freely stated that the influence of the Shell Oil Company in Roma was sufficient to prevent proper development there. It seems to me that this company has a finger in the pie in all these matters, and its influence is so great that it was able to prevent development at Newnes even prior to the last failure to re-open the field. Mr. John Fell, who had charge of the leases in 1927, closed down, and it was alleged that this was due to labour troubles; but these are usually mentioned by way of excuse in order to hoodwink the public as to the real facts. The view is commonly held that the Shell Oil Company, or the major oil companies, exercised influence at that stage, and prevented the development of the field. Now, however, we have a statement, for the first time in black and white, by Mr. Treganowan himself, as to the influence this company is able to wield.

Recently, Mr. John Gunn reported to the Government that he could make no headway whatever with the public inquiry into the price of petrol, unless the Government ordered the big oil companies to supply the information that was required. They refused to give access to their books and papers, and Mr. Gunn showed clearly that it was useless, in the circumstances, to proceed with the inquiry. When the honorable member for Maribyrnong (Mr- Fenton) was acting Prime Minister, he attempted to make certain inquiries into the price of petrol, and a parliamentary paper was published on the 22nd April, 1931, dealing with it. But it is clear from the outset that the figures obtained in this report do not provide reliable data, because the two departmental officers - one from the Trade and Customs Department and the other from the AttorneyGeneral’s Department - were refused access to the records in order to check the figures placed before them > by the major oil companies. Therefore, the action that I have suggested to-day is the only means whereby we can deal with the situation. At the present time we cannot present the facts of the position with any degree of reliability, since the permission sought by officers of the department to check the figures has been denied them. It was said at the outset that the inquiry was made in the offices of the major oil companies themselves. That may have been a convenient arrangement, but it was not an appropriate atmosphere for an inquiry into the affairs of companies concerning whose business methods there is considerable doubt.

The customs duty on petrol was increased from 4d. to 7d., as from the 10th July, 1930, and on the same date a primage duty of 2-Jd. per cent, ad valorem was introduced. The major oil companies did not increase the price of petrol immediately following the imposition of these duties; but. later they increased it by 2d. a gallon. The report of the departmental officers shows that, according to the records of the Shell company a balance of nearly 13,000,000 gallons, with duty paid at 4d. a gallon, was on hand on the 2nd October, when the selling price was increased by 2d. It is thus seen that the company had a vast quantity of petrol on hand; yet, under the pretence that the customs duty had been increased, it was able to rake off an increased price. It is also stated in the report that, at 2d. a. gallon, the additional return to the Shell Company, on account of this balance, amounted to close upon £106,000. The actual stock held by the Vacuum Oil Company could not be definitely stated; but it appeared to have been in the vicinity of 5,000,000 gallons, which, at 2d. a gallon, represented an extra profit of £41,667. We notice that the two major oil companies were able to fleece the public, and we claim that they have been doing so over a long period. On the occasion to which I have just referred, they got away with over £147,000 between them.

The report further points out that the Australian accounts of the Shell Company are branch records, foi* which returns are prepared in each State and forwarded to the Australian head office in Melbourne for transmission to London, where the head office of the company is situated, and where the main books of account are kept. This prevents ready access by any authority in this country to the books and documents which would enable the profits of the company to be ascertained. Its ramifications are worldwide. The Shell Oil Company not only supplies petrol in bulk in this country, but it is linked up with the Royal Dutch group and the Anglo-Saxon Petroleum Company of London, which supplies, in Australia, installations, depots, tanks, plant, machinery, &c. This monopoly has control of the transport and the fuel used in bringing oil in bulk from other parts of the world, so we see clearly that it is of such a character that it embraces almost every aspect of the industry, which enables it, by the juggling of its figures, to inflate its apparent costs under the heading of freight, &c., while all the time the public is being fleeced. It is interesting, also, to read from the report on page 5 the paragraph dealing with the freight charges as between Australia and Great Britain. The report states -

Over90 per cent. of the consignments of bulk petrol to the Shell Company in 1930 were received from Balik Papan, Borneo, the longest journey for a tanker to any one port in Australia being to Melbourne - a distance of 4,040 miles. The freights to all ports in Australia were the same, irrespective of distance.

The distance from the Gulf of Mexico to the United Kingdom is about 4,500 miles. The freight charged on the 4th December, 1930, from Balik Papan to Australian ports was 58s. 6d. per ton, while from the Gulf of Mexico to the United Kingdom it was 10s. per ton.

Mr Hughes:

– Do they carry it in their own bottoms?

Mr BEASLEY:

– Yes. The insurance wouldbe about the same in each case. Although this report was submitted to Parliament in 1931, the latest balancesheet of the Shell. Oil Company that was made available was that dated the 31st December, 1928. The report states -

The accounts disclope a net profit for the year of £978,431 (inclusive of a payment to the Asiatic Petroleum Company of £602,860), which is equal to 8.7 per cent. on turnover, and 48.9 per cent. on the paid-up capital of £2,000,000. This figure of £2,000,000, however, does not take into account advances, approximating £3,000,000, stated to have been made by the Anglo-Saxon Petroleum Company Limited, for the purpose of providing the installation, tanks, plant, &c.

Even in the presentation of this report the departmental officers were unable to obtain up-to-date figures. As I have said, they were shown only the balancesheets up to 1928. Since then much more prosperous years have been experienced by the company, and I am inclined to think that the actual profit on its turnover would be much more than 8.7 per cent.

The Vacuum Oil Company, from which further inquiries were made, refused to make available to the officers their trading and profit and loss accounts. They stated that the business was their own, and they were not prepared to disclose their exact position. The committee could not understand, nor could it see any reason for, the difference of1½d. a gallon between the distribution costs of the Vacuum Oil Company and the Shell Oil Company, respectively. In view of the circumstances that have been brought to light by this report, and the failure to prevent the exploitation of commercial and primary industries, definite action by the Government is imperative, so that these foreign companies may no longer be permitted to exploit our people.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– The question that has been raised by the honorable member for West Sydney (Mr. Beasley) is an important one, which probably engages the attention not only of all honorable members, but also of a very considerable section of the Australian people. Questions affecting the price of petrol and of other petroleum oil products are most complicated and difficult. As the honorable member has indicated, they in many instances are so interwoven with complex and intricate world arrangements that it is most difficult, indeed, sometimes impossible, to ascertain what would ordinarily be regarded as commercial facts.

Some time ago the Government announced that, on account of the importance of the cost of petrol and similar products to practically all industries in the Commonwealth, it was proposed to institute an inquiry into the matter. That inquiry was placed in what I venture to describe as the competent hands of Mr. John Gunn. On the 6th December last the Minister in Control of Developmentsent the following memorandum to the Director of the Development Branch: -

I desire to inform you that the Government has given consideration recently to the effect which the prices of petrol and oil have on the costs of production in primary industries, and it has been decided that von should be instructed to conduct an inquiry into the petrol and oil industry.

The inquiry should be confined to imported petrol and petroleum products, and should cover, as far as possible, the rami fi cations of the industry from the source of production to the consumer.

Particular attention should be directed to such matters as -

) The prices of petrol and other petroleum products and the various factors associated therewith;

The contributions of the industry to revenue ; and

Any other matters having a bearing upon current prices.

I suggest that the scope of that reference is wide, and that an inquiry under the heads set out ought to provide all the information needed for any purpose desired by this Parliament. Already there hadbeen an inquiry into the wool industry, those connected with the various sections of which had willingly agreed to make all material available for the committee that was appointed under the chairmanship of Mr. Gunn. The Government hoped that it would be found possible to adopt a similar procedure in the case of the petrol industry. The appointment of a royal commission was an obvious alternative course, to which I shall refer more particularly at a later stage. Meanwhile, I propose to relate what has happened with respect to the inquiry that the Government desired to have conducted by Mr. Gunn.

Mr. Gunn interviewed the leading oil companies, and also communicated with them by letter, and all of those whom he saw indicated their concurrence in the proposed procedure. A draft questionnaire was prepared, containing 33 questions under different heads, some general questions being subdivided into a number of specific questions. In the first instance, this questionnaire was handed to the Vacuum Oil Company, the Shell Oil Company, and the Commonwealth Oil Refineries Limited, in Melbourne. A copy of it was also given to a leading independent oil importer in Melbourne. A discussion took place upon the form of the questionnaire, and the representatives of the companies that I have named stated that they were willing to assist the inquiry in every possible way. They promised to peruse the draft questionnaire, and to inform Mr. Gunn of their views upon it. Mr. Gunn subsequently visited Sydney, and there interviewed representatives of the Atlantic Union Oil Company and the Texas Oil Company. Both of those companies expressed their willingness to assist the inquiry in every possible way, and agreed, as had the other companies, to make all their records available for inspection, if that were desired. As a result of these conferences, some amendments were made in the questionnaire, and. an amended questionnaire was sent to the companies thatI have named, as well as to Ramsay and Treganowan Limited, oil importers, of Melbourne, the Independent Oil Industries Company Limited, of Sydney, the United Oil Company Proprietary Limited, of Melbourne, Petrol Distributors Australia Proprietary Limited, of Melbourne, Socony Proprietary Limited, Melbourne, and the Pacific Oil Company. When these questionnaires were sent it was hoped, in fact it was expected, that replies to them would be received, bus instead of that happening the general manager of the Shell Company wrote on the 14th February, stating that careful consideration had been given to the letter accompanying the questionnaire, and to the questionnaire, and adding -

The oil companies generally, and perhaps my company more than others, have been the subject of constant mischievous insinuations by irresponsible people, and nothing would give me greater pleasure than to co-operate in an inquiry which would have the effect of silencing such ill-informed criticism, but judicious selection and distortion of the mass of information asked for in the questionnaire would present an opportunity for the furtherance of the campaign against us that I am not optimistic enough to expect, would be neglected. Little good can, therefore, be expected to accrue to my company from the proposed inquiries, and, in addition, the questionnaire asks for confidential information, the publication of which cannot fail to be helpful to our competitors, and therefore detrimental to us. As a responsible manager of a large business enterprise, I cannot possibly disclose such information.

I am sure you will agree with me that, under the circumstances, there is nothing to be gained by my accepting your invitation to attend the inquiry on the 27th of this month. It is unnecessary to say that no distrust of your capacity or fairness has influenced my refusal, and I hope the fact that I am acting through a sense of duty to my company, will free me from any possible charge of discourtesy to you or to the Federal Government.

A similar letter, although not in identical terms, was sent by the Vacuum Oil Company. It says -

At a comparatively recent date we were asked for and supplied information about our business to the Government, and we do not think that we should he called upon, at frequent intervals, to make public information which is valuable to our competitors, and, in their possession, embarrassing to us in the conduct of our business. In addition, the collection of the information asked for would mean the spending of a great deal of time and money.

We are not less, but no more willing than any other honest business, to have our affairs made public. We conduct our business on legitimate lines, keep our books and records according to recognized accounting methods, faithfully comply withall taxation and revenue acts, and act honestly and fairly with governments, customers and the public, but we do all this in the course of a highly competitive business.

Under the circumstances, we have been forced to the conclusion that we should not be justified in submitting to you the information requested.

There is a letter from the Commonwealth Oil Refineries which also refuses to supply certain of the information asked for. It reads -

I have been giving further consideration to your questionnaire and, as the terms of reference clearly limit the inquiry to imported petrol and petroleum products, I regret that I must respectfully decline to answer those of your questions which do not relate to such imported products. This will apply to -

Then are set out some nine or ten questions. The lettercontinues -

With regard to the penultimate paragraph of your letter of the 9th inst., a draft of the evidence proposed to be given by me will be placed before my board on Monday next, and 1 shall be pleased, as soon as possible thereafter, to forward you a copy of such evidence, if any, as is approved by the board for submission to you, provided I. can have your assurance that any evidence which I desire to submit in camera will be so heard, and will be treated as strictly confidential.

There are also some objections that it is impossible to go back for five years and similar periods, as a number of the companies are asked to do in the questionnaire. The companies first agreed that they would facilitate the inquiry in every possible way, provided that it was held by Mr. Gunn in much the same manner as the wool inquiry was conducted. Such an inquiry does not call for evidence upon oath, nor does it afford remedies against witnesses who may decline to answer questions. I need hardly say that the Government would go on with such an inquiry only so long as it was quite satisfied that a full disclosure of all relevant material would be the result. Now the companies to which I have referred have stated that they are not prepared to co-operate in the manner proposed.

The Government is going on with the inquiry. Only to-day I have been personally engaged in settling the terms of reference to a royal commission for the purpose of making a full inquiry into the matters which I have mentioned in general terms. Honorable members are possibly aware that there has been a considerable amount of legal discussion concerning the validity of the Commonwealth Royal Commissions Act. I need not delay the House by relating the history and fate of that act before the High Court and Privy Council respectively.

If the companies are prepared to retire from the stand which they have recently adopted, and the Government is satisfied that an inquiry before. Mr. Gunn upon the basis that I have mentioned willbe a thorough one, it does not desire to incur the not inconsiderable expense of establishing a royal commission. Unless the Government is quite satisfied on those points, it will proceed with the appointment of a royal commission, the precise termsof reference of which it is proposed to settle as soon as possible, for there are some difficult legal problems involved. The commission will consist of persons who, when their names are announced, will be recognized as being fully qualified to inquire into such a difficult and intricate subject. Provisional arrangements have been made with certain gentlemen to act as members of the commission.

Mr Scullin:

– Has the AttorneyGeneral considered a joint commission, in conjunction with the States?

Mr LATHAM:

– That was the procedure adopted in connexion with an. inquiry into the coal industry, at my suggestion, and it was most successful in preventing difficulties being raised which mighthave caused, considerable trouble. Such an alternative has notbeen forgotten in the present instance. However, it is hoped that those concerned will recognize that the means exist for obtaining the information which Parliament and the Government desire, and that they will not make it necessary for the Government to associate a State Government with aninquiry. If that shouldbecome necessary, a request willbe made to a State Government to join with the Commonwealth in the appointment of a commission. As considerable delay would ensue if this Government were to postpone action until agreement on all matters had been reached with the State

Government regarding the personnel of the commission and its terms of reference, the Government proposes toappoint a royal commission in the contingency which I have mentioned of those concerned not retiring from the position which they have taken up.

The honorable member for West Sydney (Mr. Beasley) referred particularly to matters affecting the Newnes deposit, and the bond which was given by Messrs. Ramsay and Treganowan. I conceive that the real object of the honorable member is to raise the general question of a petrol inquiry, and that that matter was mentioned only incidentally. The honorable member said that, to prevent Messrs. Ramsay and Treganowan from assisting in the development of Newnes, they had, in effect, been put out of business by the Shell Oil Company withholding supplies. I am told that information is in the hands of the Government - and in this connexion, I do not speak with the precise knowledge that I have on the general subject - which indicates that Messrs. Ramsay and Treganowan were notified long before the Newnes question arose, with respect to the proposed cutting off of supplies. If that is so, there is no foundation for the statement that the action taken was for the purpose of preventing them from engaging in operations at Newnes. The Prime Minister (Mr. Lyons) is more closely acquainted with these aspects of this matter than I am, and he will explain them to the House. I hope that I have answered, to the satisfaction of the House, the major question raised by the honorable member.

Mr LYONS:
Prime Minister · Wilmot · UAP

– There is no need for me to touch on the general question which has been raised, since it has been so ably dealt with by the right honorable the AttorneyGeneral (Mr. Latham).

The honorable member for West Sydney (Mr. Beasley) suggested that the main reason for the failure of Messrs Chambers and Treganowan to complete their negotiations for the formation of a company to, develop the Newnes deposits was the influence of the major oil companies.

Mr Beasley:

– That is what they themselves have said.

Mr LYONS:

– The honorable member will recollect that I had sympathy with this smaller company, because I knew what Mr. Chambers had attempted in connexion with the shale oil deposits of Tasmania, and was convinced that Mr. Treganowan was making a bona fide effort to develop Newnes. That they failed was not entirely due to lack of supplies, although that probably had something to do with Mr. Treganowan’s inability to meet the financial situation which arose; they failed because of their inability to raise the necessary capital to enable them to proceed. As the AttorneyGeneral has pointed out, the oil company from which the smallercompany was obtaining supplies has made clear the reason for its refusal to make available supplies of crude oil to Messrs. Chambers and Treganowan for their Newnes enterprise. On the 26th October, 1932, the Shell Oil Company wrote to the Government stating, inter alia -

Some years ago, Messrs Ramsay and Treganowan -

They were operating in Melbourne - it was Messrs Chambers and Treganowan who were working at Newnes - derided that they would attempt to meet this special fuel requirement (gas oil), and they came to us for supplies of crude oil from which they could distil gas oil. We made a contract with them, as we considered this a more economical method than importing and storing the then very limited requirements of this special fuel. Some two years ago-

Long before Mr. Treganowan dreamed of entering into the Newnes operations - we decided that the time had come when we would have seriously to consider marketing gas oil ourselves, as it was apparent that the manufacturers were creating a real demand for this new type of fuel, and we therefore gave Messrs Ramsay and Treganowan notice of termination of their contract. The depression intervened, however, and we hesitated further in incurring these new expenses; therefore, at Messrs Ramsay and Treganowan’s request, we have from time to time sold them further quantities of crude oil for the production of gas oil, but we have all along explained to them that they could not count on us for the continuity of supplies, and, of course, they have been in no way debarred from seeking supplies in other quarters. We have now definitely decided that we must market gas oil ourselves in Victoria to meet the growing demand, and it stands to reason that we cannot do this and, at. the same time, sell crude oil to a competitor to enable him to produce gas oil to compete with ourselves.

I am not attempting to defend the Shell Oil Company; but I want to make the position clear, since the honorable member has expressed his belief that Messrs. Chambers and Treganowan had had their supplies of crude oil cut off because of their having engaged in operations at Newnes. The company’s letter is definite that two years earlier it had notified Messrs. Chambers and Treganowan that they could not depend on continuous supplies of crude oil.

Mr Rosevear:

– Does not that letter indicate that the Shell Oil Company gave Messrs. Chambers and Treganowan to understand all along that they were in its grip?

Mr LYONS:

– Although the Shell Company continued to supply them with crude oil, it had told them that, at the right time, the company itself would enter the gas oil trade, and would not make further supplies of crude oil available. I believe that the withdrawal of those supplies affected Mr. Treganowan’s financial ability to play his part in the development of Newnes, and that to that extent he suffered. Nevertheless, the fact remains that long before Mr. Treganowan began operating at Newnes, the company had told him and his partner that they could not rely on supplies of crude oil.

Mr Beasley:

– Mr. Treganowan says that the propaganda was far too strong for him.

Mr LYONS:

– I know nothing of that.

When Mr. Treganowan found himself unable to proceed with the formation of the new company and the developmentof the Newnes deposits, he mentioned his difficulty to the Government. Believing that he was genuinely desirous of developing those areas, the Government, notwithstanding that it had legal control of his £5,000, felt that it would not be justified in estreating that money. Mr. Treganowan still desires to be associated with the development of Newnes; he is prepared to take up shares to the value of £5,000 in any bona fide company which may be formed to develop that area. The Government has never really held his £5,000; it has the guarantee of the bank and of Mr. Treganowan that the amount will be made available when it is satisfied that a bona fide company has been formed for the development of Newnes. I hope that the whole position is now clear to honorable members. The Attorney-General has already explained the position in relation to the major question raised.

Mr Beasley:

– That question is fundamental.

Mr LYONS:

– Yes. My colleague has madethe company’s position clear, and I hope that honorable members will support the attitude adopted by the Government.

Mr Riley:

– What information has the Government relating to the formation of a new company ?

Mr LYONS:

– A committee has been set up to carry out certain investigations in connexion with some of the problems which have arisen because of the failure of the previous company. If the investigation proves satisfactory, and a company is formed to operate Newnes, the Commonwealth and New South Wales are each prepared to make available by way of loan to the company the difference between the amount provided for investigations and £40,000. In effect, subject to certain conditions, the Governments have undertaken to assist the development of Newnes to the extent of £80,000. Subject to the results of investigations proving satisfactory, the Governments have undertaken to encourage the forma tion of a public company, and certain conditions are set out in the agreement defining the attitude of the Governments towards a company which may be formed. The chief of these are-

That provision shall be made that the company shall always be and remain an independent Australian business.

That moneys advanced shall carry interest at the rate of 4 per cent.

That repayment of principal shall commence at the latest upon the termination of the company’s third complete year, after which a minimum sum of £8,000 per annum shall be repaid.

The object, of course,is to provide information that will enable the company to be formed.

Mr SPEAKER:

– The right honorable member’s time has expired.

Mr BLAKELEY:
Darling

– I am sure that honorable members and the people generally, particularly the users of petrol and oils, will be pleased to learn that the Government intends to appoint a royal commission for the purpose of inquiring into the petrol industry. We. in Australia have suffered for a number of years because of the rapacity and greed of a huge combination of companies which has bled the users of fuel for internal combustion engines to the extent of many millions of pounds. I do not say that the whole of the operations pf these companies are unjustified, but certainly the manner in which they have established their buildings and plants is an excellent illustration of the incompetency and the absolute madness of capitalism. These huge organizations have had tanks and loop lines constructed at great expense, and that plant has been duplicated probably by two or three other companies. They have spent millions of pounds on the purchase of motor, lorries,’ tanks, buildings and railways, all for the purpose of taking toll of the users of their commodities. No matter how small a town may be, if, has one or two, or even four, of these establishments run by similar organizations. When one oil company installs a petrol pump in an up-to-date modern garage, that is the immediate signal for other companies to follow its lead, and to erect similar, if not better, installations. The people of Australia have had to pay dearly for this wasteful and extravagant expenditure. It is capitalism gone mad. Of course, the supporters of the Government may hold views different from mine, but I call- this duplication of installation absolute madness, and I suggest that it has been responsible, to some extent, for the ->resent financial difficulty in which we find ourselves. While we might expect foreign organizations such as the Shell, Vacuum and Texaco companies to bleed the users of petrol in this country, we do not expect a company in which this Government and country holds, a majority of the share capital, to take the same line of action. The Anglo-Persian Oil Company, in which Australia holds a majority of the share capital, controls exclusively the policy of the Commonwealth Oil Refineries limited. I was informed by the then manager of the Commonwealth Oil Refineries Limited, that a gentleman’s agreement exists between the Anglo-Persian Oil Company and the rest,t of the petrol organizations. That statement was made to me in the presence of other members of the Scullin Government who were at the time making in.quiries respecting this subject. The manager of the Commonwealth Oil Refineries Limited, when taxed with his statement at a later stage, denied that he had made it. Yet there did, and still does; exist a gentleman’s agreement between the foreign companies and the Anglo-Persian Oil Company. This royal commission, when appointed, should investigate the ramifications of that organization and its relations with the foreign companies. The Attorney-General (Mr. Latham) lias referred to the fear which many of us have that if twenty royal commissions were appointed, they could do very little so far as the oil combines are concerned, and because of that, and because of the great likelihood of discovering oil in Australia, I urge the Government, not only to appoint the royal commission, but also to expedite the discovery of oil in Australia, with the object of making us independent of the company in which we hold a majority of the share capital and the foreign organizations, whether they be Dutch or American. There are excellent chances of finding oil in Australia. Oil has been found in New Guinea, but at present not in commercial quantities, but I anticipate that in the course of a few months there will be shipments of oil from that country. There is an oil-field in Queensland, but it is not yet upon a commercial basis. There is also an oil-field at Lakes Entrance, in Victoria, and traces of oil have been, obtained from the town bore of Longreach, in Queeusland. In various parts of Queensland’ structures have been found which give excellent indications of major structures and oil-fields. Geophysical surveys have taken place in various parts of Australia. In the Gippsland area magnetometric surveys indicate that there is a formation underneath a great modern surface deposit. A number of companies are operating in and about Lakes Entrance and the Gippsland Basin. The Goon Nure bore is down 2,000 feet, and it is anticipated that there will soon be more evidence of oil in that vicinity. Knight’s dome, at Mount Gambier, is down 1,600 or 1,700 feet.

This bore is down in formation which, in the opinion of Dr. Woolnough, would be bored if the field were in the United States of America or any other country in which oil has been found. Aerial surveys, inaugurated .by the Scullin Government, which I had the honour to carry out in conjunction with Dr. Woolnough, have made important additions to the available, evidence as to potential oil supplies in Australia. When

Dr. Woolnough first advocated an aerial survey of likely areas, he was scoffed at by laymen, and, in some instances, by fellow geologists. His critics have since been forced to admit that the photographs obtained by Dr. Woolnough in an air force aeroplane are exceedingly valuable. Although he had had no previous experience, other than knowledge gained during his recent visit to the United States of America, the photographs reflect the greatest credit upon Dr. Woolnough and the air force pilots and photographers who carried out this important’ scientific work. These photographs disclose the existence of important oil structures or domes in Queensland and elsewhere; but perhaps the most important results relate to the north-west of Western Australia, where fifteen perfect domes or structures were located. The Government should give greater encouragement to the various companies which, are spending large sums of money in attempts to discover oil in Australia

Mr SPEAKER:

– The honorable member’s time has expired.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I commend the honorable member for West Sydney (Mr. Beasley) for his solicitude for the welfare of the users of petrol in Australia, but his references to the Newnes project were most untimely, because a company is at present being formed for the purpose of developing the Newnes field, and I am afraid that his observations this afternoon may damage its prospects of success when it makes an appeal for public subscriptions.

Mr Ward:

– What information has the honorable member on the subject?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Those interested in the scheme are anxious to develop the Newnes field, as are the people of Newnes and Lithgow, and I have no doubt will persevere and succeed, despite the / efforts of the honorable member for East Sydney (Mr. Ward) to obstruct it. His disparaging ‘ references to the scheme at a time like this are certainly not in the best interests of this country or of the development of this great national asset.

The more recent history of the Newnes shale oil-field may be said to be the history of that unfortunate body known as the Shale Oil Development Committee, appointed in 1931 by the Scullin Government. This committee, I understand, is now defunct.

Mr James:

– It was forced into liquidation by this Government.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The committee was set up in April, 1931. Doubtless the scheme which the Government had in mind was a most excellent one, and, had the work of the committee been carried out along the lines contemplated by the Government, probably Newnes would today be providing employment for hundreds of men. But the Government made a most unhappy choice in its appointees. Had men of ‘ the requisite ability been appointed, the (results would have been correspondingly better. The original idea was to discover the ‘best means for the exploitation of the field in the interests of the Commonwealth. To this end the Scullin Administration made a very generous grant, and, in the course of twelve months, the committee spent about £30,000; but, unfortunately, it was not working along economic and commercial lines. For example, the cost of delivering shale in the bins ready for retorting was approximately £2 a ton, as against 12s. 6d. to 17s. 6d. a ton which, in the opinion of competent authorities, is the maximum price at which the industry can be carried on successfully. Subsequently, and following inquiries made by the Minister controlling Development (Senator McLachlan), it was discovered that many tons of shale, which had been paid for, had never been delivered to the bins, and that a man named Miller who, I understand, was in charge of the works, had ‘been indulging in practices which the Minister regarded as highly questionable. Generally speaking, the management was extremely lax, with the result that the scheme was not developed as originally contemplated.

The honorable member for West Sydney has made some reference to labour troubles. I am well aware that certain people have suggested that labour troubles made the work of the Shale Oil Development Committee impossible. I do not hold with that view. In my opinion, the trouble lay entirely with the management. The Shale Oil Development Committee, made no proper survey of the field, and, as far as we are aware, it carried on no research work into the possibilities of the industry. It simply spent the money made available to it by the Scullin administration in putting the plant and rolling-stock in order, but made no attempt whatever to carry out the intentions of the Government regarding this field, or to inquire as to the probable return of petrol from crude oil under modern cracking conditions. It led the public to believe that the return would be exceptionally high; but upon inquiry by the present Minister, at the instance of interested persons and would-be investors, it was discovered that there was no foundation whatever for the statement; that as a matter of fact, no crude oil had been despatched overseas for treatment by a modern cracking plant. The engineering firm of Dubbs, in the United States of America - the firm which, we were told, had carried out investigations on Newnes crude oil- denied that it had made proper tests, and declined to give any guarantee as to the return of petrol from the Newnes shale. The Shale Oil Development Committee spent about £14,000 in repairing the railway line from Newnes Junction down to Newnes Valley, a distance of about 30 miles; and honorable members will gain some idea of the way in which that work was carried out when I tell them that, on the day fixed for the handing over of Newnes by the Minister in control of Development to Messrs. Treganowan and Chambers, the party which attended the ceremony, consisting of prominent citizens, prospective investors and other interested people, was delayed for 5-J hours on a lonely part of the mountains owing to a breakdown of the train.

That is briefly the history of the Shale Oil Development Committee. The present Commonwealth Government was obliged to take over the responsibility for the development of Newnes shortly after it assumed office. Tenders were invited ; five were received, and on the recommendation and with the full concurrence of the Shale Oil Development Committee, Messrs. Treganowan and Chambers were entrusted with the task of developing the field. It appears to me that this firm had not the necessary capital for developing the field or any prospect of obtaining it. The unfortunate publicity which had been given to the field by the committee, the damaging statements made by certain misguided politicians and the shadow cast by the Lang Government upon enterprise had left it in ill odour, with the result that when Messrs. Treganowan and Chambers appealed to the public to subscribe £300,000 for the development of the field they received only £4,500, which was totally inadequate. That is the true explanation of the failure of Messrs. Treganowan and Chambers. They were therefore obliged to abandon the undertaking. The Prime Minister has dealt with the £5,000 bond, and honorable members will realize that at least full satisfaction has been given in respect of that.

Mr SPEAKER:

– Order ! The honorable member’s time has expired.

Mr JAMES:
Hunter

– I am very pleased that the Government has agreed to appoint a royal commission to inquire into the important subject of shale oil. I suggest that the scope of the inquiry be broadened to include the extraction of oil from coal, and the possibilities of developing the Baerami field. The Scullin Government made available £100,000 for the repatriation of surplus northern miners after the lockout in the coal industry in 1929-30. The expenditure of that money has been confined to Newnes without any northern miners having been placed there. Inquiries should be made as to the reason why Baerami has not received at least the same attention as Newnes. The Baerami scam of shale is of high grade, and analytical tests show that the oil content is similar to that of the Newnes shale. Furthermore, the field is wider. I understand that £14,000 would have to be expended at Newnes to drive a tunnel through a mountain in order to gain access to the seam in the Capertee Valley. No “ dead “ work of this character would be needed at Baerami. The principals of the Baerami company have stated in a letter dated 13th March, that they are prepared to expend £25,000 on the field on condition that such expenditure is subsidized £1 for £1 by the Government. Already £30,000 has been disbursed at Newnes, and the expenditure of a further £40,000 by the Commonwealth and New South Wales Governments is proposed. Yet no assistance is to be given to Baerami, and I ask why?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The honorable member agreed to the Newnes proposal at a deputation.

Mr SPEAKER:

– Order ! The honorable member for Macquarie must not interrupt.

Mr JAMES:

– The honorable member for Macquarie stated in Lithgow and in Newnes that the shale is costing £2 delivered into the bins, whereas the cost should be only 12s. 6d. a ton. I advise him to tell the miners of Newnes that he expects the whole of the underground work to be done and the shale delivered into the bins for 12s. 6d. a ton. If the honorable member is serious in that contention, he is a slave driver who is not worthy to represent the miners in Macquarie. There is a widespread suspicion in the minds of the Australian people that the oil trusts are blocking every project for the development of oil in Australia. Apparently they are determined to retain for themselves the Australian market, from which they extract approximately £20,000,000 annually. Whenever any proposal is put forward for the development of oil resources in this country, they buy up the leases, or intervene in some other way. These activities are not only confined to the American oil trusts and the Anglo-Persian Oil Company; the German dye trust, which is supposed to be interested in the extraction of oil from coal, is equally alert. A lease for this purpose was taken up by this trust two years ago, but nothing has been done with it. Australian citizens, who have proved that they can “ deliver the goods “ have not received sympathy from any Federal Government in recent years. The Lyons Brothers, in particular, have carried out a number of successful tests.

Mr HUGHES:
North Sydney

– I am sure that honorable members will hail with great satisfaction the AttorneyGeneral’s announcement of the intention of the Government to appoint a royal commission to inquire into the oil industry. We all hope that the inquiry will be thorough, and that the position will be explored from end to end. There is something about the oil industry not only in Australia, but in every other country, which has defied the efforts of peoples and of governments to control it. Oil has actually been the cause of wars. As the honorable member for West Sydney (Mr. Beasley) pointed out the oil trusts have exploited the public in Australia in a way that appears on the face of it wholly unwarranted, and, indeed, outrageous. In the New York Trade Bulletin of November, 1932, the average price of gasoline at the refineries is quoted at 5 cents a gallon. After making all allowance for the difference between the American and the Imperial gallon, and for the costs of distribution, freight and insurance, there remains between the American price and the retail price in Australia a wide and, to my mind, unbridgeable gap. Reference hasbeen made to the Commonwealth Oil Refineries. The honorable member for Darling (Mr. Blakeley), in characteristic fashion, attacked me, and said that the oil agreement which established this company was a gross betrayal of the people of Australia. That statement was totally unwarranted. The honorable member must know that the company was formed to protect the interests of the Australian consumers. While he was a member of the Scullin Ministry this matter came before the chamber on a tariff item in October, 1931. The present PostmasterGeneral (Mr. Parkhill), with characteristic indignation, denounced the exploitation by the oil companies.I followed in much milder vein, and was assailed by members of the then Administration ; upon my shoulders was sought to be placed the responsibility for the price of oil in Australia, because the Commonwealth Oil Refineries Limited had, as it were, taken from the Government those plenary powers to rectify all abuses which we thought it possessed. When I protested against this baseless imputation, I was again ruthlessly assailed, and, in self-defence, I read the agreement between the Commonwealth and the Anglo-Persian Oil Company. I pointed out that the Commonwealth Government always had the power to check these abuses. Clause 14 of the schedule of the Oil Agreement Act of 1920 provides -

In order to ensure the full success and development of the oil refining industry in Australia, the Commonwealth will, so long as the prices chargedby the refinery company for products of refining are consideredby the Commonwealth fair and reasonable, but not further or otherwise -

exercise or cause to be exercised such statutory and administrative powers as it deems advisable to prevent dumping and unfair competition by importers of refined oil from other countries ;

refund to the refinery company, any customs duty paid by the refinery company upon the importation into Australia of crude mineral oil purchased from the oil company and refined in Australia by the refinery company; and

cause to be introduced into the Parliament of the Commonwealth and supported as a government measure, a bill providing for the imposition of customs duties on crude mineral oil whenever in its opinion such action is necessary or advisable to prevent unfair competition with the products of crude oil refined in Australia by the refinery company.

There is the weapon, potent and ready to the hands of the Government,by which the public can be protected, and fair and reasonable prices ensured. We are told that there is a gentleman’s agreement between the Commonwealth Oil Refineries Limited, which was established for the express purpose of protecting the interests of consumers in Australia, and the two companies which it was brought into existence to control and check. Yet nobody does anything. The last Administration was grossly to blame, in that it did not, in the face of the clear evidence placed before it, endeavour to remedy the position. It is true, as the honorable member for West Sydney (Mr. Beasley) said, that a committee of inquiry was appointed;but it did not probe very deeply, and did not obtain the information upon which we can formulate a charge. But we do not need an inquiry to inform us that there is a prima facie case. We know so much already. What we require are the whole of the facts, and to obtain these we must investigate all the ramifications of the industry. This is the petrol age. The honorable member for Macquarie (Mr. John Lawson) has brought under notice the position at Newnes. The honorable member for Hunter (Mr. James), before his premature departure, informed us of the possibility of exploiting our coal-fields. We should explore every avenue. I agree with the honorable member for Darling (Mr. Blakeley) that there is good reason to believe that oil in commercial quantities exists in Australia, and that we may be able to use it quite soon; but, at any rate, we have an abundance of shale and an abundance of coal. There is now a welltried process of extracting oil from coal by low temperature distillation, which would enable us to obtain all, or nearly all, the oil we need, and provide employment for coal-miners who are now idle. It is the bounden duty of the Government to inquire into this aspect of the matter. We hear from honorable members in the corner about the disability of the primary producers.. Here is one glaring disability under which they suffer. Let us grapple with it, and at once.

Mr RILEY:
Cook

.- I support the request for the appointment of a royal commission to inquire into the operations of the major oil companies, and also to review the history of the Newnes shale proposition, and its possibilities in the future. Mention should also be made in the terms of reference to the failure of the Commonwealth Oil Refineries Limited, to protect the consumers of oil in Australia. I regret that fourteen or more weeks’ delay has taken place since the matter was referred to the Commonwealth adviser on development, Mr. John Gunn. All that has been done in the meantime is for a questionnaire to be drawn up, and for the oil companies to apprise the Government that they do not propose to make available information of a confidential character. The Government must surely consist of a set of innocents if they imagine that they will obtain confidential information from the companies merely by setting up a committee of inquiry, and asking for it. They are not likely, for instance, to get the same full and satisfactory information in that way as was obtained in regard to the wool industry by the committee set up to investigate it. The Attorney-General (Mr. Latham) and the Prime Minister (Mr. Lyons) ought to know that the wealthy oil companies are the last organizations in the country likely to divulge confidential information regarding profits, &c, without being compelled to do so.

The delays that have taken place regarding the petrol inquiry, and the development of Newnes, make me come to the conclusion that there is some sinister influence at work to prevent the development of our shale oil fields, and the establishment of an industry for the extraction of oil from coal. The Prime Minister made some reference - whether it can be regarded as official or not I do not know- to a proposal to place the imprimatur of,, the Commonwealth Government on some new company formed to exploit the Newnes deposits. An official statement should be made as to the Government’s intentions in regard to this matter, and we should be informed of the identity of those associated with the new enterprise.

The Attorney-General stated that provisional arrangements had been made for certain gentlemen to act on a royal commission. If they are members of the judiciary or legal men, I have no suggestion to make, but’’ if it is proposed to appoint recognized, accountants and engineers, I hope the Government will appoint persons who are not at present associated.’ with the joint committee investigating the Newnes field. The :refusal of the Shell Oil’ Company to make available information to Mr. Treganowan may be the reason for the failure to obtain capital for the Newnes venture. I am not satisfied with the way that the firm attempted to carry out ‘its obligations in regard to Newnes.

The Commonwealth Oil Refineries Limited has fallen down on its job of protecting Australian’ consumers against exploitation. The whole arrangement, since its inception, has been wrong. The company has appointed Dalgety and Company as its’ agent in some of the States, notably South Australia and’ Queensland, and the same firm has been ^appointed distributing agent for country- districts in New South Wales. ‘Such an arrangement is absurd. The unfortunate users of petrol, including industrial users, are at the mercy of the oil companies. The Commonwealth Oil Refineries Limited has not adopted, the aggressive and progressive policy which we might have expected^ Instead of taking the lead, it has ‘been content, meekly aud miserably, to follow behind the major oil companies. Petrol users in country districts are called upon to pay from 2s. 3d. to 2s. 9d. a gallon, which is out of all proportion to the landed cost of petrol. The information given to us by the right honorable member for North Sydney (Mr. Hughes) regarding the cost of petrol overseas shows that there is a serious gap between overseas and Australian prices which must be bridged. We should insist on a-n explanation from the oil companies. It cannot be seriously argued that freight and insurance charges account for the difference in prices in the United States of America and Australia. - Petrol is brought to this country in huge tankers with a capacity exceeding 4,000,000 gallons. If we assess freight and insurance charges at Id. a gallon, it would amount to £17,000 on One cargo of oil. The honorable member for West Sydney referred to the practice of the major oil companies in furnishing, from time to time, financial statements to their offices overseas. I suggest that this procedure is designed to evade’ income tax in Australia. A royal commission appointed to inquire into petrol prices should have associated with it a high officer of the Commonwealth Income Tax Department. I am confident that some of the. oil companies are “defrauding the Commonwealth in the matter of taxation. I am glad to associate myself with the honorable member for West Sydney in this matter, and compliment him on ‘bringing it forward.

Mr GARDNER:
Robertson

.- The honorable member for Hunter (Mr. James) referred to-day to the shale oil deposits at Baerami, which happen to be situated in my electorate. I followed the honorable member’s remarks closely, and I feel that I cannot let the occasion pass without acquainting my constituents with my attitude and wishes. I have visited this field, and have it on the best authority that it is larger than any other in the Commonwealth, and consists of miles and miles of deposits of considerable depth, and great richness. Two companies were at first engaged in the development of the field. £5,000 has been spent on the field out of the fund of £100,000 granted for repatriation of excess miners. I was greatly impressed with the excellent work which hadbeen done in tunnelling and other initial operation, and I am anxious to see the field exploited. The enterprise is deserving of success, and men of the right type are engaged in it. Unfortunately, there was some trouble at first in regard to the two companies, but efforts to overcome the difficulty were made by the Miners Federation, by myself, and others, with the result that a better feeling has been engendered. Recently, I received at my home a deputation from the Miners Federation and others, and was informed that a certain amount of private capital is available if the Government would grant a subsidy of £20,000 on a pound for pound basis. I recognize that, up to the present, the Government has had an indirect interest in the Newnes field, and it was, therefore, only reasonable that it should concentrate on that field with the idea of learning whether it could be developed commercially, and whether private capital couldbe attracted. Neither the Newnes proposition, as it is at present situated, nor the Baerami deposit can be exploited unless private capital is subscribed. The Minister has wisely adopted that attitude. I regret that my friend the honorable member for Hunter (Mr. James), is temporarily absent from the chamber, for I wished to assure him that I have been informed on reliable authority that the Miners Federation, taking into consideration all the circumstances in regards to Newnes, believe that it is reasonable and wise to defer subsidizing any further shale propositions until the Newnes leases have been tested.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That was agreed to by all the leaders of the Miners Federation.

Mr GARDNER:

– Although the Baerami deposits are in my electorate, I believe that the right course has been adopted by the Minister. When I received a deputation on this subject recently, and was told that it was hoped that from £20,000 to £25,000 of capital could be obtained in a very little while if the Government would only subsidize it to the same extent as it has subsidized the £100,000, namely, on a £1 for £1 basis on the wages spent, I was rather dubious, though I hoped that the statement was accurate. Inquiries have since elicited that the capital is, unfortunately, not forthcoming. I am prepared, like the honorable member for Macquarie (Mr. John Lawson) and the honorable member for Hunter, though my political views and the latter’s are as wide apart as the poles, to give my strong support to any promising proposition for the development of Baerami ; but Ibelieve that it is in the interests of both the Newnes and Baerami fields that attention should be concentrated upon Newnes. If success is achieved there, developments at Baerami will undoubtedly follow. But capital must be subscribed in each instance. The Baerami proposition will be helped if the proposal of the State Government to construct a railway from Sandy Hollow to Merrivale is carried into effect, because Baerami will then be within reasonable distance of transport facilities. My constituents and those who are interested in Baerami may rest assured that I am ready, at all times, to press the claims of this field; but, although I candidly believe that the Baerami deposits are the richer of the two, I think that the best thing to do at present is to facilitate the development of the Newnes deposits. Unfortunately, there is no plant at Baerami. Those interested in Baerami have nothing to fear from the policy which the Government is pursuing. In any case, I shall be on the heels of the Minister for the purpose of urging him to do everything possible to develop this rich and valuable area.

Mr WARD:
East Sydney

.- Honorable members on both sides of the House haverecognized theimportance of the subject brought under notice this afternoon by the honorable member for West Sydney (Mr. Beasley), but I wish to direct attention once again to the immediate reason which prompted the honorable member to urge the Government to appoint a royal commission to inquire into the operations of the major oil companies in Australia, and that by their propaganda they had caused the failure of Messrs. Chambers and Treganowan to develop the Newnes shale leases. During this discussion many other and conflicting reasons have been advanced by honorable members for the failure of Messrs. Chambers and Treganowan to do what they undertook to do. The honorable member for Macquarie (Mr. John Lawson) said, for instance, that the interference of some meddlesome politicians had made it impossible for Messrs. Chambers and Treganowan to obtain from the public the capital necessary to float their new company.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I did not say that.

Mr WARD:

– Although honorable members may disagree as to the reason for the failure of Messrs. Chambers and. Treganowan to develop these leases, they all seem to be agreed that the people of Australia have not been, given a fair deal by the major oil companies operating’ in thi3 country. I suggest that if these oil companies have prevented the development of our shale leases, it would be wrong for us to remain silent on the subject, for that might cause public bodies and private individuals in the community to provide funds for another company to undertake this work, which would have no greater prospects of success than had Messrs. Chambers and Treganowan. To say that we should remain silent, in these circumstances is tantamount to concurring in the robbing of the people. In reply to an interjection which I made while he was speaking, the honorable member for Macquarie said that I was only trying to hinder the development of the Newnes deposit. Nothing is further from my mind than that. At the same time, we must realize that if the failure of Messrs. Chambers and Treganowan to do what they undertook to do was due to the strong propaganda of the major oil companies, and not to what the honorable member has described as the meddlesome interference of certain politicians, we must face the fact that it will be impossible for any company to obtain the capital necessary to develop these fields. I direct attention to the fact that the Prime Minister (Mr. Lyons) in the course of his address, said that he was not prepared to accept the statement of Messrs. Chambers and Treganowan that the strong propaganda of the major oil companies was responsible for their failure to obtain the necessary financial assistance to develop Newnes. If the Government did not accept the reasons given by Messrs. Chambers and Treganowan for their failure, what justification had it for releasing them from their bond ? If the reasons they gave were not the real reasons, they were guilty of making false representations to the Government. The Attorney-General (Mr. Latham), in the course of his speech, made a rather vague statement to the effect that the Government proposed, in certain circumstances, to appoint a royal commission, but the right honorable gentleman did not give a definite promise to that effect. He said that the Government was anxious to avoid the expense that would be entailed in the appointment of a royal commission, and that if it could obtain the information required from the major oil companies without such expenditure, it would do so. The right honorable gentleman went on to say that the Government was examining all the legal means by which the major oil companies could be obliged to supply the Government with the information that, it desired. I suggest that if the existing law is not sufficiently comprehensive to enable the Government to obtain from these companies the information that it desires, the law should at once be amplified in the interests of both the consumers of petrol and the general public. If an amendment of the law were necessary to force the workers to make certain information available to the Government, no time would be lost in introducing the necessary legislation. I think therefore that the Governmentshould adopt the same attitude towards the major oil companies as it would adopt towards the workers.

Mr Riley:

– The Government did not waste any time in investigating the financial position of our invalid and old-age pensioners.

Mr WARD:

– That is so. We should be honest with ourselves in this matter. Unfortunately, it appears that if certain commercial interests, such as the major oil. companies- which have international financial connexions, are sufficiently wealthy they can purchase immunity from the operations of the law. If the representatives of the people in this Parliament are not the real Government of

Australia., and if we are not able to determine the exact form that an inquiry into the operations of these companies should take, and if we cannot force them to supply the information that we require, it is only a sham to talk about selfgovernment. The major oil companies have not been robbing any one section of the people - they have been robbing the whole community. Any one who has examined this question in even a casual way must realize that enormous difficulties will be put in the way of any government which is prepared to explore the ramifications of this enormous combine.

I should like to know what steps the Government is prepared to take to carry out any recommendations that a royal commission might make, even after it obtains all the information it desires. We know very well that it is the policy of this Government to maintain as friendly relations as possible with these great financial institutions. We also know that when an inquiry was being made a couple of years ago into a certain matter, the companies concerned absolutely denied the Government access to their books and accounts. Unless the Government is prepared to act upon the recommendations of a royal commissionit would appear to be useless to proceed with the proposal. If a commission discovered that these oil companies have been exploiting the people of Australia for a number of years, would the Government have the courage to take action against such an international combination of financiers? Other countries have been forced to take drastic measures to break the grip of these oil monopolies upon their industries and people. Last year the Government of Yugoslavia was informed by the major oil companies that if a certain duty on the petroleum of these companies was not removed by July, 1932, the importations would cease. That Government had the courage to stand up to the ultimatum, and it informed the companies that unless they were prepared to guarantee a continuity of supplies, negotiations would at once be entered into with the Soviet Government for the supply of Russian petrol to the people of Yugoslavia. The result was that the major oil companies immediately withdrew their ultimatum, and intimated that they were prepared to continue supplying their products to Yugoslavia. Unless this Government is prepared to take some definite action to break the grip of these oil companies upon the very livelihood of our people, it will beuseless to conduct an inquiry.

Let us look at the facts in connexion with the Shell Oil Company. As the right honorable member for North Sydney (Mr. Hughes) has pointed out, this concern has international connexions. It is part of an international combine known as the Royal Dutch Shell Group, which operates in many countries. The Shell Company of Australia, with its £2,000,000 capital, is responsible for the marketing of the products of this group in Australia. It has made arrangements with another subsidiary company associated with the Royal Dutch Shell group, known as the Asiatic Petroleum Company Limited of London, to tranship and deliver all the petrol imported by the Shell Company into Australia. This running means has been devised by this international group-

Mr SPEAKER:

– The honorable member’s time has expired.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Honorable members are usually grateful to their colleagues who move the adjournment of the House for the purpose of discussing business of urgent public importance; but one would naturally expect that the discussion of the subject now before us would not have been tinged with the usual propaganda associated with-

Mr SPEAKER:

– The honorable member for Wentworth must not make insinuations.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member for West Sydney began by blaming the Government for its attempt to release Messrs. Chambers and Treganowan from a bond entered into by them; but I submit that the object of the Government was to see that the Newnes shale oil-fields were developed by some other company if Messrs. Chambers and Treganowan found it impossible to develop it. The honorable member also criticized the major oil companies. Having read through the report of the investigation officers on petrol prices, he satisfied himself that a huge combine was in operation in Australia, and acting against the interests of the consumers as a whole. He immediately condemned the Government, although it was endeavouring to upset this huge combine by encouraging the development of the shale oil areas. Although the honorable member was moderate in his observations, the statements made by other members of his party were not so moderate. I shall confine my comments to the remarks of the honorable member for Hunter (Mr. James), and the honorable member for East Sydney (Mr. Ward). The former, in a violent attack upon the honorable member for Macquarie (Mr. John Lawson), made a number of misstatements concerning what that honorable member had said. He attempted to cast a reflection upon the honorable member, whom he accused of ‘advocating slave conditions at Newnes, and the breaking down of award] rates. I submit that any development at Newnes must take place under award conditions of labour. The honorable member for Macquarie merely pointed out that the overhead charges, and the cost of management generally, should be placed on a business basis, in order to keep down operating costs. The honorable member for Hunter talked about the need for development at Baerami, and told us what should be done. He should have been sure of his ground before dealing with a subject with which he claimed to be familiar. He should know that no plant or machinery has been installed at Baerami, whereas at Newnes there is plant to the value of £1,750,000. If the latter field is to be further developed, it will be necessary to spend another £300,000 there. Yet the honorable member asked for £40,000, in order that Baerami might be developed! So much for the knowledge he claims to possess. The Commonwealth Government in conjunction with the New South Wales Government has prepared a certain agreement to be entered into by a public company that will be formed to operate Newnes, and a very important provision of the agreement is that not only Newnes, but also Latrobe and Baerami, ‘ must be considered. The honorable member for

Hunter spoke of the carbonization process, and advocated low temperature carbonization in the treatment of oil shale. The right honorable member for North Sydney (Mr. Hughes) also referred to this subject. This process has been dealt with by Dr. Rivett, who has declared that there is no satisfactory way of using it on a paying basis. I submit that, if we waste money in that direction, we shall get nowhere in our attempt to produce shale oil, and the ultimate development of rich fields such as we have at Newnes, will be considerably retarded. Sir Herbert Gepp has reported from time to time that there are extraordinary features to be taken into consideration in regard to the development of the Newnes field - a fact that may have had some bearing on the withdrawal of Messrs. Chambers and Treganowan.

Debate interrupted under Standing Order No. 257b.

page 323

PAPERS

The following papers were presented : -

Nationality Act - Regulations amended - Statutory Rules 1933, No. 2.

Seat of Government Acceptance and Seat of Government (Administration) Act - Ordinance of 1933 - No. 3 - Removal of Prisoners.

page 323

QUESTION

TARIFF PROPOSALS (1932-1933.)

Customs Tariff (1932) : Special Duties (No. 4) : Primage Duties (No 2) : Customs Duties (Canadian PREFERENCE No. 2) : Customs Tariff Amendment (No. 1) : Special Customs Duty (No. 5) : Excise Tariff Amendment (No. 3).

In Committee of Ways and Means: Consideration resumed from the 16th March (vide page 301), on motion by Sir Henry Gullett (vide page 1167, Volume 135)-

That on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs at the rates respectively specified in the column of the schedule hereto headed “ British Preferential Tariff “ be imposed on goods the produce or manufacture of tha United Kingdom. . . .

Upon which Mr. Paterson had moved by way of amendment -

That after the words “United Kingdom “ the following words be inserted: - “and that the Government without delay submit a further schedule which will carry out the terms and the spirit of the Ottawa agreement with respect to increased preference to British goods in the following manner: -

Duties against British goods to be reduced to the level of the 1921-1930 tariff in all cases where they have been raised above that level without report by the Tariff Board”.

And on motion bv Mr. White (vide page 29)-

That the Schedule to the Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two, be amended us hereunder set out.

Mr ROSEVEAR:
Dalley

– I have listened to the somewhat heated debate that has taken place upon the Government’s tariff proposals - to the dissertations of the protagonists of high tariffs, low tariffs, and no tariffs at all, and I have also heard the supporters of the Government extolling the virtues of what has been described as a middle course. During the last twelve months the Government has been trying to follow a middle course, but has failed. Judging by the heated views expressed by various honorable members, one might imagine that the whole world hinged upon the fiscal policy of governments; but I take a somewhat detached view of this matter. So far as my vote and voice in tariff matters are concerned, my chief concern will be to promote the best interests of the workers in industry. I shall always give first consideration to Australian industries, and to the workers employed in them, particularly because of the conditions that obtain throughout the world to-day. Wherever we may look, even among the units of the British Empire, we see the common desire of all countries for self-preservation. Every country is trying to safeguard its own interests, and it will be well for this Parliament to do what it can to promote the special interests of the people of Australia. I, at any rate, intend to give first consideration to the interests of the workers in industry. I have watched the progress of our industries for many years; and I have noticed, at times, an apparent community of interests between the manufacturers and the workers when markets have been rising. In the past, the Labour party has given good protection to our manufacturers, in order to build up the Australian industries that provide profitable employment; but, during the last few years, markets everywhere have been falling, and the whole world has been wallowing in the slough of depression. We now see that the manufacturers who formerly shared a community of interests with the workers, and were prepared ro accept the protection of Labour tariff policy, are in the forefront among those who desire to make an onslaught upon their hard-earned conditions. I do not view tariff matters from the outlook of the manufacturers. The only tariff proposals that I am interested in are those calculated to build up industries, and provide remunerative employment for the workers.. In cases in which I find any section of the employers deliberately trying to force down the conditions of the workers, I am not prepared to give them the consideration that Labour has accorded them in, the past.

Turning to the primary producers, I find that during the present depression they were the first section to make an attack upon the wages of the employees. To-day, they are calling out for the support of the representatives of the workers in an attempt to bring down duties. My party is bound to pay regard to the present attitude of the manufacturers, both politically and industrially, on the subject of the wages and conditions obtaining in, industry. In New South Wales, at the present time, an attempt is being made to break down those conditions. Mr. Corke, the representative of the sawmilling interests, has urged the adoption of a 48-hour week in the industry, and Mr. Bennett, the president of the New South Wales Chamber of Manufactures, has claimed that a 48-hour week should be observed permanently. My party must remember those statements when the manufacturers ask for protection. We are living in a machine age, -in which the inventive genius of man has been applied to industry to such an extent that every year thousands of workers in Australia, and millions throughout the world, are being forced upon the industrial scrap heap. Owing to the mechanization of industry, we should not fix upon 48 hours as the proper working week; but there should be a steady reduction of the hours of employment if we are to attempt, so far as a reduction of hours will effect it, to solve the unemployment problem. If the employers are not prepared to work along these lines, we are not particularly concerned whether the present tariff suits them ; we are prepared only to consider whether it sufficiently protects the interests of the workers themselves.

The Postmaster-General (Mr. Parkhill) dealt with monopolies, and pointed out that the policy of Labour in the past had been directed against monopolies, but that its present, fiscal policy favours their’ creation. I do not know how the Minister makes that amazing deduction. The most definite and direct attack ever made against monopolies was launched on one occasion by the Labour party by means of a referendum, and at that time the PostmasterGeneral was actively associated with the party that was successful in defeating Labour’s proposals. Labour always did, and always will, attack monopolies iri restraint of trade in Australia. -If its policy is designed to create a monopoly of the Australian market for Australian industries, that is a laudable objective, in view of world conditions. I maintain that if Labour succeeded in its aim, both primary and secondary industries would be benefited. Employment in the secondary industries at good wages will result in a better market for the primary producers than they would otherwise have.

Mr Abbott:

– “Wool is not affected by the Ottawa .agreement.

Mr ROSEVEAR:

– Although . that commodity may not be directly dealt with under the agreement, the whole object of the agreement was alleged to be to build up inter-empire trade. In a further endeavour to display his powers of deduction, the Postmaster-General professed to believe that, under the tariff enactments of the Scullin Government there had been a falling off in employment in the manufacturing industries of Australia. No other factor was taken into account by him; he deliberately placed on the Scullin tariff the whole of the responsibility. By way of interjection, I and other honorable members attempted to obtain from him a statement of the conditions existing in other countries, but he studiously avoided that aspect of the matter. The figures that he quoted were obtained from the latest publication of the Commonwealth Statistician. He said that the number of employees in manufacturing industries in Australia was 450,482 in 1928-29, 419,190 in 1929-30, and 338,843 in 1930-31. He omitted to quote the figure for 1931-32; but the Prime Minister admitted the other day that it is in the vicinity of 340,000. According to those figures the number of persons engaged in the manufacturing industries of Australia who have lost their employment during the last four years, represents 25 per cent, of the total number of- workers engaged in those industries. The honorable gentleman did not quote figures relating to conditions outside of Australia, although they were accessible to him. I have taken the trouble to examine the gazette of the British Ministry for Labour, which gives perhaps the most exhaustive analysis of the employment position published in the world. It shows that the number of persons unemployed in Great Britain rose to the extent shown by the following figures from 1928 onwards : -

Those figures apply, only to persons who are recognized by the Department of Labour and Industry in Great Britain as “persons who are usually regularly employed, usually, in the industries of Great Britain and Northern Ireland, and they do not take into account persons who are customarily regarded .as casual workers. Consequently, during the .identical period covered by the figures given by the Postmaster-General the increase in the number of persons unemployed in Great Britain was 1,630,000, or 160 per cent., compared with 25 per cent, in the manufacturing industries of Australia; yet, Great Britain has, until recently, been a freetrade country, in which elections have been won and lost on the policy of a free breakfast table. This may be regarded as a comparison of the effect of the operation of two extremes - that of the allegedly Himalayan Scullin tariff, and that of the freetrade conditions operating in Great Britain, which are infinitely worse than those of Australia. Then we have the example of the United States of America, where practically prohibitive tariffs are imposed on everything, and where there is an unemployed army of 10,000,000 persons who cannot even obtain the dole. These facts indicate that the tariff policy of the respective governments has not a very considerable effect upon employment. Therefore, it is sophistry to argue that the unemployment- which exists in the manufacturing industries of Australia is a direct result of the Scullin imposts.

The Postmaster-‘General complained that the Leader of the Opposition (Mr. Scullin) could find nothing good in the Ottawa agreement. Who can? Practically every honorable member who has spoken during this debate, and particularly those who supported the agreement when it was submitted to this chamber, has expressed disappointment at the result of its operations. What are the primary producers of Australia obtaining from Great Britain at the present time? The agreement itself laid it down that our meat industry should secure an expanding proportion of the British market; yet, within a few months of the acceptance of the agreement by this Parliament, proposals were submitted for the limitation of the supplies of Australian meat to that market. Pressure is now being exerted, undoubtedly as a result of overseas influence, to compel Australian butter producers to impose a restriction on their exports to Great Britain. Despite the assurances that have been given in regard to wheat, I challenge any one to show that the marketing conditions in connexion with that commodity are more favorable under the Ottawa agreement than they were before the agreement was made. The honorable member for Corangamite (Mr. Gibson) is still hopeful that some day good will come out of the agreement. The fact is that an endeavour has been made to create an artificial scarcity of meat and butter in

Great Britain, with the object of forcing up prices. I put it to honorable members that the success of any scheme that is designed to control the supplies of meat and butter to Great Britain depends on the power of the Commonwealth Government, or of the primary producers of this country, to control the markets of the world. That they cannot do. If less is exported to> Great Britain, one of two things must happen: Either production must be lessened to the extent that exports are restricted, or the additional output must be dumped on another market. If the latter course be followed, it is unquestionable that, the effect will he felt on the prices in the British market. It will thus be seen that already the primary producers of this country occupy an unfavorable position in regard to those two features of the Ottawa agreement, from which they expected so much. The creation of an artificial scarcity of meat or butter on the British market would not automatically bring about a greater demand for those commodities. Unless means are found to increase the purchasing power of -the people of Great Britain, no good can come from an automatic rigging of the market. If the people of Great Britain were compelled to buy meat or butter at an enhanced price, they would purchase less of other commodities that we export.

At the Ottawa Conference, the Resident Minister in London commented on the situation in Australia. The verbatim report of the proceedings of that conference shows that he presented the case for Australia in the following light: -

I now propose to indicate the nature of the requests we seek from Great Britain. We are not seeking great or difficult concessions:

In that, the right honorable gentleman ran true to form. The Australian delegation did not ask for, nor did it receive, anything substantial.

Mr Abbott:

– Did it concede anything substantial ?

Mr ROSEVEAR:

– That remains to be seen. I believe that within a very short period, the primary producers of Australia, as well as those who are engaged in secondary industries, will realize exactly what has been given away. The right honorable gentleman went on to -say - .

Australia, however, recognizes that if she is asking for consideration in the British market, it is essential that she should take every possible step to reduce her costs of production, and increase her competitive power.

It might have been suggested to the representatives of Great Britain that, in order to ensure fair and reasonable competition between British and Australian manufacturers, the political party in power in Great Britain might endeavour to raise the conditions of the workers of that country to the level of those prevailing in Australia. Apparently, our delegation did not advise the British delegates that they desired the workers of Great Britain to be given conditions comparable with those existing in Australia. On the contrary, the British delegates were assured that Australia had already cut down costs in industry, and that she was prepared to go further in that direction. How has the reduction of costs been effected? It has been done mainly at the expense of the wages of the workers.So far, few of the other charges in industry have been attacked. The worker has been the sole loser from the endeavour to bring about some degree of equality in the conditions existing in Great Britain and Australia.

The CHAIRMAN:

– Order ! The honorable member must connect his remarks with the debate.

Mr ROSEVEAR:

– While I shall certainly obey your ruling, sir, I submit that honorable members have been allowed a good deal of latitude during the debate. The Acting Leader of the Country party (Mr. Paterson) declared that we were not keeping faith with Great Britain. The honorable gentleman always appears to be greatly concerned about Great Britain’s end of the stick. If we were to follow the example setby the Mother Country in connexion with butter and meat, it would be a simple matter to “keep faith,” and, in the process, break our part of the agreement.

Now that further light has been thrown on the subject, it is interesting to consider the attitude of the leaders of the various delegations that attended Ottawa, in respect of the right of parliaments to fix their own tariff. We know that, under article 12, we are denied that right, which has been handed over to the Tariff Board. The Leader of the South African delegation stated emphatically that his Government would not allow outside inter ference in the matter, and Mr. Bennett, the Canadian Premier, expressed a similar view.

Mr White:

-The Canadian Government is now following the example of Australia, and constituting a tariff board to deal with this matter.

Mr ROSEVEAR:

– It is usual to accept the assurance of a Minister, but, if what he says is correct, I should imagine that article 12 of our own agreement and article 14 of the Canadian agreement would have been couched in similar terms. A qualification exists in the Canadian agreement, which gives to the Parliament of that country the final say as to what the tariff shall be on each article.

In an endeavour to provide “ reasonable competition,” our delegation was, apparently, prepared to sacrifice the standard of living that has been so hardly won by our workers, and reduce it to standards which obtain overseas. My principal concern is whether the revised schedule will create further employment in Australia, and whether the agreement , will confer anybenefits on us commensurate with the sacrifices which our secondary industries are called upon to make. Even if I receive assurance in that regard, I should not be prepared to worry about protecting industries, the controllers of which are not willing to give an adequate measure of protection to the workers that they employ. Nor am I prepared to countenance any alteration in the tariff which will result in a reduction of costs by lowering the wages and conditions of our workers to the coolie standard.

I do not believe that the tariff policy of the Government has any far-reaching effect on the general problem of unemployment. Honorable members have compared the conditions which obtain in the United States of America, Great Britain and Australia. In each country there is a widely divergent opinion- in respect of tariff policy, but each is suffering from unexampled unemployment. That indicates that tariff is not the root of the unemployment trouble, here or elsewhere. Statistics indicate that the production of real wealth - that is, goods produced by industry - is as near to perfection to-day as human ingenuity can bring it.

Actually, the production of real wealth has outstripped the consuming capacity f the people, and the channels of distribution are choked from various causes, some .being attributable rather to the action of trusts and combines rather than to government policy. Invention, too, has its bearing on the subject. The real difficulty lies in the control of exchange and credit resources. Until those resources are controlled by the people there can be little hope for those whose jobs tremble in the balance; those millions throughout the world who starve in the midst of plenty.

I doubt whether we are justified in devoting so much time to the consideration of problems which, as the Leader of my party indicated last night, leave the people cold. In view of the experience of governments throughout the world who have experimented with tariffs in an endeavour to remedy existing economic difficulties, one inclines to the belief that it is unnecessary for us to waste so much time over this matter, or to get heated over whether a tariff should be high, low, none at all, or prohibition. That problem does not matter a great deal to the people generally, and I am not surprised that our persistency and seriousness in the matter causes the people to begin to lose faith in parliamentary institutions as a remedial medium. The attitude of the Parliament towards the real issues that affect the people to-day certainly “bolsters up the opinion of the Cynics who declared that the only man who entered Parliament with good intentions was Gu, Fawkes.

Mr Maxwell:

– Would not the remedy suggested by the honorable member involve united world action?

Mr ROSEVEAR:

– Possibly ; as it would not be safe to theorize, I am not prepared to commit myself to an opinion on that aspect of the subject. I believe that we in Australia could attempt the remedy that I have indicated. It must .’be obvious to all that there is something wrong’, apart from the business that we are at present discussing. I am trying to find a remedy. I think of the example of the United States of America, with its 12,500,000 unemployed, and a government unwilling to give those unfortunates even the miserable dole that is granted to our unemployed. The United States of America has the most highly developed industrial community in the world, and holds two-thirds of the world’s gold. All other countries are indebted to it, yet in that country there are vast numbers in misery, suffering from poverty and starvation. These facts, together with the unprecedented collapse of private banking institutions in the United States of America, cause me to believe that the system that has prevailed in that country has proved a dismal failure.

The CHAIRMAN:

– The honorable member will not be in order in discussing banking generally during this debate.

Mr ROSEVEAR:

– The policy that I have advocated will be followed by members of the party to which I belong. We do not intend to commit ourselves to a high, low, or a prohibition tariff. We shall consider each item on its merits and vote according to how we consider the interests of the workers will be affected, not concerning ourselves with the interests of the investors.

Mr ABBOTT:
Gwydir

– I congratulate the last speaker upon having delivered an address into which, obviously, he must have put a good deal of thought. While some of the problems with which he dealt are not relevant to the subject matter under debate, they areat present very much in the minds of the people. Tariff must be considered from various angles. We must pay regard to its revenue possibilities, and its protective incidence on our industries, particularly those basic industries which we desire to build up. I have never advocated freetrade in any degree. I believe that, so far as possible, we should extend adequate protection to industries that are really worth while. I instance the iron and steel industry. We had an outstanding example of unpreparedness when war broke out in 1914, for Australia found herself with scarcely any resources of her own. It was largely on that account that ‘ the Government, led by the right honorable member for North Sydney (Mr. Hughes),’ set about establishing industries, the products of which we had previously imported from abroad, but had become prohibitive in price during the war because of the scarcity and uncertainty of shipping space.

We must also consider the tariff in relation to taxation. We, in Australia, bear a heavy burden of taxation, of which tariff is jio inconsiderable part. During this debate many honorable members, including the Minister for Trade and Customs (Mr. White), have declared that if the amendment moved by the acting leader of the Country party (Mr. Paterson) were carried, it would result in a diminution of revenue. We must also consider whether it might result in less taxation per head, which is a most desirable objective. We, in Australia, are labouring under a tremendous burden of taxation; next to Great Britain, we are the most heavily taxed people in the world. The burden is too great for 6,500,000 people. It is the duty of both State and Federal Parliaments to endeavour to reduce that burden, irrespective of any criticism that- may follow. I admit the necessity for balancing our national budget, but there is great danger that in doing so we may place individuals in so hopeless a position that they will find it impossible to balance their private budgets, and if that situation arises the outlook for Australia as a whole will be poor indeed. We cannot continue to disregard the inescapable law of diminishing returns. If we tax people beyond their capacity to pay, the returns from them must lessen. We. have almost reached that point in Australia; the law of diminishing returns is about to operate, if it is not already operating. The question of tariffs is always bound up with that of governmental policy. I was struck by the statement of the honorable member for Dalley (Mr. Rosevear) that, perhaps, it does not really matter to what extent we argue in this chamber, because a great proportion of the people are not interested. Nevertheless, a country’s tariff is an important matter, if only as it affects its revenue and protects its industries. I should like to see fiscal matters taken out of the hands of Parliament, and entrusted to an impartial tribunal such as the Tariff Board. The making” of tariffs should be removed, as far as possible, from those political and other influences of which all honorable members who are endeavouring to discharge their duties faithfully, are aware. I have no doubt that when this debate has proceeded a little further, Canberra will see many visitors who will arrange their visits to synchronize with certain items in the tariff in which they are interested. That has been the case before. One member of this chamber, who is not now with us, likened the influx of visitors during a tariff debate to a plague of blowflies. If we were to remove the tariff from political influences, that most disagreeable feature of the debates in this chamber would be obviated.

Mr Scullin:

– In order to be logical, that argument should apply to everything, and Parliament should be closed;

Mr ABBOTT:

– I should like the Tariff Board to have absolute powers, so that political considerations would no longer enter into these issues.

This is the first opportunity that I have had of congratulating the honorable member for Balaclava (Mr. White) on his elevation to the important position of Minister for Trade and Customs. I do so most heartily; but I warn him that his work will be arduous. It has taken heavy toll of those who have held the office in the past. While we wish the Minister well, and hope that we shall not unnecessarily worry him, we promise that we shall keep him up to the collar in connexion with this schedule. I compliment him on the speech in which he introduced the schedule. I have heard some of the speeches in which previous tariff schedules have been introduced, and I have read others, some of which were tremendously lengthy. I was impressed by the Minister’s remark regarding the need for considering our primary industries. It was pleasant to hear him; but the schedule which he laid on the table told a different story. While I congratulate the Minister on his speech, I fear that I cannot congratulate him on his schedule. It is a schedule of high duties, whereas we expected it to be a schedule which would conform to the spirit of the Ottawa agreement, and be the basis of greater’ inter-dominion Made I cannot think that the schedule implements the spirit of Ottawa. The Country party expected that the Ottawa agreement would not only lead to a better understanding on the part of the peoples of the Empire, but also that it would increase the volume of trade between them. For a long time I have thought that much of the trouble in the world to-day is due to our having planted ourselves behind high tariff barriers. That is the cause of the present trouble in the United States of America. Indeed, it is the cause of most of the trouble that has occurred among the nations of the world since the war. When the nations were in conflict, and supplies not always available, they set to manufacturing their own requirements; and since the termination of hostilities, they have tried to retain for themselves their home market by erecting tariff barriers against the rest of the world. During the last few days some honorable members have waxed indignant because Great Britain, in extraordinary circumstances, has expressed a desire for a restriction of the imports of dairy produce into that country. It seems to me strange that we should become indignant because Great Britain will not take our products when we are discussing a tariff schedule which raises a very high barrier against British goods entering this country. The attempt to have one-way traffic in trade is one of the chief causes of the high overseas freight. Numbers of ships . trading to Australia come here almost in ballast. No shipping firm can succeed while that state of affairs continues; there must be full cargoes both ways for the enterprise to pay. Australia is 13,000 miles from Great Britain, and, consequently, transport is a matter of tremendous importance to this country.

Mr Scullin:

– The trouble is that we have brought in more goods than we have sent out.

Mr ABBOTT:

– The present schedule will not help us. We have heard a great deal of criticism of the Ottawa agreement. At Ottawa our plenipotentiaries agreed to allow the producers of the United Kingdom to enter into fair and reasonable competition with Australian producers. Surely we can decide what fair and reasonable competi tion is. Some of the members of the Country party who, groundlessly, are branded as freetraders, have spent a good deal of time in studying Australian secondary industries and visiting factories in an effort to find out what is really wrong with Australia. Having visited a number of Australian factories, I can say that the trouble is certainly not due to national laziness. The average Australian is not lazy, whether engaged in primary or in secondary industry. I do not agree with those who say that a policy of high protection means the protection of laziness. Nevertheless, there is a tremendous difference between the cost of an article manufactured in Great Britain and the cost of a similar article manufactured in Australia.

Mr Hughes:

– Give an instance.

Mr ABBOTT:

– In the Sydney Morning Herald of the 11th March, 1933, a letter from Mr. W. H. Gardiner, the governing director of Sargood, Gardiner Limited appeared. I have seen no contradiction of his statement, and, therefore, I assume that it is correct. Mr. Gardiner says-

Before examining the duties themselves, it is well to note that, in the case of all goods which enter the Commonwealth from the United Kingdom nominally free of duty, there is a minimum protective effect of 52 per cent. on cost.

That applies more to the valuable goods, because goods of lesser value would pay relatively higher freights. The letter continues -

This is brought about as follows: -

Mr Scullin:

– Does the honorable member regard the sales tax as a protective tax?

Mr Hughes:

– Why not also include income tax and land tax?

Mr ABBOTT:

– So far as I am aware, the figures of Mr. Gardiner have not been contradicted.

Mr Scullin:

– No one would consider it worth while to attempt to correct such ridiculous figures.

Mr ABBOTT:

– The letter proceeds-

I have only dealt with charges proposed under the new schedule. There are innumerable other duties equal to, and higher than, these herein quoted. It should be remembered that, including landing cost, primage, exchange, and sales tax -

The average must be nearly 100 per cent. The right honorable member for North Sydney (Mr. Hughes) asked me to give an instance in support of my contention. I mention galvanized iron, a commodity about which, in my opinion, too much has been said. The average farmer or grazier would not require more than about 2½ tons of galvanized iron in a lifetime, unless his buildings were destroyed by fire or storm. That represents about 1½ cwt. of galvanized iron per annum costing approximately in duty 6s. 9d., per annum - a little more than we used to pay for a lawyer’s advice. It is amazing that there should be such a tremendous difference between the cost of galvanized iron in Great Britain and the cost in Australia. Only lately I visited the Australian factory, and I pay my tribute to the management for the way in which the establishment is run and the spirit of harmony and contentment that prevailed among the men engaged there, and the manner in which they work. But, at the same time, I cannot help feeling greatly concerned about the fact that the price of galvanized iron in Australia is £22 16s.11d. a ton, while the price in Great Britain is only £13 15s. Of course, certain factors have to be taken into consideration. For instance, there is the question of zinc. The manufacturers of galvanized iron in Australia use 15,000 tons of zinc each year, and that, of course, makes a tremendous difference to the Electrolytic Zinc Works of Tasmania. The London price of zinc is £14 a ton, but in Australia the manufacturers of galvanized iron have to pay £20 7s. 6d. a ton for it.

Mr Gibson:

– Is it the same class of zinc ?

Mr ABBOTT:

– Yes. The added cost to that particular factory, because of the high price of zinc, is £90,000 a year.

Mr Scullin:

– The zinc is shipped from Australia, and sold in London at £14 a ton?

Mr ABBOTT:

– Yes, I understand that is so. It is, therefore, evident that factors other than wages are responsible for the high price of galvanized iron in Australia. The landed cost in Australia of British galvanized iron is £13 15s. a ton. Added to that are these charges - Freight, £211s. 3d. ; insurance, 2s. 3d.; wharf charges, 7s. 6d. ; commission, £1 ; exchange, £4 5s. 5d. ; and primage, £1 9s. 2d., making a total of £23 10s. 5d., as against the price of the Australian article of £22 16s.11d. That is a difference of about 15s. a ton.

Mr Nock:

– The honorable member is not taking into account the duty on the British article.

Mr ABBOTT:

– The duty increases the landed costby £4 10s. a ton. It is claimed that this particular firm - and I think others - have never taken advantage of the protective incidence of that £4 10s. a ton. but they contend that they require it in ease British firms sell their product iu Australia at below the cost of production. I do not pass any opinion on that. We have heard a good deal- in and outside of this Parliament of the dire straits of the primary producer, and the urgent need to assist him. A few days ago, when the position of the people engaged in the wool industry was brought before honorable members, the discussion was lifted out of the atmosphere of party politics altogether. I admit that at times this National Parliament can rise to the occasion when big questions are before it ; but, at the same time, I feel that a great deal of the sympathy expressed for the primary producer is lip service only. No great effort is being made to assist him. His position is serious, indeed, and his burden could be lightened by lifting from his shoulders some of the burden, not only of the tariff, but also of other factors which are pressing heavily upon him, We are now discussing the tariff. I did hope that, before I re-entered this Parliament the political parties in it would have realized that some united effort was needed to place the ship of state once more on an even keel. Instead of parties being broken up as they have been into different sections, they should have tackled this problem collectively. The other night I listened with great interest to the speech of the Attorney-General (Mr. Latham), but, as the honorable member for Wakefield (Mr. Hawker) has said, it was mainly an exhibition of dialectics. Those of us who have enjoyed the friendship of the Attorney-General know that it is something to be prized. Most of us have seen and admired the working of his wonderful brain. I remember one occasion when the- right honorable member put a case to me. He said, “ What do you think of it?” I was. indignant, indeed. I said, “I think that it is a scandalous business “. He then said, “ There is another side to it “. When he had put it to me I could not but form the opinion that the defendant had as much justification as the plaintiff in respect of the matter involved. The other night the Attorney-General excelled in a speech somewhat on the lines of that conversation. He pleaded his case very well, but I would say, with Hamlet, “ Words, words, words “. In that particular speech the Attorney-General did me the honour of singling me out as the secretary of a unity conference which was called in Sydney before the last federal election. I appreciate the tribute that he paid to me, but 1 do not appreciate the slighting way in which he referred to that conference. Many notable men attended that conference, and I remember seeing there the genial face of the Minister for Health (Mr. Marr). Unfortunately, through an oversight, the Postmaster-General (Mr. Parkhill) was not invited. The Sydney Morning Herald did not consider that that conference was of slight importance.

Mr ARCHDALE PARKHILL:
Postmaster-General · WARRINGAH, NEW SOUTH WALES · UAP

– It thought that the conference was a joke.

Mr ABBOTT:

– Some people have the temerity to think that the PostmasterGeneral is a joke; but, of course, I do not agree with that. The Sydney Morning Herald of the 14th October, 1931, published an article under the head-lines - “Anti-extremist Forces; Unity at Federal Election “. The names of the delegates at the conference, as published by that newspaper, were -

Chairman - F. H. Tout.

Nationalist Party- J. G-. Latham, M.P.; T. R. Bavin. M.L.A.; B. S. Stevens, M.L.A.; A. Helmsley, M.L.C.; T. A. Playfair, M.L.C.; S. Walder, now Sir Samuel Walder; and F. H. Stewart.

Country Party- Dr. Earle Pago, M. P.; E. A. Buttenshaw, M.L.A.; M. F. Bruxner, M.L.A.; D. H. Drummond, M.L.A.; A. K. Trethowan, M.L.C.; and Charles Hardy, now Senator Hardy.

There was then in existence an organization known as the “All for Australia League “, but it seems to have met with an untimely end. Those representing the All for Australia League were - A. J. Gibson, Cecil Hoskins, and Sydney Snow, who is now chairman of the United Australia Party in New South Wales. In the Sydney Morning Herald of the 15th October, 1931, the following paragraph appeared : -

Speeches by Mr. Latham, the Deputy Leader of the Opposition, greatly impressed delegates. He said that the next few months were fraught with gravest possibilities.

Then the right honorable gentleman made this statement to the press -

I was very pleased, indeed, with the results of the conference. I hope and, indeed, expect that it will lead to a realization of unity of effort, both in the city aud country.

Dr. Earle Page gave this statement to the press -

It has been an eminently satisfactory conference. Great progress has been made.

Mr. Bavin stated “I think the result is very satisfactory “.

In the Sydney Morning Herald of the 21st October,1931, under the heading “ United Australia Party “, the following paragraph appeared : -

Important reforms are provided for in the policy of the United Australia Party; including a scientific revision of the tariff.

page 333

POLICY ADOPTED

To create employment and lower the cost of living it is agreed there must be a reduction in the cost of production and distribution, both in primary and secondary industries.

This can largely be achieved by a revision of the industrial situation and a revision of the tariff.

page 333

TARIFF

The scientific revision of the tariff for the economic rehabilitation of Australia with a view to the encouragement and protection of efficient primary and secondary industries.

According to the dictionary, the meaning of the word “ revise “ is “ look over, re-examine or reconsider “. The Attorney-General was not quite fair in slighting that conference, because it was certainly of considerable importance, and I had the impression, after attending all the meetings, that this great problem of the tariff was to be tackled in the direction stated by the Postmaster-General yesterday; that there was to be a downward revision of the tariff.

Mr ABBOTT:

– It may take place later, but not under this schedule. I deplore the unfortunate interview which took place between Nationalist members and certain interests in Melbourne just before the federal election. The Ministry, in bringing forward this tariff schedule, is not imbued with the spirit which dominated it when it went before the people of Australia, nor with the. spirit that was evinced at the meeting of all political parties, which was held in Sydney prior to the elections.

I wish to make some reference to the speeches that were delivered prior to the elections by certain honorable members who now sit on the treasury bench. I cannot speak firsthand of the speeches that were delivered in this Parliament while I was not a member, but Iheard the statements quoted by the acting leader of the Country party (Mr. Paterson), and I have been able to procure an epitome of what transpired at that time. I crave the indulgence of honorable members while I read it. The writer has made his statements in verse, but I think it describes exactly the happenings in respect of the tariff issue. It is as follows : -

In the reign of Caesar Scullinus,

The Country party swore

That purchasers of fencing wire

Should suffer wrong no more:

By the nine gods they swore it,

And named a certain day:

That day, said they, shall be the last

That husbandmen shall stand aghast.

Wire shall ho free, as in the past,

And duty shall not pay.

Then out spake John Lath-am ius,

Lord of the U.A.P.: “ The noble Country Men are right,

Beside them we would be;

Right nobly have they battled,

The argument they’ve won.

We’ll help get Scull in rattled,

And justice shall be done.”

And thus this noble lawyer,

Pride of his party, spake: “ This levy from producers,

Scullinus shall not take.

Twere better for the coal-mines,

For those in iron who trade,

If this impost on those who till

Australia’s soil with such goodwill,

Yet whose returns are almost nil,

In future be not made.”

Then up rose Archius Parcus,

Erect to his full height,

Then rushed at Micus Fordius,

And smote with all his might. “With my last ounce of strength,” said he, “These tyrants I’ll resist;

This tax shall never more be wrung

From men already well-nigh hung

While I have hand, and heart and lung,”

And shook his mighty fist.

Henricus Gully-tus sprang up,

Right glad to join the fray.

Cried he, “ The Country party’s hand

With joy I’ll grasp this day.

To hardy toilers on the land

Injustice has been wrought,

If factories cannot make this wire,

Without a tax enforced from buyer

Beset with difficulties dire,

To end let them he brought.”

Said Leo Alo-ysius, “ I do this day repent

That, when in Scullin’s legion,

I yielded my consent

To place this heavy burden

Upon producers’ backs.

The arguments convince me quite,

The Country party’s view is right.

For their amendment I shall fight,

And hope defeat this tax.”

At the Country party’s onslaught,

Backed by the U.A.P.’s,

Scullinus blanched and Fordius paled,

And quaked ahout the knees; “Much more consideration

This wire required,” they owned,

And quickly moved a motion, “ That the item be postponed.”

1932-1933.

The “ Big Four “ U.A.P.’s are now

Enthroned in Scullin’s place

With power to carry out their will,

False fiscal steps retrace.

Now surely would prompt action

Enforce expressed desire.

They must remove the duty

They damned with fervent fire.

Alas ! This tax so late condemned,

This Government will not amend,

Their masters they will not offend -

The duty stays on wire!

As the right honorable member for North Sydney (Mr. Hughes) said on one occasion, in respect of another matter, “ This is no child of mine.” It is not my production ; but I pay a tribute to the author for the manner in which he has expressed the events of those fateful days, when honorable gentlemen who are now on the treasury bench enunciated fiscal beliefs somewhat different from those which they espouse to-day.

I shall support the amendment moved by the Acting Leader of the Country party (Mr. Paterson), believing that, if we can bring the duties back to the level of the Pratten tariff, the country as a whole will benefit, and no worth-while industry will suffer. At the same time, our primary producers will be relieved of the intolerable burden which has been placed on their backs.

Mr HUGHES:
North Sydney

– I regret that I cannot emulate the honorable member for Gwydir (Mr. Abbott) who brought his observations to a close by quoting verses descriptive of the political situation which arose a year or two ago, but I congratulate him on introducing to this somewhat arid debate those pleasing reminiscences of bygone days.

The agreement to which these tariff schedules are intended to give effect is imperial in its scope. Its object is to strengthen, solidify and make permanent the imperial system under which we live, and the principle running through it is reciprocity. It purports to benefit, not one, but both parties to the agreement; to benefit, and so strengthen, the whole Empire. It is from this angle that the schedule must be considered rather than from the narrow and parochial angle from which some honorable members have approached it.

My intention is to consider it in relation to its effect upon the Empire and upon Australia. As the honorable member for Dalley (Mr. Rosevear) has reminded us, we must ask ourselves what does it mean, not to any particular section in Australia,but to our people as a whole. If we strip ourselves of any illusions which we may have as to our economic welfare and national security, we recognize at once the strength and the weakness of our position. We are a young and virile people, heirs to a great estate, the most magnificent heritage that has ever descended to the inhabitants of any country. We alone among the peoples of the world can boast that we are all of one race, speaking one language, under one government in undisputed possession of a continent, a western people set at the gateway to the East. But if our privileges are great, our responsibilities are heavy. Numbering 6,500,000, we may be justly proud of our achievement in the development of our country, but we must admit that, if we have to rely upon ‘ ourselves for defence, we cannot occupy it safely. Our dependence upon the Empire is absolute. I am the last to belittle what Australia has done or could do. I should not be so rash as to set a limit to what we could do if called upon to defend this country. But I think that everyone will admit that our circumstances are such as to preclude the adoption of any scheme adequate for the defence of Australia. At present, that is ‘far beyond our capacity.

In the light of these facts we must ask ourselves what this agreement does for Australia, for its safety, for its welfare. “We have heard a good deal already and, doubtless, as the debate proceeds, we shall hear a good deal more of the position of our primary producers and the workers in our factories. But the prosperity of all sections depends upon our national safety. That is the rock upon which our economic welfare rests. No one will deny that Britain has stood, and still stands, as our sword and shield. During the fateful four years of the World War, we, as a people, proved ourselves worthy to stand side by side with the Mother Country and the other dominions in the fight for freedom. The Allied nations won the war because Britain had complete command of the sea. This enabled Australia, an outlying portion of the Empire, to pursue the even tenor of its way throughout the conflict without hearing one shot fired in anger during the whole of that titanic conflict. How does this agreement affect Australia as a nation, apart from its economic aspects? Britain is the keystone of the Empire of which Australia is but a part. The Empire’s strength depends upon the influence and power of Britain. In the present position of the world, it is impossible to conceive of the Empire without a prosperous Britain. Britain’s prosperity and strength are essential to the safety and progress of Australia. That is the outstanding fact of which we must never lose sight.

As I have said, the principle running through the agreement is reciprocity. The agreement purports to, and does, encourage trade” between the Mother Country and Australia. This is a natural and a proper policy. Trade between the two countries has developed . because it was so obviously necessary and proper. The Ottawa agreement, for the first time in the history of the Empire, gives direction and stability to this policy. It is a gesture to the world, a gesture the significance of which is not lost on other nations, because it shows them an Empire comprising peoples of various races, and drawn from every quarter of ‘ the globe declaring their intention to trade together in economic unity. The Ottawa agreement marks a new era in the history of the Empire and of the world.

During the last few years, the position of this country has been most unfortunate; but, as we all know, misfortune has been the common lot of the nations. What has been Britain’s position ? Throughout this debate, the members of the Country party have- been favouring us with dissertations on the virtue of low tariffs and freetrade. They surely cannot be blind to the fact that, until Britain abandoned her traditional policy of freetrade, she. was drifting to the bad at the rate of £2,000,000 a week, and was within measurable distance of complete economic collapse which, if it had taken place, would have dragged down Australia, and probably, the whole of the civilized world. It passes my comprehension how, in the face of this universal upheaval, honorable members of the Country party can affirm that tariffs are the cause of the world depression. Tariffs may be an incident in, or one of the consequences of the depression, but certainly, they are not the cause of the world’s economic distress.

Sitting suspended from 6.15 to 8 p.m.

Mr HUGHES:

– There has been during this debate much loose talk about tariffs and their effect upon industry, which gives evidence of confused thinking. The problems that confront the man on the land are not confined to Australia; they are present in every part of the world irrespective of its form of government or its’ fiscal policy. Tariffs in their present form are to be regarded as the effects of the depression rather than as the cause of it, though I do not deny that they may have aggravated it. Nevertheless, they are in some form or another essential to the well-being of every country. We have to deal with the world as it is, not with the world as it should be or as we would like it to be. For thousands of years production was the great problem that confronted the people of the world. They lived on the very edge of famine, and only by the strenuous and prolonged efforts of the overwhelming bulk of the population was it possible for them to produce enough food and other necessaries of life. Those days have gone for ever. We are now confronted with a position fundamentally different. The trouble is that while the world has advanced man has stood still. Ideas and doctrines attuned to the circumstances of an age of scarcity that has passed must be scrapped. We live in a new world, and must adapt ourselves to the new conditions or perish. This is an age of overflowing abundance, which is likely to prove fatal to us unless we show ourselves capable of dealing with it.

What is wrong with the man on the land? He wants markets for his products. There is no difficulty in respect of production. Everywhere throughout the world the same story is told of overwhelming abundance side by side with great masses of unemployed. The great problem before the world is the provision of work for its people. On the one hand tens of millions of unemployed men are denied opportunity to live and to share the overflowing abundance that civilization has made possible. On the other hand communism is preaching with fanatical enthusiasm an economic and political doctrine, holding out hope to these millions now denied hope, and promising a solution of all the problems that confront the world. Until we are able to remove the evil of unemployment we shall never erect an effective barrier against communism. What is the matter with the man on the land? The complaints Ave have heard during this dis- cussion that the prices of primary products have fallen much lower than the prices of secondary goods, are well founded; but this condition is not peculiar to Australia; it is universal. In Germany, America, France and every other country the same facts are to be noted. The cost of living has not fallen proportionately with the price of raw materials. For example, in the United Kingdom the price level in 1929 was 141, and in 1932 it had dropped to 94. I believe that to-day it is in the neighbourhood of 65. On the other hand, the cost of living in Great Britain has fallen only from 165 to 145. That is the outstanding fact in the American situation also. We have to deal with conditions as they are. What is the remedy ? According to members of the Country party it is to decrease the prices of secondary good3 to the level of primary goods; but the only trueremedy is to raise the prices of all goods. The Ottawa Conference placed on record its unanimous opinion that the decline of prices was the greatest problem that confronted the world, and that a substantial rise was essential to the well being of all peoples, and affirmed the readiness of the British Commonwealth of Nations to co-operate with other nations in the great task of raising prices. There has been dangled before the people of the world for two years at least the promise of a world economic conference, whose business it would be to do this very thing.’ Postponement has succeeded postponement, and the world conference is as far off as ever. Committees have been appointed to draw up the agenda, to explore the position, and to suggest remedies; but the task seems far beyond their capacity. Mankind is deluged with a flood of figures in place of a remedy; we are lost in a maze of intricate calculations, and all the time the financial fabric of the world is steadily weakening. Within the last fortnight, owing to the banking crisis in the United States of America, we have been within measurable distance of its complete collapse, and only by the resolute and capable handling of the situation by British financiers has that been avoided. Had Great Britain adopted the same tactics as some other countries,- complete chaos would seem to have been inevitable. We are not yet out of the wood. We do not know what will follow on this financial collapse succeeding a depression of unprecedented severity such as has existed in America for some time. But we do know that sterling has kept its position steadily, and has contributed to the world’s stability. When the whole world appeared to be rocking to its fall, sterling stood fast. The British people have a policy and the power to give effect to it, and I hope they will not hesitate to apply it. The world must look to the leadership of Great Britain rather than to the leadership of a mythical and ever-receding world conference.

The honorable member for Gwydir (Mr. Abbott) has suggested that a remedy for the distress suffered at present by the Australian primary producer in common with every other producer in the world, is to be found in a reduction of costs. I do not deny that we must bow our heads to the storm. But a reduction of costs is only a temporary expedient. The remedy is to raise prices, but this presents an economic problem of extraordinary complexity. What is wanted is international agreement on monetary and economic reforms. But as things are, this seems impossible. The world is obsessed to-day by a spirit of nationalism, and this spirit prevails at the very time when the interdependence of nations is becoming more and more complete. No nation can live for itself alone. Some people, think that we can do so, but we cannot. Bough hew our policies as we will, we are subject to circumstances far beyond our control. I commend that undeniable fact to the members of the Opposition. The right honorable member for Yarra (Mr. Scullin), in one of those eloquent speeches for which he is noted, pictured to us the ruin that would descend on Australia if the schedules now before the committee were adopted. I am as concerned as he is for the well-being of the secondary industries, but I tell him that he has looked, as the members of the Country party have looked, at only one side of the picture. When the right honorable gentleman tells us that these schedules threaten the secondary industries with ruin, I am relieved to find from the criticism by the Country party that these schedules help the British manufacturer not at all, and that he is left at the mercy of a tariff which the honorable member for Gwydir has reminded us this afternoon, on the authority of one of the great importers of textiles, raises the protection on some goods to 255 per cent. The honorable member for Gippsland (Mr. Paterson) has sought to remedy this appalling state of affairs by proposing that the duties shall be reduced by 50 per cent. Apparently, he thinks that the way to relieve the British manufacturer is to put him at the mercy of a tariff which is at least 127 -J per cent. For this relief, much thanks! The honorable gentleman’s remedy has been stigmatized as rough and ready. It is rough without being ready; it is not a remedy at all. The honorable member embellished his speech with quotations from the eloquent utterances of honorable members on this side of the House when they were in Opposition, and he seemed grieved and stricken to the heart by the fact that those honorable members have changed their views. He derived much satisfaction from those quotations, but it is a pity that he did not add to them some from his own speeches. He has forgotten those halcyon days when he was on the treasury bench during a regime when every sound principle of government was flagrantly violated, when imports reached prodigious heights, and when our credit in London which, before the Bruce-Page Government took office, had been built up to a satisfactory level, was exhausted, so that when the Government left office there was neither a surplus in this country nor credit abroad. The honorable member for Gippsland spoke

Of applying the remedy of increased exchange, but was rightly admonished by the Leader of the Opposition for having made no attempt while he was in office to remedy that condition of affairs. I remind him that during the regime of the Government which he supported most faithfully, the excess of imports over exports was not less than £92,000,000, and that the customs and excise revenue exceeded the revenue from this source in the previous seven years by £122,000,000.

In face of these facts, the honorable member should be the last to talk of the evil that tariff taxation does to the people of this country, and to lecture the Minister on how to govern this country. The Government of which he was a member had the power to reduce the tariff; instead, it raised duties. If that Government had remained in office longer, what would it have done? Judging by what it did before, it would have raised the tariff wall ‘ still further, as the Scullin Government did. I am not called upon to defend the policy of the Leader of the Opposition (Mr. Scullin) when he was Prime Minister, but I do say that he was a creature of circumstances, as we all are. Compelled, by conditions unprecedented in the history of this country, which threatened disaster, to deal with a situation when we were within an ace of being forced into the position of a defaulting nation, he imposed duties, many of them far too high for normal conditions or, perhaps, for present day conditions, but, undoubtedly, necessary at the time. For drastic remedies had then to be applied. Conditions are now easier, but depression still hangs over us like a pall. How are we to remove it? How do honorable members of the Country party propose to apply a remedy to a condition of affairs world-wide in its incidence? Every country has a surplus of goods, and, at the same time, a great army of unemployed. A League ‘of Nations report states that there are 30,000,000 persons unemployed in the world, without counting their dependants. Actually, to-day, there must be nearly 100,000,000 persons dependent on charity, public and private, in order to keep alive. That sad state of affairs will certainly not be remedied by a 50 per cent, reduction of the tariff. How do honorable members of the Country party propose that the Australian Governments should carry on? They would be the first to insist that budgets be balanced. But how can budgets be balanced unless government revenues are maintained? Honorable members of the Country party demand vehemently that there shall be a reduction of direct taxation, and that the tariff shall be reduced also. Where is the revenue to come from? The criticism of honorable members in the corner is like the twitting of sparrows; they do not understand what is the position ; they will not face facts. They do not realize that we live in a new world, and must adapt ourselves to new conditions. Theories and practices which were adapted to the placid lagoon of world affairs in which we lived in days gone by, are utterly useless when we are on an unchartered sea, buffeted hither and thither by the raging fury of a cyclone, economic and financial.

We must deal with the position as we find it. We have to provide employment for our people, and until we do so we cannot substantially reduce taxation. I ask honorable members of the Country party: how arc we to find employment for the people if we ruin the secondary industries of Australia ? It is quite true that those honorable members qualify their vehement criticism of the tariff by a declaration of their belief in a tariff of a certain kind. They admit that certain industries ought to be protected, but they do not say just what those industries are. The only information afforded to the committee in its earnest pursuit of information, was that furnished by the honorable member for Gwydir, who, besides enlivening the proceedings by classical quotations, referred to the galvanized iron manufacturing industry. Is the salvation of the country to be obtained by a reduction of duty on galvanized iron, which, according to the honorable member, enters into the life of the man on the land to the extent of only 6s. 9d. a year?

Mr Abbott:

– I did not recommend any reduction of duty iri that direction.; I quoted galvanized iron as an example.

Mr HUGHES:

– If the honorable member did not recommend a reduction, language must have lost its meaning. If he did not intend to urge that the duty be reduced, I cannot see how the reference was relevant to the matter before die Chair.

We must prove ourselves worthy of our heritage. We must look at the Ottawa agreement as ‘ it affects Australia as a nation. Just as we have to pay the cost of Empire, so we must pay the cost of secondary industries, and, indeed, of primary industries also. The honorable member who moved this amendment for a reduction of duties by 50 per cent.-

Mr Paterson:

– Who said anything about a reduction of duties by 50 per cent.? The right honorable member has not read the amendment. He ought to read it first and speak afterwards.

Mr HUGHES:

– I shall be very glad to do so. Read in conjunction with the remarks of the honorable member for Gwydir it ought to prove most interesting. In substance, however, the amendment provides for a reduction of duties by 50 per cent.

Mr White:

– It provides for a reduction of revenue by £1,300,000.

Mr HUGHES:

– Exactly. That is the proposal which the honorable member for Gippsland (Mr. Paterson) puts forward in all seriousness as a remedy for the situation im which we find ourselves to-day. How does he propose to find employment for the people? Certainly not in primary industries. In 1911 the number of our people engaged in primary industries, including agriculture, dairying and pastoral pursuits, was 487,000; it is now 449,000. Twenty-one years have passed away, our population has increased by nearly 2,000,000, yet there are fewer people on the land to-day than there were in 1911. A considerable number of those on the land have found employment in the dairying industry, which is the only primary industry that has made any advance; but even that industry is dependent for its very existence upon an ingenious arrangement, fathered by the honorable member for Gippsland, which imposes on the people of this country an impost of 3d. per lb. on every lb. of butter they consume. It is further dependent on tariff protection to the extent of 6d. per lb.., without which it could not exist at all. If that tariff protection were removed, cheap butter would come in te the country and flood the market.’ I ask again : how does the honorable member propose to provide employment for the people now in Australia; how does he propose to absorb new people? In every country in the world the. number of people in primary industries is steadily decreasing. I remind honorable members in the corner that during my regime as Prime Minister, I was responsible for the expenditure of no les3 than £35,000,000 in placing soldier settlers on the land. In addition to the amount expended by the Commonwealth in this direction many more millions were spent by the States; yet there are fewer people on the land to-day than there were then. Nevertheless, as the honorable member for Capricornia also pointed out, they are producing far more wealth than was previously produced. There has been a tremendous increase in the production of butter, fruit, wheat, wine, wool, and other primary products, although the number of people engaged in such production has declined. As a matter of fact, honorable members in the corner fail to recognize that in this new world of which I have spoken, conditions have fundamentally changed; that whereas at one time 75 per cent, of the population was required to produce food, now 25 per cent, can produce not merely enough food for any given population, but actually three or four times as much as is required. This has involved a diversification of industry and a redistribution of population, and has led to people seeking employment in other industries than , those connected with the land. The additional two million people in Australia to-day as compared with 1911, have in the main found employment in secondary industries, and without these industries they could not have ‘been absorbed.

The Country party does not appreciate what the employment afforded by the secondary industry means to the primary producer. The home market is the best market for . the man on the land. In 1929, Australian production was worth £447,000,000, of which only £97,000,000 worth was exported. The balance, £350,000,000 worth, was consumed in this country. Without the home market many of the primary industries would be unable to carry on at all. But, although the home market is for this, as for every country in the world, the best market, it is not the only one. We must also endeavour to foster overseas markets. The Ottawa, agreement provides us with the means of developing intra-Empire trade. I have already said that the British Empire is essential to our safety and progress. A prosperous Britain is essential to us. It is essential to our safety and to our prosperity. Britain is our best overseas market. In 1929, she bought £57,000,000 worth of our produce. It is to our interest to ensure that Britain, insofar as we can help her, is enabled to pursue a prosperous course. The more we buy from her, the more she can buy from us. But if Australia is to help Britain she must be prosperous. The effect of the economic depression in Australia on our >purchase3 from Great Britain has been most marked; our demand for British goods fell away very considerably. A return of prosperity to Australia would mean an increased demand in Australia for British goods. Our ideal must be a prosperous Australia, as well as a prosperous Britain. To achieve this, we must be prepared to give as well as to take. We cannot expand our industries without paying due regard to the industries of Britain. Nor can the British manufacturer expect to extend his trade to the detriment of Australian industries. I commend a policy of wise restraint to my friends in the corner as one they ought to seize upon with avidity and follow with enthusiasm. Carping criticism of the tariff without regard to the prosperity of the country, or the balancing of budgets, and without regard to the spirit underlying the Ottawa agreement-

Mr Paterson:

– That is the best joke yet-

Mr HUGHES:

– I do not know exactly what joke the honorable member sees. I am bound to say that the honorable member’s quotation from the speeches of honorable gentlemen on this side of the chamber was, in all the circumstances, the biggest joke of the session, because, if any man in the world has shown what a gulf can stand between promise and performance it: is he. We have only to look at his record to see that he entered this Parliament on the strength of promises that he would establish new States, and bring freetrade to this country. But what did he do ? He associated himself with a Government that brought down the highest tariff the country had ever known up to that time. He has shown, by hi3 narrow and provincial outlook, that he is incapable of dealing with the great problems tha’t now confront us.

I see nothing in the schedule now under consideration that supports the contentions of either of the hostile sections in this House. I see nothing in it to lead me to believe that it does not give the British manufacturer an opportunity for successful business in Australia. The best answer to that allegation is the increase of British imports during the last few months. That has been referred to by the Leader of the Opposition. I ask the right honorable gentleman to point out where this schedule, in itself, menaces Australian industries? If the reports that may be received from the Tariff Board recommend reductions of duties below the margin which is necessary to afford our manufacturers the reasonable protection to which they are entitled, then the time will have come for action. For my part, I shall regard such recommendations as very serious. I shall never consent to, nor support any, proposals that may tend to undermine Australian industry. As these schedules stand, I see nothing in them that is opposed in any way to the principles of the Ottawa agreement. I believe the Government has taken the via media. It is pursuing a course which is the happy medium between the extreme sections in this chamber, and which will commend itself to the great majority of the people of this country.

Mr Holloway:

– I rise to make a personal explanation. On Tuesday evening, the honorable member for Corio (Mr. Casey) criticized the speech which I delivered on Friday last, which he was quite entitled to do. But in his criticism, he made some mis-statements in regard to myself, and charged me with having made statements that I did not make. He charged me with having said that this debate was not worth while, and that while I honoured my personal obligations, I recommend that the nation should repudiate hers. Next, he described as ridiculous the statement that I made in’ regard to the Brussels Conference held in 1920, and said that it did not advise

Governments to go back on the gold standard. Speaking in a most melodramatic manner, he ridiculed the idea that Mr. Winston Churchill would ever be influenced by any banking experts, and visualized him as shrugging his shoulders. All these statements concerning myself are incorrect, and I wish to prove it.

I did not say that this debate was not worth while-

Mr Archdale Parkhill:

– I rise to a point of order. I submit that the honorable member is not showing that he hasbeen misrepresented. He is merely replying to arguments advanced by the honorable member for Corio (Mr. Casey). If the honorable member has been misrepresented, every other honorable member has been similarly misrepresented, and would be entitled to a similar reply to that which the honorable member for Melbourne Ports is making. I ask for your ruling, Mr. Chairman, whether the honorable member is not merely replying to arguments advanced against his speech, instead of instancing misrepresentations.

Mr Blakeley:

– Speaking to the point of order, I remind the committee that the tradition and practice of our parliamentary system for hundreds of years, is that an honorable member who feels aggrieved, or who feels that he has been misrepresented, shall have the opportunity to make his position clear. This is regarded as an inherent right of honorable members. It is very rarely, indeed, that honorable members take advantage of this provision, but it is definitely provided for in our Standing Orders. I submit that, if the honorable member for Melbourne Ports believes that he has been misrepresented, he should be given an opportunity to correct the misrepresentation. The honorable member cannot, by any stretch of the imagination, be regarded as one who takes undue advantage of this provision in the Standing Orders.

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– Standing Order No. 260, which governs this matter, reads as follows: -

A member who has spoken to a question may again be heard, to explain himself in regard to some material part of his speech which has been misquoted or misunderstood, but shall not introduce any new matter, or interrupt any member in possession of the Chair, and no debatable matter shall be brought forward or debate arise upon such explanation.

I understood the honorable member for Melbourne Ports to set out a number of instances in which he felt that he had been misquoted or misrepresented. So far as he has gone he is in order. He has not introduced any new matter.

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– The first misrepresentation of which I complain is that I said that this debate was not worth while. I made no such statement. Isaid that this debate would not be effective, and could not be effective in our present circumstances, unless in dealing with the tariff we were also allowed to deal with our monetary and currency position. The honorable member for Corio next said that I had recommended the Government to default. What I said was that I believed that the Government should pay what it had contracted to pay to the very last farthing, just as an individual should do, but that I objected to Australia any longer being compelled to pay 70 per cent. or 80 per cent. in excess - a burden which had been placed upon her through the cornering of gold and the reducing of prices. The press put that statement the other wayround. I also said that, at the conference held in Brussels, contrary to the advice of Professor Cassel, resolutions were carried calling upon the governments to reduce expenditure, and, in certain environments, to bring about deflation. The honorable member for Corio said that no such thing was done. He said that he had looked through the resolutions of the conference, and could find nothing in them to justify the statement that I had made. What I object to is that, in effect, the honorable member said that my statement was without foundation, and that the conference had nothing whatever to do with recommending governments to go back to the gold standard. I said that it had.

The CHAIRMAN:

– I think the honorable member is now going beyond a personal explanation.

Mr Holloway:

– May I indicate what the conference did?

The CHAIRMAN:

– The honorable member cannot do that; it would go beyond the scope allowed in making a personal explanation.

Mr Holloway:

– May I make such a statement on the adjournment?

The CHAIRMAN:

– The Chair is only concerned with what is being done in the committee and cannot give a ruling as to action that the honorable member may wish to take in the House.

Mr COLLINS:
Hume

.- As a preface to my remarks on the tariff I take this opportunity to congratulate, in person, the honorable member for Balaclava (Mr. White) upon his elevation to the Cabinet, and upon his having been put in charge of the important portfolio of Trade and Customs. I have already sent written congratulations to the honorable member. I desire now to wish him every success and happiness in his high office. I am perfectly satisfied that he is both physically and temperamentally fitted for it, and that he has the necessary intelligence and integrity honorably to discharge the duties that will devolve upon him.

I have listened with great interest to the speeches that have been delivered during this debate, and particularly to the speech which has been just delivered by the right honorable member for North Sydney (Mr. Hughes). I was very sorry that in his brilliant address the right honorable gentleman characteristically offered no constructive ideas. His speech was destructive from one end to the other. He set out to excuse his fellow members who support the Government, for having changed their minds in regard to the tariff policy which they promised to pursue prior to the election in 1931. I can only hope that they will change their minds again. There is. no harm in. a person changing his mind provided that he changes it in the right way. In this instance I hope that the Government supporters will revert to the course that they first intended to follow. In this connexion I quote the following cablegram which appeared in the Daily Telegraph of to-day’s date: -

Washington, Wednesday

Attacking the present United States tariff system, the Secretary of Commerce (Mr. Roper ) last night advocated a tariff policy “ of common sense and common decency “ to other nations. “ There are honest differences of opinion as to tariff policies, but I believe the overwhelming majority of American people have unmistakably shown that they are tired of a policy that has antagonized every other nation in the world,” he declared.

Such is the position in Australia. I am not in any sense of the word a free trader. I wish to see Australia’s industries grow and flouriph, but, in my opinion, it is not common sense to give exorbitant protection to industries that have no possibility of making progress. Such industries must not be bolstered up at the expense of primary production. In the case of many of our uneconomic industries it would be far better for the Government to pay the basic wage to the few persons engaged in them, and let them sit down and twiddle their thumbs, than to strain our trade relations with othernations that are prepared to buy our primary products. These nations wish to export certain goods to Australia, and we should not hinder themby placing prohibitive duties on such goods. It is necessary for us to buildup a purchasing power which will enable other people to buy our primary products. It is interesting to compare our imports from France with our exports to that country. The figures for the years from 1926-27 to 1930-31, are as follow:-

It is seen from the foregoing figures that the prohibitive duties imposed under the Australian tariff has caused the value of our exports to France to drop from £17,627,139 in 1926-27, to £6,747,944 in 1930-31. The credit balance in our favour was £11,000,000 in 1926-27, 1927- 28, and 1928-29; but it was only £7,000,000 in 1929-30, and £5,200,000 in 1930-31. The value of our exports to, and imports from Belgium, is shown in the following table: -

It should be noticed that the value of our exports has dropped from £8,000,000 in 1926-27 to £4,000,000 in 1930-31. Our total exports to Belgium for the five years to which I have referred amount to £36,400,000, while the imports from that country total only £4,088,000, leaving a credit balance in our favour of £32,312,000. Those figures are sufficient to show that we cannot afford to close our doors to the nations that provide the markets for our great primary products. Yet we find that our trade is dwindling away. We should realize that while the rest of the world can live without Australia, we are absolutely dependent on world markets for the .disposal of our primary products. Japan formerly purchased large quantities of wool from Australia, but now their buyers pass our doors and secure supplies from South Africa, because of the tariff barriers that we have raised. We have’ been accustomed to look to Japan as a market for our tinned meats. We are urged to exploit the markets of the East ; but we now notice’ that in South America the J apanese have established meat works of their own, to the detriment of Australia.

It is hardly necessary - to remind honorable members that about 97 per cent, of the export wealth of our country is derived from primary products, the remaining 3 per cent, arising from the exports of secondary industries. In the business world, men concentrate on supplying the articles for which there is a steady -de mand, and if we find that, our national wealth comes from the products of primary industries, it would be wise to do everything within our power to place ( hose industries back on the road to prosperity. Therefore, we must reduce the tariffs that are militating against their progress. Subsidies to the wool industry will prove but a palliative. The best course to pursue is to assume that the prices we are now receiving for wool will not be higher in future than they are to-day. It is therefore, necessary to bring the cost of production down to bedrock by reducing overhead charges and lowering duties,, in order that the present prices may prove profitable. My sympathy is with the Government in its efforts to rehabilitate’ industry: But it should be business-like, and should be guided by men with knowledge born- of practical experience of our great primary industries. The right honorable member for North Sydney (Mr. Hughes) has said that Australia is a great country. Undoubtedly we have a noble heritage, and the duty .devolves upon us to populate our vast empty spaces. One often hears city men in Sydney advocating the development of the great unoccupied areas of the west; they have probably never been further west than Strathfield, yet they would try to solve the problems of settling the great western division of New South Wales! We must adopt a comprehensive policy of decentralization, in order to place large numbers of young Australians on the land. Commonwealth and State Governments should co-operate in a determined effort to encourage agricultural education, realizing that unless we develop our great natural resources, we shall never regain the road to prosperity.

The honorable member for West Sydney (Mr. Beasley) spoke in gloomy terms of the prospects of the young people who are now leaving school, and I arn equally concerned about the future of the rising generation. The responsibilities of parenthood, serious as they invariably are, have acquired, at the present juncture, a gravity unequalled in our history, and the factor which has created this unhappy phase of the problem is the impossibility, in so many cases, of finding employment for many young Australians. This difficulty becomes more acute each year, as numbers of our young people leave school, after having passed the intermediate, leaving- and many other examinations, and are faced with the problem of unemployment. There are a fortunate few who, by reason of their favoured circumstances in life, can treat this problem more lightly than the majority; but even the favoured ones cannot afford completely to disregard it. The danger of idleness has to be faced, jio matter what the monetary position of the individual may be, and that factor, which is a very disturbing one, is of concern to. rich and poor alike. A lad with nothing to do, and unable to find healthy and remunerative employment, is an easy target for -

The slings and arrows of outrageous fortune.

Unemployment is apt to create, in plastic minds, a sense of inferiority, and a feeling of not being wanted, which may easily lead on the one hand to hopelessness, or on the other to rebellion, either being a tremendous handicap to a boy.

Idleness affects many girls, and the parents of the girls in the same way, since there are many homes in the community where the women of the family must be the bread-winners. This problem must, because of the circumstances of the times, remain for the present insoluble, because the mysterious forces that govern economic relations the world over have made it impossible for employment to keep pace with the demands .upon it. For the fortunate few who can afford to wait, there need be no great concern at present; but regarding the large proportion of would-be workers, who, through no fault of their own, are denied an opportunity to make a start in business life, there is every reason for anxiety. Commonwealth and State Governments should adopt a vigorous land policy for the absorption of the young people. In Sydney to-day, a scheme for the rural employment of boys is in operation under the voluntary directorship of Captain Aarons, President of the Blind Soldiers Club, and remarkable success has been achieved in placing city boys on farms and stations throughout the State, where they acquire a first-hand knowledge of dairying and farming generally. Nearly 1,000 lads have been sent out, after the most searching inquiry as to their suitability for a life on the land, and in only about 2 per cent, of cases have they proved failures. They do not ask for wages provided that they get a good home and decent food. I do not altogether subscribe to that policy, but they are acquiring a practical insight into farming pursuits, and equipping themselves with the knowledge necessary to enable them to work holdings of their own.

I hope that the Government will endeavour to steer a middle COurse in regard to tariff matters, adopting neither a policy of extreme protection, nor one of freetrade. I trust that, honorable members will take a commonsense view, realizing that in their hands lies the destiny of future generations. The worst element in the community that is militating against the progress of this country is that of communism. I trust that the Government will use every endeavour to carry out its platform pledge to destroy this menace. I look to the Government so to shane the destinies of this country that it will remove the bitterness that has crept into different debates. Let us unite in this National Parliament with the one object of sweeping aside any obstacle that might militate against the smooth working of our industries and the development of the Australian nation.

Mr GUY:
Assistant Minister · Bass · UAP

– At the outset, I offer my congratulations to the right honorable member for North Sydney (Mr. Hughes) upon the excellent speech that he delivered to-night. It was one of the most interesting and informative speeches to which honorable members have listened for a long time. The right honorable member has raised the debate to a very high plane.

While it is not the desire of the Government to curtail in any way the debate on this important and, may I say, vexed question of tariff -ma king, it yet. is anxious to place the tariff on the statutebook, in order that that stability in our tariff laws, and that sense of security, which are so essential to the business and. industrial community, may be secured. A good deal of disruption and hardship has been caused in business circles by the drastic and frequent changes that have taken place during the last few years in our tariff laws.

I wish to correct a few wrong impressions that may have been caused by the utterances of some honorable members. Last week the Deputy Leader of the Opposition (Mr. Forde) made the following observations: -

The outcome of the policy adopted by the Scullin Government was not only to rectify the adverse trade balance, for 34 branch factories of big overseas manufacturers were established in Australia, and 75 new and important factories also set up in this country. Those establishments provided work for between 4.000 and 5,000 Australians, and, as they developed, so additional hands were taken on.

The honorable member for Dalley (Mr. Rosevear) this afternoon quoted figures relating to unemployment in other parts of the world, as a justification for the failure of the high protective duties of the Scullin Government to rectify the unemployment position in -Australia. Admittedly, unemployment is a worldwide problem; but the honorable member did not add force to his contention by quoting figures relating to the position in Great Britain, especially as, according to the Deputy Leader of the Opposition, one of the reasons for the imposition of such high duties by the Scullin Government was to correct the position in Australia. At the 30th June, 1929, prior to the Scullin

Government assuming office, the number of manufacturing industries in Australia was 22,916. At the end of the next financial year, which was eight months after the Scullin Government was returned to power, the number was only 22,707, or 209 fewer. At the 30th June, 1931, twenty months from the date that that Government was elected, by which time, if we accept the contention of the Deputy Leader of the Opposition, additional factories should have been established, the number had dropped to 21,751, or 1,165 fewer than at the end of the financial year 1929. So much for the contention of ‘ the Deputy Leader of the Opposition, that additional factories were established as the outcome of the tariff policy of the Scullin Government. On the question of the provision of additional employment, it will be found that at the end of June, 1929, the number of hands employed in manufacturing industries was 450,482. Eight months after the Scullin Government assumed office it was only 419,190, a drop of 31,292. By the end of June, 1931, the number was further reduced to 338,843, a drop of 111,639. At December, 1929, the percentage of unemployment was 13.1. It increased during the first quarter of 1930 to 14.6 per cent., in the second quarter to 18.5 per cent., in the third quarter to 20.5 per cent., and in the fourth quarter to 23.4 per cent. In the first quarter of 1931 the figure rose to 25.8 per cent. In the second quarter it was 27.6 per cent., in the third quarter 28.3 per cent., and in the fourth quarter 28 per cent. It could not be expected that much change would be witnessed in the first quarter of the present Government’s term of office in 1932. Before the drift could be stopped the percentage increased to 28.3 per cent., and in the second quarter of that year it rose to the abnormal figure of 30 per cent. But, at the expiration of six months after the assumption of office of the present Government, the position had considerably improved. In the third quarter of 1932 the figure was reduced to 29.6 per cent., and in the last quarter there was a further improvement to 28.1 per cent. The following figures compare the percentage of unemployment in different industrial groups for the fourth quarter of 1930 and 1931 :-

It will be seen that in every industrial group specified in the statistics, unemployment increased during the term of office of the previous Government. In the year 1930 the number of applications received for employment at the State industrial bureaux was 668,506. In the following year, when, according to the contention of the Deputy Leader of the Opposition, some improvement should have been shown, the number increased to 838,481.

The honorable member for Grey (Mr. McBride) stated, in effect, the other night that, if the amendment of the Acting Leader of the Country party (Mr. Paterson) were accepted, and the duties involved were reduced immediately, the provisions of the Industries Preservation Act could be applied where industries were adversely affected. Such a course is impracticable. It is not so easy and simple as the honorable member would have us believe to bring that act into operation. Owing to the machinization of industry throughout the world, goods are now being turned out in much larger quantity, and with much greater rapidity, than hitherto; consequently, there i-° a surplus of goods floating round the world seeking a market. If, as the amendment suggests, tariff restrictions were removed without inquiry, it would be an easy matter for any country to dump its surplus goods into Australia, and that might lead to the destruction of some of our worth-while industries. The suggestion that the Industries Preservation Act could be made to operate will not stand investigation. It is impossible to bring that act into operation until there has been a full and complete inquiry by the Tariff Board, and the Minister is satisfied that no detriment is caused to any Australian industry. Under the Australian Industries Preservation Act of 1906-10, finality may not be reached until the matter has proceeded as far as the High Court of Australia. Under the Customs Tariff Industries Preservation Act of 1921, before the Minister can impose a dumping duty on goods coming into Australia, it is necessary to refer the matter to the Tariff Board for investigation and report. Obviously, while the inquiry is proceeding, great quantities of goods may come into Australia to the detriment, and even ruin, of our industries. In any case, the Tariff Board must make an inquiry, and it is but common sense to allow the Government to maintain the statics quo, and retain safeguards in the form of existing duties, particularly as the report of the Tariff Board comes before Parliament in the usual course.

Protection for Australian industries is the accepted policy of the Commonwealth, and in order to give effect to it and make honorable . members familiar with the position, the Tariff Board was set up. After making full inquiry into each case submitted to it, whether for an increased or reduced duty, that, body makes a recommendation for the guidance of the Government and Parliament, which could not be better informed by any other method. The Tariff Board consists of skilled experts who are free and unfettered, absolutely impartial, and insensible to the wiles of tariff touts. That the Government does not believe in violent changes in protective duties by ministerial action was clearly indicated in the Prime Minister’s policy speech some sixteen months ago. No alteration of existing duties will be made by ministerial action until the Tariff Board has examined the merits or demerits of the case and submitted its report.

Our aim should be what might be termed an all-round, or sane protection ; protection for the manufacturers, the producers, the processors, and, above all, the consuming public. That brings me to a realization of the many inequalities of the past, such as the risk of unscrupulous manufacturers exploiting the community by endeavouring to make excessive profits. In this connexion, I quote the following paragraph from the last annual report of the Tariff Board, under the heading “ Profits “ : -

1. Profits. - Many industrial undertakings have been compelled to carry on their operations during the last year either at a loss or at a low rate of profit. The board still finds however that some industries which are seeking high rates of duty have built up profits and reserves quite out of proportion to the earning capacity of other - industries. It is considered by the board that in times like the present when the pastoral and other primary industries are in so parlous a condition no secondary industry should be allowed to use protective duties to maintain a price level capable of returning excessive profits.

In its annual report for the previous year, the board stated -

1. That under the rates of duty provided in the Customs Tariff 1921-1930, the industries seeking additional protection were earning substantial and in some instances ~ abnormal profits. In several cases dealt with by the board in the period covered by this report there was evidence that the manufacturers who made the requests for increased duties or supported proposals for such duties could, by reducing the selling prices of their products, have secured a considerably greater output in competition with imported goods. There was. also evidence that the manufacturers concerned, although earning profits which justified such action, had made no attempt to reduce their prices. Instances came under notice where requests, had been made for increased duty, or support had been given to increases embodied in tariff proposals by manufacturers earning abnormal profits. One manufacturer in an industry supplying goods to the value of £100,000 per annum was making J 00 per cent, per annum on the capital employed in his business. Another company with an output of £50,000 per annum had paid dividends ranging from 22£ per cent, to 12* per cent, over the four years preceding the inquiry. In another industry a company having an annual turnover of over £1,000,000 made over a period of seven years profits ranging from 37 per cent, to 13* per cent, per annum on the capital employed.

I submit that that is not the intention of reasonable or sane protectionists, or of this Parliament. Monopolies- have been brought into existence as the result of excessively prohibitive duties. We must safeguard the public against this danger, because monopolies inevitably make for higher prices and, often, for inefficiency. The healthy breath of competition should be allowed to permeate the markets of Australia. Only last week an Australian manufacturer on a large scale told me, personally, that he was producing an article at a cost of 2s., and that the duty on a similar imported article was 5s.! Had he chosen, he could have made over 200 per cent, profit in his trading. Again, I say, that is not the intention of sane protectionists, for it fails to afford protection to the public. Unfortunately, there are some in the community who would eliminate competition; who seek prohibitive duties for their products, at the same time desiring free entry for them in the markets of the world.

Some honorable members profess to see’ industrial destruction in the proposals submitted by the Government. They say that they will have a disastrous effect upon our secondary industries. Others claim that the same proposals are absolutely inadequate, and will not protect the community. We must examine . our tariff requirements in the light of our industrial needs and rights, and consider each industry in relation to the circumstances surrounding it. What body is more competent to hear and consider evidence and advise the Government and Parliament, after full investigation, than the Tariff Board? Section 15 of the Tariff Board Act prescribes that such matters shall go to the Tariff Board.- The Government intends that that shall be done, for the guidance of honorable members.

The Government’s tariff proposals which are now before honorable members represent an honest endeavour to foster efficiency in industry, which is an essential qualification of tariff protection, and is strictly in accordance with the policy of the Prime Minister, as enunciated in his policy speech. I shall not detain honorable members longer, as I wish to see this tariff law placed on the statute-book as quickly as possible. I again express my disappointment at the sneering remarks of some honorable members, who question the benefits that Australia will enjoy from the Ottawa agreement. It is no exaggeration to say that there is hardly a primary producer in Australia who will not gain to some extent, from the preferences granted under that agreement, be he an agriculturist, pastoralist, dairyman, fruit processor, or meat producer. The agreement also gives our primary producers a substantial advantage over foreign producers in the great British market. I suggest, in- all sincerity, that the Ottawa agreement has given a great stimulus to some of our rural industries. I urge that the amendment of the Acting Leader of the County party (Mr. Paterson) should be rejected, and commend the schedule that has been presented by the Government to the favorable consideration of honorable members.

Mr FENTON:
Maribyrnong

– At the outset, in case there should be some doubt as to my position, I inform honorable members that I cannot bring myself to support- the amendment of the Acting Leader of the Country party (Mr. Paterson). I have not counted heads, but I believe that the amendment will, rightly, be rejected by an overwhelming majority. The Assistant Minister for Trade and Customs (Mr. Guy) referred to the allegedly great benefits that will accrue to Australia from the Ottawa agreement. I should like some evidence in that regard. To date there has been little justification for the claims that have been made in various quarters that our primary producers will reap considerable advantage from that agreement.

I desire to correct an idea that appears to prevail, particularly in ministerial minds, and which received emphasis this afternoon in an interjection by the Minister for Trade and Customs (Mr. White) during the speech of the honorable member for Dalley (Mr. Rosevear). The Minister declared that the Canadian Government had appointed a Tariff Board to act in a similar capacity to our own Tariff Board. When perusing a Canadian newspaper to-day, I noticed that a Tariff Board has been appointed in Canada, composed of the following gentlemen : - Judge Sedgwick, chairman ; Mr. M. N. Campbell, M.P., vicechairman; and Mr. Hebert, Montreal, manufacturers’ representative. The following paragraph, which appeared in the same journal, indicates what that Tariff Board will be called upon to do. I particularly commend it to the attention of the Minister and others who persist in claiming that Canada is in the same position as Australia in this regard: -

The body will not make recommendations as the result of its tariff hearings, but shall submit a finding of facts to the Government. Parliament will stilt continue to exercise its tariff -making powers. Reports of the board will be laid before Parliament.

We in Australia, through our delegates at Ottawa, have bartered away “the powers of this Parliament, and given them to an outside body. We have not been as wise as the Parliament of Canada, and I am confident that the people of Australia will not agree with what we have done. It is true, as the right honorable member for North Sydney (Mr. Hughes) said, that the world to-day is living under ‘ new con’ditions. Even the wisest of men have had to re-cast their opinions during recent years. Statesmen, financiers and economists, have all had to admit that, with the changing times, they have had to change their views. The world is in a state of flux; from one day to another we do not know what will happen in some other part of the world to affect us in Australia; and for that reason we should be particularly careful before altering our tariff laws. The storehouses of the nations are full, yet, unfortunately, there are millions of people starving. With those -storehouses full, it is easy to see how slight a change might cause the Australian market to be flooded with cheap goods from other countries, causing u ur lactones to be closed, and our workers to be thrown out of employment. The great question confronting Australia, and, indeed, the whole world, to-day is the necessity for finding employment for the people. Only a slight diminution of orders is necessary to bring about a reduction of the staffs of our factories. Honorable members- do not need to be reminded that any reduction of the number of persons employed would bc serious indeed at this stage. It is estimated that a reduction of . the output of our factories to the extent of only 1 per cent., and a transfer of the work to British factories would throw 5,000 employees out of work.

Mr Maxwell:

– The honorable member is now discussing the principles underlying the Ottawa agreement, which has already been accepted.

Mr FENTON:

– I am aware of that; but in any discussion of this tariff schedule it is difficult to avoid references to the Ottawa agreement. It is true that (his Parliament has accepted that agreement; but another Parliament may hold entirely different views. We must endeavour to look into the future, in order to anticipate the effect of that agreement on Australia, because anything which will tend to increase unemployment can only be regarded as disastrous.

Mr White:

– This tariff will stimulate employment.

Mr FENTON:

– Unless the schedule is dealt with most carefully, and later, is properly administered, I am afraid that it will lead to further unemployment. At the present time large quantities of imported goods are being sold in Australia at prices which prove that they are the product of sweated labour. I shall not give the details of these articles now; but when the specific items are before us I shall do so. The strong protectionists in this chamber have been accused of worshipping the golden calf of protection. I say that some members of the Country party worship at the shrine of cheapness. They do not care where the goods come from, or under what conditions they are manufactured, so long as they are cheap.

The Country party also claims that, of Australia’s export trade, 96 per cent, represents primary products, and only 4 per cent, manufactured articles. That is not stating the position correctly, because among the commodities classed as primary products im the statistical records, are many which should come under the heading of manufactured articles and be credited to our secondary industries. The Statistician regards butter as a primary product, whereas we all know- that butter is a manufactured product. If it is not a manufactured article why have we hundreds of butter factories scattered throughout Australia? The same thing is true of other commodities which are classified as primary products. I shall have more to say on this subject later.

Mr Thorby:

– What difference does that make to the butter position?

Mr FENTON:

– The classification is wrong. If these commodities were properly classified by the Statistician they would affect the ratio of primary products to secondary products which are exported.

Mr Thorby:

– According to the honorable member’s reasoning, wool should be regarded as a manufactured product, because it goes through a shearing shed.

Mr FENTON:

– Wool is entirely different from butter. I claim always to have considered the interests of the primary producers of this country. In’ advocating the development of our secondary industries I am acting in their best interests, because, with the extension of our factories, more people will be employed, and they, in turn, will become purchasers of those products which the primary producers have to sell. In an article which he contributed to Australia To-day, Professor Copland stated -

The belief that primary production is more important to a country than manufacturing, comes down to us from the discussions that took place at the end of the eighteenth century among a group of French economists (the Physiocrats), who held that all wealth came from the soil, and that other forms of labour were unproductive. It is, perhaps, natural that this belief should survive in a country like Australia, where primary production supplies the bulk of the exports. But it is a mistaken view, and it has led to much misunderstanding concerning the contribution made , by manufacturing industries to the national income and the economic prosperity of the country. There is, in any case, some secondary production in the exports from primary industries. For instance, flour is manufactured in Australia for export. All butter produced goes through a process of manufacture, metals have to be refined, and meat has to be slaughtered and frozen. The “ processing “ of these exports is not different from the manufacturing of other products, whether these products are exported or sold in the domestic market. Any operation that produces a commodity at a marketable price is productive, and secondary industries are just as much engaged in producing wealth as primary industries. They add to the national income, enabling the country to support a greater population. How vital tills has been to Australia since the war is shown by the fact that the majority of Australian workers now find employment in the secondary industries.

Mem,bers of the Country party may be interested to know that Professor Copland is the son of a farmer, and spent his early life on a New Zealand farm where he had practical experience of farming. Later, he became an economist, and although we may not all agree with what he says, we must admit that he stands high in reputation among the economists of the world. His opinion is that because many items which are now classed as primary products pass through processes of manufacture, they should be placed in the category of secondary products.

Mr Maxwell:

– What does this extension of the definition of manufactured articles prove?.

Mr FENTON:

– It proves that the products of our secondary industries have not ‘been correctly stated as being only 4 per cent, of our exports. A proper classification of our exports would add many millions of pounds to the value of the manufactured articles which wie send overseas.

Mr Maxwell:

– Then the honorable member must be satisfied with the same measure of protection for manufactured goods as for butter.

Mr FENTON:

– There is a prohibitive duty on imported butter ; if 6d. per lb. is not a prohibitive duty, I do not know what a prohibitive duty is. Butter is not the only primary product which is protected by a prohibitive duty. -The honorable member for Corangamite (Mr. Gibson) was able to persuade the BrucePage Government that a protection of £8 a ton. was necessary to protect the Australian onion trade. If £10 a ton were necessary to protect the Australian onion industry from competition, I would favour it. Barley, entering Australia from other countries, is subject to a duty of 2s. a cental, and imported maize is dutiable at the rate of 3s. 6d. per cental. These are practically prohibitive duties. I am prepared to extend to our primary industries as much, or even more, protection than I would grant to our secondary industries. It is ‘ inconsistent for Country party members to seek high duties on primary products entering this country, and to be unwilling to grant reasonable protection to Australian secondary industries.

Mr Thorby:

– Who advocates that?

Mr FENTON:

– The votes of honorable members will show where they stand. Those honorable members who believe in granting to our secondary industries as much protection as they would afford to primary industries will not vote for the amendment of the Acting Leader of the Country party.

Mr Thorby:

– He will accept a 50 per cent, reduction all round, primary products included.

Mr FENTON:

– The honorable member for Gippsland had no right to make a promise like that. Would the primary producers in the Corangamite electorate agree to their representative favouring such a proposal ? How would the’ growers of maize at Orbost, in the district of the honorable member for Gippsland, favour a reduction of the duty on imported maize? If the duty on maize were reduced, it is quite likely that this country would be flooded with maize grown in South Africa by black labour. Some honorable members who worship at the shrine of cheapness would be quite prepared to admit foreign maize into this country, but I contend that we cannot maintain a decent standard of living if we force down our tariff barriers and allow goods from cheap labour countries to compete with our own products.

Mr THORBY:

– What is the standard of living of the primary producer to-day?

Mr FENTON:

– What is the standard of living of thousands of working people to-day? It is unfortunate that nearly every section of the community is suffering during this time of depression. A3 the right honorable member for North Sydney (Mr. Hughes) has stated, until our people are placed in employment there is not much hope for improvement in the world’s affairs. What has happened in Australia applies to other countries. It is difficult to visualize the awful suffering that is taking place throughout the world, because of 30,000,000 workers being out of employment. The United States of America is supposed to be the richest country in the world, yet to-day it has 12,500,000 people unemployed. I admit that Australia cannot govern the affairs of France, Germany, Great Britain or the United States of America. Our position can be alleviated only as a result of some international co-operation. The right honorable member for North Sydney has said that the world economic conference is as far off as ever. I do not know whether that is so. I looked forward to the Ottawa Conference as the forerunner of the greater conference to be held in connexion with the world’s affairs. I am still hoping that that conference will take place at an early date in an effort to bring about international equilibrium. We can play our own part in this young country, and in some respects we can give a lead to the world as we have done previously.

The effect of the passing of the amendment of the Acting Leader of the Country party (Mr. Paterson) would be to reduce the number of people engaged in our factories. According to the latest figures the number of factories in Australia is 21,751; the number of hands employed, 340,000; the amount paid in wages and salaries, £62,000,000 ; the value of production, £118,000,000; and the total value of output, £300,000,000. Every country throughout the world is faced with the problem of unemployment, but it is stated by those who should know, that Australia is in a far better position than most of the other countries. Our secondary and subsidiary industries give employment directly and indirectly to at least 2,000,000 people out of a total population of 6,500,000. hi fact at least 3,000,000 people are directly and vitally affected by employment given by our tariff, and the general benefit is felt by all. A little while ago, I gave an illustration, of an article used for dentistry purposes.. At one time that article was imported, but now it is manu.factured in Australia, and sold to the consumer at a price lower than was the imported article. It is sold in a bottle which is also manufactured in Australia. The bottle is encased in a cardboard box which is made in Australia, and on it is printed a description of the article, that, of course, giving work to the printing trade in Australia. A flourishing industry develops subsidiary industries, and in that way increases business and employment. The protective policy of Australia enables our factories to give employment either directly or indirectly, to at least half the population of Australia. If we lower our tariff wall, we shall reduce the number of people in employment, fewer people will be able to buy the goods that are produced here, and our position will gradually become worse. Unless we retain our protective policy we shall not be able to maintain our present population, nor shall we be able, in the future, to invite our brethren overseas to take up residence here. It would be far better for us to absorb some of the thousands of surplus people in Great Britain than to allow the manufactured goods of that country to be sold here in competition with our own. Our first duty is to develop our own industries, so that we may give employment, not only to our own poeple, but also to our kith and kin from overseas. But we cannot do so until our position is considerably improved. Australia played its part during the war, but only because of the operation of our protective policy. It is well known that, had we not factories in our midst to come to our assistance at that time, we could have done little to help Great Britain and her Allies.

Mr Gregory:

– The high tariff was imposed in 1920.

Mr FENTON:

– Let me remind the. honorable member that Great Britain itself has now decided upon a protective policy. We should give preference first to our own people, and then to the other parts of the Empire. As a* result of the Ottawa Conference, 250 foreign factories have been established in Great Britain. Those foreign factories are employing, not British people, but their own people, just as the Dutch did in respect of the manufacture of cigarettes and cigars. Therefore, if we give preference to Great Britain, we are likely to benefit, not the people of Great Britain, but the people of other countries who have established themselves in Great Britain to develop their own interests. My first schooling in protection was given to me by a farmer. His complaint was that, under the policy of freetrade, reapers and binders and binder twine were being sold to the farmers at exorbitant prices. But, so soon as we commenced to manufacture our own binder twine, and later, reapers and binders, prices declined. If we were to discontinue the manufacture of these implements, the price of the imported articles would be immediately increased. In that respect the protection policy of Australia is a safeguard to the man on the land, Honorable members opposite talk about monopolies in this country. I contend that the importing monopolies are one of the. greatest curses of the world to-day. We can deal with monopolies in our own country, but not with outside monopolies. The Minister mentioned one company which was making a profit of 200 per cent. An investigation could be made into that ca3e, but no action could be taken against a foreign monopoly selling goods in this country at an enormous profit. If we lower our tariff wall, we shall encourage foreign monopolies to operate in Australia. Doleful free traders in Great Britain have predicted that the imposition of a protective tariff would enable the consumers to be fleeced. Lord Hailsham, a member of the British Cabinet, has stated -

We have put on a tariff and the consumer has not paid, and the price has gone down instead of going up.

I hope that, before the tariff debate closes, the honorable member for Swan and I will have a consultation, so that I may be able to show him a long list of goods that are being sold more cheaply to-day than they were when this country was entirely in the hands of the importers. We cannot afford to play fast and loose with our tariff policy, particularly at this time of crisis.

I have not the faith in the Ottawa agreement that some honorable members seem to have, but I hone, for the sake of Australia and the rest of the Empire, that it will operate to our mutual benefit. An alteration of the Ottawa agreement has already been sought by Great Britain in respect of two classes of goods which are of considerable importance to us. I am aware of the clause in the agreement enabling an alteration to be made after consultation with the British Go- vernment. In my opinion, a very serious blunder was made when our representatives agreed to allow the Tariff Board to decide what protection should be accorded to Australian industries, and I am afraid that this concession will work to the detriment , of our people. I have no wish to make any charges against our delegates in their absence from this chamber) but I believe that a hint was given at the Ottawa Conference that if the duties on certain items were submitted to the Tariff Board for inquiry and report it was probable that there would be downward revision of the tariff. The British delegates took the hint, and then the conference accepted the clause to which I have referred. I very much fear that it will not be conducive to harmonious trade relations between the Commonwealth and the Mother Country. The need- for complete unity within the Empire was never greater than it is to-day. In my opinion, the present crisis, though of a different character, is as grave as that of 1914. and I firmly believe that empire unity now will mean empire safety. I therefore regret that the Ottawa agreement contains provisions which, in my judgment, will lead to a considerable amount of dissension among the dominions. Already there is an agitation in Canada for an investigation, by the Canadian Tariff Board, into some of the disabilities which that dominion is suffering as a result of the agreement. I believe, however, that if we can discuss these differences in a friendly spirit all will be well, and that we shall be able to prevent disruption or bad feeling between the Mother Country and the dominions.

I intend, during this tariff discussion, to vote for duties which, in my judgment, will maintain Australian industries at a consistently high standard. During the last election campaign, I gave definite pledges to my electors in connexion with this matter, and I intend to honour them. The Prime Minister (Mr. Lyons), in his policy speech, announced the tariff policy of his party, but, as I have said, I made my own, and I intend to vote in accordance with my pledges. The need for the maintenance of Australian industries will be realized by honorable members when I tell them that, according to official figures which have been published, the diversion overseas of one per cent. of Australian secondary production will displace from employment 4,465 Australian workers; the diversion of 10 per cent. of such production will render unemployed 44,655 of our people, and the diversion of 20 per cent. will mean that 89,311 good Australian workmen will lose their jobs. This country has an abundance of raw material for the use of what should be natural secondary industries. When I was in Great Britain a few years ago, I met a considerable number of British manufacturers who assured me that because of our advantageous position, due to the production of large quantities of raw material, they had not the slightest objection to the establishment in this country of secondary industries. They were sufficiently broadminded to admit that we should be exceedingly foolish if we did not make use of this raw material.

I do not wish, at this stage, to touch upon the importance of secondary production to defence, but I should mention that, it is absolutely essential, from the defence point of view, to have certain secondary industries well established in this country. I shall say no more on that point at this stage. I advise the members of the Country party not to lay the flattering unction to their souls that they are the only people who represent the primary producers in this chamber, or that their view of the Government’s tariff policy is unassailable. I have, on other occasions, and I am prepared again, to go into any country constituency, and, before a representative rural audience, advocate protection for our secondary industries, being firmly convinced that I shall be able to persuade such an audience that protection for our secondary industries is in their interests. Only a day or two ago, an old friend of mine, a representative farmer in my own district, said to me, “ Whatever you do, Fenton, don’t cease advocating protection for this country “. I have been a protectionist all my life, andI am quite sure that the farmers of this country are broadminded enough to acknowledge that thriving secondary protected industries mean a wider home market for their products. I have no patience with a man who endeavours to set town against country, because their interests are identical, and in this tariff debate my vote will, as I have said, be given in support of duties which will maintain our secondary industries. I hope that the amendment will be rejected by an overwhelming majority, and that the vote will be an indication of the determination of the committee to adopt a tariff that is in the best interests of the people of Australia.

Question - That the words proposed to be inserted be so inserted (Mr. Pater- son’s amendment) - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 18

NOES: 39

Majority . . . . 21

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

The general debate being concluded,

Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP

– I move -

That the consideration of all items other than those specified in Group 1 in the Customs Tariff memorandum (showing rates of duty under various tariff proposals) circulated hy the Minister for Trade and, Customs, be postponed until after the consideration of the items specified in Group 1.

The purpose of this motion is to meet the convenience of honorable members, by shortening discussion so that it will not continue into the winter months.. The consideration of the Kingston tariff extended over 70 sittings, from the 8th October, 1901, to the 18th April, 1902; the Lyne tariff, 62 sittings, from the 4th July, 1907, to the 12th December, 1907; and the Massy Greene tariff, 38 sittings, from the24th March, 1920, to the 8th July, 1921. The grouping of items will mean that only a few introductory remarks will be required on each group, and many speeches will be obviated. Therefore, the procedure proposed is desirable. The leaders of all parties in the House have promised to support the grouping arrangement, and I am grateful for their co-operation. I could wish for the same unanimity to be displayed in regard to the general principles of the tariff and the individual items.

Motion agreed to.

Progress reported.

page 354

ADJOURNMENT

Conference of Aero Clubs - Interest Payments Overseas - Deflation - Gold Standard: Brussels Conference - Naval Rating Seeking Discharge - War Pensions and Old-age Pensions.

Motion (by Mr. Lyons) proposed -

That the House do now adjourn.

Mr FRANCIS:
Assistant Minister · Moreton · UAP

– This afternoon the honorable member for Capricornia (Mr. Forde) asked a question, in the course of which he voiced the complaint of aero clubs in Queensland regarding the brevity of the notice given them of the conference of aero clubs to be held in Melbourne on Friday next. I promised to obtain the facts for the honorable member, and I am now able to inform him that as the associated aero clubs had arranged for representatives of the various State organizations to meet in Melbourne on Friday, preliminary to the annual pageant of the Victorian Aero Club on the following day, it was decided at the beginning of this week to take advantage of this meeting to have a discussionbetween representatives of these clubs and officers of the Civil Aviation Department, upon the subject of future assistance to the clubs. Invitations were consequently issued on Monday last to each club included in Associated Aero Clubs to nominate its representatives to attend the conference with the department. Simultaneously, invitations were also sent to the minor aero clubs at Rockhampton, Lismore and Bendigo to send representatives, although these clubs, unlike the major clubs, are not in receipt of direct financial assistance from the department. Although the notice was short, particularly in the case of the more distant clubs, it was deemed advisable to hold the discussion during the time fixed for the Associated Aero Clubs’ meeting, as larger representation was likely to be secured thereby. It is expected that representatives of all the clubs to which invitations were issued, except Rockhampton and Lismore, will be present. The notice given was sufficient to enable at least the Lismore club to be represented had it so desired. Both it and the Rockhampton club have already been advised that their non-representation will not in any way prejudice the department’s attitude towards them ; any representations they desire to submit will be given due consideration. It is feared that any postponement of the meeting would not only be inconvenient, but might also result in certain of the major clubs, which are more directly concerned with the discussions proposed, not being represented.

Mr HOLLOWAY:
Melbourne Ports

– I desire to refer to a matter which is of the greatest importance to the people of Australia. I have mentioned on previous occasions - and what has occurred since then has merely served to strengthen my belief - that it is necessary for the Government to take action. to prevent the exploitation of the Australian people, the smashing of our standards of living and the ruin of our rural industries by the continued payment of the excessive burden of interest on obligations entered into years ago. I say this without desiring to make any suggestion ‘ in favour of repudiation. I do not believe in repudiation, either as an individual or as a member of this Parliament, but it is wrong to make the people suffer further degradation and poverty, as all sections have been’ suffering, by forcing them to pay 70 to 80 per cent, more in the discharge of interest obligations than they legitimately ought to pay. I am in good company when I make that statement. I propose to quote from the speeches of some of the leading statesmen of Britain, delivered in the House of Commons a few months ago. They have stated that it is unfair to expect Australia, among other countries, any longer to bear these increased burdens imposed by the artificial cornering of the gold supply of the world.

This plan of world-wide deflation had its genesis in the recommendations issued by a conference held in Brussels in 1920. That conference dealt with the methods which ought to be adopted for stopping inflation, and for getting back to the 1914 standard of values. At the conference, Professor Gustav Cassel made a statement which has since become world famous, because of the absolute accuracy of the prophecy it contained. In the same year I received a verbatim report of the speeches delivered at the conference and of the resolutions passed, because I happened at the time to be the Australian representative of the Geneva office. I remember the substance of the speeches quite well, but in order that I might have some authority other than my own recollection for the references I might make to them, I have sought to obtain copies of the speeches and resolutions from the Commonwealth Library. I regret to say that the Library does not possess a verbatim report of the conference, but I have here a copy of the speech delivered by Professor Gustav Cassel. He pointed out that they were likely to kill rather than cure the patient if they followed the advice which had been given to embark upon a period of deflation. The experts suggested the tightening up of the money market, and the raising of the bank rate, so that advances could be procured only with difficulty. Honorable members will recall that seven or eight years ago it was extremely difficult to obtain money. The conference carried resolutions calling on governments and municipalities to restrict their operations, and to cut everything to the bone. It was suggested that if the tightening of money and the increase in interest rates did not turn out to be the natural corrective, other methods should be tried. All superfluous expenditure, it advised, should be avoided if the wise control of credit brought dear money; that result would in itself, it was stated, help to promote economy. It was further recommended that it was highly desirable that those countries which had lapsed from an effective gold standard should return thereto. The general opinion in Australia is that that conference did not deal with the gold standard at all. Experts at the conference argued against any effort to stabilize gold values. They did not want prices to fall because if would check the work they wanted to do. Another resolution stated -

It is useless to attempt to fix the ratio of existing fiduciary currencies to their nominal gold value; as, unless the condition of the country concerned were sufficiently favorable to make the fixing of such ratios unnecessary, it could not be maintained.

This resolution was carried after the conference had heard the speech of Professor Gustav Cassel, in which he had advised that any sudden attempt at deflation would result in severe unemployment and distress. The resolution continues -

Deflation, if and when undertaken, must be carried out gradually and with great caution; otherwise the disturbance to trade and to credit might prove disastrous.

We cannot recommend any attempt to stabilize the value of gold, and we gravely doubt whether such attempt could succeed.

At this conference those governments which had lapsed from the gold standard were advised to return tq it, and that advice was followed by some of them, including Great Britain. Mr. “Winston Churchill, speaking in the House of Commons last year, admitted this. There is a belief in Australia that Great Britain was not -influenced by the resolutions of the conference; that British statesmen would not allow their judgment to be swayed by outside advice; but it has since become evident that, on this occasion, the British Government was guided by the financial experts. This is what Mr. Winston Churchill said -

When 1 whs moved by many arguments and forces in l’.)25 to return to the gold standard I was assured by the highest experts, and our experts are men of great ability and of indisputable integrity and sincerity.

I take for myself and my colleagues of other days whatever degree of blame and burden there may be for having accepted their advice. But what has happened? We have had no reality, no stability. The price of gold has risen since then by more than 70 per cent. That is as if a 12-inch foot rule had suddenly stretched to 19 or 20 inches; as if the pound, avoirdupois, had suddenly become 23 or 24 ounces, instead of- how much is it? - 16. Look at what this has meant to everybody who has been compelled to execute their contracts upon this irrationally enhanced scale. Look at the gross unfairness of such a distortion to all producers of new wealth, and to all that labour and science and enterprise can give us. Look at the enormously increased . volume of commodities which have to be created in order to pay off the same mortgage debt or , loan. Minor fluctuations might well be ignored, but I say. quite seriously that this monetary convulsion has now reached a pitch where I am persuaded that the producers of new wealth will not tolerate indefinitely so hideous an oppression.

Are we really going to accept the position that the whole future development of science, our organization, our increasing co-operation, and the fruitful era. of peace and goodwill among men and nations; are all these developments to be arbitrarily barred by the price of gold? Is the progress of the human race in this age of almost terrifying expansion to be arbitrarily barred and regulated by fortuitous discoveries of gold, mines here and there or by the extent to which we can persuade the existing cornerers and hoarders of gold to put their hoards again into the common stock?

If there is any doubt that the Brussels Conference recommended governments to go back on the gold standard, and that Mr. “Winston Churchill accepted its advice, as shown by hi3 speech in the House of Commons from which I have quoted,

I submit that I have resolved it. I also submit that 1 have shown that Mr. Winston Churchill regrets having taken the advice of the conference, because of the results which have accrued from doing so. I wish to say that this Government would be justified, in all the circumstances, in calling upon the Australian Resident Minister in London (Mr. Bruce) to open up negotiations -immediately with the overseas money lenders with the ob ject of pointing out that in justice and fairness there is an imperative necessity on them to convert these loans, or to permit us to pay them back on the basis of the date at which they were made. If we pay back every penny that we contracted to pay, on the basis of the terms on which the loans were made, I submit that we shall have done our duty. This Government should not, any longer, force the people of Australia to pay 80 per cent, more than they ought to pay, for in doing so, it is making the country poorer and poorer. This policy involves undue taxation on our people, and the cutting of our standard of living to a deplorable degree. In these circumstances, I su’bmit it is the duty of this Government to open up negotiations through its representative overseas with the object of lifting from Australia what Mr. Winston Churchill has described as “ a hideous burden “ that should be no longer tolerated.

Mr CASEY:
Corio

.- If we are to get to the bottom of the subject introduced by the honorable member for Melbourne Ports (Mr. Holloway), we shall, of necessity, be compelled to make a complete analysis of the source or sources from which this depression has arisen. This, I submit, is impossible at this time in the evening. The honorable member for Melbourne Ports has quoted Professor Cassel’s remarks at the Brussels Conference in September, 1920, and has stated that he gave advice to that conference in opposition to the resolutions which the conference eventually reached. I maintain that that is an unfair method of argument, for honorable members generally have not access to the verbatim reports of that conference. I feel sure that it would be quite possible to quote other authorities of possibly equal eminence on the other side. If we are to discuss the Brussels Conference of 1920. we must do so on the basis of the actual resolutions that were eventually taken at it. This subject has been debated previously in this House, and on that occasion, I ventured to offer a resume of the resolutions of that conference. I tried to point out that the resolutions were not revolutionary, or unique, or radical, or even very conservative 111 character. One mud remember the conditions that obtained in 1920, when the whole world was in confusion - confusion equal, I think, to that of to-day, but of rather a different order. We were then very close to the war, and no one knew the answer to the question, how we could get out of the mess in which the war had left us. I submit that the resolutions of the Brussels Conference were the reasonable and commonsense resolutions that any body of reasonable ‘men and financial experts must have come to at that time. They were not really very far removed from the resolutions that were come to only a month or so ago at the last meeting of the Loan Council in Melbourne. They were, at least, of the same order. Mr. Winston Churchill, who was quoted by the honorable member, has, like a number of equally eminent people, taken leave to change his mind entirely on the subject of the return to the gold standard. Five years after the Brussels Conference, in 1925, Great Britain, after a considerable amount of mental searching, and a good deal of acid discussion in the House of Commons, and in the public press of the country, decided, eventually, that a return to the gold standard would probably be the best thing for the country in the interests of the whole population. We, being wiser after the event, think that that was probably a wrong and premature decision, because it involved a measure of deflation which gave a crippling blow to British industry, and emasculated it so that it could not successfully compete with the manufacturing industries of other countries. I repeat that it is certainly being wise after the event to say that the deflation, which the return to the gold standard entailed, was wrong.

Certain people at that time predicted a measure of deflation which would be crippling to Great Britain, but certain other people, who were in a majority, said that it would not be so, and that on the balance Britain would gain. No very definite lesson can be learned from Great Britain’s return to the gold -standard, except, perhaps, the frailty of human judgment.

I had no conscious intention of misquoting the honorable member for Melbourne Ports when I said that he suggested, or at least implied, that the cornering of gold by Prance and America was the direct outcome of the resolutions of the Brussels Conference.

Mr Holloway:

– I did not say that.

Mr CASEY:

– I do not think that that proposition can be maintained. By connecting up the resolutions of the Brussels Conference, which -he held were definitely deflationary, with the cornering of gold, I think the honorable member really suggested that there was some connexion between them. I certainly understood him to suggest that the cornering of gold followed as a necessary corollary of the resolutions of the Brussels Conference.

Mr Holloway:

– Of the return to the gold standard.

Mr CASEY:

– I point out that the cornering of gold by France did not take place until 1928, and that it was occasioned by certain banking legislation which had nothing whatever to do with the so-called deflationary proposals of the Brussels Conference. It was a question only of the policy of France in regard to banking legislation. I remind honorable members, also, that in the intervening period between the Brussels Conference and the passing of this banking legislation by France in 1928, certain catastrophic events took place in France. There was inflation in that country for a period of four or five years, and tremendous efforts were made by the French nation to stabilize its currency, and link it up with gold again, although not perhaps on the previous parity basis. As for America, I suggest that the cornering of a great deal of gold in that country had nothing to do with deflation or the Brussels Conference. America, after 1920, had almost ten years of unexampled prosperity, which was interrupted only by a period of depression for twelve months in 1931. The corralling of gold by America was the direct result of the tariff policy of the United States of America, of the insistence by Congress on the collection of interest on war debt account, and of its refusal to take payment in goods. As payment in goods was declined, it had to be made in. gold. It needs an undue effort of the imagination, against which my personal common sense revolts, to believe that the corralling of gold by America had any connexion whatever with the Brussels Conference or the process of deflation. The subject of a return to the gold standard seems to occupy an important place in the mind of the honorable member. Personally, I see nothing very hideous or immoral in such a return. There might be more point in his argument if he qualified it by speaking of a return to the gold standard at the old time parity. Not having had an opportunity to peruse a verbatim report of the Brussels conference, I do not remember that any part of the recommendations was that there should be a general return to the gold standard at the old parity. Even to-day, at the’ middle of the financial upset of the world, the subject of a return to the gold standard is being seriously discussed in Britain; not necessarily at the old parity of 4.86 dollars to the £1 sterling, but at some depreciated sterling rate.

Mr Holloway:

– Does the honorable member agree that the cornering of gold has enhanced its price? .-

Mr CASEY:

– Certainly; but to make a complete statement on the subject one would have to go back to all the causes or supposed causes of the depression.

Mr Holloway:

– Does the honorable member agree that the enhancement of the price of gold reduced the price of everything else?

Mr CASEY:

– .Certainly, to the extent that it is generally admitted that the general problem of gold is one of the primary causes of the drop in prices that has been such a pronounced feature of this depression. As the honorable member knows, Sir Henry Strakosch lays great stress on the monetary aspect of the depression, but the bulk of informed opinion is that gold is only one of many causes of the depression. Certainly it has been demonstrated beyond doubt by Sir Henry Strakosch -that the cornering of gold by Prance, the United States of America and, to a lesser extent, by the Argentine, has resulted in bleeding other countries white. That was the maldistribution of gold, added to which was the fact that there was a promise at the early stage of the depression that the world’s supply of new monetary gold would decline. As a matter of fact, there has been an increase in the supply of gold ; but based on the assumption that it would decline, the picture was painted of countries other than those which had cornered gold, having insufficient gold on which to base the pyramid of credit necessary to finance industry and commerce. In replying to the honorable member for Melbourne Ports, one has to be unduly suspicious to see in these movements anything wilful or obnoxious in the efforts made by the countries of the world generally. I do not think that any statesman consciously had in mind the reduction of world prices.

Mr Holloway:

– But the facts are here.

Mr CASEY:

– This result was not wilfully precipitated, as the honorable member has suggested. I do not think that we can blame any of the delegates to the Brussels conference ; it was a result of a lack of experience. The world did not then have the monetary experience that has been gathered in the succeeding ten years. A point of more substantial interest to this country is the effect of the catastrophic fall of prices upon our export surplus with which we must meet our external debt. I think that the honorable member implied that the lowering of prices had been foisted on us by some artificial juggling by individuals or governments abroad; but I suggest that it has come about solely by a most unfortunate concatenation of econo- mie circumstances. We are the sufferers, and no one regrets it more than I do. The honorable member says that he would recommend the payment of interest on the basis- of what we have borrowed.

Mr Holloway:

– Under the conditions operating at the time when we contracted the loans.

Mr CASEY:

– If we base any claims on questions of contract, we shall not have a leg to stand on. We made our contract in sterling, and if our creditors insist on our observing the letter of that contract, we must abide by it. The thing, that the honorable member deplores, although he did not say so in so many words, is that when we contracted our loans in Great Britain we did not do so on the basis of interest payments varying with the purchasing power of gold. That method has been suggested for the last five or six years. I personally remember discussing it with Sir Norman Angel in 1928, and I regret that it is not a financial habit to base loans on the purchasing power of gold. I suggest that there has been no venal intent-

Mr SPEAKER:

– The honorable member’s time has expired.

Mr WARD:
East Sydney

.- Honorable members of my party have been besieged by applications from men who were retrenched from the Navy because of a shortening of hands, and are now anxious to re-enter the service. They have been told, however, that no vacancies are available to them. On the other hand, I have been approached by the wife of a naval rating who wishes to leave the Navy in order to take up a business career. He made application to his commanding officer for a discharge, expecting that the application would be forwarded to the Navy Office in Melbourne. Since no reply had been received, his wife asked me to ascertain whether the matter had been dealt with by the Navy Office. I received the following reply in January last : -

The regulations provide that the captain is to be careful not to entertain or forward an application for discharge without fully satisfying himself that the applicant has good and substantial reasons for seeking his discharge. In these circumstances, it is sug gested that any further representations in this matter be made by the rating to his commanding .officer. This ratings engagement does not expire until the 24th June, 1939.

Evidently, the Navy Office takes the view that it must consider the future of the men who now desire to be discharged. In view of the fact that in many cases naval ratings are anxious to re-enter the service, the department should take a more sympathetic view of applications for discharge, and in cases where men are prepared to leave the service without claiming the benefits to which they would ordinarily be entitled, their applications should be granted. Since his application has been lodged, the man to whom I refer has been subjected to harsh treatment by his commanding officers. The application was originally made to the captain of the Australia, and the man has since been transferred to the Penguin. He suffers from an affection of the feet, due to their contact with caustic soda, and because he was wearing slippers on board, he was subjected to certain penalties. This unfair treatment has been experienced since I have made representations for his discharge. I suggest to the Minister that sympathetic consideration should be given to these claims, because the navy is not at the moment seeking additional ratings, but, on the contrary, many ratings are being discharged. The name of the rating whose case I have referred to is John Southern, of H.M.A.S. Penguin.

Some time ago the Minister for Repatriation gave in this House an undertaking that where an old-age pension was reduced, and the pensioner was also in receipt of a war pension, if the total income was reduced below £3 a fortnight, the war pension would be increased by an amount that would raise the total income to £3 a fortnight, upon application being made to his department. I have made to the department representations on behalf of Mrs. Rosalind Hay ward, of 71 Hooper-street, Randwick, a war pensioner. The oldage pension received by this lady was reduced in January last, after review, because she was in receipt of a war pension. The Repatriation Department, in conformity with the undertaking given by the Minister, increased the war pension of this lady from £1 13s. to £1 18s. a fortnight, which raised her total income to £3 a fortnight. The notification to that effect was dated the 6th March. On the 8th March she received a further communication from the Invalid and Old-Age Pensions Department, notifying her that her pension had been further reduced to 13s. a fortnight, the reason given again being that she was in receipt of a war pension. Have I to make fresh representations to the Repatriation Department to secure the restoration of the amount by which the old-age pension has been reduced? This see-saw process is not only irritating to the pensioner, but also involves honorable members in needless additional work. I suggest that there should be some agreement between the two departments, under which the Repatriation Department would agree to pay from the outset the full amount of £3 a fortnight. Such an agreement would obviate unnecessary delays, and the irritation that is now caused to applicants.

Mr MARR:
Minister for Health and Repatriation · Parkes · UAP

.- If the honorable member will supply me with particulars of the matters to which he has referred, I shall have them inquired into and shall furnish him with information concerning them.

Question resolved in the affirmative.

House adjourned at 10.54 p.m.

page 360

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Buffaloes on Melville Island

Mr Nelson:
NORTHERN TERRITORY, NORTHERN TERRITORY

n asked the Minister for the Interior, upon notice -

1. Are buffaloes counted as stock for the purpose of stocking conditions in. leases on Melville Island, Northern Territory?
2. What is the total area of Melville Island?
3. How many buffaloes are there on the island?
4. What are the methods of checking the accuracy of the numbers returned for stocking conditions?

Mr Perkins:
Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP

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

1. Yes. By a determination of the South Australian Government stocking with buffaloes is regarded as complying with the stocking conditions of the existing pastoral leases, and it has been ruled that the Commonwealth is bound to carry on this arrangement.
2. Approximately 2,400 square miles.
3. The department has no accurate knowledge of the number of buffaloes on Melville Island.
4. No attempt has been made to check the number of buffaloes on Melville Island.

Galvanized Iron

Mr Hawker:
WAKEFIELD, SOUTH AUSTRALIA

r asked the Minister for Trade and Customs, upon notice -

Whether he has taken any steps since the reduction of the basic wage in New South Wales to ascertain whether the makers of galvanized iron have reduced the price in conformity with the Tariff Board’s recommendation; if so, at what dates have such reductions in price occurred,or can such reductions be expected?

Mr White:
UAP

– Inquiries into this matter have been proceeding for some time, and it is expected that they will be completed at an early date.

Sales Tax

Mr Price:
BOOTHBY, SOUTH AUSTRALIA

e asked the Treasurer, upon notice -

Has the Government been able to give favorable consideration to the request for removal of the sales tax from sausages, dripping, and small goods; if so, when will it become operative ?

Mr Lyons:
UAP

– The request for exemption of such goods has been noted for consideration when attention is being given to further amendments of the Sales Tax Assessment Acts.

Protection of North Australia waters.

Mr Francis:
UAP

s. - Inquiries will be made and a reply will be furnished as soon as possible to the honorable member for Herbert (Mr. Martens) in reply to questions asked, upon notice, in regard to suspicious occurrences in North Australia waters.

Cite as: Australia, House of Representatives, Debates, 16 March 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19330316_reps_13_138/>.