2nd Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
SenatorPLAYFORD (South AustraliaVicePresident of the Executive Council). - I anticipate that at some time to-day we shall be able to conclude our labours for this week. I intend to ask the Senate to adjourn until 6th April.
– I am in the hands of honorable senators. If they wish to adjourn until the 13th April well and good.
– I think it will suit the Senate to adjourn until the 13th April.
– I move-
That the Senate, at its rising, adjourn until Wednesday, 13th April.
– I object to a long adjournment so early in the session. A large number of honorable senators have given up all their business connexions in order to come down here and proceed with the business of the country. It is a very curious thing that there should be no business ready for the Senate to go on with. When the Parliament is called together the Government should have some business ready for our consideration. It is simply absurd that the Senate should meet for three weeks, do practically nothing, and then be asked to adjourn for three weeks or a month. What is the good of a month’s adjournment to me? It would take me a fortnight to reach my home in Cairns, and nearly another fortnight to return to Melbourne. Honorable senators, whose homes are far distant from this city should have their convenience consulted by the Government. It was not right to bring us down from the far north or west of Australia merely to comply with the terms of the Constitution when there was no business ready to be proceeded with. The Government should always be prepared to go on with public business when Parliament is convened, and should not bring us here simply to kill time, aswe have been doing for the past three weeks.
– I am thoroughly in accord with the protest which has been lodged by Senator Givens. In previous sessions I have objected to long adjournments. Although we met early in March, the Government have placed no business before the Senate except a wretched little Bill, called the Acts Interpretation Bill.
– I do not think the honorable senator ought to characterize a Bill as “ a wretched little Bill.”
Senator STANIFORTH SMITH.May I say an absurd Bill ?
– The honorable senator ought notto speak of a Bill which has been passed by the Senate in that way.
Senator STANIFORTH SMITH.Well, I will say a Bill which is of absolutely no importance. We are placed in a most invidious position. Although we were called together early in March, the Government have no important business to place before us until the 13th April. I understand that the object of calling a Parliament together is that it may consider certain legislation which a responsible Government has to submit. I believe that the Navigation Bill has been ready for a considerable time.
– The honorable senator is entirely misinformed.
– I may be. Why is the Senate called together when the first business of the session, the Navigation Bill, cannot be submitted for nearly two months? It is most unfair to honorable senators who have come from distant States that no business should be ready. It is not possible for the representatives of Queensland and Western Australia to go to their homes. They have to cool their heels in Melbourne for several weeks in order to suit the idiosyncracies of the Ministry. I protest most strongly against this proposal to adjourn for practically a month. If the Government were unable to have the Navigation Bill ready for submission to the Senate, they should have had some of the other multitudinous measures which they mentioned in the opening speech. But they are treating the Senate in a most cavalier manner.
– It has been mentioned by two honorable senator’s that between now and the 13th April the Easter holidays will intervene.
– The holidays are not sitting days - Friday and Monday.
– Suppose that we meet next week, we could begin the consideration of the Navigation Bill - a Bill big in size and bigger still in importance; and then we should have to adjourn over the Easter holidays. It would be an unfortunate thing to have a break in the consideration of that big Bill. If we were to meet at all during the following week it could only be on Wednesday, 30th March, because the representatives of adjoining States would have to leave here on the Wednesday in order to be home on Thursday afternoon. A short adjournment would be of no use to those honorable senators who live in Brisbane. If we were called together on the 6th April some honorable senators would not be able to spend Easter Monday at home. I recognise the desirability of the Senate doing all the work it possibly can, and of going on steadily when it gets an opportunity. One point which has to be considered is the great and excessive strain on the physical system when honorable senators have to travel so often from adjoining States. Those honorable senators who are compelled to take up their residence in this city naturally feel that they are more or less wasting their time. We ought to meet their convenience as far as we can, but we must ask them to remember the strain which is imposed on those who have to travel frequently from other States. If we were to meet immediately after Easter Monday, honorable senators who wish to come from the adjoining States could not get here; that is, unless they were to leave before the Easter holidays.
– They all leave on Tuesday, and get here on Wednesday.
-I would suggest that we should meet on Tuesday, 12th April, and do four days’ solid work in that week; and if honorable senators like, four days’ solid work in the following week. It is unfortunate that the Easter holidays should intervene as they do. We all recognise that the Government are not ready with the Navigation Bill. If it had been ready last week the debate on the Address in Reply might have been closed, and the Bill proceeded with. If the AttorneyGeneral is prepared to move the second reading of the Bill to-morrow we should be better fitted to meet a few’ days earlier than the date I have suggested, because we should have, had the advantage of reading his speech in Hansard. In view of all the circumstances, I think it is a fair and reasonable suggestion that we should meet on the 13th April.
– I desire to ask the Attorney-General if the Navigation Bill will be introduced today ? If it is to be introduced to-day there will be a distinct advantage in having an adjournment. I deny that this adjournment is sought in the interests of the representatives of Western Australia and Queensland. We do not desire an adjournment at all, but, at the same time, we are prepared to support an adjournment for three weeks if it suits the convenience of other honorable senators. We do not wish to be made scape-goats of. I recognise that in the case of a big Bill, it is a distinct advantage to honorable senators to have an adjournment after its introduction, so as to enable them to study its provisions thoroughly.
– Col. GOULD (New South Wales). - The only other suggestion which can be entertained is that the Senate should meet on the 6th April, hear the second reading speech on the Navigation Bill, and then adjourn until the 13th April, when the debate could be resumed. That course might be adopted, but it would, not really advance publi business. I do not blame the Government for delaying the introduction of the Navigation Bill, and introducing another Bill in the other House.
– I expect that they want the consideration of that Bill to be concluded first.
– I do not think that that is the case. The other Bill is a remanet from the last Parliament, and naturally it is the first business which the Government wish to be taken in hand in the Chamber in which it was originated. Ido not think that there is any ground to complain that the Senate is not being treated fairly in that regard. Although the Navigation Bill has been on the stocks for a considerable time, still any Government would consider it desirable to have as late a revision of its provisions as it possibly could before it was introduced. Assuming that the Bill was introduced this afternoon, and that the Attorney-General moved its second reading, we should not be able to follow his speech so well aswe could if we had had the Bill in our hands for a little time. I agree with Senator Pulsford that it would be a mistake to have a break of two or three weeks in the debate on such an important measure. However eager honorable senators may be to see a measure of that character placed on the statute-book in some acceptable form, still they must recognise that it ought not to be passed without receiving the fullest possible consideration. I hope that it will be recognised that Senator Playford is endeavouring to meet the convenience of honorable senators as far as possible. I shall be content with the understanding that as soon as we meet again the Government will proceed with their measures uninterruptedly. I am quite aware that long adjournments are inconvenient to some honorable senators ; but there are others to whom they afford opportunities for going to their homes. Why should we not give them that chance, if it can be done reasonably and. fairly in the interests of public business? We desireto assist one another as far as we can, as well as to expedite business. I, therefore, trust that the Senate will assent to the proposal.
– There are one or two reasons why I made the suggestion that the Easter adjournment should be extended to the 13th April. When a proposal of this kind is made, I am rather pained to listen to those honorable senators who are continually crying” out about the absolute impossibility of getting to their homes. Where, for instance, is Senator Smith’s home? He has not a home to go to. Why should he be the first to jump up and object to an adjournment, except that he desires to show to the Western Australian people how extremely anxious he is to get on with public business? There is a great difference between the position of the Senate and that pf the House of Representatives. The Senate numbers only half the number of another place. We have exactly the same amount of business to do, and there must be intervals when we have to wait for the other House to catch up with what we have done. Another point is that the discussion of measures in the Senate does not occupy so much time as do the discussions in the House of Representatives. We have not in the Senate orators who are prepared to occupy hours and hours of time, and to fill pages upon pages of Hansard. I am glad that we have not. But there are such people in another place, and we have to stay our hands while they are doing that kind of thing. With respect to the proposed adjournment to the 1 3th April in preference to an adjournment to the 6th, I would point out that there are a number of new senators who have not yet had opportunities of visiting the proposed sites for the Federal Capital. I believe that the Government are prepared to extend to them opportunities for visiting the sites. It would be far better .to extend the adjournment as proposed than to have an adjournment for the purpose later on. Of course Senator Smith and Senator Dobson have visited the sites, and do not care about the convenience of others. But it is the duty of every honorable senator who has to cast a vote on an important matter of that description to go and see for himself. They cannot go before Easter, because to do so would probably interfere with their other arrangements. The visit must be made after Easter.
– I do not know of any arrangements to prevent the visit being paid before Easter.
– What are the Labour Party’s arrangements?
– My own arrangements are these: I knew about twelve months ago that there would be an Easter this year. I knew that Good Friday would be on the 1st April, 1904; that Easter Sunday would occur two days afterwards, and that Easter Monday would follow the Sunday. Consequently, twelve months ago I arranged to visit a certain portion of my constituency on Easter Monday ; not Onkaparinga, for the races, but a place at a greater distance from Adelaide. It is my intention to go there, so* that if I wanted to view the Capital sites I could not do it. There are other honorable senators who have made similar Easter arrangements, and it was. a wise thing to extend the adjournment from the 6th April to the 13th April. I hope that the motion will be carried, and that the arrangement will prove satisfactory to the majority of honorable senators.
– Senator McGregor has anticipated almost all I intended to say. There has been a large influx of new senators, and the representatives of New South Wales are delighted to know that they will have an opportunity of visiting the proposed Capital sites. We hope that they will avail themselves of the opportunity, and we will do what we can to facilitate the inspection.
– The Senate always getsthrough its work more quickly than does the other Chamber, and probably always will. There is practically the same amount of work to be done by each branch of the Legislature, and the difference arises in consequence of there being a smaller number of senators than of representatives, and less talking in this Chamber. It must be admitted that the two Houses have to commence the session at the same time, and that both have to remain in session until the prorogation. So that if the Senate gets through its work more quickly than does the other House, there must be periods when we shall have no work to do.- It has been represented to me by honorable senators in the past, that they recognise that there must be adjournments of the Senate owing to the longer time taken by the House of Representatives in discharging its business, and they have expressed the hope that such arrangements would be made as would enable honorable senators to take advantage of those adjournments. That position was fully put to me last session on more than one occasion. I endeavoured, as far as I could, when I was in charge of business, in the absence of the Vice-President of the Executive Council, to arrange matters so that when there was a slackness of business honorable senators might be able to get away for two, or, perhaps more, weeks at a time, rather than have the Senate sitting continually when there was not sufficient work to go on with.’
– There is plenty of work to do if it were ready.
– But suppose we rushed through our work at the beginning of the session, we should then have to wait until the other Chamber had caught up with what we had done. Consequently we should not be a whit more forward than we should if we had taken a holiday. When the Conciliation and Arbitration Bill comes before us, the probability is that the Senate will not take so long’ to consider it as will the House of Representatives. In the same way we shall not take so long to discuss the “ Navigation Bill. With regard to that measure it has been said that it was drafted twelve months ago. It is quite true that a Navigation Bill was drafted, but not this Bill.
– It was drafted and submitted to experts.
– But improvements have been made in it from time to time, and as a matter of fact the drafting was not actually completed until this morning.
– Whose fault is that?
– It is nobody’s fault. In the drafting of a Bill of such an extensive character, the work of continually going through it, and revising and again revising, proceeds right up to the time when the copy is delivered to the printer. The finishing touches of the Bill were not given to it until to-day, and therefore it will’ not be ready for circulation this afternoon.. It is now ready to lay upon the table of the Senate for its first reading, and I am informed by the Clerk that as soon as it has been read a first time it will be sent to the printer, with instructions to have it printed as quickly as possible. Then it will be circulated amongst honorable members, wherever they may be. I hope that within a couple of days the Bill will be in print, and ready for distribution.
– Can we not take away copies to-morrow ?
– Honorable senators will be able to take away copies as soon as it is printed.
– Will that be by noon to-morrow ?
– I hope so ; but that will depend on the printer. It is im, possible for me to say absolutely whether it will be ready to-morrow. I sincerely hope that it will. Copies will be forwarded to honor able senators immediately. I need hardly say that I ought not to be expected to move the second reading of the Bill next week. I do not. think it would be fair either to the Bill or to the Senate to do so.
– I find this debate both disappointing and irritating. It is disappointing, because it appears to me that the Government have brought us here without having any work for us to do. If we are to have an adjournment for three weeks it means that it will be six weeks after the meeting of Parliament before there will be any work worthy of the name ready for the Senate. The Vice-President of the Executive Council knows perfectly well that honorable senators have complained more than once that there was not a sufficient amount of work to keep them together, and the ex-Vice- President of the Executive Council promised that that complaint would be attended to. It appears that there is no Bill ready for the Senate to discuss. I have listened with great patience to the remarks of the Attorney-General, and, as far as I know - and I know something about these matters - there is nothing in his contention. The Navigation Bill, with its 550 clauses, has been before the Cabinet for a long time. I suppose that nineteentwentieths of its clauses are absolutely undebatable. It will be found that there are only a few clauses affecting Western Australia and the coasting trade about which there will be contentious discussion.
– I guarantee- that the honorable and learned senator will debate five clauses out of six.
– The press has been enlightening us about the contentious clauses for the past twelve months. When the Bill was introduced in the other House it was criticised, and there is no excuse for its not being ready.
– When was the Bill criticised ?
– The policy of theBill has been criticised by the press and by members of Parliament for months past. We were promised that there would be business for us to deal with, and that promise ought to be kept. The Vice-President of the Executive Council is taking a wrong view of his duties, when, he calmly suggests a three weeks’’ adjournment. He first told me that we should adjourn for, a fortnight, but, at the bare mention of another week by Senator McGregor, the honorable senator leaned back in his comfortable chair and smiled assent to the request of the leader of the Labour Party.
– I had forgotten about Easter.
– I have referred to the disappointing feature of the discussion. What about the irritating feature of it? The Vice-President of the Executive Council ought to have given us better reasons for the three weeks adjournment. What are the true reasons? Senator McGregor tells us that the new senators desire to visit the Federal Capital sites. Well, we visited about twelve sites in ten days, and if honorable senators wish to visit Tumut and Bombala they can very well finish their inspection by the 6th April. It seems to me to be monstrous for Senator McGregor to say that honorable senators cannot start to visit the sites until after Easter. Senator Gould, for some reason, desires a long adjournment, but I do not think he will insist upon it when he knows how absolutely inconvenient it is to the senators from Tasmania, Western Australia, and Queensland. It is said that we could not return in Easter week. It seems to be forgotten that the Tasmanian steamer leaves Tasmania on Easter Tuesday and arrives in Melbourne at 12 o’clock on Wednesday, and that the Adelaide and Sydney trains leave on Tuesday evening at 7 o’clock and arrive in Melbourne on Wednesday morning. Therefore, I cannot understand that argument. Those of us who have been brought from our homes to Melbourne have a right to expect that business shall be proceeded with. The AttorneyGeneral says that he will not be prepared to move the second reading of the Navigation Bill next week. In my opinion, he is as prepared now as he ever will be. He has been looking over the Bill, and thinking over it for a very long time, and if he is not ready now I do not think he ever will be. There is no reason for this unexpectedly long adjournment. If honorable senators insist upon it, all I can suggest is that we, who are opposed to it, should endeavour to negative the motion. If we cannot do that we must “ loaf “ about Melbourne or visit the Capital sites. But it will not take the new senators until the 13th April to do that. The leader of the Government is not,I think, acting fairly or reasonably towards those honorable senators who desire to get on with the business of the country.
– As one who is not a member of the Labour
Party I may be permitted to expressthe hope that an opportunity will be given to new senators during the adjournment to view the proposed Federal Capital sites at Tumut and Bombala.
– And at Lyndhurst.
– I have already been to Lyndhurst, and therefore I cannot honestly urge a desire to view that area as a reason for the adjournment.
– I ought to have made my reference to new senators.
– I sympathize very much with the remarks of Senator Dobson as to our being called here as representatives of the Commonwealth, on an absolute promise that as soon as we met business would be placed before us. So faras I know the Senate has, up to the present time, done absolutely nothing; and in this connexion there is, and must be, blame attachable to somebody. But I realize also that there is another reason, exceptional in. itself, why the proposed’ adjournment to the 13th April, will be conducive to the interests of the Commonwealth. We recognise that the Navigation Bill is of the utmost importance to the trading community of the Commonwealth, and, personally, I should like to have an opportunity, after the circulation of the measure, to obtain the advice of experts in the shipping laws of the Commonwealth and other countries, so that in the debate I may be able to give the Senate the benefit of the knowledge thus obtained. If other senators take a similar course there will not be that loss of time which it is feared would prove detrimental to the interests of the Commonwealth. For these reasons I support the motionfor the adjournment until the 13th April.
-In parliamentary life, protests of this kind are very often made, and are frequently made, merely for the purpose of enabling parliamentary representatives to say something. When the question is put, I shall call for a division.
– I feel very much in the position of the man with the donkey; I find it utterly impossible to please everybody, try as hard as I can to meet the wishes of the majority.
– That is the policy of the Government.
– It is the policy of any courteous person who thinks of the interests, wishes, and comforts of his fellows.
– The Government make a proposal, and then accept another.
– There is a miserable suspicion on the honorable senator’s part that Governments are always playing tricks, and apparently nothing will remove that idea from his mind. The chances are that if the honorable senator were in charge of the Government, he would go “crooked,” and he thinks that other people are exactly like himself. I always try to live in peace and concord with my fellows, and to make them happy and comfortable in this “ vale of tears.” In view of the importance of the Navigation Bill, it was suggested that after it had been circulated there should be an adjournment in order to enable honorable senators to master its contents, and also that it might be sent throughout the Commonwealth with a view to obtaining suggestions and advice from those with especial knowledge of shipping matters. When I proposed that the adjournment should be for a fortnight, I had forgotten all about Easter; and as the period I first suggested would bring us back in the Easter week, which might prove inconvenient, I accepted the suggestion to make the date the 13th. It appears to me that the majority of honorable senators favour the longer adjournment.
Question put. The Senate divided.
Majority …… 13
Question so resolved in the affirmative.
Bill presented by Senator Drake, and read a first time.
– I move -
A similar motion has twice previously been discussed in this Senate, and on the one occasion when the vote was taken, it was defeated owing to the standing order which provides that every question on which the voting is equal shall pass in the negative. When submitting that previous motion, I pointed out that this was an industry largely in the nature of a monopoly. I am now in a position to say that events have occurred here which practically constitute this industry one of the biggest monopolies in Australia. It is, in fact, part of a monopoly of world-wide extent. In the Melbourne Age of 15th March, an article appeared dealing with this question, and I think it wise to lay before honorable senators the following extracts -
It will be remembered that about three years ago the great American Tobacco Corporation, which had obtained control of the tobacco trade in the United States, turned its attention, in accordance with the usual policy of monopolistic trusts, to Great Britain. . . . This company was formed with a capital of£6,000,000, and its object, in the words of the president, was to “ conquer the tobacco trade of the world,” having a special eye on that of the British colonies. On 14th March, 1903, it was announced in the columns of the Age that the two Australian tobacco businesses - Dixson’s Tobacco Company Limited, and W. Cameron Bros. and Co. Proprietary Limited-had been amalgamated as the BritishAustralian Tobacco Company Limited, with a subscribed capital of£1,500,000. A circular was issued at the time, explaining that the object of this amalgamation was to fight the American and British combination, which had declared its intention of capturing the’ colonial markets. “During the last few months,” the circular stated, “strongindications have pointed to the fact that the attention of this company is being directed to Australia, and in order the better to meet the anticipated attack, and before wresting from Australia the control of its tobacco industry, Dixson’s and Cameron’s businesses have lately been considering measures of joint action for mutual defence. Negotiations have resulted in the decision to follow in the lines of the British precedent.” It was subsequently stated that the British-Australian Company (the Dixson and Cameron combination) had secured the Australian business of T. C. Williams, of Richmond, Virginia, the famous tobacco manufacturers, and the largest exporters of aromatic tobaccoes to Australian States.
I may say that the correct name of this corporation is the British-American Company, as will be seen by reference to the Age of 16th March -
There was a second notification stating that the business in Australia of David Dunlop, of Petersburg, Virginia, the maker of the wellknown Derby brand of tobacco, and the chief exporter of dark tobaccoes to Australia, had also been taken over by the British-Australian Company on a hundred years lease. Towards the end of last year it was stated in our columns that a movement was on foot for consolidating certain large interests in the Australian trade. Shortly afterwards the announcement was made that J. Kronheimer Proprietary Limited, Melbourne, and W. D. and H. O. Wills (Australia), Limited, had amalgamated, under the title of Kronheimer Limited. The next move was the absorption of the National Cigarette Company by Kronheimer Limited, and the closing of the factory. Kronheimer Limited were appointed sole distributors for the American Tobacco Company of Australia, which controls a very large number of the leading brands of cigars made in Havana and Manila. They were also appointed sole agents for the David Dunlop and T. C. Williams tobaccoes. The agencies of the leading brands of imported cigars and cigarettes were taken over from the old companies, and the State Tobacco Company handed over its distributing business to Kronheimer Limited. Then Messrs. Alfred Gross and Co. announced their retirement from the Australian trade, and finally the British-Australian Tobacco Company Limited passed over the distribution of its manufactures to the same concern. The result is that Kronheimer Limited controls practically the entire trade in imported tobaccoes, and nearly the whole of the distributing trade in locally manufactured tobaccoes. A large portion of the local cigar and cigarette trade is also in its hands. The movement started a year ago by the formation of the British-Australian Tobacco Company ostensibly to fight the British-American combination in its attempt to capture the Australian trade, has evolved into a monopolistic agency, which transacts the distributing business for both combinations, and which practically dominates the whole of the tobacco trade in Australia.
Up to the present time there has been no refutation, or attempt at refutation, of the statements contained in that article, and I take that as proof positive of the correctness of the details set forth. We know that the power to deal with monopolies effectively must rest .with the Commonwealth Government. In the early history of the United
States it was held that the power to deal with trusts and monopolies rested entirely with the States Governments.
– That is, to deal with them by way of suppression.
– By way of suppression or regulation. It was held that that, was a limitation which arose from the Constitution, but from that time onwards the Supreme Court has given a larger and increasing power to the national Government to regulate and control monopolies. Only last year we had that notable reference by President Roosevelt to the intention of his Government and of Congress to control trusts by regulation. We know that in the Courts of the United States to-day cases are being settled as the result of Congressional legislation on the question of regulating trusts. That goes to show that the Supreme Court has recognised the necessity and the advisability of conferring that power on the national Government ; and to-day it is exercised, although nowhere is it to be found within the Constitution. Again, we must recognise this fact, that a monopoly of this character is a menace to the peace, order, and good government of Australia. Where you have such a complete monopoly, not only in the manufacture, but in the distribution of this article of commerce, you have a monopoly which can disturb the peace and order of the trade of the Commonwealth in this particular industry.
-Col. Gould. - Why not in other industries?
– Because there is no other case in which, one trust controls both the manufacture and the distribution of the article. We can find monopolies in the manufacturing industry and monopolies in the distributing industry of the Commonwealth ; but here we have a monopoly in both classes of industry. Both the late Government of the Commonwealth and the present one proposed to introduce legislation for the purpose” of dealing with trusts. I take it that in each case the Government ascertained that this Parliament has the power to regulate and control trusts.
– The Constitution does not give the Government the power to manufacture.
– The Constitution of the Commonwealth gives a larger power in that regard than does the Constitution of the United States; and when Senator Playford makes that remark, he shuts his eyes to what has been laid down by the Supreme Court of that country under a more limited
Constitution. It has been held there on numerous occasions, as the AttorneyGeneral well knows, that if, for the purpose of providing for trade and commerce between the States, it is necessary for the national Government either to regulate the control of railways or to build railways, it has the power to take that course. The power to regulate commerce by controlling privately-owned railways has been held to give the national Government and the State Government the right to construct those railways, if they are found necessary, in the interests of trade and commerce.
– The honorable senator is over-stating the case.
– I venture to say that the Attorney-General, who will speak for the Government, and, I suppose, oppose the motion, will not say, and cannot prove, that I am over-stating the case. I was merely speaking in general terms ; but since Senator Fraser has made that interjection, I shall proceed to quote some authorities. The preamble to the grant of the legislative powers of this Parliament reads as follows: -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to-
– It is limited by the words “ with respect to,” and the legislative powers are enumerated afterwards.
– A recognised authority on Australian Federal law, and a man of high standing in the legal world - I refer to Mr. Justice Clark, of Tasmania - discusses the meaning of the phrase “ peace, order, and good government of the Commonwealth” in these words: -
It cannot be contended that they are required for the purpose of giving the Parliament of the Commonwealth full power to legislate with regard to all subjects mentioned in the sub-sections of section 51 ; and, if they are not required for that purpose, they must inevitably encourage the contention that they are inserted for some additional purpose. But if their insertion is not intended to add in any way to the powers of Parliament in relation to the matters mentionedin the sub-sections of section 51, then they violate the canon of drafting, which requires that no unnecessary words should be used in giving expression to theintention of the Legislature. They are very properly inserted in section 52, because, that section confers upon the Parliament of the Commonwealth plenary and exclusive powers in regard to the several matters mentioned in the subsections of that section. But their presence in section51 tends to create a resemblance in the scope of the powers conferred by the two sections, whereas it would be much more desirable to make the difference in the purport of each section as apparent and emphatic as possible.
The words either mean that we have the power to legislate for those purposes except where we are expressly forbidden, or except the power is expressly reserved to the States, or their insertion was unnecessary.
– We have no powers except those which are expressly conferred.
– Let us consider the necessity for the use of these words. Would it not give this Parliament all the necessary power, would it not provide in the Constitution all the checks and safeguards which are required, if the section began in this way -
The Parliament shall, subject to this Constitution, have power to make laws with respect to-
Why was it needful to put in the words “ for the peace, order, and good government of the Commonwealth”? Either they are mere surplusage, or they were put in for the express purpose of giving subsidiary powers. I think that Mr. Justice Clark has good common sense on his side when he says that they were put in for some purpose. The section goes on to empower the Parliament to legislate with respect to -
Trade and commerce with other countries, and among the States.
In order that there may be no confusion in the mind of any honorable senator, I propose to quote from Webster’s dictionary the meaning of trade and commerce -
Trade means the act or business of exchanging commodities by barter, or by buying and selling for money; commerce; traffic; barter. It comprehends every species of exchange or dealing, either in the produce of land, in manufactures, in bills, or in money; but it is chiefly used to denote the barter or purchase and sale of goods, wares, and merchandise, either by wholesale or retail. Commerce means the exchange or buying and selling of commodities; especially the exchange of merchandise on a large scale between different places or communities; extended trade or traffic.
I could quote from Quick and Garran’s Annotated Constitution several cases in which the power to regulate commerce has been held in the United States to imply the power to construct railways to promote commerce and carry merchandise. The making of tobacco for the purpose of sale is as much trade as the making of a railway for commercial purposes is commerce. I contend that if we can show that the presence of a monopoly in this industry is a disturbance to trade, then, for the purpose of securing the peace, order, and good government of the Commonwealth, it has the power to take over the industry, and to make a monopoly of the manufacture and sale of tobacco. Under sub-section 20 of section 51 we have legislative power to deaf with -
Foreign corporations and trading orfinancial corporations formed within the limits of the Commonwealth.
I have made that quotation because it may be said that we have no control over a foreign corporation. But it has been held that laws regulating commerce are just as applicable to foreign corporations trading within the United States as to local companies. As regards the acquisition of this monopoly, I would quote sub-section 31 of section 51, which says -
The acquisition of property on just terms from any State or persons for any purpose in respect of which Parliament has power to make laws.
That shows that we have power to acquire this land if we have power to make laws with respect to it. Under subsection 3 of section 51 we have the power to legislate with regard to invalid and oldage pensions. That provision, I take it, implies a power to raise the money to pay the pensions. It is said in the United States that if it is necessary to regulate commerce that power carries with it a right on the part of the national Government to build railways.
– Our power to build railways depends upon the consent of the States being given.
– I am only using that as an illustration.
– Do the Government contend that the Commonwealth has no power to engage in any enterprise?
– We have no power to go beyond the bounds of the Constitution.
-In order to be consistent, the Government will be obliged to say that they have no power to establish an arsenal for the manufacture of small arms and ammunition, or to do any work in the Federal Capital.
.- That is only an implied power.
– We can only take over the manufacture of cannon and small arms because we have an implied power; we have no express power to enter upon the manufacture of those articles. The power of controlling the defences of the Commonwealth necessarily carries with it the subsidiary power to manufacture the necessary weapons. Under sub-section 39 of section 51, the Parliament is vested with powers even greater than any of those I have mentioned.
Matters incidental to the execution of any power vested by this Constitution in the Parliament, or in either House thereof, or in the Government of the Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth.
– That does not extend our legislative powers.
– Clearly it gives us the power, in order to deal with this monopoly for the peace, order, and good government of the Commonwealth, to step in and say that it shall be conducted by the Government.
-It can be dealt with as has been done in the United States, by making a law against combines and trusts.
– That law has failed miserably. I would remind the honorable senator of President Roosevelt’s notable saying to the coal-owners - “ If you do not arbitrate I shall bring in a Bill to nationalize coal mines.” Was he merely using an empty phrase, or did he know that he had the implied power to nationalize the industry ? If he had not that implied power, would not his political opponents have made capital out of his ignorance, and make him look ridiculous in the eyes of the nation?
– Very possibly he made use of those words as a threat, but the chances are that he could not have carried it out.
– The threat has been discussed very widely by journals and reviews in the United States, and never in one instance has the power of the Federal Government to nationalize the coal mines been challenged. If the Government of the United States, with their more limited Constitution, have that power, it is very good ground for assuming that we also have the power. In connexion with the question of the express powers given in the Constitution, I should like to quote an authority that I think will impress Senator Fraser. Irefer to ProfessorHarrison Moore, whose name will be well known to the honorable senator, and whom, I think, he will recognise as an authority who is worth listening to.
Dealing with the powers of the Commonwealth, in regard to the construction of railways and so forth, Professor Harrison Moore says -
In the United States it has been contended, and is apparently now established, that the commerce power of Congress includes as an incident the authorization and execution of all manner of works for facilitating Inter-State and foreign commerce, including the construction of roads, railroads, bridges, and canals. This is very much more than the general power of appropriating money for the general welfare where the objects of expenditure remain under State laws ; it is a Federal power in which the Federal law prevails, notwithstanding the obstacles of State law.
The same writer, dealing with the ample powers of our own Constitution, says -
The Constitution establishes many things “until the Parliament otherwise provides.” This article is equivalent to a declaration that in such a case the Parliament shall have power to provide from time to time for the matters in question-*-that its power over the matter is not exhausted by a single provision.
Then Professor Harrison Moore quotes another power of the Federation -
Matters incidental to the execution of any power vested by this Constitution in the Parliament or in either House thereof, or in the Government of the Commonwealth, or in any department or officer of the Commonwealth. Of the corresponding provision in the Constitution of the United States Judge Cooley says : - “The import of the clause is that Congress shall have all the incidental and instrumental powers …. to carry into execution all the express powers. It neither enlarges any power specifically given, nor is it a grant of any new power to Congress ; but it is merely a declaration for the removal of all uncertainty that the means for carrying into execution those otherwise granted are included in the grant.” The Government claim to have the power to deal with trusts. I would ask the VicePresident of the Executive Council where they get that power from ? Can ‘he show me a section of the Constitution which expressly gives it to them?
– We have it just as the Government have it in the United States.
– The Government have it, I presume, under the -sub-section which gives them authority to make laws for ‘the “ peace, order, and good government of the Commonwealth.”
– No; we have it under the sub-section with regard to the regulation of trade and commerce.
– If it is necessary to regulate trade and commerce with respect to the manufacture of an article, it may also be declared to be necessary for the Government to conduct the manufacture and sale of that article itself . Another point is, that we have supreme powers in matters of taxation. Sometimes we are apt to give a very narrow interpretation to the word “ taxation.” But what is meant by it ? Professor Harrison Moore, commenting upon our Constitution^ points out that - “Taxation” is adopted as being the most comprehensive word for describing all the various means of raising a revenue. “In the broadest sense an exercise of the taxing power occurs whenever a compulsory contribution of wealth is taken from a person, private or corporate, under the authority of the public’s powers.”
He quotes that last passage from Carl Plehn, on Public Finance, and he goes on to say, in his own comments -
The practice of enumerating more particularly the modes of revenue (as in the United States Constitution - “Taxes, duties, imposts, and excises”) is one which a very slight acquaintance with English history condemns.
He condemns the contention that that exhausts all that is meant by the word “ taxa- tion,” and he holds that the whole matter of the raising of money in any form by the Government is covered by the word.
– Then the Government might carry on the business of a butcher, and sell meat.
– My contention is that by ihe Federal Constitution several express powers are conferred upon the Federal Government, and that there are also several implied powers for the purpose of carrying those others into effect. There are some powers which can be exercised by the States and the Federal Government in conjunction, and there are other powers which can be exercised only by the States. For instance, we could not take over the management of the Mines Departments of the various States, because they are reserved to the States themselves. We could lease a mine from a State, but we could not take over the control of mining legislation. Neither could we take over the lands of the. various States. Land legislation is reserved for the States. ‘ But here, I contend, is a domain that has not been touched bv the State authorities. There is no State in the Commonwealth which attempts in any way to control the tobacco monopoly. There is no State which attempts even to licence its control.
– The States could do so if they liked.
– I am doubtful as to whether they could.
– The States could manufacture tobacco and cigars.
– In taking over these powers we should not be interfering with any powers which the States have exercised.
– But we should be depriving the States of their right to manufacture tobacco and cigars which they have at present.
– There is a sentence from a writer on the United States Constitution, Ashley, which I will, quote. It reads -
No one in our days denies that the United States Government has the right to supplement the powers expressly stated in the Constitution, by such means as are reasonable and wise, to carry out these powers.
– The United States is a very much older country than Australia. We have not had time to grow.
– We have to commence to grow, and this would be a very good and profitable commencement to make. It would be grappling with a monopoly that threatens to be a serious public danger to the Commonwealth. In dealing with monopolies I adopt the definition given by Mr. H. C. Adams in his work entitled The Relation of the State to Industrial Action. He defines an industrial monopoly as follows : -
An industrial monopoly may be defined as a business superior to the regulating control of competition.
If we apply that definition to the present position of the tobacco trade, it will be seen that it fits the case very well. I will guarantee that if any one went into any city in Australia, with the intention of starting a retail tobacco shop, he would find that he would first of all have to get the consent of Messrs. Kronheimer and Co. Limited. Senator Playford shakes his head, but I know that what I have stated occurred in the city of Melbourne within the last fortnight.
– Such a thing has never taken place in Adelaide.
– But it will take place. The agreement to which I allude was only completed on the 16th of last month. This monopoly has issued a circular, which I will read -
We have pleasure in enclosing for your information revised price list of our Melbourne manufactured tobaccoes. Arrangements have been comby which that company will in future act as sole pleted with Messrs. Kronheimer and Co. Limited, agents for the sale of this company’s goods in all the States of the Commonwealth, and we shall be pleased by your placing all orders for our tobaccoes with them. It is our intention, with the assist ance of Messrs. Kronheimer and Co. Limited, to insist upon the list price being strictly observed by all sections of the trade, and we look for your co-operation in this matter. Whilst gratefully acknowledging the support you have accorded us in the past, we rely on your able* assistance in the future distribution of our manufactures.
This control of prices by Kronheimer and Co. Limited means that they have power to say to every retailer of tobacco what price he shall pay, what price he shall charge his customers, and what amount of profit he shall have to make his living from.
– Yes, in several cases.
– They have not raised it to me, and I have been buying tobacco ever since I was a boy.
– This trust can say to the retailer -“ You must buy your tobacco from me, and sell it at a certain price.” In other industries the retailer can say - “ I will go over the road and buy from another firm.” But under this tobacco monopoly the retailer has no such opportunity. There is no other firm in the world that will sell to him.
– That is to say, that will sell the goods of this company.
– No; that will sell any manufactured tobacco. The monopoly is in league with the British-American Company ; the British firms are in league with the American monopoly ; and the Australian company is a subsidiary branch of that monopoly. If a retailer refuses to buy from the local monopoly, and turns to British firms, they will refer him at once to the monopoly which has the control of the trade in Australia. If he turns to the American trade, he will again be referred to the Australian trust. Therefore, in the matter of prices, the retailer is completely in the hands of a world-wide monopoly. Cannot this be said to be an interference with the trade of the Commonwealth?
– No more than was the case with respect to reapers and binders.
– I do not say that it is any more so, but it is quite as much.
– The same thing was done in Sydney with reference to the maize market. The holders of maize rigged the market, and one could not get a grain of maize except at their price.
– We can deal with that kind of thing by legislation.
– That is exactly what I propose. I propose that we shall deal with it by drastic legislation. Temporary patchwork legislation has been tried in the United States - first of all by the States individually, and then by the national Government - and has miserably failed.
– No, look at the last reports.
– In spite of the last reports, the trusts in the United States are as strong and as vigorous as ever, and are going on with their disastrous work.
– Some of the trusts have been of benefit to the consumer.
– The only way effectively to deal with these trusts is to take them over. President Roosevelt recognised that when he came to reckon with the coal trust and the steel trust; and no less a personage than exSenator Reid, who came in contact with the shipping trust, in speaking before the Melbourne Chamber of Commerce, said, Conservative as he was, that he had been led to the opinion that the only way to grapple with these trusts was by the nationalization of their industries. He said, also, that if these trusts did not soon mend their ways the Government would have to take into serious consideration the question of the nationalization of the carrying trade between Australia and the old world. There comes a time when a trust reaches such a magnitude that it has the well-being of the people of the country within its grasp, and then it becomes imperative on them to insist that its industry shall be made a national one. I contend that that is already the case with the tobacco trust. This trust can say to any retailer - “ We will not allow you to make a living.” It can say - “We will not permit you to extend your business,” or “ We will prevent you from entering into competition with a business that has already been started.” It can prevent that kind of competition which is alive in every healthy industry in the world. When that happens, I contend that it is time for this Commonwealth to take action.
– Hear, hear; when it comes to that point.
– A trust is only a trades union after all, and the honorable senator believes in trades unions.
– I do. I believe that trades unionism will lead eventually to the just solution of industrial problems; and, on the other hand, the trusts are going the right way to lead to their solution in another direction. We have in this tobacco monopoly in Australia a method by which a foreign corporation, to all intents and purposes, levies taxation on the people of Australia.
– The people need not consume tobacco unless they like.
– Well, smoking has become almost a necessity. When a luxury is so generally indulged in as smoking is, it may be said to have become practically a necessity of our civilization.
-Col. Gould. - Some get on very well without it.
– I do not find it to be a necessity myself. I manage to live without tobacco. But smoking is a general habit, and my contention is that by its means this tobacco monopoly levies taxation wholesale upon the people of the Commonwealth. I therefore affirm the principle that the Commonwealth, having the power to levy taxation, has the right to step in and say that this foreign corporation shall be stopped from levying any further taxation upon the people of Australia, and that the revenue which is being raised by it, the enormous profits which are now going into the pockets of foreign shareholders, shall go into the Treasury of Australia. I have no objection to people paying a high price for tobacco and cigars, provided that the difference between the cost of manufacture and the selling price goes into the public Treasury. But I am satisfied, and I think I shall satisfy the Senate, that there is a tremendous margin of profit in the difference between the cost of manufacture and the sale price which the public pay, which is now going into the pockets of the foreign shareholders in this monopoly.
– That is true, no doubt.
– It is for this Parliament to see that this taxation goes where it ought to go - into the public Treasury. The figures which I shall quote have been carefully worked out by myself, and have been revised by members of the tobacco trade, who are in a position to know the actual state of the case. They know the cost of the manufacture of cigars and tobacco. The figures have been also carefully revised in the light of evidence which was given before the Select Commitee of the Victorian Parliament bv tobacco manufacturers, importers of cigars, makers of cigars and cigarettes, and retailers. That Committee reported in 1896. I have dealt with the importation and local manufacture of tobacco in Australia in the year 1903, and I shall assume that the Commonwealth takes over the industry and carries it on for the present on its existing basis - that is to say, that the Commonwealth manufactures tobacco, cigars, and cigarettes of a weight equivalent to those now manufactured, and that it imports as much as is now imported. I wish to show the profit which could be, and would be, derived by the Commonwealth if the system were adopted.
– The profit would soon disappear if the Commonwealth took over the industry.
– I may tell the honorable senator that I have made allowance for one factor in my computation. I have allowed that instead of paying sweating wages to the operatives, we shall pay them fair wages.
– The Arbitration Court will deal with that, will it not?
– There is no Arbitration Court in some of the States of Australia. I may say that manufacturers in Victoria, where there was a wages board, shifted the scene of their operations to South Australia in order to avoid the payment of a fair wage.
– The same thing happened in Western Australia.
-Col. Gould. - It has not been done in New South Wales, where there is a big tobacco industry.
– I admit that the industry is still being carried on in New South Wales. Taking 3,889,618 lbs. as the quantity of locally manufactured tobacco, and estimating the cost of material at’ 8d. per lb., and the cost of manufacture at 8d. per ]b., the total cost is ,£259,307*. I have estimated the allowance to retailers at 15 per cent., or ,£203,235, and this, added to the cost of manufacture, gives a sum of £462,542. The sale of that quantity of tobacco at an average price of 6s. per lb. would realize _£i, 166,885, from which, of course, we have to deduct the cost of manufacture and sale, leaving a profit of £704.343-
– People will not give 6s. per lb. for tobacco made out of leaf costing 8d. per lb.
– I am taking the average price of both leaf and manufactured tobacco. A quantity of leaf is sold in Australia at 3d. per lb.
– But the tobacco made from such leaf is not worth 6s: per lb.
– By taking- the average price of the leaf at 8d. we get an average value of 6s. per lb., some tobacco selling as high as 8s. 4d.- and 9s. per lb.
– But the latter is not made out of colonial leaf.
– Locally manufactured tobacco made from leaf bought at 2d. per lb. is sold at 3s. and 4s. per lb. The quantity of locally-manufactured cigars is 109,806 lbs., and allowing 15 lbs. per 1,000, this represents 7,320,000 cigars. The average cost of manufacture at 50s. per 1,000, including leaf, labour, &c, is £18,300, and allowing 15 per cent, commission to retailers, or £10,080, we find the total cost of manufacture and sale to be ,£29,280.
– Is the honorable senator deducting the Excise?
– I shall deduct the Excise and Customs from the total receipts afterwards. If these 7,320,000 cigars were sold it an average of £10 per 1,000, they would realize £73,200, which, less the cost of manufacture and commission to retailers, shows a profit of ,£43,920. The locally-manufactured cigarettes amount in weight to 5-16,935 lbs., that is on a basis of z lbs. to the thousand, and this represents 207,000,000 cigarettes. If we average the cost of manufacture at 5s. per 1,000, or £51,750, and the retailers’ profits at 15 per cent., or £54,330, we have a total cost of £106,080. Taking the average sale price of these cigarettes at 35s. per 1,000, we have the return of £361,250, which, when’ the cost of manufacture and sale is deducted, shows a profit of £256,170. To summarize the figures which I have just laid before the Senate, we are shown a profit on the local manufacture of tobacco of .£704,343 ; on cigars, of £43,920; and on cigarettes, of £256,170, or a grand total of ,£1,004,433. The imported tobacco amounts to 3,537,508 lbs., which, sold at 6s. per lb., realizes £1,061,251. To purchase the quantity of tobacco annually imported at is. 7d. per lb., we should require £330,052, and retailers’ profits at 15 per cent., would absorb £159,170, showing a total cost of ,£489,222. When that total cost is deducted from the -gross receipts, there is a net profit of ,£572,029. Of imported cigars there are 40,438,000 sold, and these, allowing 15 lbs. to th=> thousand, and a sale price of ,£15 per 1,000, mean receipts amounting. t0 .£606,570. To purchase these cigars at £4 18s. od. per 1,000 - which was the declared value of the cigars imported into Victoria in 1903 - would require £199,156, while retailers’ profits at 15 per cent, would absorb £’90,975, showing a total cost of £290,131. When the cost of production and sale is deducted from the gross receipts a net profit of £316,439 is shown. The imported cigarettes total 97,078,000, and at 45s. per 1.000. realize ,£218,425. To purchase these cigarettes at 15s. per I,000’ would require £72,808, while retailers’ profits would absorb about 15 per cent., or £32,760, showing a total cost of £105,568. When we deduct the total cost from the gross receipts we see that there would be a profit of £112,857. A summary of these figures relating to imported tobacco, cigars, and cigarettes shows that the profit On the tobacco would be £572,029, on cigars £3I(t439> and on cigarettes £112,857- a total of £1,001,325. Adding to this sum the net profits on the locally manufactured articles, we have a grand total profit of £2,005,758. From this profit of £2,005,758 we have to deduct Customs and Excise to the amount of £1,332,304.
– The figures supplied to me show that the Customs and- Excise duties amount to £1,370,533.
– But I am deducting the cost of collection, which I put at 3 per cent. When an allowance is made for this charge the national monopoly “in tobacco shows a net profit of £673,454.
– When- the honorable senator last dealt with this question he placed the net profit at £700,000 odd.
– We have to remember, however, that the local manufacturers must be compensated for the loss of their business ; and from estimates in my possession I place the amount required under this head at £r, 000,000. To provide interest and sinking fund on the amount at 4! per cent, would require £45,000 annually, and if that be deducted from the profit I have already shown, we have an absolutely clear net profit of £628,454 to the Commonwealth. I contend that that amount, together with the surplus revenue now returned to the States, would be sufficient to pay old-age pensions throughout the Commonwealth. At the present time about £600,000 of surplus revenue is returned to the States, and that added to the profits of the tobacco monopoly, would give about. £1,200,000, which is exactly the amount which ‘ Mr. Coghlan estimates as requisite to pay an old-age pension to every person over sixty-five years of age who has been fifteen years within the Commonwealth. “In short, by using the surplus, which we have a Tight to use, but which we now return to the States, the Commonwealth Government could, by the means I have indicated, obtain sufficient money to pay old-age pensions throughout the Commonwealth, not on the Victorian, but on the New South Wales basis. This national monopoly of tobacco is no new experiment ; and there are means by which we may check the figures which I have laid before the Senate. In France there has been a national monopoly in tobacco for over 100 years, and from Coghlan we can ascertain the average consumption per head, cost of production, and selling price in that country and Australia respectively, and thus arrive at the revenue which would be - received in Australia.
– What are the wages paid in France?
– I have allowed for a greater cost of production in Australia.
– The price of tobacco is very much higher in Australia than in France.
– In France, with apopulation of 40,000,000, which consumes 2 lbs. of tobacco per head, at an average price of 3s. iod. per lb., and an average cost of production at 9& .per lb., there is a profit of 3s. id. per lb., and a net revenue of £15,000,000.
– In what year was’ that?
– I am giving the latest figures available, which are, I believe, for the year 1902. In Australia, with a population of 4,000,000, which consumes 2½1bs. of tobacco per head, sold, at an average of 6s. per lb., and with an average cost of production of 2s. per’ lb., there should be an annual revenue of £2,000,000. Senator Gould will notice that while the cost of production in France is 9d. per lb., I estimate the cost under that head at 2s. per lb. in Australia, and the revenue of £2,000,000 is practically that at. which I arrived working on another basis.
– Has the honorable senator obtained the opinions of practical men as to the cost of manufacture in Australia ?
– I have obtained the. opinions of practical men in all the branches of the trade in which they are making their living, and they confirm the figures which I have laid before honorable senators. Another country affords a comparison, which, though not so useful, still shows that I am not far out in my calculation. In Roumania, where there is a population of 5,500,000, the Government derive a revenue of £1,500,000, principally from the manufacture and sale of cigarettes, and in Portugal, where there is a population of 4,500,000, and a much smaller consumption per head than in Australia, the revenue is £1,600,000.
– The Commonwealth Government at the present time derive _£i, 300,000 from Customs and Excise.
– But the consumption in Portugal is only about three quarters of a lb. per head as compared with a consumption in Australia of 1 lb. per head, and this, combined with a higher selling price here, would seem greater revenue. I have in my hand a report of a Select Committee of the Victorian Legislative Assembly on the subject of the national monopoly in the tobacco trade, and I find that that Committee were distinctly favorable to the course which I am advocating. In their report the Committee say : -
Your Committee are of opinion that, amongst other advantages likely to be derived from the establishment of a State monopoly in the manufacture of tobacco in Victoria, are the following : - Increased revenue j better quality of tobacco to consumers ; encouragement to Victorian farmers to grow tobacco ; and increased employment to the people……. The success of a State monopoly would hinge to a great extent upon the cost of production. In this regard your committee consider that the State could import as cheaply as private firms the special brands of cigars, &c, favoured by consumers.
– Can the honorable senator give us the amount of capital invested in the tobacco industry in France?
– I have not the figures »n that point, but since I first addressed myself to this question, I have received a number of letters from European tobacco growers in Victoria and New South Wales, assuring me that they are wholly in the hands of the tobacco combine, and can only obtain a price which renders the growing of tobacco unprofitable. The reason for this is stated to be that the tobacco combines do not want to see the manufacture of the local leaf extended. The Wangaratta, King River, and other growers’ associations have passed resolutions urging the Government to nationalize the industry, pointing out that under the present system they cannot obtain a price to enable them to grow successfully. They are of opinion, however, that if they were paid the same price that is given for American leaf, they could make a profit; and there are thousands of acres in Australia which are suitable for the growth of tobacco, but which at the present time cannot be put to this most profitable use.
– Is not the tobacco made wholly from Australian leaf very inferior ?
-Tobacco made wholly from Australian leaf is to a certain’ extent inferior, but that is very largely owing to the fact that in Australia growers have not been sufficiently educated to thoroughly understand the process of curing. Honorable senators will remember that a few years ago Australian butter was a disgraceful production, and would not have realized a profitable price in any of the markets of the world. However, owing to the encouragement given to the industry, and the scientific knowledge extended to butter makers and farmers, Australian butter is now as good as that produced in any part of the world.
– And the same would be the case with tobacco. Western Australian leaf has sold at a price as high as 2s. per lb.
– At the present time Victorian leaf is sold in the London market.
– New South Wales growers cannot get 2s. per lb.
– That is because of the tobacco combine.
– The trouble is that the Australian growers have not yet produced the right class of article.
– Australian growers have not yet grasped the proper process of curing, but some growers, who have made a study of the question, have produced leaf equal to that to be found in any part of the world. The encouragement offered, however, is not sufficient, seeing that, no matter how well cured the leaf may be, there is only the one unprofitable price offered by the combine.
– I know that in New South Wales efforts have been made to encourage the production of highclass leaf, but, unfortunately, without success.
– Not by the tobacco combine.
– By a tobacco company.
– And that tobacco company, I suppose, has now been engulphed by the combine, and has ceased to carry on its philanthropic work. Growers assure me that, so far from receiving encouragement, they receive discouragement from the tobacco combine. I feel confident that under the Constitution we have power to deal with this matter. I propose to have a Select Committee to confer with a similar Committee from the other House, and report as to the best method of carrying the motion into effect.
– Would it not be best to simply move that a Select Committee be appointed to inquire into the whole question, instead of first making an affirmation ?
– It is very likely that the Government will contend that we have not the power to carry out this motion ; but if we have not power now - which I do not admit - I contend that it is advisable for a Select Committee to point out how we may obtain control of the trade. There are two ways - one, by an alteration of the Constitution, and the other by asking the States Governments to give us the power. I am not at all afraid that the States Governments would refuse the request, but, on the other hand, believe that they would readily grant it, seeing that they do not, and cannot, effectively exercise such a power themselves. In many of the States, in order to pay old-age pen sions, it will be necessary to resort to direct taxation ; this, for instance, will very probably be the case in Western Australia. I believe the States Parliaments would willingly extend the desired power to the Commonwealth, if it were understood that the proceeds of the monopoly were to be ear -marked for the payment of old-age pensions. I am dealing with the question as a layman, and I therefore do not presume to say whether we have the power, but the committee I suggest- could take legal opinion on the subject; and if it is found that we have not the power, they could recommend the course we should adopt to secure it.
– That could be done just as well if the committee were appointed to inquire into the whole question, without the Senate being asked to specially affirm anything.
– I am satisfied with the proof that a monopoly exists, and with the proof that a profit can be derived from carrying on the business. What I ask is that we should say, by adopting my motion, that it is advisable for the Commonwealth to take over this monopoly, and we should ask a committee to discover whether we have the necessary power, and to suggest the best means for carrying the motion into effect. I thank honorable senators for the attention with which they have listened to me, because I recognise that the subject is a dry and, perhaps, uninteresting one. I hope that the motion will be carried.
. -We always listen with very great pleasure to Senator Pearce. Whenever the honorable senator brings a subject under our notice he makes it evident that he has taken pains to master it, and his remarks are exceedingly, interesting and instructive. This is the second occasion on which I have listened to the honorable senator on this question. In the last Parliament he moved -
That in the opinion of the Senate it is advisable that the manufacture of tobacco, cigars, and cigarettes should be a national monopoly.
The honorable senator now submits his motion in three separate paragraphs, in which he asks the Senate to affirm the desirability of doing what he proposes; of appointing a joint Committee of both Houses to give advice as to the bést means of giving effect to it ; and of setting .aside the revenue derived from the monopoly to meet the expenditure required for old-age pensions, and for other purposes. I think the honorable senator would have been better advised if he had asked the Senate for a Select Committee to inquire into the whole subject. He has asserted first of all that a monopoly exists in this business at the present time. His next assertion is that the existence of that monopoly is absolutely injurious to the people of this community. The only way in which the operations of a monopoly are likely to be injurious to a community is by bringing about an increase in the price of the article affected.
– It may be injurious also if the price is not reduced as much as it ought to be.
– So far as I know, no increase in the price of tobacco has taken place, and that being so, I cannot see how the honorable member proves that the monopoly is injurious to the public.
– There are other interests besides those of the consumer.
– That is only a way pf avoiding the question. ‘ If the people who create a monopoly dip their hands into the public purse and take from it money which was not taken from it before, they will be doing an’ in jury to the public. If they charge the public no more than the public were accustomed to pay before the existence of the monopoly, how can it be said that it is a disadvantage to the public? The honorable senator must prove that it is. He has made certain assertions ; he has quoted certain statements which have appeared in print; and he has quoted from a circular issued by some firm giving a price list,’ and announcing the appointment of some person as the agent of the firm. But all this does not prove that a monopoly exists. What is done here is done all over the world in connexion with articles which are largely manufactured. A manufacturing firm in England appoints an agent for the Colonies, and sends out circulars saying that this person is their agent, and submitting a certain price list.. These price lists are much better than the miserable salted invoices which used to be issued by wholesale houses, and by which people were deceived. It is to the public interest that there should be fixed prices for an article, but, so far as I know, the existence of a monopoly in this business has not been proved.
– Does the honorable senator deny that there is a tobacco trust in Australia ?
– I deny nothing, because I have not positive knowledge. What we require to do is to appoint a Select Committee to take the evidence of witnesses to prove whether there is a monopoly, andwhether its operations are injurious to the public. Monopolies are not necessarily injurious to the people of any community. One of the best known monopolies is that of the Standard Oil Company of America. That company has an unmistakable monopoly, but it has lowered the price of oil to the consumer, and its operations have not resulted in any disadvantage to the community. Where a number of manufacturers are working in a small way with imperfect machinery, they must charge a considerable price for the . articles which they manufacture, when, if by combination they can cheapen the process of manufacture, they are able to reduce the price to the consumer. The Government have not considered this particular question, because it is not yet ripe for consideration. I am therefore only giving my personal views on the subject of monopolies. I believe that all absolute and unquestionable monopolies, such as gas, water supply, tramways, and markets, should be in the hands of municipalities, whilst other unmistakable, and, to a certain extent, injurious monopolies, should be controlled by the Government. I am not personally opposed to the Commonwealth taking over a business of this kind if it can be shown that it can be. done with profit to the Government and advantage to the public. In this case we require further information as to the probable results of the action suggested by Senator Pearce. With respect to the profit which the Commonwealth would be likely to receive from the control of this monopoly, the honorable’ senator last session told us that it would ‘ amount . to £750,000 per annum. He has to-day, with the advantage of better information, reduced that estimate by nearly £100,000. I shall proceed to show, from the evidence given by an expert before the Victorian Commission, that the honorable senator must still be very far wrong in the estimate of profit which he submits. Mr. Bruford, an officer of the Victorian Customs Department, and an expert in this business, was asked by the Commission to make a statement showing what the State of Victoria would receive if the. Government conducted this manufacture. I do not propose to read the whole of the report which this gentleman made, but I call the attention of honorable senators to it in order that those who take an interest in the question may learn the opinions he held on this subject. He admits that it is exceedingly difficult to arrive at a satisfactory conclusion ‘ as to what the profit would be. He says that there is a good deal of guess-work in connexion with it, but he is in a position to make a very fair guess, and he believes that if the State of Victoria took over the manufacture and importation of tobacco the Government could make a profit of £55,000 on the business. When I came to inquire into details, as I tried to do, I found that Senator Pearce, in the speech he made last session, reckoned that the Commonwealth could sell tobacco at an j average price of 6s. per lb. When the statement was made I interjected that the honorable senator must be mistaken, because I could buy the best Virginian tobacco at ss. per lb. How, in the sale of the finer, as well- as of inferior, sorts of tobacco, the honorable senator could contend that an average price of 6s. per lb. could be obtained, I could not see. What does this expert say as to the price at which the Victorian Government could sell tobacco to the consumer? He estimates that the average selling price of imported tobacco would be 4s. yd. per lb., whilst the average selling price of Victorian manufactured tobacco would be 3s. 6d. per lb. It will be seen that if the profit were reckoned on the average prices. given by Mr. Bruford, a fearful hole would be made in the estimate of profit submitted by Senator Pearce. The honorable senator’s estimate of £750,000 a year has shrunk on this occasion by about £100,000, but honorable senators must see that the profit could not be anything like what the honorable senator imagines it would be. If we accept the view of Mr. Bruford, and take the profit to be derived in Victoria at £55,000, that to be derived in New South Wales at another £55,000, and make a similar estimate for the other and smaller States, we shall see that there would be a total profit of £165,000 for the whole Commonwealth. If we allow a big margin, “and say that the profit would be £200,000, that is still very much below the estimate of over £600,000 submitted by Senator Pearce.
– It would still be a very good annual income.
– We require evidence to prove the assertion made by the honorable senator. I have no doubt he has gone into the question with very great care, but he has unquestionably made a mistake in this matter. He says that the average price at which tobacco could be sold by the Commonwealth would be 6s. a lb., whilst the expert who gave evidence before the- Victorian Commission believes that the average selling price of imported tobacco would be 4s. 7d. a lb., and. of locally manufactured tobacco 3s. 6d.
– Did the honorable senator ever take the trouble to assure himself that he got a pound of the best Virginian tobacco for 5s. ? .
– I did not take the- trouble to weigh it. .
– The honorable senator got four plugs.’
– No ; I buy it by the £ lb., and I get three sticks for is. 3d.
– If the honorable senator has not assured himself, it is possible that the nominal price of 5s. per lb. more nearly approaches an actual price of 6s. per lb.
– There ‘are State laws dealing with persons who do not give proper weight, and I suppose they are administered. I admit that I have never taken the trouble to weigh the tobacco I have bought. I know that tobacco may be made .very heavy or very light. If a slice of potato is put into a tin of cutup . tobacco it will absorb the moisture in the potato, and will then weigh considerably more than it did before, whilst if tobacco is kept in an exceedingly dry place it will become very hard and very light. Before we commit ourselves to a statement that it is desirable that the Commonwealth should take over this business we should be satisfied that it is at present a monopoly and that it is injurious to the community. Unless that can be shown we have no right to interfere. Then if we are to take it over we should know whether the profit derived from it is likely t6 be considerable or very small. I come now to the most important phase of the question, and that is whether we have any power to take over the manufacture of cigars, tobacco, and cigarettes. Honorable senators will recollect that last session a Royal Commission, of which Mr. Kingston was chairman, was appointed to report on the Bonuses for Manufactures Bill. I have here the report of that- Commission which dealt with the iron, galvanized iron, zinc, and wire netting manufactures. The Commission took evidence in connexion with the manufacture of iron by private individuals under a bonus system. They considered the question of whether the States or the Commonwealth should . undertake the manufacture of iron. When the question of the Commonwealth doing so came up, Mr. Kingston very properly asked the Attorney-General of the day, the present Prime Minister, whether’, under the Constitution, the Commonwealth had the necessary power. I will read what Mr. Deakin had to say on the subject; reminding honorable senators that . the question was exactly upon all-fours with that introduced by Senator Pearce in the motion he has submitted. Mr. Deakin wrote -
Dear Mr. Kingston,-
You ask formy opinion, for the information of the Bonus Commission, as to the powers, if any, of the Commonwealth to esablish iron works.
In my opinion, no such power is included in the express gift of legislative power to the Federal Parliament.
The trade and commerce power, vast though it is, does not appear to extend to production and manufacture - which are not commerce.
Senator Pearce laid great stress on the amplitude of our powers relating to trade and commerce, and he read opinions with regard to them which he tried to construe into meaning that they cover manufacture, but which, so far as I could follow them, referred only to the power to . regulate trade and commerce in order to prevent abuses. Mr. Deakin further wrote -
Commerce only begins where production and manufacture ends. (See Kidd v. Pearson, 128, U.S., 1, 20). Moreover, the fact that the trade and commerce power is limited to external and. Inter-State trade and commerce indicates that the power which the States undoubtedly possess to undertake Government industries within their own limits is not shared by the Commonwealth under this sub-section.
Under sub-sections1,2, and 3, taken together (trade and commerce, taxation and bounties) the authority of the Commonwealth over industrial development is of the largest; but though it allows of control, regulation, and guidance, it in no respects points to direct establishment or management of any industries. Nor can I find in any other part of the Constitution any express authority for the course suggested.
The implied powers of legislation remain to be determined, but include (under sub-section 39, of section 51) matters “incidental” to the exercise of the express powers.
The manufacture of iron may be incidental to the execution of many such powers, e.g., defence or the construction of railways. The Commonwealth might clearly undertake the manufacture of any goods for its own use ; and probably if it did so, and it were incidentally advantageous to the interests of the economical working of the undertaking, that it should also manufacture for other consumers, such manufacture would also come within its implied powers. Except as above, it does not appear that any power to establish and conduct manufactures can be implied from the Constitution.
When Senator Pearce gave notice of his motion this session, I was not aware that an opinion had been given by the late AttorneyGeneral ; and as I wished to reply to his speech I asked the present Attorney-General to favour me with his opinion on the question of whether the Commonwealth had the power to manufacture tobacco, as desired by the mover of this motion.
– The opinion of the late Attorney-General is not very definite; he does not seem to be sure of his ground.
– He says that there is a probability.
– Did my honorable friends ever know a lawyer to tie himself in a knot if it could be helped? If it is at all possible a lawyer will alwaysleave a loop-hole of escape for himself. The late Attorney-General believes that the Commonwealth has not this power, and the present Attorney -General has favoured me with his opinion in these words : -
You ask me - “Has the Commonwealth power to establish the manufacture of tobacco, cigars, and cigarettes, close all present establishments, and prevent private persons in future manufacturing such articles” ?
This question appears to me to be governed - with the exception mentioned below - by the opinion given by Mr. Deakin on18th July, 1903, to Mr. Kingston, the President of the Royal Commission on the Bonuses for Manufactures Bill, in connexion with the establishment of iron works by the Commonwealth. The text of that opinion is printed on page 184 of the report of the Commission.
With that opinion I entirely agree. The only difference between the iron industry and the tobacco industry, so far as regards the principles there laid down, seems to be that it is not easy to conceive how the manufacture of tobacco, cigars, and cigarettes can be incidental to the execution of any of the express legislative powers of the Commonwealth.
Here we have the opinions of two lawyers on this subject, that the Commonwealth has not this power.
– Neither of them is definite.
– My honorable friend will have to admit that the question is in doubt.
– Does the honorable senator not think that the best course for him to adopt in the circumstances would be not to press the motion, but to move for the appointment of a Select Committee to make inquiries into the whole subject, and to take evidence as to the power of the Commonwealth Parliament to take over the manufacture of cigars and tobacco ? If that course were taken, we should be able to get some information as to whether a monopoly does exist, and if so, to what extent; whether its effect has been injurious to the people, and what profit we may anticipate to get if it is. taken over as a State industry. All that information could be collected, and at the same time we could obtain the best legal opinion on” the subject. We might be able to state a case for the opinion of the High Court, which, after all, will have finally to decide the question. If that course is taken, we shall know where we are, but at the present time we do not. The honorable senator must admit that, although he has taken very great pains to collect evidence on this question, still a Select Committee would be able to collect a considerably larger volume of evidence than he has been able to do. In the circumstances, therefore, the Government have to ask the honorable senator not to press the motion to a division.
– Will the honorable senator promise to support a motion for the appointment of a Select Committee?
– I have not consulted my colleagues, but my personal inclination would be unmistakably to support the motion.
– On two previous occasions I thrashed out this subject in such a manner that there is very little left for me to say now. I should not have risen on this occasion but for the assertions of Senator Playford ‘as to the price of tobacco, and the amount of profit from this industry. He quoted the price of the best imported tobacco at 5s. per lb. According to Coghlan, for the last fourteen years the minimum price cf the best imported tobacco has been 6s. per lb., and the minimum price of colonial tobacco, has been, not 3s. 94, but 4s. per lb.
– I gave the price on the authority of a Customs expert. Is Coghlan giving the wholesale or retail price?
– Senator Pearce has just placed in my hands a copy of the Australian Tobacco Journal, which quotes the price of Wills’ Three Castles brand ?t 7s. 6d. per lb., which is a considerable advance on the price quoted by Coghlan.
– That must be for some very fancy brand, I suppose.
– That is wholesale, too.
– This publication quotes the price of Capstan tobacco at’ 6s.. per lb. ; Diadem at 6s. 6d. per lb., and Player’s Navy Cut at 7s. od. per lb. Therefore, the price of 5s. per lb. quoted bv Senator Playford is very low, when it is compared with the prices quoted by Coghlan and in this journal.
– I do not know what Coghlan or any one else says. I know what I pay.
– Let rae now refer to the figures of this expert with regard to the profits. I understood Senator Playford to say that if all the profits of the trade in Victoria were pooled they would not amount to £55,000. During the discussion on the tobacco duties, Senator Clemons produced a balance-sheet of Cameron Brothers and Co., and he quoted the profits of that one firm in one year at £50,000.
– They had not only Victoria, but other States to supply.
– At that time there were in the other States tobacco factories which do not exist now. That company could not possibly have been doing the whole of the Australian trade, because their capital amounted to only £50,000. In one year they made as much in profit out of the industry as they had invested in it These facts should be remembered when a gentleman is referred to as an expert whose figures are altogether different from those which we have had hitherto. The statements read by Senator Playford are not worth the paper’ on which they were written, because they appear on their very face to be entirely erroneous, and have no bearing on the question of profits. The honorable senator demanded proof of the existence of a monopoly. Every person in _ Australia who has been paying, any attention to the industry must be aware that, since Inter-State free-trade has been established, there has been a trustification pf the tobacco factories of Australia. We have in existence the States Tobacco Co., which is a combination between the Dixson Tobacco Company, Cameron Bros, and Co., and various other tobacco manufacturers. There could be no question that a monopoly does exist. The honorable senator also said that even if there were a monopoly he wished to know what evil effects it had brought about before we did anything to alter the state of affairs. Even suppose that the selling prices were the- same as hitherto; we have other considerations to think of than the interests of the mere consumer. I will briefly state the position of Western Australia. Before Inter-State free-trade was established we had two factories in Fremantle, but since the trust was formed those two factories - the only two we had in the State - have ceased to exist, and the employe’s have had to go elsewhere to look for work. Western Australia, however, is not the only State which has suffered in that way. In Victoria there has been a reduction in the number of hands, and, perhaps, a’ reduction in the number of factories. At all events, fewer hands have been employed in the tobacco trade in Melbourne than used to be employed before this trustification came off. We also know that a quantity of labour which used to be done in this city is now done in Adelaide. Seemingly, Adelaide is the city in which cheap labour can be procured, and in which there is no Wages Board Act or Compulsory Arbitration Act The cheap girl-labour of this so-called moral city has to do the work for 50 per cent, less than trade union rates. ‘ By this means the objects of the Arbitration Act of Western Australia, and the Wages Board Act of Victoria, have been defeated. That is one of the results of this monopoly. Senator Playford requires proof that the monopoly is doing harm. Those are proofs which he cannot get over. The harm which is being done to .tobacco operatives is unquestionable. - The price for the production of 100 cigars in Adelaide by cheap girl- labour runs from 6d. to is., .whereas the rates which were fixed by the Wages Board in Melbourne ran from is. 8d. to 2s. 3d. per 100. In the face of these figures there can be no doubt that this monopoly has done an injury. Taking Senator Playford’s- argument, it is apparent that we have the right to abolish the tobacco trust straight away and to put in ils place a monopoly of a national character, so that the people, as a whole, will reap the benefit. The Republic of France has nationalized the tobacco industry. Many years ago the French Government put into the tobacco industry something like’ £2,000,000 of capital. The figures for the , latest year which I have been able to obtain, -those for. 1 902 - show that the tobacco industry of France, which is a Government monopoly, produced a profit of £14,00,000. Surely, there is proof that there will be a greater amount of .profit from nationalizing this industry than we get out of it’ at present. I hold that tobacco is a. commodity which is a fair subject for taxation. There is scarcely a civilized country in the world but has recognised that tobacco is an eminently taxable commodity, and. several countries have nationalized the .industry. Even a little Asiatic country like Japan nationalized the tobacco industry four years ago. Those who are admirers of the Japanese should be influenced by that fact. These countries have not nationalized the industry because they believe in the prin- ciple of State socialism, but for the purpose of getting the full amount of revenue out of it. Looking at the matter from a revenue stand-point, I contend that we can do much better by nationalizing the industry .than bv allowing such enormous profits as are reaped by Messrs. Cameron Bros., to go into private pockets. The figures quoted by Senator Clemons showed that as much as £s°>000 profit was made by Cameron Bros, in one year in Victoria alone. That is the best proof we can have of the enormous incomes that the tobacco manufacturers are securing. Furthermore, the monopoly has been able to lower the expense of manufacture, and has decreased the number of hands employed. They have discharged sixteen travellers, and having now a monopoly of the trade no longer advertise as before. The works have been shifted to a State where there is no compulsory arbitration law in operation, and the operatives are being paid 50 per cent, less than the wage formerly paid. In Victoria I find that, notwithstanding the fact that last year the income tax minimum was ^£125, only one tobacco worker had to pay income tax’. . That will give an idea of the wages paid, and why the manufacturers shifted their works to the “model” State of South Australia in order to get cheap labour. . From the stand-point of revenue, and also from the stand-point of the worker, who has to bear the heat and burden of making the commodity, the tobacco industry should be nationalized. I hope that the motion will be carried, and that it will serve as an indication to the other House to do likewise.
Debate (on motion by Senator Gray) adjourned.
Senate adjourned at 5. 11 p.m.
Cite as: Australia, Senate, Debates, 17 March 1904, viewed 22 October 2017, <http://historichansard.net/senate/1904/19040317_senate_2_18/>.