3rd Parliament · 2nd Session
The President took the chair at 2.30 p.m., and read prayers.
– I desire to ask the Vice-President of the Executive Council, without notice, if he will be kind enough to inform the Senate when he does hear that the guarantee of . £25,000 in connexion with the cancelled mail contract to Europe has been paid?
– I understand that the Postmaster-General is pressing for payment, and as soon as the money has been paid, it will be my duty to inform the Senate.
asked the Minister representing the Minister of Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
A refund of the Customs duty paid on the importation of leaf tobacco may be made in respectof all stalks, refuse, clipping or waste arising from the operations in any factory and destroyed in the manner prescribed.
– Arising out of the answer, I desire to ask the Minister whether it is not a fact that the past method has been to mix the waste with kerosene, and then to burn it?
– I have no personal knowledge on the subject. I would ask my honorable friend, if he does not mind, to give notice of a question, or, if he so desires, I shall be very happy to make inquiry and let him know.
– I prefer to ask a question to-morrow without notice.
Whether honorable members of the Senate will be supplied with copies of the Blue Book containing the report of the recent Imperial Conference held in London ; and, if so, when ?
– The answer to the honorable and learned senator’s question is as follows: -
Yes. The report is now being printed. Copies will, it is expected, be available next week.
asked the Minister representing the Minister of Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
– Arising out of the answer, I desire to ask the Minister if he is quite sure that therehas been no complaint made about these rates on the north-western coast of Western Australia?
– I have made inquiries, and that is the answer which has been supplied to me by the Department.
– It is erroneous.
asked the Minister representing the Postmaster-General, upon notice -
What was the number of applications for telephones for the years ending 31st December, 1905 and 1906 respectively ; the number of lines connected for the same periods ; and the applications in hand at the end of each year?
– The answer to the honorable senator’s question is as follows : -
Inquiries are being made, and a reply will be given as soon as the necessary particulars have been obtained.
asked the Minister representing the Minister of External Affairs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
– Arising out of the answer, I desire to ask the Minister whether the immigrants who left the vessel at Fremantle were engaged under contract by Mr. Hughes, who is acting on behalf of the Colonial Sugar Refining Company, and, if so, under what conditions were they engaged ?
– I have no personal knowledge, but I shall be happy to supply the honorable senator with the information privately, after inquiry.
– No; publicly.
– If my honorable friend will be good enough to give notice of a question I shall supply the information on Wednesday next.
asked the Minister of
Home Affairs, upon notice -
Is it the intention of Ministers to introduce a Bill making provision for compulsory voting at all Federal elections?
– The answer to the honorable senator’s question is as follows : -
Not this session. The matter may be considered at a later date.
asked the VicePresident of the Executive Council, upon notice -
– The answer to the honorable senator’s questions is as follows: - 1 and 2. There is no trace of any such correspondence. If the honorable member will give a reference to the promise alluded to a further inquiry will be made.
Motion (by Senator de Largie) agreed to-
That all communications between the Imperial Government and the Commonwealth Government on the question of marine survey of the northwest coast of Australia be placed on the table of the Library.
Motion (by Senator Needham) agreed to-
That there be laid on the table of the Senate a return showing -
The names of all firms of agricultural implement makers who have secured exemptions under section 2 of the Excise Tariff Act 1906.
The rates of wages paid to, and the hours of labour worked by, the employes of such firms as lodged with the Registrar of the Commonwealth Conciliation and Arbitration Court.
Senator SirJOSIAH SYMON (South Australia) [2.40]. - I desire to ask the VicePresident of the Executive Council, if it is not inconvenient to him, to postpone the
Bills of Exchange Bill until the Commonwealth Salaries Bill has been dealt with. If he will adopt my suggestion it will give me an opportunity of speaking upon a Bill which is a practical measure dealing with a practical difficulty.
– I have no objection to adopting the suggestion of my honorable and learned friend. Personally, I should have preferred him to deal together with the Commonwealth Salaries Bill and the Judiciary Bill ; but I understand it would be inconvenient to him to do so before Wednesday next. If he prefers to go on with the Commonwealth Salaries Bill this afternoon, well and good; or if he prefers to deal with the two Bills together on Wednesday next I shall be happy to meet his convenience.
Senator Sir JOSIAH SYMON (South Australia) [2.43]- - I certainly would be lacking a sense of appreciation if I did not thank my honorable and learned friend for his reply. As he adopted the course of dealing with the two Bills together, honorable senators might prefer that it should be followed by other speakers. If he is in a position to allow me to deal with the two Bills together on Wednesday next, I shall be most happy to do so if that falls in with the views of honorable senators. Since the adjournment of the Senate yesterday I have considered the two Bills very carefully, and it seems to me that it would be possible to deal with them separately. However, I appreciate what my honorable and learned friend says, and I am not in a position - because of the absence of papers which I thought might be here - to deal with the Judiciary Bill, which involves very serious constitutional questions which the other Bill does not, certainly not to the same extent. I shall be glad to fall in with the view of my honorable and learned friend and postpone what I have to say on the Commonwealth Salaries Bill until Wednesday next, when the two Bills can be dealt with together.
– What I did propose was that we should go on with the Bills of Exchange Bill this afternoon. It is a very important and comprehensive Bill, which under ordinary circumstances should command the attention of the Senate both to-day and to-morrow. If the suggestion made be adopted, then, if we should dispose of the Bill earlier than is now anticipated, the Commonwealth Salaries Bill may be discussed. It will be understood, however, that the consideration of that Bill and the Judiciary Bill will thereafter be postponed until Wednesday next. I can only act with the concurrence of honorable senators, and if there is a general understanding to that effect I am willing to go on with the Bills of Exchange Bill this afternoon. It is a measure which should command critical attention on the part of honorable senators.
– I should like to ask the VicePresident of the Executive Council if, supposing the proposed alteration in the order of business takes place, the Senate will have business to go on with this evening?
– Private business is set down for this evening.
– I object to any change in the order of business to suit the convenience of any member of the Senate if it involves an early adjournment.
-The honorable senator may ask a question, but he will not be in order in debating the matter.
– I move -
That the Bill be now read a second time.
Honorable senators who have had an opportunity of looking at the text of this Bill will have observed that in the main, it is drawn from the British legislation upon this important subject. It covers legal provisions relating, as stated in the title of the measure, to bills of exchange, cheques, and promissory notes. As far back as 1882 an Act was passed through the Imperial Parliament, which is known as the Bills of Exchange Act 1882. It was intended to be, and has since been, regarded and used as a code of law upon this subject. So successful were the efforts of those who endeavoured to codify the law and give expression to it in that enactment, that since 1882 it has stood as the law of the United Kingdom with but one amendment, which is incorporated in clause 88 of the measure now before honorable senators, making provision for protecting a banker who, in the ordinary course of business receives payment of a crossed cheque. Apart from that amendment, the proposed law as attempted to. be set forth in this Bill is the expression of what is the law to-day, not t only in the United Kingdom, but practically also in every one of the States of the Commonwealth. It might, therefore, be asked: Where is the necessity for this measure? We find by practical experience that each of the States has in the main adopted the Imperial Act of 1882 as an Act referring to bills of exchange, cheques, and promissory notes, within its borders. There have been from time to time amendments, which so far as experience has shown have been required, adopted in each of the States. Each of the States has a Bills of Exchange Act modelled on the Imperial Act of 1882. With the exception of New South Wales, each State has since amended the local Act by a single amending Act, and in the case of Tasmania by two amending Acts. So that so far as Australia is concerned, the legislation on this subject is comprised at present in six principal States Acts and six amending Acts. But, while some of the Acts which have been passed in the States, have practically followed the Imperial Act of 1882 almost absolutely, in others all the provisions of the Imperial Act have not been adopted by reason of the fact that certain of them had already been legislated for in Acts of the States, previously passed. To give an instance : Provisions relating to the liabilities on different instruments known as bills of exchange have to be made when the due date falls on a holiday or on a non-business day. The Imperial Act contains all the provisoins necessary to cover such contingencies. In most of the States Bills of Exchange Acts those provisions have been practically adopted. In Victoria, however, because provisions of the character had been inserted and provided for in what are called their Bank Holiday Acts, they have not incorporated them in their Bills of Exchange Act. Honorable members will recognise the inconvenience which might possibly arise from this slight deviation in the adoption of the provisions contained in the Imperial measure. The banker and commercial man who has to make himself cognizant of the law applicable to bills of exchange must, if he desires to know the law throughout Australia, consult no less than six different statute-books, and when he has consulted them thoroughly, so far as Bills of Exchange Acts are concerned, he may not then have equipped himself with the information necessary to prevent him from making an error which might, perhaps, be very serious. He might discover, only after the error had been committed, that he should have looked beyond the Bills of Exchange Acts in the statute-books of the States, and should have consulted ‘ such measures as the Bank Holidays Acts. This Bill will, if passed into law, supersede all State enactments on the subject. To the extent to which they are repugnant to or inconsistent with this Bill they will cease to have any effect. We do not repeal any State enactments in so many words. We merely pass legislation on the subject, and then, by the operation of the Constitution, it takes precedence over that of the States, and becomes the law of the whole Commonwealth. If it should be necessary hereafter at any time to introduce any amendment dictated by experience it can be introduced into the Commonwealth Bills of Exchange Act, and it will immediately have the force of law throughout all the States. At present bankers will sometimes find that, in the State of Tasmania, for instance, provision has been made to meet some unexpected aspect of the law, whereas in some of the other States the difficulty is not provided for. It necessarily follows that commercial men require to be on the gin vive to know what is the law. It may also be found that in many instances the law in one State differs from the law in another in respect to what might be regarded as common transactions relating to trade or commerce. In the circumstances, honorable senators will recognise that we have been well guided in submitting to this Parliament a Bill which in all respects is practically modelled on what, for the purpose of these remarks, I may term the Imperial Act of 1882. That Act has been the basis of legislation passed in all the States on this important subject. It has stood the test of time and experience for a quarter of a century, and I have already said it has been found necessary in Great Britain to amend it only in. one particular. That should of itself go to show that’ the Imperial Act is a piece of legislation which has carefully and accurately provided for the necessities arising out of transactions in which bills of exchange take an important part. I need not remind honorable senators that bills of exchange, promissory notes, and cheques are the ordinary every-day instruments of the commerce and trade of the community. They, are more particularly used in connexion with trade transactions which take place between individuals removed at a distance from each other. They are used in connexion with ti ade transactions taking place between residents of the different States, and between residents of the Commonwealth and residents of various parts of the Empire and of foreign countries. They are not instruments confined in their use, only to exceptional occasions, but are the every-day instrumentalities of trade and commerce. If, therefore, legislation which has been designed to codify the whole of the law relating to them has stood the test of time and experience extending over the past Quarter <“>( a century, a period of the Empire’s and the world’s history which has been particularly prolific in trade expansion, it will be admitted that we cannot verv well do better than to adopt for the legislation of the Commonwealth referring to this importtint subject the legislation which has stood that test.
– Can1 the Minister say that any of the States of the Commonwealth have not codified the law on this subject?
– I am not quite certain as to New South Wales, but I think the law of that State dealing with the subject is based on the Imperial Act of 1882, and certainly the other States have adopted the Imperial Act, and have amended it in but very slight particulars. The only two amendments introduced have been a provision designed to meet the case of The Capital and. Counties Bank v. Gordon, and another, which was introduced in the States of Tasmania and Queensland quite recently to meet the consequences of the decision of the High Court in regard to Marshall’s case.
– And of the Privy Council also.
– The High Court decision in that case was sustained by the Privy Council.
– That is as to fraudulently altered cheques.
– That is so. Honorable senators will recognise that it would be of considerable convenience to the trading community of the Commonwealth if they could find the law on this subject in one cede, and could be certain that if amendments, no matter how desirable, were introduced, they would be in relation to that one particular code of law. They would be saved a considerable amount of trouble, as it would not be necessary for them to consult the statute-books of six different States, nor would they be exposed to possible error in consulting them by overlooking some important provision which might be contained in a State Act dealing with bills of exchange, but not intituled in such a way as to indicate that its provisions affected those instrumentalities. I believe honorable senators will agree that the Commonwealth Parliament will be doing only its duty in bringing the law on this subject into line in the whole of the States. The matter is one upon which there has been practically unanimity, not only amongst the States, but between the States and Great Britain, and also, I understand, between the States and other parts of the Empire. Of course, honorable senators will find in this Bill some few divergencies from the original model ; but I do not think that by the utmost straining they can be regarded as anything in the nature of a departure from the principles underlying the Imperial Act. One or two provisions which will not be found in the Imperial Act find a place in this Bill simply by reason of the tocal conditions. Clause 6 makes the application of the Act prospective, and not retrospective. I invite the earnest attention of honorable senators to_ clause 7, because some of them may think it involves constitutional . principles. In it we make provision that once a bill of exchange is issued, it shall bear the stamp only of the State of issue. In that provision, we propose to take away from any other State in which that instrumentality of commerce may be current at any time the power of superadding to the original duty paid to the State of issue any other species of taxation.
– Does the honorable senator think we can do that ?
– I think so. I invite the earnest attention of honorable senators to the clause, because quite possibly it may be argued that in it we are exceeding the power conferred upon us by the Constitution.
– It is possible to have two stamp taxes, is it not ?
– We want to avoid that.
– But the Constitution allows it.
– That is the question. Supposing for a moment that there is no doubt in the mind of any honorable senator of our capacity to take away from any particular State, other than the State of issue, its power to tax bills of exchange, I would put it to honorable senators, that this is a very convenient and fair provision. There is no reason why a document of this kind, once issued in the Commonwealth, should be subjected in any other State, and in the ordinary course of its currency until it arrives at maturity, to any additional taxation. I would briefly urge on honorable senators some of the reasons why we think it desirable that there should be only one duty paid. We have the power, under sub-section xvi. of section 51 of the Constitution, to legislate with regard to bills of exchange and promissory notes. It is therefore competent for us to legislate as to whether or not bills of exchange are valid in relation to their stamping. That is to say, we can legislate that bills of exchange shall be negotiable and’ usable, as they are to-day, without any stamp at all. We have the power to do that if we choose, and if we have that power, “ surely we have the smaller power contained in it to say that bills of exchange are valid and usable if they bear the duty stamp of the State only in which they are issued. We do not propose to take the revenue arising from the stamping of these documents. We propose to allow the State in which the bill q is issued to continue to get the benefit of that revenue, but we do not want any other State than ‘ the State of issue to come in and superadd any obligations of this kind which will, involve the necessity of contributing to the revenue of that other State. In sub-section xxxix. of section 51 of the Constitution, Ave have all the incidental powers necessary to the execution of any of the powers contained in the other thirty-eight sub-sections of that section. Under subsection i. of section 51 of the Constitution, we have the power to legislate with regard to trade and commerce between the States and between the Commonwealth and the outside world. The negotiation of bills of exchange might not of itself be regarded as an act of trade or an act of commerce, but still I think honorable senators will agree with us that they are the instrumentalities, so to speak, of trade and commerce.- They are part and parcel of the transactions which go to make up the trade and commerce of a community, and we might have the power to legislate fully on this subject, even under that heading. Again, we have the fullest powers to impose taxation, provided that there is no discrimination between the States, under sub-section n. of section 51 of the Constitution. Another consideration in this regard is the provision contained in section 92 of the Constitution that, after the ionposition of uniform duties, trade, commerce, and intercourse throughout the Commonwealth shall be absolutely free. It may be argued with very good reason that te impose charges or taxes upon these instrumentalities of commerce is an interference with that very freedom of trade and intercourse for which the Constitution provides, and which the Federal authority is bound to maintain. I am pointing out these matters at this stage in order that if the subject is discussed at any length hereafter, honorable senators may be in a position to know what is in my mind when submitting that, both for reasons of convenience and reasons of constitutionality, it is desirable that we should have the powers contained in clause 7 of this Bill. It has been held in a case in the United States Supreme Court that it is unlawful for a State to impose stamp duties upon bills of lading used for the transport of gold from one State to another, on the ground that it is a violation of the fundamental principle of the Constitution relating tq the establishment and maintenance of free-trade and free intercourse between the States comprising the Union. I would now direct attention to clause 9, which defines an inland bill as a bill which is, or on the face of it purports to be -
I draw attention particularly to the use of the word Australasia. Commonly in the Acts of the Federal Parliament the word. Australia is used, and is defined under our Acts Interpretation Act as practically synonymous with the Commonwealth. Under the definition clause of this Bill, Australasia means -
Australia, and any Territory under the control of the Commonwealth, New Zealand, and the Fiji Islands.
Therefore, any bill which is, or on the face of it purports to be, both drawn and payable within the Commonwealth, or even in New Zealand or Fiji, and which is current in the Commonwealth, would come under the provisions of this measure relating to an inland bill. In the definition of an inland bill of exchange under the Bills of Exchange Act of Tasmania, the word “ Tasmania” appears where Australasia occurs in this clause. Honorable ‘ senators will naturally ask, as I would in the circumstances, why we make Australasia, as defined in the interpretation clause, the territory which will determine whether a bill is inland or foreign. The provision we have adopted is similar to that which has heretofore existed in all the States excepting Tasmania. Another provision to which I would direct attention is sub-clause 2 of clause 65. This was not contained in the original Bills of Exchange Act of 1882 of the United Kingdom. Sub-clause 1 of clause 65 appears in the Imperial Act of 1882, but not subclause 2, which reads -
An order on demand, drawn by or on behalf of a banker at one place of business on and payable by the banker either at the same or at some other place of business, shall, for the purpose of the protection of the banker under this section, be deemed to be a bill payable to order on demand.
That provision has been found necessary by reason of the decision in a celebrated English case. The earlier part of the clause protects a banker who in the ordinary course of business passes a demand draft whereon the indorsement is forged, and provides that it is not incumbent upon the banker - to show that the indorsement of the payee or liny subsequent indorsement was made by or under the authority of the person .whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.
There the Imperial Act stopped, and it was subsequently determined that that section did not apply to a bank cheque or draft from one branch of the bank to the other. A case, known as The Capital and Counties Bank v. Gordon, arose where there was a forged indorsement on such an instrument, and where the bank sought the protection of the provisions in the Imperial Act similar to those in sub-clause 1 of clause 65 of this Bill, but it was held that they did not cover a bank cheque or draft from one branch of the bank to the other. In nearly every State in the Commonwealth legislation has subsequently been adopted to cure that defect in the law. Honorable senators will see in the margin reference to the Victorian, Queensland, South Australian, and Tasmanian Acts. There is a Western Australian provision to cover this defect, and it has exactly the same effect as sub-clause 2 of clause 65. It gives to the banker a like protection in the case of bank cheques and drafts from branch to branch, but as the wording is very different from that in the Acts of the other States and in this Bill, we have omitted reference to it from the marginal note, because we thought it might be misleading. New South Wales adopted subclause 1 of clause 65 from the Imperial Act as it stands, but went even further, and made provision which had the effect really of saying that in such cases, where the indorsement was forged, and the banket had paid the cheque or draft honestly, and in the ordinary course of business, the indorsement would be deemed to be what it purported to be, and so throw upon the individual who was defrauded a loss which we do not like to share the responsibility of putting upon him. The New South Wales provision in that respect was singular. The omission of any reference to Western Australia in the marginal note is due, not to the fact that that State has not a provision to the same effect, but that its provision is different in form “ from those prevailing in the other States; and though the effect is the same, we thought that it would be misleading to include a reference to the Western Australian Act. Here, I may say, with regard to the marginal notes to this Bill, that wherever there is anything touching upon a matter that is a little singular, or a departure from the Imperial enactment, attention is drawn to it by reference to a State enactment on the subject. If we have not followed States enactments exactly in every respect in language, I can assure honorable senators that any departure made does not involve a departure in principle. Such departures as do occur are made purely for drafting purposes - perhaps to achieve what is considered to be a better form of expression; but certainly there is no departure in principle. The only reason why I am dealing with this question is to draw attention to particular divergences from the Imperial Act of 1882, and the necessity for them’. The next clause to which I invite attention is clause 81. It is designed to amend the law in a matter in which it is considered that the law may fairly, and reasonably, in justice to all parties, be amended. That law was declared so far as Australia is concerned, in the case of The Colonial Bank of Australasia Ltd. v. Marshall. The circumstances of that case were, as I remember them, these : There were two or three individuals who were concerned in a joint account. I forget whether they were trustees. They had their account in the Colonial Bank. One or more of them was living, not in Melbourne, but in some country portion of Victoria. The ordinary procedure which they followed in drawing on the bank was that the cheques were sent to the drawers in the country with the amounts filled in, and their names were signed. Then the cheques were returned to the other drawer in the city. But through a fraud on the part of one of the parties, after a cheque had actually been signed by one or more of the three, the amount for which it was drawn was altered. The cheque was presented to the bank. There was no apparent evidence on the face of it that there had been any fraudulent alteration in the words or figures. The bank honestly and in good faith honoured the cheque as presented to it. The other drawers who had signed it for the lesser amount before it was altered subsequently took action against the bank, and recovered the difference between the amount for which they had signed and the amount for which the bank : had honoured the altered cheque. After going through various courts, the case finally came before the High Court of the Commonwealth, which decided that the bank was liable, and that the drawers were not liable by reason of negligence, which the bank alleged against them for their action in signing the cheque in the form in which they did.
– Was the negligence proved or was it merely alleged?
– I do not know whether it was actually proved.
– The Court held that there was no evidence of negligence on the part of the drawers.
– I said, “ The negligence alleged,” because I forget whether it was proved. The case afterwards went to the Privy Council, which sustained the decision of. the High Court. Some doubt had been expressed in Great Britain for some years previously as to what would be held to be the law in such a case. As far back as 1829 a similar case had been decided differently. That is a celebrated case, which most students of law have to read, and is known as Young v. Grote . The circumstances of it were that a customer of a bank leaving home left with his wife his cheque book or a number of cheques signed in blank with authority for her to fill them up for such amounts as she might require. The husband’s clerk filled up a cheque for a certain sum - let us say , £50. He showed it to the lady, who was satisfied, and afterwards he fraudulently altered it by putting in a figure and writingin words. Ultimately he cashed it for, let us say, £450.
The customer sued the bank, and sought to throw the responsibility upon it, but the Court held that he and not the bank had to bear the loss. But the reasons assigned for that decision were so various that some doubt has always been entertained as to its soundness. When it came before the Court of Appeal it was decided by, I think, four Judges that the loss should fall upon the customer, and not upon the bank, but if I remember rightly each of the four Judges assigned for his reason a different principle. One based his judgment upon the negligence of the customer in leaving his cheques about in such a form. Another based his judgment upon the doctrine of estoppel - that where an individual takes a certain course of action he is precluded from setting up certain circumstancesin his favour. Another Judge based his decision upon a different ground altogether. The result was that the decision had been canvassed for a great many years, though no British Court ever accepted the responsibility of saying that the decision in Young v. Grote was bad law. The High Court of Australia, however, bridged this chasm, and took the responsibility of saying that the old decision was bad law. That the High Court did in Marshall v. The Colonial Bank, holding that the decision in Young v. Grote. did not govern, and throwing the responsibility and loss upon the Colonial Bank. That decision, as I have said, was afterwards sustained by the Privy Council. The view that we take is that where an individual is a customer of a bank, and is drawing cheques upon that bank, it is due from him to the bank that he should observe ordinary care and caution, and not be guilty of negligence. Therefore we propose in clause 81 to amend the law in this particular. We provide that -
a cheque, drawn on a banker by a customer, has been drawn by the customer with negligence, and
the negligence of the customer has afforded facility for the fraudulent alteration of the amount of the cheque, and
the cheque has been fraudulently altered so as to increase its amount, and
the cheque as so altered has, in good faith and without negligence, been paid by the banker, the banker shall not be responsible or incur any liability by reason of having paid the cheque, but shall be entitled to charge the customerwith the amount of the cheque as paid by him.
In other words, we say. that if a man is negligent in drawing his cheques, and leaves opportunities for them to be altered in such a way that an alteration is not de- tectable by a man in ordinary circumstances carrying on the business of the bank, then he, and nor the bank, shall bear the loss. I think we can commend that alteration of the law to honorable senators. A provision to the same effect has already been made in Queensland since the decision in Marshall v. The Colonial Bank, and another alteration of the law to a like effect has been made in Tasmania. The Tasmanian amendment goes further.. than we propose to do in some respects, throwing upon banks the responsibility of publishing the section affecting this matter in their cheque books. I do not know that we need make provision for the publication of the law by such means as that. I have now indicated to the Senate in what respects this Bill makes divergencies from the basic measure, if I may so call the Imperial Act of t.882 ; and I think that, with the explanation which I have given of these divergencies, honorable senators will realize that I was quite correct in saying that they are not departures from the principles upon which that measure is founded. They are simply divergencies necessitated by experience in the working of the law. I think that the measure ought to commend itself to a cordial reception from honorable senators. It is not a Bill of a party character. It is designed to convenience the trade, commerce, and finance of the community. It is desirable, in view of the trade relations that we have with the mother country, that our law upon this subject should approximate as closely as possible to that of Great Britain. I do not think that there is any departure from that law proposed by this measure which has either not been acquiesced in or will not be followed by the mother country herself. There is one provision in this Bill, clause 65, sub-clause 2, as to which it will be noted that the mother country has not adopted amending legislation. The reason for that is that in the particular case that came before the Courts in which a defect in the Bill of Exchange Act was disclosed, the defect was cured, so far as Great Britain was concerned, by” reason of the fact that an old Stamp Act met the case. We have not that Stamp Act, or any law of the kind, in operation in Australia. It was not necessary to amend the Bills of Exchange Act in Great Britain in the way in which we propose to amend it here, and in the way in which, in the meantime, it has been amended in each of the States. I omitted to mention that point in dealing with clause 65 ; but I do not think that there is any other clause in the measure to which special attention need be drawn. With the explanation that I have given of the divergencies from the original Imperial measure of “1882, I think I can say that, in submitting this Bill, we are asking honorable senators to pass a satisfactory code for the whole Commonwealth. The Bills of Exchange Act of Great Britain, and the Bills of Exchange’ Acts which have been -passed by nearby all the States of the Commonwealth, are here practically codified. In these circumstances it will, I think, be recognised that there is very little room for discussion of a. party character, and that the measure is a utilitarian one, and one which affects the vital interests of trade and commerce throughout the Commonwealth. It will, when passed, be conducive to a greater measure of convenience to those who are engaged in trading, financial, and commercial operations throughout the whole Commonwealth.
Senator Sir JOSIAH SYMON (South Australia) [3.30]. - This is a Bill of a character which covers a good many Bills which come before the Federal Parliament. They are included in a category of which it is impossible to over-estimate the importance. In the framing of the Constitution one great desire - it was also an urgent necessity - was that a great many subsidiary matters should be dealt with by the Commonwealth Parliament. Even although they might ‘not be regarded’ as involving great executive dr constitutional powers, still they were ‘of importance, because they were intended to secure that uniformity amongst the States, and that’ evenness of law and administration without which, of course, the Federation would only have brought about confusion instead of advantage. Measures of that kind have usually been regarded and spoken of as more or less machinery Bills. In strictness machinery Bills are those which are required to enable the Federal Executive powers to be brought into effective play. Bills of the character of that which is now under consideration rest on ,a rather higher platform than purely machinery Bills, because thev involve not merely matters of machinery but also legislation which’ prior to Federation was entirely in the hands of the
States. To give an illustration, the legislative powers given bv the operative part of section 51 are made applicable to “postal, telegraphic, telephonic, and other like services,” and these have already been exercised. Then in another paragraph comes a subject which I believe is now being dealt with in another place, and that is quarantine. Next, in paragraph xv., we find a provision which enables the Commonwealth, again with the view of securing uniformity throughout the States, to legislate with regard to weights and measures. The next paragraph is that under which the present Bill is introduced, namely, “ Bills of exchange and promissory notes.” Honorable senators will see that, although there may not be a great deal that is fresh in respect of this measure - nothing very startling in the way of a new legal departure from what we have been accustomed to in the States - still it is very important and very essential from the point of view which has been indicated and emphasised by Senator Keating, namely, in respect of securing uniformity in a matter of so much importance. It is scarcely necessary to add further emphasis to what he has said on the subject of the importance of this department of our law. If there is one department of human affairs more than another which requires everything that can be done to facilitate the operations therein, and to remove all elements of confusion, it is that which relates to trade and commerce. Whilst I do not quite agree with my honorable and learned friend when he seeks to found the new law proposed to be enacted by clause 7 on the suggestion that otherwise there might be an interference with freedom of trade, still I do agree that every’ element of restriction ought to be removed as far as possible. I do not regard bills of exchange and promissory notes quite as mv honorable friend described them, as involving really trade and commerce, or. their regulation, and therefore coming within the power given by the Constitution to this Parliament. They are not merely necessary, but absolutely indispensable to the conduct of trade and commerce. The trade of a country does not depend on the handing over of so many sovereigns, or the exchange of specie for goods. It depends on credit. Trade itself is a mere system of barter, and the bills of exchange and promissory notes which rest on that intangible thing known as credit are really the instruments of exchange, as their name imports, to enable trade to be properly carried out, which otherwise would be impossible. Cash transactions over the counter are extremely convenient, and I have always thought that they ought to be more encouraged than they are, but big transactions can only take place with the existence of a gigantic system of credit, and of those instruments of exchange which are called bills of exchange, promissory notes, and cheques. Nothing is more striking in the history of British progress and trade than the development of that branch of the law, out of which the common law relating to bills of exchange and promissory notes has arisen. The law, before the codification took place in respect of bills of exchange and promissory notes, was properly described as the law merchant, and I’ doubt very much whether any portion of the English common law has rested on a wiser and broader foundation of justice - a better and broader foundation of what is desirable for the commerce of a great country - than that particular body of the law. Difficulties always will arise in connexion with a far-reaching system of law, and difficulties did arise in connexion with the development of this branch of the law merchant. Decisions of great variety were given by the Courts, no doubt owing to the differing facts in each case, and led in many respects to a difficulty amongst commercial men and bankers “ in ascertaining exactly what the law on a point was. That very laudable movement, which began a good many years ago for the codifying of what I might call the floating body of English law, in particularly departments such as the law of evidence and others which I could mention, was, after a time, extended to that branch of . the common law which related to bills of exchange and promissory notes, and the result was an Imperial enactment on which this Bill is founded. Honorable senators, of course, are familiar with the codification which was made in the law in respect of sales of goods. That is a most excellent example, and no measure I think has been more useful than that comparatively short measure codifying the law in a most excellent and lucid way. No one can deny that the codification with respect to bills of exchange and promissory notes has been equally well done. I believe that every lawyer will agree that it has been well done. The States have adopted the Imperial code, and nothing more need be said in respect of the desirability of utilizing the Imperial Act. The next step is to exercise the power which was wisely conferred on this Parliament by the Constitution, to enable us to realize the fruits of the Union by having that uniformity amongst the States which it was one of the objects of Federation to bring about. It is obvious that if each State were ‘ permitted to continue to legislate in respect of these important matters, we might find the law of one State differing from the law of another State, and commercial and trading affairs brought to a condition of terrible confusion, so far as regards bills of exchange and promissory notes. I think we shall all join in saying that it is a very proper thing that we should exercise this power at the very earliest opportunity. On this occasion there is no question of implied power, because we have express power to make a law which will supersede the States laws on the subject, and prevent divergencies should they happen to arise It is not merely a matter of convenience, but it is our dutv to do this so that the resident in northern Australia may have in his hand a code relating to bills of exchange and promissory notes, which is equally available to and binding upon the resident in the southern part of Tasmania. If we succeed in doing this, we shall have taken one more step towards realizing the object for which we federated. The Minister very properly pointed out divergencies between this Bill and ‘ the Imperial Act. I think the honorable senator acted wisely in confining himself to that, in so lengthy a Bill. But when the Bill is in Committee, it would be well that he should be prepared to point out to honorable senators, so far as possible, the corresponding sections in the States laws on the subject, and in the Imperial enactment. He did, in referring to the divergencies, allude to the necessity of calling- attention to these things, so that honorable senators should not be under the impression that they were being asked merely to adopt a transcript of the Imperial enactment. When we had the Copyright Bill before us, its consideration in Committee occupied a long time, though, in view of its importance, not a minute longer than I think was necessary. But in dealing in detail with that measure I think we were delayed a little because of the inaccuracies, as I think I may call them, in a great many of the marginal notes. References were made to -provisions in other laws as though they were identical with the provisions contained in the clauses of that Bill, when, as a matter of fact, there were very serious discrepancies between them. These inaccuracies were remedied by amendment, and further information was given to honorable senators, but it led to some little delay in the passing of the Bill. However, I think the Minister is right when he says,that care has been taken in this instance that the references shall be accurate. To come to the special departures from the provisions of the Imperial Act, the first is to be found in clause 7. That is the clause, which restricts the taxing powers of the States in respect- of these particular instruments. Personally, I should be sorry to pronounce any final opinion upon the matter, and when a provision of the sort is introduced we have always the consolation that there is a vista of litigation opened up which is, r think, the proper avenue through which these problems are to be solved. So that we need not absolutely set ourselves up as a tribunal to decide that this is or is not the right thing to do. But if, on the face of it, there is a doubt, to say the least of it, I think it would be much better that we should stay our hands, and allow such a matter to be the subject of further legislation after more mature consideration.
– We should not ; do anything that’ would cause litigation.
- Senator Turley will not expect from me an unqualified assent to that, but, speaking of it as a matter of prudence and not of principle, I am not sure that I disagree with the honorable senator. We should not do anything which would cause litigation, and I aim obliged to Senator Turley for mentioning that, because it leads me to say that we ought, in the first place, to be extremely careful that we do nothing which, on the face of it, looks like an interference with States rights, or with the power of a State to seek its own revenue by whatever method is lawfully open to it. And, in the second place, we ought to do nothing which might lead to that interesting phase of litigation, with which some other Bills on the paper are concerned, as to the relative powers of the States and the Commonwealth of taxation or non-taxation. I take the view at present that this Parliament cannot curtail the power of the States to impose stamp taxes ‘ on instruments which are either made in or payable out of a State, or which come within its jurisdiction. It seems to me that we could not by this Bill impose stamp taxes on those instruments. The power to impose stamp duties, of course, exists in the States. They have the power to collect revenue by means of stamps on whatever documents, with the exception of those affecting the Crown, they choose to make subject to stamp duty. It appears to me to be a strong thing for us to say that the State shall not impose stamp duty on particular documents within their cognizance. I cannot better illustrate this point than by referring to paragraph a of sub-clause 2 of clause 7, which says -
In the case of a bill of exchange, not being a cheque, the State in which the bill is drawn -
The intention is that the bill shall not be subject to the stamp duty of a State unless it is the State in which the Bill is drawn. That is to say, we are here seeking to prohibit the State in which the bill is made payable from imposing a stamp dutv on it. Though that is not exactly the point now, I would say that if there were a choice between them, I should be rather disposed to think that it is the State in which the money is paid that should be able fo collect stamp duty on the bill, because, it is the citizen of that State, whether a corporation or an individual, who is paying the money over. It would seem, according to common sense, that that is the State that should be able to collect the stamp duty. It is not a doublet taxation in a sense. A State is entitled ti. collect its revenue ;n whatever way it chooses, subject ‘ to the law by means of a tax.
– But it might easily be double taxation.
– It might be so now. If, for instance, in the State of Victoria there is imposed a stamp duty on all bills drawn in the State, a bill so taxed might be made payable in South Australia, where a stamp duty might be imposed on all bills payable. I do not see why that should not be so. It has never worked any inconvenience that I know of, and it is a very small contribution to make to the revenue that men should have to pav the’ amount of the stamp required for these instruments. The stamp duties on them are not, as a rule, ad valorem.
– I think they are.
– On promissory notes perhaps, but not on cheques.
– On bills of exchange the stamp duty is ad valorem.
– That is so, but even though the stamp duty should be ad valorem, I do not see why, in big transactions, a proportionate stamp duty should not be paid if the State chooses to impose such a duty. At any rate, that observation is rather as to the propriety or otherwise of allowing the States to tax these instruments in the way which suits them best. The real point here is whether, if there be the slightest doubt about the matter, we ought to seek to curtail the power of the States to impose stamp taxes in whatever way they choose upon, bills of exchange and promissory notes which come under their jurisdiction and control. Of course, in the case of a cheque the limitation here is that the stamp is only to be the stamp of the State in which the cheque is payable, and in the case of a promissory note nf the State in which the note is made. The point for grave consideration is whether we are entitled to do what is here proposed, and whether in doing it we shall not be inviting not merely criticism, but legislation, and whether, also, it is wise for us to interfere with what is undoubtedly a State right, unless we find hereafter that it has been the subject of some abuse. If it could be shown to have been abused in any way, we might insist that the abuse should be remedied, but I think that we cannot at present assume that a State would not remedy .such an abuse if it were thought necessary. It seems to me premature that this Parliament should undertake to remedy something which has not been shown to be an abuse, and in doing that, to interfere with States rights to levy stamp taxes in respect of these as well as all other documents which come under their control. Of course, the less complexity introduced into these trading and commercial matters the better. Senator Keating referred to section 92 of the Constitution, which is the section establishing absolute freedom of trade between the- States. The honorable senator also referred to these documents as “instrumentalities.” I confess I do not like that word. It covers a multitude of errors, if not of sins. I am afraid that from my point of view it has already been given a great deal too much to do, and has been made responsible for some difficulties which have arisen.
– If these are instrumentalities, we should, according to the decision in McCul loch’s case, have to give the States power to stamp.
– That might be. The Minister will forgive me for saying that I think it is a little too far fetched to call these documents “ instrumentalities “ of commerce, when, for another purpose, the public servants of the Commonwealth are called “ instrumentalities “ of the Commonwealth.
– Section 92 of the Constitution would not apply to this matter.
– I do not think so. The domestic imposition of taxes for the purpose of revenue on bills of exchange and promissory notes can constitute no interference whatever with, or restriction upon the freedom of trade within the Commonwealth. Reference was made, to give support to what the Minister said, to an American authority with respect to bills of lading. That is a totally different matter. A bill of lading, if we stretched the term sufficiently far, might be called an instrumentality of trade or commerce, because it is the receipt, so to speak, for the goods at the port of despatch which entitles the person at their destination to receive those goods subject to the conditions of transport. Of course if a State could put taxes upon an instrument of that kind, it might possibly do so to such an extent as gravely to interfere with the transport of commodities, and so to interfere with the freedom of trade, but there is a great distinction between a bill of lading, or a receipt for goods, and a promissory note, cheque, or bill of exchange. Upon that question Ministers would do well to reconsider the clause, and not to be precipitate in asking the Senate to agree to it, because we do not want to rouse the States any more than we can help to complaints of interference with their rights or taxation for revenue purposes, or with their State rights generally. There is ample time, as this Parliament is not going to expire by effluxion of time, and if abuses were found to creep in provision could easily be made, if necessary, by us to meet them, although I am sure the States themselves would take steps if any injustice was likely to happen. I do not think the existing system presents any injustice which furnishes a reason for this provision.- Because bankers are large traders, and so may have to pay a stamp duty in the State where a bill is drawn, and another in the State where the bill is payable, I do not think we ought to interfere with the States in order to relieve bankers of that obligation. I am sure they would be the last to suggest that they should be given an immunity in that respect from what it is not contended is other than a perfectly fair tax. It is not suggested that the tax imposed is of an extravagant character, and I think we might very well let well alone.
– The honorable senator will understand that it is not the banks that would have to pay it, but their constituents.
– It might be paid either by the banks or their customers. I do not feel such extreme sympathy for the banks or for their large customers, who would have to pay the heavier sums. Most of us, if we were getting a large bill paid to us in another State, would not mind paying the extra stamp dutv in that State. I dare say the honorable senator behind me will be able to make out a very good case for immunity from all taxation upon instruments of that kind. I do not know very much about clause 9, which declares an inland bill to be one drawn and payable within Australasia, including New Zealand and Fiji, but it is an odd thing to make an inland bill a bill that is drawn and payable outside the Commonwealth. I do not understand quite why that is proposed. Ordinarily one would regard an inland bill as a bill drawn and payable within the boundaries of the Commonwealth, for which we are legislating. The Minister referred also to clause 65, upon which I do not wish to say anything. It is an amendment upon the original code, and probably a desirable one, and any criticism I might be disposed to offer - if there was any, and I do not at present consider that there is - would be removed bv the fact that the clause embodies an amendment which is already the law in the State of South Australia, from which I come, and therefore it must be right. Clause 81 professes to deal with the recent case of Marshall v. The Colonial Bank of Australasia Limited. This provision, which is an amendment made in Queensland and Tasmania does not, I think, carry th« matter very much further or help the post tion laid clown in that case. The short facts have already been stated by the Minister. The case did not settle the law at all. It altered the law in no respect. It merely decided that in that particular instance, as a question of fact, there was no evidence of negligence on the part of the drawers of the cheque to make them liable, and to relieve the bank from its liability for paying a forged instrument. Of course the law of England is that if a cheque with a forged signature is presented to a bank and the bank pays it, the liability and loss rests with the bank.
– Does the honorable senator remember whether the jury did not find, as a fact, that the plaintiffs had been negligent ?
– I am nut quite sure, but the decision of the High Court, confirmed by the Privy Council, was that there was no evidence of negligence to exempt the bank from liability for paying, or really to estop the drawers of the cheque from saying that the amount was as originally filled in. The High Court recognised the principle, which is the law of England at this moment, quite apart from this decision, and quite apart, also, from this Bill, that-
All contractual relations impose upon the parties a mutual obligation that neither shall do anything to hamper the other party in performing the contract, or to delay him in performing it.
Then this is the whole point -
The mere fact that a customer signs a cheque upon which there are spaces before the amount in words and in figures is not sufficient evidence of such breach of duty towards his banker as will give rise to estoppel or to a claim for damages, if another person, subsequently to such signature, fraudulently inserts in such spaces other words and figures, so as to increase the amount, and the banker is thereby induced to pay away the larger amount.
The decision proceeded upon the question of fact that there was no evidence of negligence in that particular case. It was admitted that the law was, that if there had been evidence of negligence, the bank would have been excused. The Privy Council, in a very interesting judgment, reaffirmed what had been decided here, saying that there was no evidence of negligence on the part of the respondents proper to be left to the jury. All that had appeared was that there must have been sufficient space for the fraudulent operator to commit a forgery of the cheque in: respect of the amount, but what they said was, “ You must go a little further than that, otherwise you would have to measure what the space would have to be to constitute negligence. One man might be in the habit of leaving a little space before he wrote in the amount, and it would be monstrous to say that he was to be liable to a loss of that kind because somebody else fraudulently forged a larger amount.’’ Honorable senators will see how difficult and how wrong it would be to lay down any hard and fast rule in a case of that kind. Certainly, as the High Court said, the mere fact alone of a space being left ought not to throw upon the drawer of the cheque the obligation of indemnifying the bank against the consequences of somebody else’s fraud or forgery, in respect of which the bank is liable by the ordinary doctrine that if a man pays a forged instrument, whether as to amount or signature, he must bear the loss of it. The Minister, as a lawyer, will see at once that clause 81 does not alter the law in any way. It simply says -
a cheque, drawn on a banker by a customer, has been drawn by the customer with negligence, and
the negligence of the customer has afforded facility for the fraudulent alteration of the amount of the cheque -
But all that has to be found as a fact just as before -
It is not correct to say that the old case which was referred to was overruled. It was distinguished, on the ground that there it was found that there was negligence. It was a finding by am arbitrator, and the matter came up on a specialcase. There, rightly or wrongly, negligence was found, and, therefore, there was the obligation on the part of the drawer to indemnify. In the circumstances I doubt very much the desirability of legislating in this direction, but if it is considered desirable. I do not see any gain in simply enacting what the learned Judges assented to, namely, that if it was shown that there was negligence the bankers would have been excused, although in that particular case both the High Court and the Privy Council said there was no evidence of negligence. The Bill is an important one, on the grounds which my honorable friend has stated. It is brought before us on the authority of the Imperial code, fortified also by the fact that it is the law in each of the States, and the great object of it is to secure that uniformity throughout the States of the Commonwealth which will prevent confusion and complexity in the operations of trade and commerce.
– This is not the first time I have had the honour of congratulating the Minister on the excellent manner in which he has introduced a Bill to the Senate. The measure is an admirable codification of the law relating to bills of exchange, and the very fact of the Imperial Act being only amended in one respect in twenty-five years is surely proof positive that the groundwork it offers is a safe one on which to proceed. Following Senator Symon, I do not think it is necessary to speak at any exeat length, but I intend when the Bill is in Committee to lend every assistance I can to the Minister in endeavouring to get it passed with as few alterations as possible. I regret very much that in all probability we shall not have much assistance from the President in the consideration of this Bill, because, sir, we all recognise your knowledge of matters relating to bills of exchange, and kindred subjects, you being a bank director, and also one learned in the law. I hope that you will not be restrained by your position from assisting the Senate in dealing with this Bill. I notice, amongst other amendments in the law proposed by the measure, that in clause 98, provision is made with regard to days of grace. Apparently some of the States have not had the same law in regard to this matter as others have. But there will be no difficulty after this Bill has passed, as to when days of grace cease. In times past - and I speak with some amount of practical knowledge - when days of grace expired on a Sunday bills used to mature on the Saturday ; but in many States in such cases bills matured on the Monday. Under this Bill days of grace will expire and such bills mature on Monday, in place of Sunday, throughout Australia. I presume that that applies to bank holidays and proclaimed holidays also.
– We deal with them as non-business days. A distinction used to be drawn in Great Britain between common law holidays and statutory holidays. We make all non-business days holidays.
– That is a decided improvement. I notice with interest the remarks of the Minister with reference to sections 51 and 92 of the Constitution. Senator Symon does not quite agree with Senator Keating in regard to them. There is probably much to be said on both sides; but in my opinion, section 51 distinctly gives the Commonwealth the power sought to be exercised in this Bill. As regards section 92, there may be more room for conflict. As to the debatable point alluded to by Senator Symon regarding clause 7, I am somewhat afraid that by passing ; that clause we shall be interfering with States rights. I am not at all clear as to whether it would be wise to enforce the clause unless we intend to lay ourselves open to a pronouncement by the High Court that we have exceeded the powers which we are entitled to exercise. I hope, however, that the States themselves will not object to the clause, because, notwithstanding what Senator Symon has said, it is the poor man rather than the rich who suffers from the double payment of stamp duty. The banker does not pay it; he charges it to his constituent, and the constituents of bankers are often small men, who feel charges of this kind just as much as a rich man feels the payment of a far larger sum. I can see, however, a means by which the payment of double stamp duty can be avoided even without this clause. For instance, suppose that a bill of exchange is drawn in Tasmania on Brisbane. It bears the Tasmanian stamp duty. It goes to Brisbane. Say that it is not due for some time, and that the acceptor writes to his banker and says, “ Here is my cheque ; kindly substitute it for the bill of exchange on the due date.” In that way the law of a State imposing double stamp duty can be circumvented. I do not say that a person ought to do such a thing, but I do say that he can do it if he wishes to avoid paying stamp duty a second time.
– In such a case, would clause 66 operate?
– I take it that there would be nothing illegal in a man doing what I have described.
– I think not.
– When it is seen how easily the payment of double stamp duty can be circumvented I trust that the States will not bother their heads about the matter of States rights in connexion with this clause.
– The difficulty that we arc trying to meet is this : If a State still imposes double stamp duty it will have the right to challenge the validity of cur Act ; and if a State says that a bill of exchange is not valid because it does not bear stamp duty, what is the use of our legislation ?
– That is certainly a matter that will have to be considered. I think that the amendment of the law proposed by clause 65 will be distinctly an advantage to banking in Australia. Many of our banks have branches in every State. Consequently it seems only fair that what is really a bill of exchange, although it is nominally a bank draft, should have the advantage of being considered to be a bill of exchange. I cannot as a practical banker agree with Senator Symon’s remarks on the case of Marshall v. the Colonial Bank. I have seen so many cases of careless drawing of cheques that I cannot believe that the drawers of cheques are not guilty pf culpable negligence in some cases. It has been suggested that bankers can negative the danger by issuing cheque forms with separate spaces marked for pounds, shillings, and pence. At present cheque forms have a printed line upon which the drawer of the cheque writes the amount. Some careless drawers write the amount at the end of the line. Say that a man writes down seven pounds, and that a person into whose hand the cheque comes, writes in “One hundred and” before “ seven.” Perhaps it may be impossible to detect the fraud, and it seems absurd that the unfortunate banker should be liable for the stupidity of the man who drew the cheque. I am very pleased, for that reason, to see the proposed amendment to be- made by clause 81. It is only fair that if a man is so stupid as to leave a space in which another person can write a word he, and not the banker, should be punished for his negligence. An alteration is also proposed in the law with regard to protesting bills of exchange. When I was a bank clerk in London the London banks actually kept on men in their offices until eight and nine o’clock at night in order to be able to answer notaries as to bills which had been dishonored during the day. Now a notary has to go to the bank during banking hours, which may be a difficult thing for him to do. The provision made in that respect in this Bill appears to mee to be an admirable one. Banks are intended for the benefit of the public at large as well as of their shareholders, and we should do everything that can be done to minimise litigation and trouble. I certainly agree> with Senator Symon that it .is rather anomalous that bills between Australia and New Zealand should not be considered foreign bills. I am not prepared to say that it is altogether wise to adopt the proposal of the Government in regard to the application of the measure to Australasia. I consider that New Zealand is to all intents and purposes for business transactions a foreign country, and am not, therefore, a very strong supporter of the clause which Senator Symon has criticised. As a whole, however, the Bill is an excellent one. It is very well drafted ; it seeks to bring about a codification and consolidation of various Acts dealing with bills of exchange; and in that and other respects it deserves our support. I for one shall have much pleasure in assisting to pass it.
– I wish to say a few words as a business man with reference to this Bill. I am very pleased to see that steps are being taken in the direction of the codification of the law in this matter. It is one of the things to which the Federal Parliament ought to pay particular attention. There is great utility in codifying the general laws of the States, in matters which are in need of such treatment. I was pleased to hear Senator Walker’s remarks, because I understand that he represents the wisdom of the bankers in reference to this Bill. From his point of view, no doubt, the measure is a very good one, as it has been modified and altered very much by the bankers themselves. I see very little to object to in it from the business man’s point of view. I shall support clause 7. I was very much impressed with what the Minister said to the effect that if we have a right to legislate so as to make a document legal, even though it may not be stamped, we have an equal right to say that one stamp shall be sufficient. I do not, however, venture to express an opinion as to whether what is proposed is constitutional or not.
– It is certainly very convenient.
– If there is a doubt about what is proposed on constitutional grounds, we should, perhaps, hesitate to pass it, but it would certainly be a orovision greatly to the benefit of the general community. T cannot understand the States being so selfish as to endeavour to impose a tax on communication between State and State in reference to bills of exchange.
– Our object is to facilitate trade and commerce.
– Undoubtedly. I do not think that Senator Symon was quite right in saying that the benefit of the clause would be derived bv the larger bankers, and the richer classes of the community. The advantage, for the most part, would be secured by the smaller customers of the banks. With reference to clause 81, which deals with the matter of negligence in paying cheques, I am of opinion that, if a customer of a bank is negligent, he ought to bear the responsibility of any loss that may occur; but at the same time we ought to be careful to see that, the banker is not excused for his negligence. If when a customer draws a cheque bankers do not take proper care to see that it is perfectly clear, the bank ought to be liable for its negligence. As a business man, I consider that the Bill will help the trading community to understand better the law regarding communications and transactions of a financial character between State and State, and therefore I shall support it.
Senator Lt.-Col. GOULD (New South Wales) [4.28]. - I should like to say a few words with reference to this Bill before the second reading is agreed to. It may be regarded by some honorable senators as rather unusual that the President should take part in a debate on the second reading of a Bill. But I hold the view that, as the various States are represented by the same number of senators, and as it is also provided by the Constitution that the President shall not have a casting vote, but only a deliberative vote, the object of the Constitution was not to prevent any State from having the full benefit of the services of its representatives in the Senate. Every senator coming from every State is constitutionally placed on an equality, so far as voting power is concerned. That being the case, it appears to me that where the President can, without raising any question of party feeling, take part in a debate on the second reading of a Bill, there ought to be no objection to his doing so. I certainly feel, however, with regard to any matter upon which there is likely to be a large amount of party feeling that it might be regarded as indecent for the senator occupying the position of President to take part in debate. I believe it to be the desire of the Senate that the President shall be a man capable and willing to discharge the duties of his office honestly and conscientiously, and without bias or favour. Holding that view, I should like to say with regard to this Bill that, in my opinion it is desirable that the law regarding these matters should, so far as it can be done, be codified. An Act dealing with bills of exchange or banking business is of great interest to the people of the community, and every citizen should have the opportunity of knowing, in as simple a form as possible, what the laws is, not only in his own State, but in the Commonwealth. One of the objects of Federation is to promote intercourse and trade between the States. We do not want to throw any difficulties or barriers in the way of intercourse and trade. Laws are not simplified for the lawyers, but for the people. It is, therefore, a very great advantage to the community to simplify the laws where it can be done. Where we find an excellent system of law such as exists in Great Britain with regard to bills of exchange and promissory notes, it will be of very great advantage to the Commonwealth to adopt, as far as possible, that system in its integrity. It helps the community generally to understand what the law on a subject really is. It assists materially in getting questions which are taken before the Courts determined according to principles which have been laid down by Judges in the old country, in which cases are constantly occurring. It has been pointed out by the Minister in charge of this Bill that with one or two exceptions it is really a reprint of the law as it stands in Great Britain, and as it has stood in most, if not in all, of the States in the Commonwealth. The honorable gentleman pointed out that there are a few changes and alterations, and in this connexion drew our attention to clause 7. So far as the object of this clause is concerned, it must commend itself to every one who desires to simplify trade and commerce between the various Dortions of the Commonwealth. It provides that there shall be only one duty stamp placed upon bills of exchange or cheques or promissory notes. But why it should provide that in the case of a cheque the stamp duty shall be payable to the State in which the cheque is payable, and that in the case of a bill of exchange the stamp duty shall be payable to the State in which the bill is drawn, I do not understand, nor do I know why a distinction of that character should be made. At the present time if a man draws a cheque on
Bank of Australasia Limited, and the Minister has mentioned that in Queensland and Tasmania provision has been made to protect a bank in a case where a cheque has been fraudulently altered through the negligence of its customer. It is well to ascertain the particulars of the case which has given rise to clause 81. We are familiar with the ordinary doctrine as to negligence, and that if there be negligence, that to a certain extent should protect the person who suffers in consequence of it; but, in the case of Marshall v. The Colonial Bank of Australasia Limited, the doctrine seems to have been so treated that it has become a very serious matter to the mercantile world. Upon referring to the Commonwealth Law Reports, it will be seen that in this case -
The plaintiffs, W. L. Marshall and H. J. Day, and one R. Myers, were the executors of Ann Myers, and, as such executors, kept a banking account with the Colonial Bank of Australasia Limited, at Melbourne. This account was, at all times, in credit. There was evidence that the bank was only to pay cheques signed by the three executors. It was the custom that Myers should fill up the cheques and forward them to the other executors for their signatures, after which they were returned to and signed by him and issued. Myers, on different occasions drew open cheques for £10, £2 6s. 4d.,£50, £10, and £10 respectively. He wrote the amounts in words and in figures, so as to leave considerable spaces before these amounts, and in writing the amounts he began each number with a capital letter. These cheques were forwarded to the other executors, who signed them as they were drawn, and returned them to Myers, who wrote in other words and figures so that the cheques appeared to be for the following amounts respectively, £110, £32 6s. 4d., £150, £110, and£110. Myers then cashed the cheques, receiving the larger amounts, and appropriated the moneys in excess of the smaller amounts to his own use.
The cheques were presented, and paid, and then the executors sued the bank for the money which they held was due to them -
The action was tried before Madden, C.J., and a jury of six. The following questions, amongst others, were put to. the jury, and they gave the answers set opposite to them respectively -
Were the cheques, or any of them, drawn by the plaintiffs negligently ? Answer - Yes.
If you answer No. 1 in the affirmative, then could the bank, by the exercise of ordinary care and caution, have avoided paying the cheques so altered ? Answer - No.
According to the jury, the cheques were altered in consequence of the negligence of the executors, and it was not possible for the bank to have protected itself, because the cheques did not show on their face that there had been the slightest tampering with them, and, moreover, the alterations had been made in consequence of the negligence of the executors in leaving cheques practically open, and sending them back to one of their number, and, of course, the cheques were paid without negligence by the bank.
Apparently, one executor kept the accounts, and, in drawing the cheques, took care to leave sufficient space to enable him to alter the amounts when they came back to him, and he so altered them after his coexecutors had signed with the smaller amount filled in. The executors signed the cheques and gave them to him, and thus placed him or any other person who might get possession of them in a position to make such alterations in the amounts as to defraud the banker, who was bound to pay the cheques when presented, to the tune of£400 or£500. The proposal submitted by the Minister is intended to rectify that anomaly. I do not propose to read the judgment in the case referred to, but to quote the short head-note to it. This is what the Court found -
As between banker and customer there is no absolute and unqualified duty on the part of a customer in drawing a cheque to take precautions against forgery.
That may be the existing law. I do not raise that question, but is there any man in the Commonwealth who would say that if two people enter into business relations, the one who is guilty of negligence should escape the consequences of his negligence, whilst the other, who is not so guilty, should suffer ? That is the effect of the law as it appears to me. In the case referred to the persons guilty of negligence did not suffer, whilst the man who, in consequence of their negligence paid money away, had to suffer the loss of that money.
– The Privy Council upheld that decision.
.- I am aware of that. I am not raising the question of what the law is, but of whether it is wise that we should continue the law in that way, and whether it did not come as a great shock to the majority of people to find that the law is as it was laid down in that case. The High Court also found -
All contractual relations impose upon the parties a mutual obligation that neither shall do anything to hamper the other party in performing the contract or to delay him in performing it. The mere fact that a customer signs a cheque, upon which there are spaces before the amount in words and in figures, is not sufficient evidence of such breach of duty towards his banker as will give rise to estoppel or to a claim for damages, if another person, subsequently to such signature, fraudulently inserts in such spaces other words and figures, so as to increase the amount, and the banker is thereby induced to pay away the larger amount.
Some honorable senators may say that, looked at from the banker’s point of view, that is very unfair and unjust, but the banker must do the best he can to take care of himself. But I would point out that the customer of a bank is also liable to suffer. It is a great convenience to men who have the control of various sums of money passing through their hands to have some place of safe custody in which to deposit it, and from which it may be drawn upon as required. If the law is not made reasonable and fair as between the banker and his customer, the former may be compelled to take extreme measures to protect himself, and I ask whether it would be wise in the interests of the public that he should be driven to such a course of action. All that we have to do in a matter of this kind is tosay what is fair and reasonable. We do not desire to place any man in a false position. We know that if a banker chooses to pay on a cheque that is false he must put up with the loss, because it is a part of his duty to know his customer’s signature when it comes before him, and not to pay on a forgery. That is perfectly legitimate and right. But if a customer may, if he desires to rob a bank, be in a position to do so, simply by leaving a space before his figures on a cheque, so that the amount may be increased, he should be deemed guilty of negligence, and might fairly and justly be made to bear the brunt of any loss to the bank due to his negligence. Senator Symon, in dealing with this matter, said that it was a question of negligence, and he doubted whether the provision in this Bill would assist by providing a remedy. So far as I can see, the Bill goes far enough to assist in remedying the evil. I should not urge that the provision made should be such as would place the customer in the hands of the bank in any way whatever, but I do say that if a customer of a bank is so negligent and careless in drawing his cheques as to cause loss, it should fall upon his shoulders, and not upon those of a person who is innocent and who knows that, if he does not pay the customer’s cheque while there is money to his credit, he will very properly be mulct in damages for so injuring the credit of the customer. I think that it is reasonable for the Senate to pass such a provision as has been indicated by the Minister. At the same time I point out my objection to clause 7. I should like to say that, in putting these views before honorable senators from this place on the second read ing of the Bill, I simply exercise what I regard as the trust imposed upon me by my constituents in sending me to the Senate. 1 think it would be lamentable if, in the Senate, where the States have equality of representation, the mere fact that a senator was raised to the most honorable position in which the members of the Senate can place him should’ prevent him from rendering to his constituents the service they expect from him.
Question resolved in the affirmative.
Bill read a second time.
In Committee -
Clauses 1 and 2 agreed to.
Clauses 3 and 4 postponed.
Clauses 5 and 6 agreed to.
Clause 7 -
Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State other than -
– I am very much indebted to honorable senators who addressed themselves to the second reading of the Bill, and who have given such attention to this clause to which I directed their notice. It is quite possible that it might be argued that, providing as we do that bills of exchange, cheques, and promissory notes shall not be subject to stamp duty under the laws of a State, the form we have adopted to give effect to the principle is inconsistent with our position in relation to the States. I think, however, that we can bring about the same object without giving occasion for any such criticism. We propose to take away from the States the power to make invalid by their legislation!, instruments the validity of which we say should be determined by Commonwealth legislation. We have full power under section 51 of the Constitution to legislate with regard to bills of exchange and promissory notes. We can, therefore, lav down what are the essentials for a valid bill of exchange, and it will not be denied that if we choose we can say that no stamp shall be necessary. If we can say that, we can say that only one stamp shall be necessary. When we say, as we do in this clause, that bills of exchange shall not be subject to the stamp duty of a State, it may be, as some honorable senators have pointed out, that we are expressly stating that we are going t’o interfere with the States powers of taxation. I have drafted an amendment to take the place of the first portion of sub-clause 2, which I will submit for the consideration of the Committee. Honorable senators will agree that it is desirable that there should be no conflict of authority between the States and the Commonwealth as to the validity of an instrument of this kind. It would be idle and futile for us to set out the requisites and essentials for a negotiable instrument of service throughout the Commonwealth if a State might step in and say, “We shall tax bills of exchange drawn in this State, or made payable elsewhere, and if any such instruments are not stamped they shall be void and of no account, or shall not be recognised in our Courts. ‘ ‘ I think we are all agreed as to the principle, and honorable senators will find nothing in the amendment I submit which can properly be met with the criticism already addressed to the clause as it stands. I propose to strike out the first portion of sub-clause 2 down to the word “than” in line 9, with a view to making the sub-clause read as follows : -
No bill of exchange, cheque, or promissory note drawn or made after the commencement cf this Act shall be invalid or inadmissible in evidence in any Court by reason only that it bears no stamp under the laws of any State, other than -
The remainder of the clause would read as it stands, and we should simply provide that these instruments shall not be invalid or inadmissible as evidence by reason of the fact that they do not bear the duty stamp of a State. I find that in Chalmers’ Treatise on Bills of Exchange, at page 362 of the 6th edition, it is stated -
The holder of a bill or note which is void for want of a stamp may, nevertheless, bring an action on the consideration against the party to whom he gave the consideration, though he cannot use the instrument as evidence. As the bill is void, the omission to present or give notice of dishonour is immaterial.
The absence of a stamp in that case made the bill void, and also made it inadmissible as evidence. All that we propose to provide by the amendment I submit is that no bill made, drawn, or accepted under our legislation shall be invalid or inadmissible in evidence by reason only that it bears no stamp under the laws of any State other than as provided in1 paragraphs a, b, and c. If the amendment I propose is agreed to, while the instrument would be protected and be admissible in evidence, the Stamp Act of a State might still subject some individual negotiating it to a penalty, and so I propose to provide further that - -
No person shall be liable to any penally under the laws of any State by reason only that he is the drawer, acceptor, indorser, bearer, or holder of any bill of exchange, cheque, or promissory note drawn or accepted within the Commonwealth that bears no stamp under the laws of any State other than as set forth in the preceding paragraph.
In those circumstances we do not say to the States, “ We are going to cut down your powers of taxation.”
– The Government take power to do it all the same.
– We simply say, “ These bills are not to be invalidated only by reason of the fact that they do not bear a second stamp.” I do not think the States themselves will cavil at all at our giving effect to the principle, and I think we are doing it in a manner which cannot reasonably evoke any hostile criticism from any one. In these circumstances, I do not think the High Court, if the question came before them, would hesitate to hold that a bill was not invalid if the Federal Parliament had legislated to the effect that it was not to be invalid only by reason that it. did not bear a second stamp, although the High Court might say we had adopted rather a wrong attitude in enacting that bills of exchange were not to be subject to stamp duties under the laws of any State. I move -
That the words “ Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State, other than,” lines 6 to 9, be left out.
I can confidently recommend the amendment to the acceptance of the Committee.
– I want to know just where we are. I do not understand the proposal, but I want to do so before I agree to it. I have always objected to the taxation of instruments such as cheques, promissory notes, bills ot exchange, and transfers of property, because it is an interference with the trade, commerce, and industry of the people. I understand that the Minister wants to provide that any such document shall be admissible as evidence before a Court, even if it is not stamped. Is not that the object of his amendment?
– My object is to prevent the necessity for stamping in each State to which the document goes. We -want to provide that if it is once stamped, :say in the State where it is issued, it –shall be good all through the Commonwealth.
– But then it must be stamped ?
– If the law of the State so provides.
– The law of all the States provides that. Have we the power to prevent the States from taxing these instruments?
– I think we have.
– Then why not exercise it, and amend this Bill so as to prevent the States from raising revenue in this illegitimate fashion? It is a handicap upon industry. There is no reason under heaven why a man should have to pay a penny every time he draws a few pounds out of the bank.
– The State Treasurers want revenue.
– If I owed Senator Walker £$0, and gave him an acknowledgment in the shape of a bill, why should I be taxed on that transaction ?
– Because the honorable senator would be a capitalist for the time being.
– In that case, the capital would be in circulation, helping the trade and commerce of the country, not like the dead land held up by monopolists, and yet it would be penalized. My intention, to state it plainly, is to remove these impositions from our trade and commerce. If the State Governments want revenue, let them find it in some more legitimate fashion, without harassing people engaged in business. I should like to move an amendment on the clause to provide that it shall not be within the power of the States to tax any instruments dealt with in this Bill. As I cannot do that on the spur of the moment, will the Minister consent to the postponement of the clause?
– The honorable senator could move that certain words be omitted, and test the question in that way.
– I have not studied the clause sufficiently to know what words should be omitted.
– If the honorable senator moved to strike out all the words after the word “ State,” in line 9, he would achieve his object. The clause would then read -
Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State.
– Then I will move accordingly.
– Before the honorable senator can move that amendment, it will be necessary for the Minister of Home Affairs to withdraw his amendment.
.- I ask Senator Stewart not to press the amendment he suggests. It is not a proper one for Ministers to accede to.
– We are not acceding to it.
– We ought to expect from Ministers opposition to such a proposal.
– We are opposing it. I simply pointed out to Senator Stewart how he could submit his intention to the Committee.
– I should be far more satisfied with the conduct of Ministers if they would point out to Senator Stewart, and any other honorable senators who are wavering, the very grave objections that could, and should, be raised by them as leaders of the Senate to any such proposal. Some honorable senators have a happy knack of trying to impress their peculiar ideas about taxation on every Bill that comes before them. This is not the place to open up such a question. Has Senator Stewart the slightest idea of how much revenue” is raised by stamp taxes in the States ?
– I do not care two straws.
– That is what I am objecting to. I also object to Ministers paving the way for the honorable senator to waste our time, and to do a very improper thing. The honorable senator ought to bear in mind that almost every State raises a very large amount of taxation in this way.
– I beg to draw attention to the fact that Senator Dobson has accused Senator Stewart of doing an improper thing. Is not that unparliamentary ?
– I did not hear Senator Dobson use those words. If he did accuse another honorable senator of doing an improper thing, the expression should be withdrawn.
– I used the words in a perfectly correct way. What I say is that, politically, and according to parliamentary practice, it is an improper thing for Senator Stewart to propose an amendment of this kind without knowing the facts, or what revenue the States raise from stamping these documents, and without having the slightest idea of the effect of his proposal on the State revenues. With all due deference to Ministers, it is also politically an improper thing for them, as leaders of the Senate, to sit quietly by and listen to such extraordinary arguments.
– Is the honorable senator in order in addressing himself to an amendment which is not yet before the Chair? Senator Stewart desired to submit an amendment, and I pointed out to him how he could best do so. You then asked me if I would withdraw a prior amendment in order to enable Senator Stewart’s amendment to be discussed. I did not consent to that request, but, while I was considering how the ‘two proposals might be discussed, Senator Dobson jumped into the breach, and accused us of not opposing an amendment which was not properly before the Committee.
– I am addressing myself to the amendment moved by the Minister and criticising Senator Stewart’s arguments.
– I do not think it is the duty of the Chairman to prevent an honorable senator criticising the remarks of another honorable senator who has spoken to the amendment before the Chair. .That amendment is to leave out certain words. Senator Stewart desires to leave out some of those words, but not others, and has indicated his intention to move another amendment. Senator Dobson is quite in order in criticising Senator Stewart’s remarks, and also in criticising Ministers for the view that he thinks they take of Senator Stewart’s proposal.
– There has been no expression of opinion on that matter from any Minister.
- Senator Dobson’s remarks may be unfair, but they are quite in order.
– And no one knows better than Ministers what an exceedingly delicate problem the financial problem is. I am astonished at an honorable senator saying that he does not approve of stamps on cheques or bills. That is a tax that every State has imposed for years. I am astonished that Ministers are absolutely dumb on the subject. They must have some information as to how Senator Stewart’s proposal will affect the revenue. This is not the proper place to go into the question of taxation, and, as a representative of State rights, I am perfectly justified in asserting that the financial position of Tasmania and other States ought not to be interfered with in a Bill of this sort. The amendment makes the clause less liable to objection, and, therefore, I shall be very happy to vote for it. But, whether we adopt the clause as it stands or amend it as he suggests, we still shall be achieving practically the same purpose. I am inclined to agree with the Minister, that, as bills of exchange are a subject which is absolutely remitted to the Federal Parliament by the Constitution, we are all powerful on that subject, and, therefore, the Bill as it stands is perfectly in order. I cannot understand how the question could have arisen of its not being in order, because, when we are dealing with a subject which is absolutely within the thirty-nine articles handed over to the Parliament of the Com- monwealth, I take it that we can pass any laws about it that we choose. Hitherto it has been felt that it would not be wise for us to interfere with one of the sources of State revenue. But Senator Stewart wishes to wipe away all such’ taxation. From a suggestion of that kind we ought to look to Ministers to protect us.
– Senator Dobson is somewhat previous in the remarks that he has made. He has quite overlooked the fact that the Minister in charge of this measure has given a most distinct pronouncement as to his views. He has told the Committee that the intention of the Bill is to offer the utmost facilities with regard to trade and commerce, and the instruments of trade and commerce. We have set forth in this measure that, so far as bills of exchange are concerned, the State in which a bill is drawn shall be at liberty to impose taxation ; as regards cheques, the State in which a cheque is payable shall be at liberty to impose taxation ; and in regard to promissory notes the State in which a promissory note is paid shall be ‘at liberty to do so. The Government are of opinion that it is well within the constitutional rights of this Parliament to make such a law. The President and other honorable senators doubt the constitutionality of the proposal, because it would prevent, the. double taxation of’ these instruments. I do, not share those doubts. But the representations that have been made are entitled to respect, and to relieve the clause from what might be a source of friction, my colleague has consented to alter its language. It has been redrafted in a form that practically carries out the same object, whilst being less offensive than it was previously considered by some honorable -senators to be. If Senator Dobson thinks for a moment that there is any desire on om part to interfere with the taxation of the States, he is doing us an injustice and wrongly construing the objects of the Bill. The Government has no sympathy with the views expressed by Senator Stewart.
– My criticism is that Ministers ought to have told him so.
– When Senator Stewart’s amendment is before the Committee it will be in order for us to tell him what we think of it. Senator Dobson is too previous. What we desire now is to carry out the objects of the Bill without interfering with the taxation rights of the States. But we have no intention of assisting in carrying any such proposal as Senator Stewart has outlined. Therefore, the unjust criticisms that Senator Dobson saw fit to launch against the Government were unjustified.
-Col. GOULD (New South Wales) [5.21]. - I should like to say, as I raised a question about the wisdom of clause 7, that the suggestion made by the Minister in charge of the Bill commends itself to me, and that I shall support it. I thoroughly believe in the principle of having only one stamp duty upon the various documents with which this measure deals. As to the State that should derive revenue from that duty I offer no opinion just now. We can perhaps leave the clause as it stands in that respect. But the method proposed by the Government gets over the difficulty that I pointed out, and I heartily commend it to the acceptance of the Committee.
.- I am sorry that Senator Best thinks that I have been guilty of unjust criticism. The clause with which we are dealing has evidently been framed with great care and thought, and it was carefully explained by the Minister. What I criticised was the action of the representatives of the
Government in paving the way for an amendment which would practically sweep away the whole clause, and deprive every, State of revenue which it is entitled to collect.
– That is an utterly unfounded and unfair statement.
– I do not think that it is.
– If an honorable senator wishes to submit an amendment on a Bill, I think that it is the duty of the Government to assist him to have it discussed.
– I beg to differ, and because I differ from the Minister, it is not fair for him to say that I am unjust. Scores of amendments might be suggested which it is not the duty of Minsters to pave the way for, but to oppose. It is, in my opinion, their duty to oppose Senator Stewart’s amen diment.
– So it will be opposed.
– We have had a remarkable exhibition from Senator Dobson He appears to think that no one in the chamber has any rights except himself. I am thankful that he does not occupy a position as Minister. If he did, I am afraid that senators holding such opinions as mine would not receive much courtesy at his hands. In my view, any senator who wishes to propose an amendment should receive assistance from the Government whether they are opposed to it or not.
– That is one of the cour*tesies of the Senate.
– I am much astonished at the way in which Senator Dobson has acted. I think that- the sub-clause before the Committee ought to be negatived. I know perfectly well that the States receive large amounts of revenue from the taxation of bills of exchange, but it is a most unfair and illegitimate system of taxation. It taxes trade, commerce, and industry. Every time a man draws a cheque he is taxed to the amount of one penny. Every time he signs a promissorynote he is taxed. Why should that be? The principle that ought to govern taxation is that a man should pay according to his means, not according to the number of cheques he draws, or the number of promissory notes he signs, or the number of bills of exchange that he grants. That is a stupid basis for taxation. The object is, of course, to throw the weight of taxation off the shoulders of people who ought to bear it. But I intend to attack this system of taxation every time I get an opportunity. It is a bad system, and is financially unsound. On that account, it is time that the Senate should exercise its wisdom and its patriotism by absolutely prohibiting the States, as apparently it has the power to do, from imposing taxes upon the people in this manner.
– - The Bill which we are considering does not initiate any new law. It does not annul any law. The intention is by a Federal Act to codify the laws of the States. The point urged by Senator Stewart against the clause under consideration is that we ought to nullify the deliberate legislative intentions of the States in regard to the taxation of bills of exchange. Now, to do so, would, in my opinion, be extremely unwise. It would be distinctly un-Federal, and would give rise in each State to such a feeling of discontent as would perhaps be disastrous. The question itself is highly debatable. It is quite possible to argue in quite the opposite direction from that taken by Senator Stewart. A stamp duty, if in other respects it is equitable, is probably the most effective form of taxation, because it constitutes every citizen a member of a vigilance committee to see that it is paid. It is, therefore, practically impossible to evade payment.
– It is a form of direct taxation.
– Yes ; but « it has- this great advantage, that in every transaction there is one party whose business it is to see that the duty is not evaded. That is an extremely desirable principle. Our greatest difficulty is to devise forms of taxation which will not be evaded, and the ingenuity of wrong-doers is continually being exercised in order to frustrate the intention of the Legislature. From that point of view a stamp tax is perhaps the most desirable tax which it is possible to conceive. The question of whether it is good or bad hardly comes under our consideration, when we view the unwarrantable interference it would be with the independent action of the States. The Federal compact was rendered necessary by the fact that certain of our conditions of life made it impossible to control them all in the common interest, because they extended beyond the boundaries of a State. This is a proposal to limit, to hamper, to destroy, the internal sovereignty of the States.
– Most assuredly it is a proposal to take away from the States the power to adopt within their own areas whatever form of taxation they may think best. I ask honorable senators to remember that this is a Federation based on the principle of two sovereignties - a sovereign Federation within the area prescribed in the thirty-nine articles of the Constitution, and sovereign States in all other directions. As a most ardent Federalist, I believe that every possible consideration should be given to the sovereignty of the States where it is not necessary to interfere with them in order to render our intercommunication more convenient. There was no need for the Federation, except to deal with matters which extended beyond the power of a State, and the only reason for dealing with the question of bills of exchange is in order that all the citizens of the Commonwealth may know the whole law of bills of exchange by reference to one Act of Parliament. But this Parliament should not interfere with the incidence of taxation within the respective States.
– It proposes to interfere.
– No ; it only proposes to make clear, and to render (possible procedure within the desire of the respective States, under a single Act of Parliament. There is no need for us to legislate on this question in a prohibitive direction, preventing the States from doing what seems to them desirable, because the incidence of this Bill does not necessarilv extend over the border of a State, and therefore does not call for Federal interference. I would strongly urge Senator Stewart to consider the equity involved in the principle of leaving to each State what the Federal compact declared with reference to its internal affairs - absolute sovereignty.
– I rise to make a suggestion in order to get a direct vote on the all-important question which’ Senator Stewart desires to submit. I would suggest to my honorable colleague that he should withdraw his amendment, and move merely to strike out all the words down to the word “State.” If these words are deleted as we desire, then the amendment of Senator Stewart will be defeated. If on the other hand the words are retained, then the honorable senator will have carried the object which he has in view, and by a subsequent amendment he can move to strike out the words “ other than.”
Amendment, by leave, withdrawn. Senator, KEATING (Tasmania- Minister of Home Affairs) [5.42]. - I move -
That the following words be left out, “ Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Art shall not be subject to stamp duty under the laws of any State,” lines 6 to 9/
I shall afterwards move to substitute the following words : -
No bill of exchange, cheque, or promissory note drawn or made within the Commonwealth after the commencement of this Act shall be invalid or inadmissible in evidence by any Court by reason only that it bears no stamp under the laws of any State other than.
– I have no objection to the Minister accomplishing his object in that way if the proposal of Senator Stewart be defeated. If Senator Stewart’ presses his amendment to a division I shall certainly vote for it. Senator Trenwith formulated the most extraordinary and fallacious line of argument I have ever heard here. He said that this is merely a codification of the laws of the States, so as to bring them all into line, but I submit that it is very much more than that. It is an assumption by the Federation of the responsibility for all legislation concerning promissory notes, bills of exchange, and cheques. It is really a federalization of the law on these subjects, and it is for us, not for any State, to say what the conditions of the law shall be. Senator Trenwith went on to emphasize the alleged fact that by prohibiting the States from taxing these documents, we were interfering with their sovereign, rights to impose any sort of taxation they chose within their territories. I submit that the States have no such sovereign rights within the Federal sphere. Directly we federalize the legislation concerning bills of exchange, promissory notes, and cheques, we shall immediately bring them within the Federal sphere, and the States will have no right to tax any instrumentalities of the Commonwealth. There is shortly to be introduced a proposal for the Commonwealth to take over the control of lighthouses and beacons. Suppose that after the transfer was made the States should say “ Those buildings were our property once. They now belong to the Commonwealth, and ‘we shall put on them a heavy tax.” The States would be able to defeat almost any object which the Commonwealth in its wisdom might think proper to seek to attain. We should have one State imposing one sort of tax, another State imposing a tax of different degree, and we should have no real federalization in the matter. The Commonwealth is given power by the Constitution to deal exclusively with bills of exchange, promissory notes, and cheques. 1o presume an extreme case, it might be held in a particular State that postal notes were undesirable things ; that, instead of being an aid to commerce, trade, and enterprise, they were a hindrance, and the State Parliament might proceed to impose a prohibitive tax upon them. Where would the Federation come in then? In such a case our Federal legislation in this respect would become a dead letter. Is that the system of Federation which was contemplated by the Convention or by the Constitution as we have it? Senator Trenwith’s argument must, I submit, be considered utterly fallacious. I should like to urge a few reasons why I think Senator Stewart’s amendment should commend itself to the good sense of the Committee. That honoI able . senator very properly pointed out that the true principle of taxation should be a man’s capacity to contribute towards the revenue of the country’. I would supplement that by saying that he should also bp asked to pay in proportion to the benefit he receives. These two principles should be the foundation of any system of taxation imposed in either the Commonwealth or the States. Suppose, for instance, a man owes £1 : He is unable to pay it at the m(,ment, but thinks he will be able to pay it next week, and he signs a promissory note for £1 - and it should not be forgotten that, after all, a cheque is only a promissory note, payable on demand - is he to be taxed to the extent of one penny because of his poverty, and his inability to pay at the moment? That is what such taxation means. The ‘mam is not taxed because of his ability to contribute to the revenue or in proportion to the benefit he receives, but because of his inability to pay a certain amount at the moment. That is a totally wrong principle of taxation, and we, as representatives of the people, should rectify it. We do not propose to enter the sphere of the States at all. Within their sphere they should have the right to impose as much stamp taxation as they think fit. Under existing circumstances, the States are not content with taxing a man because of his poverty, and compelling him to put a stamp on an I.O.U. for £1, but when he l:as paid the £1, the other fellow is taxed id. for the receipt. If that system of taxation commends itself to the wisdom of this Parliament, I may be excused for saying that I have no very high opinion of such wisdom. Senator Trenwith further pointed out that, in his opinion, a stamp tax is desirable, because there are always two parties to the transaction, and that is a safeguard to prevent the evasion of the tax. In my opinion the great evil of existing systems of taxation is not that some people evade a particular tax, but that a large number of people, and especially the wealthy persons in the community, evade taxation altogether, by keeping taxation that would affect them off the statute-book. I am the more pleased to support Senator Stewart in his amendment, because I believe that, by preventing the imposition of taxation which, in my opinon, should not be imposed, and depriving States Treasurers of revenue improperly collected, it will have the. effect of compelling them to turn their attention to the arch-evaders of taxation in the past to secure revenue from them.
– Who are the arch evaders of taxation?
– The big land monopolists, and there are several others, also. For the benefit of the legal light on the other side, let me point out that it must be patent to any one who has given any study to the law, that nine-tenths of the time of our expensive Courts is taken up in administering the. laws relating to property. The general taxpayer, who has no property to go to law about, is being compelled to pay for the administration of property laws for the benefit of those who own property, and should be compelled to meet this expenditure. I might elaborate that argument until I wearied the Committee. It is not a part of our duty to find ways and means for raising revenue for the States.
– Surely we are not going to prevent the States from raising revenue ?
– Within their sphere they should be allowed to raise any revenue they please. For that the people of each State will be responsible. But I say that if we permit them to tax our instrumentalities we shall be paving the way to. future action on their part, which might have the effect of rendering our legislation null and void. I quoted as an extreme case the imposition of prohibitive taxation by a State on promissory notes, on the score that they really are a brake upon commerce, and should be abolished. Such action within their own sphere by the States would render our legislation in this connexion null and void. I have not heard Senator Stewart, or any one else, propose that the States should be prevented from imposing any local stamp taxation they please. Provided they do not go out of their own sphere they mav impose as much taxation as they please in the way of probate dutv, stamps on receipts, or a stamp duty on returned empties if they please. But in our sphere we must be supreme, and it must be for us to say what should, or should not, be done in connexion with matters which are placed under our control by the Constitution, which has been ratified by the people of Australia.
– I am in the very happy position of being able to congratulate the Minister upon a proposal on right lines to get out of a very awkward position indeed. I am delighted to have heard the two speeches which have been made by representatives of my own State, Senators Stewart and Givens, as it seems to me that they are urging the Committee to take action which, if their view is adopted, would have the effect of reducing the revenue of the State which they represent. I shall also be delighted if, on a future occasion, they will repeat those speeches in the State of Queensland, whose revenues would be bound to be affected by the legislation they propose.
– We have proposed the same thing before on dozens of occasions.
– I may say that I was delighted to hear those two speeches.
– The honorable senator will hear the same ‘thing again.
– The honorable senator is at liberty, if he pleases, to distribute my speech throughout Queensland.
– There can be no doubt that, as Senator Trenwith ably pointed out, the imposition of a stamp duty upon documents by a State is one of the most just methods of raising revenue, and there is no reason why a State should not tax its citizens in such a way.
– Why ?
– I believe that documents which pass a title to property, and by which exchanges of property, very often of great value, can be quickly made between one person and another are justly a subject of taxation. I congratulate the Government, and I congratulate also, shall
I say, their allies, or their opponents? There is an underlying mistake in the statements made by Senator Givens. Neither a cheque, a promissory note,- nor a bill of exchange is an instrumentality of the Commonwealth Government.
– They are matters upon which we have the exclusive power to legislate.
– To say that they are ‘ ‘ instrumentalities “ is to use a magnificent phrase which some persons have recently introduced without knowing, if I may be pardoned for saying so, exactly what it means ; but it seems to be giving some honorable senators the same kind of pleasure as the old lady enjoyed on hearing her archbishop talking so unctuously about “ Mesopotamia.” These documents are not instrumentalities of the Federal Government by any means. I am glad that the substance of the clause is being abandoned by the Government. It would certainly have raised a most contentious matter, and we should have been here for I do not like to say how long if the Minister had persisted with the clause as framed. As I understand the amendment proposed by the Minister, if a State has a law that a promissory note, a bill of exchange, or a cheque shall have a stamp upon it, and if the State in which the promissory note, cheque, or bill of exchange is taken up or redeemed also imposes a tax on it, the document shall not be invalid or inadmissible as evidence in a court of law by reason of -the fact that in the latter State stamp duty has not been paid. By the amendment suggested, the Minister will be getting nicely out of the difficulty in which he was placed, and I congratulate the two honorable senators to whom I have referred upon getting nicely into a difficulty. I am going to do all I can to help both sides in this way.
– - I have great pleasure in stating my intention to support Senator Stewart’s suggested amendment. I look upon stamp duties as a conservative form of taxation, which it is time we abolished. The stamping of cheques and documents was, in the first instance, approved, because at the time such taxation was introduced those who had dealings with deeds and cheques were in almost every instance men of wealth. Owing to the ramifications of business in our advanced modern times, stamp duties instead of being a tax on wealth, have become a very severe-tax oh persons in the middle and poorer classes of society, and in these days they retard rather than develop trade.- In Scotland, as some of us know, every tradesman, no- matter in how small a way in business, has a banking account, and gives cheques for as low an amount as 5s. or 10s. I am pleased to observe that in Australia a feeling has arisen that a bank account carries with it a certain amount of credit and respectability. I believe we should encourage that feeling in every way. A grocer in a small way of business may put ^30 a month into a bank, and I am unable to see why, if he finds it convenient to pay £25 or £2& of that amount in the settlement of separate accounts by cheques, he should be mulcted to the extent of a penny on each payment. I believe we shall be considering the interests of the trading community if we deal with these matters in a Federal spirit, and do away with these conservative taxes upon the community.
– I hope honorable senators will fully realize the seriousness of the amendment suggested by Senator Stewart. Taxation in the shape of stamp duties on cheques, promissory notes, and bills of exchange is a recognised and easy source of revenue in the several States, and, in fact, throughout the whole British community. It is a source of revenue that we, as a Chamber, recognising how valuable it is to the States, are not justified in interfering with, unless that interference is necessary to enable us to carry out our own rights, powers, and jurisdiction under the Constitution. If it interfered in any shape or form with what we desire to carry out as a Federal Government, we should undoubtedly be justified in removing it. All that we attempt to do by this Bill is to make uniform the law in regard to cheques, promissory notes, and bills of exchange. We do not intend, except so far as is necessary for that purpose, to interfere with the States rights of taxation. We have our own rights of taxation. The States have theirs, and this is one of them. We felt that, in order to make uniform this law so as to facilitate trade and commerce, a slight interference was necessary, and to that extent we did not hesitate to go, but we have put it in the mildest possible form, being most cautious arid careful not to wound the tenderest susceptibilities of the States. This is a States House> and I for one am anxious to avoid, as far as possible, any friction between the Commonwealth and the States. That is a duty which we owe to ourselves, and certainly to our States. Why should we, as a Senate, deliberately throw down the gauntlet, challenge the States, and seek to rob them of a certain source of revenue? I may be forgiven for mentioning Victoria as an example. She gets a revenue of something like ^184,000 a year from stamp duties, including, of course, receipt stamps and a number of other sources, but the point is that that amount includes the receipts from stamp duty on cheques, promissory notes, and bills of exchange. If we do what Senator Stewart proposes, and go out of our way in this measure deliberately to deprive the States of a substantial and recognised source of revenue, we shall at once set 1] D friction which would be harmful to ourselves and to the States. What justification is there for doing it ? This is not the occasion for doing it. Taxation is a concurrent right of the States.
– We do not propose to interfere with their rights.
– The honorable senator proposes to cut off one of their particular sources of taxation. Are we acting wisely, are we not rather acting wantonly, in attempting to do anything of the kind? If it was necessary for the purposes of our Bill I should not resent it so strongly. I can only say, in the most earnest words, that if such an amendment was carried it would be a serious one, and could not be completely accepted.
– I expected the Vice-President of the Executive Council to advance some very much stronger arguments against my suggested amendment. Apparently his only argument is that it would be an invasion of States rights, and would rob the States of a certain amount of revenue they now levy. “Under sub-section xvi. of section 51 of the Constitution, laws relating to bills of exchange and promissory notes are now solely within the province of the Com-‘ monwealth Parliament.
– But taxation is not.
– Then, although we have the power to make the law regarding such instruments, a State Parliament can go behind us and impose on ‘them conditions of taxation which ma.y very materially affect the law regarding them. If we have the power to make the law, I should conclude that we also have the power to say whether the States should tax those docu-ments or not. Every honorable senator is responsible to his constituents according to the platform upon which he was elected. I was elected on a promise to abolish, whenever an- opportunity arose, every one of the particular taxes with which we are now dealing. I am now seeking to carry out that promise to the best of my ability. Senator St. Ledger seemed to be surprised that honorable senators from Queensland should have the presumption to endeavour to destroy a certain portion of that State’s revenue. I was sent here with an express mandate to do away with this form of taxation, and I am not in the least afraid to go before the people who elected me, and tell them what I have done. There is no likelihood of . my being like a weathercock in politics. Every one knows where to find me politically, and so much cannot be said of some honorable senators. I trust honorable senators will not be led away bv the statements of the Vice-President of the Executive Council. The Minister of Home Affairs, who is the legal representative of the Government in this Chamber, has told us that we have the power to say whether these documents shall be taxed or not.
– Possibly we have that power.
– The Minister said so. I do not know that we have, and I am merely taking the Minister’s statement as indicating the law on the subject. Then if we have the power, let us test the matter.
– We are assuming the power in this Bill when we limit the States rights of taxation. If we can limit them we have the power to stop them.
– If the Senate believes that the States have the power to tax these instruments, let it say so, but it will be very unwise for this Parliament, having the power to deal with those instruments, to permit any portion of that power to remain with the States. The States might just as well tax tea or kerosene, or any other article of commerce which has not been taxed by the Federal Parliament.
-Col. Gould. - The cases are not parallel. The exclusive power to impose taxation by means of duties of Customs and Excise has been given to us.
– We have exclusive power with regard to Customs and Excise, and we have it, also, under the Constitution with regard to promissory notes and bills of exchange. The Constitution gives us full power over the one just as much as over the other. I am sure honorable senators will vote on this question as they think best in the interests of their States and of the community as a whole.
-Col. GOULD (New South Wales) [6.13]. - I desire to say a few words about this subject, because I regard it as a very important matter, apart from the altitude the Government themselves have taken up. Assuming, for the sake of argument, that this Parliament has full power to do what Senator Stewart proposes, that is to take away from the States altogether the right to impose taxation on bills of exchange, promissory notes, and cheques, I ask whether it would be a wise or prudent step to take? The stamp duties are regarded by the various States as one of the most important sources of revenue, and the amount derived from the duties on cheques, promissory notes, and bills of exchange reaches a considerable sum in the course of the year. Some honorable senators say it is not desirable that any duties at all should be placed upon those documents, because such duties hamper trade and commerce, and interfere unduly with the small merchant or tradesman. Granted that honorable senators do regard it in that light, is it not a matter that should be dealt with by the States themselves with regard to their own internal revenue? They require revenue to carry on their work. The Commonwealth Constitution has taken away from them absolutely the power of imposing taxation through the Customs or by means of Excise, and has handed it over to us, but has left all the other sources of taxation at the disposal of the States if they desire to make use of them. It is, therefore, unwise for us to put ourselves in a position of antagonism to the States. There is friction enough between the States and the Commonwealth, and we do not want to add to it. Honorable senators may say that this friction is not due to the action of the Commonwealth so much as to the action of the States themselves. That may be true, but at the same time members of the Commonwealth Parliament will not be acting as broadminded men if they regard it as a reason for acting in any spirit of antagonism towards the States. The States say that they want this taxation, and the Commonwealth should say to them, “ We will allow you to have it, but we will regulate the law with regard to promissory notes and bills of exchange in. the interests of the people of Australia as a whole. While you are entitled to levy a tax upon these documents, and we do not intend to interfere with you in so doing, still, we will leave it to you to say whether the documents shall be taxed or’not.” If this Parliament were to make it illegal for the States to tax bills of exchange and similar documents, they would have to make up the loss of revenue in some other way. We should thus inaugurate another system of taxation which might be more objectionable than that of which Senator Stewart complains. Is it not far wiser to allow the States to require stamps to be put upon these documents? The small tradesman who, perhaps, pays £30 or £40 into his bank one week, and draws it out again the next week, puts it there for his own convenience, and the State has a right to call upon him to contribute towards the cost of the protection given to his money.
– Is it a fair thing to charge one penny on a cheque for £1, and only the same amount on a cheque for £500?
– It is beyond our province to say whether the States should impose a tax of one penny or one shilling on a cheque. We should leave it to them to determine the rate. But it is a fair thing for the Commonwealth to say that it will place the States on an equal footing with regard to bills of exchange, cheques, and promissory notes, irrespective of the stamp duties that they impose. I appeal to honorable senators to allow the clause to stand as now proposed, letting the States cut down the stamp duties if they think fit. In common with other people I do not like to pay stamp duties, butI recognise that the matter is one for the States to deal with. I trust that the Committee will do nothing to interfere unduly with States privileges, or what the States consider to be their privileges, in any matter.
– It must be exceedingly consoling to the Government to find that’ there is such an array of honorable senators on the Opposition side of the Chamber who are prepared to support them on this matter. The Government are frequently twitted with being kept in office by the Labour Party. It must be comforting to find that on the present occasion they are supported by the solid ranks of honorable senators opposite I wish to point out that Senator Stewart’s amendment does not propose to interfere with the rights of the States to impose any stamp taxation that they choose, provided they do not interfere in the Federal sphere of action. There can be no doubt that the Constitution gives the Commonwealth Parliament supreme power to deal with bills of exchange, promissory notes, and cheques. It is agreed that this Parliament has absolute power to say whether or not there shall be taxation upon those documents. The Government themselves adopt that view, because they have embodied in this Bill a provision limiting the rights of the States in that respect. If we have power to limit the rights of the States to impose taxation on such documents, undoubtedly we have the right to prohibit their taxation altogether. When we were granted exclusive power by the Federal Constitution to deal with bills of exchange, promissory notes, and cheques, one of the principal reasons for it was that it was exceedingly desirable to make the law upon such matters uniform throughout the Commonwealth.
– Not exclusive power.
– The honorable senator must excuse me; in regard to every item of the familiar thirty-nine articles of the Constitution we have exclusive power, and any State law which comes in conflict with Federal law on any of those matters has no effect. I think there is no doubt that both the States and the Commonwealth could deal with this subject concurrently, but a State has no power to enforce any law that is in conflict with Federal legislation upon any matter handed over to our control. That being so, I take it that we have power to say what shall be the uniform law of the Commonwealth with regard to bills of exchange, promissory notes, and cheques, Was it not one of the main objects ot Federation to place all the States upon an equal footing in respect of trade and commerce, so that no State should have an advantage over any other State? If we permit the States to impose taxation upon bills of exchange, promissory notes, and cheques, and do not insist upon similar taxation being imposed in all the States, it is evident that equality of trade and commerce will not be secured. The stamp duties are not the same in every State. If a State Parliament, in its desire to raise taxes, or to avoid resorting to proper sources of revenue, chooses to pile on stamp duties, and thus to tax the merchant class, it places merchants who have to pay those taxes at a disadvantage in competition with merchants in other States. In that way Federation will fail, because the Government has not had courage enough to bring forward proposals which are in exact accordance with our Constitution. Legislation cannot be uniform so long as we leave to the States the right to impose taxation on the instrumentalities of trade and commerce ; and as one who desires to see fair play between the people of the different States, I shall support the amendment.
– Although I believe that the people of the Commonwealth would be very glad to be relieved from taxation upon industry, such as is imposed by stamp duties, yet, having regard to the merits of this Bill as a whole, and to the fact that I gather from the Minister in charge of it that there is some danger that the Government will not go on with the measure if the amendment is passed-
– The honorable senator should not allow the Government to “bulldoze” him.
– I am prepared to sacrifice my own feelings, having regard to the merits of this important Bill ; and on that ground I shall vote with the Government, and ask to be relieved from the responsibility of supporting by my vote the statement which I previously made.
– The question before us is one which deserves very serious consideration. I wish to see the Constitution (protected, and intend to become a defender of it on this occasion. I have listened carefully to the arguments of the learned and the unlearned members of the Senate, and am going to take the side of the unlearned. If section 51 gives this Parliament the same power to deal with promissory notes, cheques, and bills of exchange, as it does with respect to patents, quarantine, trade marks, and Customs and Excise, undoubtedly we have the power to do what Senator Stewart proposes. Would it not be a ridiculous position in connexion with our patent laws if the Government proposed to permit the States to collect fees in connexion with patents, or to put a stamp tax on them? Would it not be ridiculous for the Federal Government” to propose to allow the States to legislate as to the manner in which trade marks should be applied? If that be admitted, it must also be acknowledged that in bringing down a Bill of this description affecting bills of exchange, promissory notes, and cheques, the Government are only giving partial effect to the Constitution. Either they should give full effect to our power or leave it alone. I quite agree with Senator Givens and Senator Stewart that stamp duties such as those with which we are dealing are absurd, inasmuch as they compel the poor man with a cheque for10s. to pay the same duty as is paid by a rich man with a cheque for £500 or £5,000. If that be inequitable, as it evidently is, the sooner we create a condition of uniformity and equity the better. ‘ There might, for instance, be no tax on promissory notes, cheques, and bills of exchange in Western Australia, and there might be a very heavy tax in Queensland. If the Federal Parliament finds such a condition existing, or even if it recognises the possibility of its existing, it should interfere so as to give every person carrying on business in this country the same chance, whether he be a merchant, a working man, or a shopkeeper. I would rather see the Bill dropped altogether than have it passed in a form in which it might create friction between the States, and inequality between citizens in various parts of the Commonwealth. We should deal with documents of this description exactly as we have dealt with Customs and Excise, trade marks, and patents. I shall support any amendment that will make the Bill as effective as the Constitution will permit it to be made.
Sitting suspended from 6.30 to 7.45 p.m.
Senator KEATING laid upon the table the following paper : -
Notification of the acquisition of land at Young, New South Wales, for postal purposes.
The Acting Clerk laid upon the table the following paper : -
Return to an order of the Senate, dated 10th July, showing the persons in the clerical and professional divisions of the Public Service exempted from the provisions of the Public Service Act.
Senator HENDERSON (Western Aus port from the Printing Committee ; and in order that honorable senators may thoroughly understand the purport of a recommendation which it makes, I may mention that the Printing Committee of the two Houses have hejd a joint meeting, at which they decided to meet on the Thursday of each week.
Report read by the Acting Clerk as follows : -
The Printing Committee have the honour to report that they have met in conference with the Printing Committee of the House of Representatives.
The following resolution was carried : - “ That it be a recommendation from the Joint Printing Committee to the Senate and the House of Representatives that, except in cases of extreme importance and urgency, no order be made for the printing of a document presented until the same has been referred to the Committee for consideration and report.”
The Joint Committee recommends that, in addition to the papers already in print, the following papers be printed : -
Return of persons employed in cigar, tobacco, and cigarette manufactories of the Commonwealth.
Report of the Conference on Wireless Telegraphy, with Appendices. Dated Melbourne, 13th June, 1907.
Chairman Printing Committee of the Senate. Committee-room, 18th July, 1907.
Motion (by Senator Henderson) proposed -
That the report be adopted.
– I do not wish to raise any factious opposition to the motion ; but I think that the Senate might consider whether it is wise to leave the whole matter of printing public documents to the Printing Committee. It has always appeared to me that any paper which is of sufficient importance to be tabled ought to be printed. What is the purpose of laying a paper on the table ? It is so that it may be seen by honorable senators. If it is not printed, then each honorable senator must go to the table to ascertain its contents. But if it is printed, it is circulated, and each honorable senator may read it in print and not in manuscript or typewriting. I still hold that every document that is tabled ought to be printed without an order or without a reference to the Printing Committee. So far as the report advises that no paper be printed until it has been recommended by the joint Committee, I am opposed to it, because I do not think that that is in the best interests of the members of the Senate.
– This is only a recommendation. Quite independently of that the Senate can order a paper to be printed.
– Only an urgent paper.
– An urgent or any other paper.
– If that 5fe the meaning of the recommendation it has no value. I desire to refer to an inconvenience which has been caused to myself on many occasions, and which has probably been felt by others, and that is, that sometimes when Ministers are presenting papers they read the titles so indistinctly that honorable senators sitting at the end of the Chamber do not know what subjects the papers deal with. When Ministers are performing that duty they ought to speak in such a tone of voice that every honorable senator, even if he is deaf, will know what paper is being presented. Otherwise a very important paper may be laid on the table without an honorable senator, who is interested in its contents, being aware of the fact.
.- Evidently Senator Stewart did not pay close attention to the recommendation of the Printing Committee, otherwise he would not have been so critical in his objection. The Printing Committees are composed of men who are as anxious to facilitate business as ‘are those who, like the honorable senator, take exception to this report. There is no desire to curtail any privileges or any necessary expenditure in connexion with documents which will be of service or use to honorable senators. Last year the Printing Committee of another place found fault with the Printing Committee of the Senate because there had not been a joint sitting. No fault could be attached to our Printing Committee, because it had not been notified by the other Printing Committee of their desire to have a joint sitting. However, we did meet to-day, and during a short discussion it was pointed out that on innumerable occasions printing had been ordered by the other House, and that similar printing had been ordered by the Senate, so that there was unnecessary expenditure. With a view to preventing unnecessary printing, it is the intention of the two Committees to meet each Thursday. When a paper of importance is tabled the recommendation, if it is adopted, will enable an honorable senator to rise and move that the document be printed.
– That right is granted in a standing order.
– We have no desire to interfere with any standing order, or to curtail the privileges of any honorable senator. Surely Senator Stewart has sufficient confidence in the Printing Committee, composed as it is of a number of men who have had practical experience of printing, to know that they will not do anything to inconvenience members of Parliament, particularly in connexion with documents.
Question resolved in the affirmative.
– I move -
That this Senate is of the opinion that, in the best interests of the Commonwealth, the Government should purchase and control a fleet of mail steamers capable of maintaining a fortnightly mail service between Australia and Great Britain.
I do not think that there could be a more fitting opportunity than the present one for the discussion of a question of this character. We are all, I presume, in a state of expectancy and wonder. On the one hand we are expecting that certain overtures will be made, and that as a result an adequate and thoroughly efficient mail service will be established between the old country and Australia on equitable terms ; while on the other hand we are wondering whether there is any possibility of such a thing being accomplished with advantage to Australia, or with even what we might call an equitable operation all round. There is sufficient evidence to show that the commercial world are very much disturbed in connexion with this matter. We also have ample evidence that the producing world in Australia are exercising their minds very much on the question as to whether there will be established a mail service which will meet their requirements, or whether there is going to be another huge failure. I should think that the people here have almost begun to believe that Australia, if it is not very rapidly becoming, has for some years been regarded by private Shipping companies of the motherland as a sort of happy hunting ground for them, and one on which they have very little else to do than simply to regulate trade and commerce almost to their own liking; at any rate, that trade which is carried by the mail steamers subsidized by the Commonwealth. It will be recollected that during last year a contract was ratified by this Parliament in order that better provision might be made for the carriage of our mails, and I use the expression “ better provision “ because I am not prepared to believe that the only expectation that governed the calling for tenders at that time was the near expiry of the contract with the Orient Steam Navigation Company. Rather do I believe that it was suggested by the almost unanimous feeling of the people that the existing service was by no means satisfactory to Australia, in that it did not meet our requirements. Under those circumstances a mail contract with a syndicate was entered into, and at the opening of this session we were informed that it had been cancelled. That, I think, furnishes almost conclusive evidence that those who believe that the private shipowners of England do very largely make a happy hunting ground of Australia are not very far out in their calculations. However that may be, the fact remains that the contract has been cancelled. Fresh tenders have been called, and what the result will be no one can tell, but if the principle of the motion I submit were made applicable to the affairs of the Commonwealth, the dissatisfaction that has prevailed, and the cause of it, would be removed. I am aware that there are a few of the members of the Senate who still believe in the good old game of private enterprise, and from them we may expect hostility to a motion of this kind. But there are times when, for the general good, men may be found prepared to free themselves from the toils of even a life’s environment, and, in doing so, to perform the finest actions of their lives for the welfare of the people. In this connexion I am reminded pf the fact that some people who, on certain occasions, are firm believers in private enterprise, prove, in the consideration of a matter closely affecting their own interests, to be as socialistic as I have ever been, and prepared to go quite as far as I should go in that direction. It is unnecessary to say that we need a service that will meet all the requirements of the Commonwealth. The producers have given ample evidence that, in their opinion, a thoroughly socialistic condition should find a place in the mail contract. They desire that the Government shall make it a condition that the contractors shall provide certain cold storage to meet the requirements of the producers of perishable goods. I do not oppose the interests of the producers, or quarrel with their desire in this regard. They have a perfect right, if they can do so, to secure such a condition as will .enable’ them to carry on. their industries in the most profitable way. But their attitude in connexion with this matter, has provided us with a new definition of “Socialism.” In a debate on this subject which took place quite recently in another place, the deputy leader of what is generally known as the anti- Socialist Party, supplied us with the new definition. He said that when the producers as a class are seeking to embody in a mail contract a provision to be applied only to their class, but to be paid for by the Government as representing the whole of the people of Australia, in the form of a subsidy, that is common sense. So that when legislation of this character is applied to meet the requirements of a class only, it is common sense, and if the attempt is made to apply it to the welfare of the whole community it is Socialism. I am with the producers in this matter to the extent that I agree that their requirements should be met, but I am not with them in their demand that while they are to derive all the benefit of the arrangement the cost shall be met by the people as a whole. If the contract is to be loaded with such a condition as that to which I have referred, the effect must of necessity be to. increase the amount of the subsidy which the Commonwealth will be obliged to pay for the carriage of our mails.
– What would the increase amount to? Would it be one-fourth or one- fifth more?
– I do not know what the increase would represent. The one thing that concerns me is that undoubtedly such a condition attached to the contract will increase the amount of subsidy which the Commonwealth will have to pay, and I consider it would be an iniquity that a particular class should be benefited in the way proposed, at the expense of the whole community. I recognise the undoubted claim of the producers to consideration, but I do ask them to be consistent, and if they accept the doctrine of Socialism for their own benefit, to extend their range of vision, and be prepared to apply it for the benefit of the whole community.
– A little of it goes a long way.
– The honorable senator must be aware that what is proposed is merely that a preference shall be given to the tenderer supplying the largest amount of cold storage.
– Quite so, but I know what that preference means, and I know that private enterprise has never yet been satisfied with a mere preference, and something more will be required to induce those engaged in private enterprise to enter into a contract of this magnitude. I am not arguing against the interests of the producer, because I say he should be considered, but those engaged in the producing industries have no more right than have those engaged in any other industry in Australia to be subsidized through a mail contract. I grant that their produce is for the most part of a perishable nature, and that a box of butter would not last so long at sea as would a bar of iron, but T say that there is no greater justification for assisting those engaged in one industry than there is for assisting those engaged in any other by means of a subsidy from the general revenue. As Australians, we should be prepared to make some endeavour to meet the growing requirements of our people. Those engaged in the fruit industry are every day calling for more space in speedy vessels, in order that they may reach the Home markets with their products at a time when those markets are not glutted. The complaint of the fruit-growers of Australia at present is that their fruit is frequently landed in the old country when the Home market is glutted.
– No, their complaint is that the Government will not let them alone. All they ask is to be’ left alone.
– Nothing of the kind. The producers of .fruit, butter, and other perishable products, no doubt, desire generally to be left alone, but .when we are making provision for a mail contract, we find that their desire is that the Commonwealth Government shall impose a condition on the contractors for the supply of more cold storage than is at present supplied.
– That is only natural.
– It may be, but it does not alter the inconsistency of the position they occupy.
– It is quite natural that anti- Socialists should be asking for Socialism.
– Apparently it is quite natural for the anti- Socialist to be a Socialist, and it is as natural as the rise of the sun for an anti-Socialist to open his arms to receive any benefit which he can derive from the operation of a socialistic scheme.
– The fruit-growers of Sydney and Melbourne declined to accept Mr. Deakin’s offer, and declined to guarantee any demand for space.
– What is the Producers’ Association ? Does it consist only of men who grow potatoes, or does it comprise also fruit-growers, cabbagegrowers, butter-producers, and producers of all other kinds of perishable articles? Those are the people who are seeking now to make their voice heard, and to have provisions embodied in the forthcoming contract to guarantee them a certain amount of storage space.
– They are looking after themselves.
– I should be about the last man in this Chamber to dispute the fact that they look well after them’ selves. They would be unwise if they did not. It is because I think it is so necessary for them to look after themselves that I am advocating the complete removal of the present unsatisfactory state of affairs, and the substitution of conditions that will give greater satisfaction to the people, and be more in the interests of Australia. I recognise that certain responsibilities rest upon any of us who undertake to give support to such a project as is embodied in my motion. It is always necessary for us to give substantial reasons for the faith thatis in us. I must admit that in this matter I have been compelled to resort to outside sources of information for facts and figures which I am going to quote, but that is an everyday occurrence in every Parliament. There are several weighty problems that must be taken into consideration in dealing with so great a question. The first problem is the cost of such an undertaking, and how to meet it. A Royal Commission was appointed by another place last year to collect facts and figures bearing on this question. That was the Royal Commission on Ocean Shipping. Their report shows that they were most careful and painstaking in their investigations, and no man can charge them with exaggeration in their findings.
– Is the honorable senator referring to the report of the majority or the minority of the Commission?
– Those who signed the report were Messrs. Thomas,
Chanter, Mahon, McDonald, Spence, and Storrer. There was no minority report at all. The Commission were very careful in their conclusions. They show us that such a project as underlies my motion is quite feasible. They give an estimate of the cost, based, I am sure, upon very careful evidence, in paragraph 3 of their report, which reads thus -
Information received from Mr. T. A. Coghlan, Agent-General of New South Wales, shows that a boat of 12,000 tons register, with a speed of 16 knots per hour, could be obtained for £355,000, not including the cost of pantry fittings, cutlery, &c. This estimate is for a steamer with reciprocating engines, but we strongly recommend that turbine engines, the type of which appears to be the latest and most efficient, should be adopted. The total cost of each mail steamer, inclusive of turbine engines and fittings as mentioned above, would be £375,000, and a fleet of eight such boats .would be sufficient to give a fortnightly service between Brisbane and London. The type of steamer specified would be 2,000 tons larger than the Mongolia and Marmora, the largest vessels of the P. and O. “Company engaged in the Australian trade. The total cost of the eight steamers would be £3,000,000.
– Where is the money to come from ?
– I will try to show the honorable senator in a few minutes -
This estimate is well within the mark, judging by the evidence of Mr. Kenneth Anderson, Chairman of the Orient Steam Navigation Company, who says that the cost of eight new steamers for an accelerated service of 662 hours, the same as the P. and O. Company now gives, would be not less than £2,800,000.
The Commission went ^200,000 above that estimate, and, therefore, evidently endeavoured to give a fair, unbiased, and reasonable estimate of the cost of such an undertaking. They contemplated in that report the provision of vessels such as almost every one in Australia would like to see coming to our shores, fitted with all the . latest mechanical appliances, and of a registered tonnage of- 2,000 tons more than the Marmora or Mongolia. The provision of such a service would be very much to the advantage of Australia, arid superior to anything we have running between Australia and the motherland to-day. It would insure that speedier communication with the old country which is necessary to enable us to land Australia’s perishable products in the best possible condition in London and which we are so anxious about. No one can gainsay the fact that there is a great expansion talking place in the perishable goods industry..
– Something for the farmers.
– And something for other classes of people also. I hope the time is not far distant when there will be such an extension of closer settlement as to compel us to make even greater provision for exporting our produce. If that is not done, those who produce those articles will be compelled to shut up, and we may as well not have closer settlement at all. There is one portion of the Commission’s report which struck me very forcibly when I read it. It consisted of a statement made by a witness - I think he was a South Australian - who testified that when shipping goods by the Peninsular and Oriental Steam Navigation and Orient Steam Navigation Companies, he was compelled to accept the agent provided for him in the old country by those companies. I presume that the same condition was applied to other shippers. It meant that this man paid about is. 6d. per case commission upon his fruit more than he would have had to pay had he been left at liberty to choose his own agent.
– Surely that was only a business arrangement?
– I have nothing to say against such an arrangement except this : If we established a fleet of our own, the producers of Australia certainly would not be compelled to treat with certain agents in London, and be fleeced by them.
– The mail companies have nothing to do with that. Their duty is at an end when they land the fruit.
– It is an easy matter to say that the mail companies have nothing to do with it, but if a producer is compelled to go to one of the mail companies to take his goods to the markets of Europe, and the companies say that they will only take his produce on condition that he sends it through certain agents in London, he is, I contend, placed in a disadvantageous position.
– Does not the honorable senator think that a man who did what he has described would be acting against his own interests, and would show a lack of ordinary common sense ?
– No, I do not. The producer may not be satisfied with the conditions that are laid down by the mail companies, but he is compelled to accept them. If he does not, his produce is likely to remain upon his hands, and he will become a ruined man.
– Would not that be the case with the proposed Commonwealth line of steamers?
– No, there would be absolutely no inducement for any such thing.
– Would not the steamers be run to pay ?
– Most decidedly, but with this difference : that there is no reason why they should be run to make a profit - none whatever. There would be no necessity to pay dividends. There would be nobody to pay dividends to, and, so long as the vessels were run to meet the public convenience, and to repay the public for every cent of the outlay upon their establishment, they would fulfil the purposes for which the public required them.
– No one would want to build up a fat banking account from the profits of the Commonwealth mail service.
– There is no member of this Senate who would not like a banking account if he could have one.
– I quite believe the honorable senator. Personally, I have never been in the fortunate position of being able to have a banking account, but 1 have, many a time, thought that it would be a very comfortable thing if the whole of the people of the Commonwealth had small banking accounts. I think, too, that if the big banking accounts that have been built up by such transactions as we have been speaking about were returned to the people who honestly owned them, the possibilities are that a large number of us who have no banking accounts todaywould be in possession of them.
– Perhaps the honorable senator will mention the dividends paid by the Orient Steam Navigation Company, and let us know the fat profits that its shareholders have made.
– I recently read the report of the Butter Commission, and noticed that it was very anxious that the butter producers should have relief of some kind from those who at present carry their goods to Europe. The report from which I have already quoted has something to sayon that point. In paragraph 7, it refers to freights, and states the reasons for items which appear in the estimate of income and expenditure for such a service as I have been advocating. The paragraph says -
In the above estimate of freights we have only allowed an average of £2 ros. per ton. Butter is now being carried at £3 10s., and fruit at from ^3 to ^’3 5sv, although the rate for butter was not long ago as high as ^7 per ton. In view of the statement made by Sir Thomas Sutherland at the last annual meeting of the P. and O. Company as to the unremunerative nature of butter freights, and the fact that both the P. and O. and Orient Companies were only prepared to enter into a two years’ contract for the carriage of butter (although the producers desired one covering three years) it is an open question whether the existing rate of £3 ros. will be long maintained.
Here is an additional reason why this project should be undertaken. The longer our producers remain in the position in which they are to-day, the greater the danger of their having to pay considerable subscriptions towards whatever dividends are made by the mail companies.
– The honorable senator will recognise that the freight on butter must, to a certain extent, be regulated by the passenger traffic and other conditions under which the mail steamers carry on business. *
– The honorable senator should not forget that the passenger traffic is more likely to increase .than decrease in the future. That being so, the tendency ought to have been to enter into contracts for a longer period, and at cheaper rates. Senator Walker has asked how it is proposed to raise money for the projected line of steamers. I do not advocate the borrowing of money for many purposes, but if there is one project more than another for which we should be warranted in borrowing ^3,000,000, it is that which I am advocating. I should be quite willing to record a vote for such a loan. I realize that there is, as the old saying has it, “ plenty of corn in Egypt “ ; that there is still money in Australia. I apprehend that the Government of the Commonwealth could, to greater advantage than any State Government, obtain such a loan, and I see no reason why it should not raise one without going beyond this continent. I do not dream that the Government would be compelled to do so. Whatever antipathy private enterprise may have to the establishment of socialistic schemes, it is most sensitive where investments are concerned. T am satisfied that it would not remain long in the background when it saw an opportunity of making a Government investment. The mail steamers would not necessarily be run by the Commonwealth for the purpose of profit.’ In other words, their primary object would not be profit. The primary object of every shipping company which is running a mail service to-day is unquestionably profit ; but that would not be any business of the Commonwealth. There is no particular reason why we should get profit ; but there is a reasonwhy we should meet the growing exigencies of our people. It has been estimated by the Commission that , £3,000,000 would be sufficient to establish a line of mail steamers which would always have a remarkably good chance of providing its working expenses.
– The hororable senator must bear in mind that there would be a large amount of covering charges.
– Let me include the covering charges, and see what it means. In paragraph 4 the Commission show an intense desire to get honestly at the best facts to guide them to the most correct solution of a difficult problem. They deal very lucidly with the expenditure involved in such an undertaking, and wind up with this statement -
Our estimate of the annual cost of. this enterprise is£1, 207,000.
– How would they manage to do all their coaling at Aden and other Eastern ports ?
– The question of coal need not trouble the intellect of the Senate, because if all a man wanted in this world was coal, he certainly could get an abundant supply of it.
– How would they coal at Eastern ports where other than white labour is used ?
– We have not yet come to that question ; but certainly we should not use black labour.
Our estimate of the annual cost of this enterprise is£1,207,000, made up as follows : -
There is one matter which I think the Commonwealth can deal with just as easily as it can deal with the question of shipping, and that is insurance. For that purpose the Commission have made an allowance of £150,000. The Commonwealth could very easily adopt the practice which has been adopted by the Co-operative Society in the motherland. That very largeassociation have a very nice fleet of steamers traversing the ocean with their produce, and they insure their own stock and ships. Surely the Commonwealth might insure its ships just as easily as the Co-operative Society can do ?
– It must be remembered that the great Manchester company insure millions of pounds worth of their goods, so that they may minimise their losses.
– The Commonwealth would be quite warranted, I think, in undertaking the insurance of its own vessels. For thepurpose of promoting the welfare of their citizens and the distribution of traffic, the States have constructed railways within their territories. It has been demonstrated that States railways in Australia are more profitable than are private railways. The States have demonstrated their capacity to construct and work railways. I believe that the adoption of this motion would create throughout the States a unanimous desire that the Commonwealth should run its own mail steamers.
– The States railways also give a better and cheaper service to the people.
– Most decidedly.
– And they also pay a much better wage.
– Yes. There is another side to this question, and that is the income. The Commission took into consideration the probabilities of passenger traffic, and again it would appear that they were very careful in framing their estimate. They were by no means beguiled by a mere desire to begin the undertaking, but they judiciously went into all facts and figures which were available. What estimate of passenger traffic didthey frame -
In making this estimate of five months’ full traffic we include the probable returns from coastal fares (see paragraph 12) trips from Australia to Colombo, and the fares of passengers travelling between England and Colombo. The class of mail steamer proposed for the Commonwealth service would be capable of carrying 5,650 tons of cargo. On the basis that each ship would carry 4,000 tons of cargo on the outward voyage from Australia (making due allowance for refrigerating space), at an average rate of £2 10s. per ton, the revenue would be , £260,000.
-That is quite an easy sum.
– It is an easy sum. In fact, it is so easy that I think the honorable senator can see how nicely it would work out year after year in practical operation.
The back freights from England may be estimated on the same tonnage at an average rate of £2 per ton, or £208,000, from which must be deducted £100,000 already reckoned as freight on goods imported by the various States Governments, leaving £108,000 for the back freights, or a total revenue from the carriage of ordinary cargo of £368,000. The grand total of annual earnings which may be expected from the Commonwealth line of mail steamers is therefore : -
leaving an estimated surplus of receipts over expenditure of £112,900.
– As regards the freights from England the estimate may be all right, but as regards the freights from Australia it is absolutely absurd.
– I am scarcely prepared to take the assertion of the honorable senator, but if by-a.nd-by he can substantiate his contradiction, I shall be very willing to accept it. The Commission devoted so much care and attention to the inquiry that I think I am quite safe in using their estimate with an amount of confidence which otherwise I might not have felt. I say again, that if there were no desire on the part of the Parliament that the transactions of the year should result in a surplus—
– The Government would surely expect interest on their capital.
– That is already provided for in the estimate of expenditure, and the amount of /[1 12,900. is what the private enterprise man would term “cold profit.” But if there were no ‘Surplus the proposal would still be undoubtedly to the advantage of the Australian people. I think I have said enough to explain the proposal.
– Is any allowance made for the effect -upon freights which would certainly follow the addition of eight large steamers to the vessels now engaged in the trade?
– The honorable senator must see that as soon as the Commonwealth made such provision as would deprive a certain line of steamers of the annual subsidy of ,£150,000 now paid to it, that line of steamers would become a thing of the past.
– What about all the other boats that are not in receipt of any subsidy ?
– They would do the Government line of steamers no injury. That is proved by the fact that the existing subsidized line of steamers is continued in the face of the competition to which the ‘ honorable senator has referred.
– But the honorable senator has been arguing all the time that the shipping companies have been extortionate in their charges, and have in consequence been making fat profits.
– I have not used any such argument. I have been trying to urge upon honorable senators the necessity for running a line of steamers of our own, in order that we may ourselves receive the benefit of the £150,000 a year now paid as subsidy to a private company, as well as any advantage that is to be derived in connexion with the cost of insurance. I have tried to show what the cost of such an undertaking would be, and how it might be met. I have estimated the probable expenditure for a year and the probably yearly income. I now say that such a proposal would, if given effect, be of undoubted advantage to the Australian produce trade, and would meet the growing requirements of our producers. I admit the necessity of despatch in this connexion, because I know that the supporters of private enterprise claim that time is money.
– But as the honorable senator has not shown that his proposal will mean any reduction upon existing charges, where is the benefit to the public to come in?
– I have made an estimate, based on an average of /”.2 10s. .per ton, and have shown that the freight charged bv mail steamers from Australia to England is as high as £3 5s. and £3 ros. per ton on the very great many tons of cargo carried.
– What reduction in freight in favour of the producers does the honorable senator propose?
– At least £1 per toa according to the figures quoted.
– I have made no statement on that point, but I have said that we estimate that at a certain figure per ton we shall realize a certain income.
– Has the honorable senator taken the average charges at present made by the shipping companies?
– What I have said is that an estimate is made of the number of tons that will be carried at an average of 50s. per ton. I have not said that the average freight at present charged by the shipping companies is no more than 50s. per ton.
– It is a great deal less. I speak of the ship’s total freight, and not merely of the freight carried in the refrigerating chambers.
– I have been speaking of the average- freight of the whole ship, and if Senator Gray can show me that the average I have quoted is incorrect I shall be prepared to admit that he has sound reason for the position he takes up.
– I speak of the ordinary freight.
– The ordinary freight does not affect the question except in so far as it is one factor.
– It is a very big factor.
– The honorable senator will admit that the passenger traffic is a very big factor.
– And the passenger traffic is estimated on the present scale of charges.
– Quite so.
– There is nothing to prevent them coming down.
– Quite so, but that would be to the advantage of the travelling public. I am dealing with existing conditions, and I think I have given good reasons why the motion should be adopted.
– The honorable senator must know that the largest shipping company of them all carries passengers for very considerably less than the average he has estimated.
– To what company does the honorable senator refer ?
– The White Star line.
- Senator Gray is not fair in his interjections. The White Star ships have nothing to do with the mail service. A producer would not send his butter home by a steamer which wouldtake three months to reach the oldcountry.If it would take that time he would prefer to send it by a sailing ship, as hewould get a lower freight.
– He couldnot send it by a sailing ship because such ships are not supplied with cold storage.
– I am aware of that. A producer would not send perishable produce by sailing ships if they were supplied with cold storage. What they are all trying to do now is to take advantage of the greater speed of the mail vessels so that they may place their produce on the Home market to the best advantage.
-The Government boats would have to meet the competitionof the White Star and tramp steamers.
– The competition of the White Star and tramp steamers
Would not affect them. They do not affect the boats engaged in carrying out the exist- ing mail contract.
– If private companies reduced their passenger fares inordinately to increase the opposition to the Government boats the producers of Australia would be the people who would benefit by the reduction.
– Undoubtedly they would.
Debate (on motion by Senator de Largie) adjourned.
.- I move -
Thatthis Senate, pursuant to section 10 of the Acts Interpretation Act 1904, disallows Regula tion 66 of the Commonwealth Public Service Act 1902 as amended by Statutory Rule No. 70, 1907, and affirms that such Regulation should be amended by -
Striking out in paragraph 2,. line 1, all words after the Word “ is “ down to and including the word “days” in line 2, and inserting in lieu thereof the words “on duty on seven or more consecutive days “; and by striking out, in line 3, the word “may” and substituting the word “ shall.”
In paragraph 3, line 1 - By striking out all words after the word “ is “ down to and including the word “days” in line 2, and inserting in lieu thereof the words “ on duty on not more than six consecutive days “ ; and by striking out all words, paragraph 3, lines 5, 6, . 7, and 8.
When the Appropriation Bill was being discussed last session, I brought under the notice of the Minister representingthe Postmaster-General the fact that there were numbers of telegraphists in various States, particularly Victoria, who were working many consecutive days, including Sunday, without a day off, and that, although the Department charged double fees for telegrams sent on Sunday, the officers received no additional remuneration for their work on that day. The Minister representing the Postmaster-General promised to have inquiries made. I subsequently had personal interviews with the PostmasterGeneral, and shortly afterwards received from the Public Service Commissioner a communication to the following effect -
After full consideration of the whole circumstances in connexion with Sunday work, the Public Service Commissioner has decided that, on and from the 1st of March, when an officer works six days per week, one of which is a Sunday, he should be granted extra payment at trie rate of half a day’s pay if full time be worked, or, if employed for less than a full day, a sum proportionate to the time so employed. The. provisions of regulation 66 are still to apply as regards payment to all officers who are required to work seven days per week, but it is the desire of the Commissioner that the number of these officers should be reduced to the utmost possible extent compatible with the public interest, and wherever, without undue disadvantage by rearrangement of staff or otherwise, arrangements can be made by which every officer will be freed from duty for one day in seven, it is desirable that such should be done.
Since then regulations have been framed by the Governor-General in Council, and have appeared in the Gazette, making certain alterations in the direction desired bv those who are called upon to work for these long periods. Whilst the new regulations do, in a measure, minimize the difficulties under which telegraphists were working, they are still, to my mind, and in the opinion of those mostly concerned: too elastic, because, if they are permitted to go in their present form without any protest, it will be possible, under the second paragraph of regulation No. 66, for telegraphists to work seventeen consecutive days, including two Sundays, without having a day off. It will be possible, also, under paragraph 3 of regulation 66, for men to work thirteen consecutive days without having a day off. Whilst a number of telegraphists object, on conscientious grounds, to working on Sundays, and get their Sundays o’ff in consequence, there are others who, although they, perhaps, have not such strong Sabbatarian principles, have a decided objection to work more than six consecutive days without having a day off. It may be urged that the rush . of business necessitates the employment of men for these long continuous periods. If there is an insufficiency of operators, I understand there are a number qualified to fill vacancies in the Department, and only too anxious to be called upon by the Public Service Commissioner to do so. In order to give effect to the wishes of the Public Service Commissioner, as mentioned by him in his communication to me, I desire that Sunday work shall be paid for at time and a half, and also that telegraph operators shall have a day’s rest after performing six consecutive days’ work. It is true that they get time and a half now, but it is also true that they are called upon to perform additional work because they get that time and a half. Typical cases have been brought under my notice, showing that on 1st July last there were three telegraph operators off and two performing overtime work; on 2nd July there were two officers off and three performing overtime work ; on 4th July there were four officers off and fifteen performing overtime work; and on 5th July there were two officers off and nineteen performing overtime work.
– Where was this?
– At the Central Telegraph Office, Melbourne, so that, although these men had time off because they had worked on a Sunday, their brother officers were called upon to work overtime - and received no remuneration for it - in a measure, in order to make up their time off. So, in their turn, these men will have to do overtime work to make up for other men having time off on other occasions. I do not think it is the desire of the Department to take any undue advantage of regulations. But it is with the object of preventing any possibility of ‘ a regulation being ambiguous that I desire the amendments I suggest. I hope that ‘ in addition to Sunday work being recognised by additional payment, the natural desire of these officers for a day’s rest after six consecutive days’ work, will be acceded to. I may say incidentally on behalf of the telegraphists that they do not desire Sunday work if it can be avoided. They are not anxious for it because it carries with it additional remuneration. The feeling of most telegraphists throughout Australia is that they would like to have Sunday off if it is possible, as well as most folk in other walks of life. Typical cases showing long consecutive periods of duty in the month of June last have been brought under my notice. They include six cases of men who worked ten, eleven, twelve and thirteen consecutive days without a day off. This applies not only to Victoria, but to’ the whole Commonwealth.
– To every State.
– The new regulations as drawn up by the Public Service Commissioner also provide that -
In all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.
If that regulation is allowed to become operative, it will do an injustice to a number of men who are residing on the premises at telegraphic offices in different parts of the Commonwealth. In several places in South Australia, and one or two in Victoria, and I understand in some of the other States as well, officers are called upon to perform’ duties on Sundays at 9 o’clock in the morning, 5 o’clock in the afternoon, and 9.30 at night. Although, perhaps, the time that they put in at the work they are called upon to perform on Sunday may not amount in the aggregate to more than one or two hours, still they have to be at their offices at the hours mentioned, and that means that they have to give up the whole of their Sunday.
– That system obtains at Port Darwin.
– As those officers have to give up at any rate nearly the whole of Sunday, the Department should treat them justly. They are not asking for anything unfair, but if those who perform continuous work on Sunday are to receive additional remuneration, those who do intermittent work should also be treated in the same way, and the time they put in should be aggregated, and paid for accordingly. I feel this matter only needs to be brought under the notice of the Government for them to see that, under the regulations as drafted, injustice might be done to those doing this work. If the regulations are amended in the way I desire, friction will be avoided, and satisfaction given to those most seriously concerned.
– The honorable senator in moving this motion correctly expressed the situation when he said he believed it was not the desire of the Department to take advantage of any regulations to the prejudice of the officers employed in it. The circumstances .to which the honorable senator has referred have received the attention and consideration of the Postmaster-General, and also> of the Public Service Commissioner. The Government desire to bring about the same result as the honorable senator seeks to achieve. So far as that portion of his motion is concerned, which relates to the alteration of paragraphs 2 and 3 of new regulation 66, there is no objection to it on the part of the Government. It may remove a certain amount of ambiguity that at present exists, and bring about with more certainty the result which the honorable senator, in common with members of the Government, desires to attain. But I cannot say that with regard to the other provision contained in his motion; namely, that which proposes to eliminate the following paragraph -
Provided that in all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.
There is no desire on the part of the Government to obtain from its officers services for which it does not pay. The honorable senator fairly put it that many of the officers who are employed on Sundays are employed intermittently, and for brief periods. We recognise that, though the actual time of occupation on a particular Sunday may be very little, yet the hours during which the officer is called upon to discharge his duties may be such that his Sundays are, so to speak, spoiled for him. As the matter stands at present, the Public Service Commissioner can, and does, consider every individual case upon its merits. It will be recognised that it is impossible to make a hard-and-fast rule. In justice to the Department, and to the officers themselves, we cannot have a rule applying with equal force to every individual officer as to the amount of remuneration that he shall receive for what may be called casual or intermittent service on Sundays. It may be that one man has to do a little work that occupies him ten minutes or a quarter of an hour, and that then he is done. Another man may be occupied for even less than a quarter of an hour. In every case, I am assured, the Public Service Commissioner gives special consideration to the circumstances. We want to avoid providing by a hard-and-fast rule that in every instance where an officer in residence is called upon to perform some little service on. Sunday he > shall be entitled to. claim Sunday or overtime pay. One of the difficulties connected with carrying out such a rule would be that, quite apart from the financial aspect of it - and if every such officer were to receive extra payment it would involve a considerable and unjustifiable increase of expenditure - we should have to place ourselves entirely in the hands of the officers, and there would be no effective check upon them to determine what time they were occupied, or how far the performance of duties on Sundays was reasonably justified. If we made it a hardandfast rule that officers were entitled, no matter how intermittent or brief the services performed on Sundays might be, to demand extra pay, we should be completely in the hands of the officers themselves, and it might be that a particular officer might so arrange his work during the week as to postpone doing it until Sunday, and so Le able to claim Sunday pay. We should thus bring about the defeat of the result that we are trying to achieve, namely, the discouragement of Sunday work. I ask honorable senators to consider these facts in connexion with the motion, and I feel sure that they will be prepared- to do what is a. fair thing so far as both the officers and the Department are concerned. It surely would not be reasonable to lay down a hard-and-fast rule that every officer in residence, no matter what work he did on Sundays, should be entitled to Sunday allowance proportionately to the time he was occupied in it, when we should have no effective check, and when, indeed, there might be no necessity for the Sunday work at all. There is no desire to relieve the Department of the legitimate responsibility which it owes to any officer byreason of such circumstances as have been referred to by Senator Findley. But it will be realized that if there were to be a hard-and-fast rule it would be practically placing the amount of remuneration to be paid in such cases in the hands of the officers themselves. I make no reflection or imputation whatever upon the integrity and the honesty of the officers of the Commonwealth Public Service. We are entitled to congratulate ourselves that in the large body of officers we have throughout the Commonwealth there have been both in the experience of the Commonwealth Government and of the States previously so few instances of anything of a dishonest nature. But it really would not be a businesslike position to place the determination of payment for Sunday work in the hands of so many interested individuals without any check upon them.
– But some consideration must be given for time worked on Sundays.
– I can assure the honorable senator that consideration is given. The Public Service Commissioner looks into every instance in which an officer makes a claim for an allowance by reason of the fact that he is employed on Sunday. Every case is considered on its merits. I think that system is better than laying down a definite rule. In half-a-dozen cases there may be four in which the Public Service Commissioner considers that some remuneration should be paid to the officers on account of their engagements on Sundays, but in the other two cases he may consider that the circumstances are not such as call for special treatment. It may be that in those two cases the officer who happens to be residing on Commonwealth premises simply has to attend to one or two minor matters which, though in the interests of the Commonwealth, may be equally in his own interest. Honorable senators should, I think, be satisfied that this system is preferable to a hard-and-fast rule which would either entitle a number of officers who are doing work of mutual advantage to themselves and the Commonwealth, to special remuneration, or which, on the other hand, might disentitle men from receiving remuneration under circumstances such as has been referred to by Senator Findley. So far as the remaining portions of the motion are concerned, I see no objection to them, but I ask the honorable senator not to press the part of his motion regarding the elimination of this particular proviso. I shall be glad now, and at all times, to help any honorable senator in securing that cases such as have been referred to shall be dealt with on their merits ; but I ask the Senate not to take any action that would be productive of such results as would deprive us of that safeguard or check which, on common business principles we should always have in regard to applications for special remuneration on account of overtime. Of course, in the case of officers who do not reside on Commonwealth premises, but have to attend at public offices to do Sunday work, we have a check. We have the means of determining whether the Sunday work is necessary, and what the extent of it is.
But we have no such check in the case of residential officers. The present system, as I ‘have already assured the Senate, conserves the right of every individual who is called upon to do work on Sundays to the calm consideration of his claim upon its merits.
– I desire to ask the Minister a question in reference to the duties of officers employed on Sundays. The paragraph to which I wish to allude says -
Provided that in all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.
Is it not just possible that in many places those duties on Sundays may mean four or five hours’ work? In such a case will payment for the Sunday work be left entirely at the discretion of the Public Service Commissioner? The Minister has stated that if he has a hard-and-fast rule the Department may be left entirely at the mercy of the operators, who may neglect a certain portion of their duties during the week so as to do work on Sundays and claim additional pay. Whilst the Minister made a statement exculpating any officer, and said that he had every trust in the integrity of the employes I should like to know how he can reconcile that statement with the inference which has to be drawn from his previous remark that an employ-6 might take advantage of the motion if passed. Senator Findley has interjected that telegraph messages cannot wait. I fail to see how, if the motion were passed, any employ^ could take an advantage of the Commonwealth, and it could be the means of causing extra expenditure.
– It applies not only to telegraph operators and messengers, but to public officers in all the Departments.
– I have sufficient belief in the integrity of public officers to feel that they would take no undue advantage of the motion. I should like the Minister to explain what is meant by “ brief periods.” In the event of several “brief periods,” amounting to four or five hours on Sunday, what consideration would the employe receive?
– I desire that the seriousness of this proposal shall be understood before the question is put. There may be a number of honorable senators who agree that the first part of the motion should be carried, but object to the part which has been referred to by the Minister. If a division were taken on the motion as a whole, one part of it might be defeated with another part. Therefore, sir, I ask that the motion be divided when it is put.
– I shall put the questions separately.
.- After the assurance which has been given bv the Minister representing the PostmasterGeneral, I have no desire to press my amendment that regulation 66 should be amended by “ striking out all words, paragraph 3, lines 5, 6, 7 and 8.” I feel that I have done my duty in bringing under the notice of the Minister and the Senate matters which affect a large number of men in the public Departments. Having obtained the full assurance of the Minister that they will be attended to, that the Government have no desire to take undue advantage of any elastic regulation, that all cases where men are living on the premises and do intermittent work will be treated on their merits, and that only in exceptional cases - where the periods of service are short - will remuneration not be paid, I am content.
– I said that there may be cases where the work done is of equal advantage to the officer, as resident, and to the Department.
– I should like to hear of any cases of that kind if they have occurred. I do not believe for a moment that any officer would be guilty of an act which would mean that telegraph messages would be kept back.
– I am not suggesting anything like that. There may be cases where the work which an officer is called on to do on Sunday is undoubtedly for. the benefit of the Department, but it may be equally for his own personal comfort or benefit as resident - for instance, something in connexion with the property.
– Such as cleaning the windows ?
– Something like that.
– Although there have been occasions when we have had to put a Minister on the gridiron for not keeping a promise, still I do not think that that action is likely to be taken in connexion with the promise that has been given to me by Senator Keating.
Question - That this Senate, pursuant to section 10 of the Acts Interpretation Act 1904, disallows Regulation 66 of the Commonwealth Public Service Act 1902, as amended by Statutory Rule No. 70, 1907 - resolved in the affirmative.
Question - That this Senate affirms that such Regulation should be amended by striking out in paragraph 2, line 1, all words after the word “ is “ down to and including the word “ days “ in line 2, and inserting in lieu thereof the words “ on duty on seven or more consecutive days “ ; and by striking out, in line 3, the word may “ and substituting the word “ shall “ - resolved in the affirmative.
Question - That this Senate affirms that such Regulation should be amended in paragraph 3, line 1, by striking out all words after the word “ is “ down to and including the word “ days “ in line 2, and inserting in lieu thereof the words “ on duty on not more than six consecutive days “ - resolved in the affirmative.
Question - That this Senate affirms that such regulation should be amended by striking out all words, paragraph 3, lines 5, 6, 7, and 8 - resolved in’ the negative.
Motion (by Senator Best) proposed -
That the Senate do now adjourn.
– - I desire to- ascertain what business the Government propose to take to-morrow ?
– The first business will be the Bills of Exchange Bill, and the next will be the Parliamentary Witnesses Bill. If we get through those measures we shall do very well.
– I understand that the other House is going to adjourn over to-morrow, on account of a visit which has to be paid by some of its members to Lithgow. As the other House adjourned over last Friday, and we sat on that day, I do not see why we should sit to-morrow.
– I am in the hands of the Senate.
– I hope that there is no intention to adjourn the Senate over to-morrow. Last Friday some honorable senators wanted to adjourn at 12 o’clock; on Wednesday they adjourned at abou[ 6 o’clock; and now it is proposed to adjourn over Friday. The Bills of Exchange Bill is a most important measure, which ought to be proceeded with without delay.
– If honorable senators are unanimous, I am quite willing to withdraw the motion.
– The honorable and learned senator can only withdraw the motion with concurrence.
– I object.
Question resolved in the affirmative.
Senate adjourned at 9.57 p.m.
Cite as: Australia, Senate, Debates, 18 July 1907, viewed 22 October 2017, <http://historichansard.net/senate/1907/19070718_senate_3_36/>.