Senate
26 November 1908

3^rd Parliament · 3^rd Session

1. Senate
2. 3^rd Parliament
3. 1908

---

• QUESTION
  • DEFENCE FORCES
• QUESTION
  • PROGRESSIVE LAND TAX
• QUESTION
  • BRITISH RESERVISTS
• QUESTION
  • PAPUA
• QUESTION
  • DRAWING LOTS
• QUESTION
  • MILITARY OFFENCES
• QUESTION
  • ADVERTISING AUSTRALIA
• NAVIGATION BILL
• QUESTION
  • COMMONWEALTH AND STATES
• QUESTION
  • EXPENDITURE ON IMMIGRATION
• PUBLIC SERVICE
  • Compensation for Accidents
• ORDER OF THE DAY DISCHARGED
• PAPERS
• MINISTERIAL STATEMENT
  • Order of Business
• ORDER OF BUSINESS
• MANUFACTURES ENCOURAGEMENT BILL
  • Second Reading
• PHOSPHATIC DEPOSITS BOUNTY
• COMMONWEALTH COMPANIES RESERVE LIABILITIES BILL
  • Second Reading

---

The President took the chair at 2.30 p.m., and read prayers.

page 2245

QUESTION

DEFENCE FORCES

Inefficients : Training

Senator DOBSON:
TASMANIA

– I beg to ask the Minister of Defence the following questions, of which I gave notice some time ago: -

1. Do the Defence authorities admit, as stated in the Argus of 1st October, that “ a proportion of the Militia Forces is inefficient and worthless,” and, if so-
2. What is the number of men who are so regarded ? .
3. In what respect are these men inefficient or worthless or both inefficient and worthless?
4. In giving the causes of inefficiency, &c, will the Minister state how many men are inefficient, either directly or indirectly, through drink?
5. How many members of the Defence Forces have during the past two years been reprimanded or punished for being intemperate, distinguishing, if possible, the intemperance caused from drink obtained in the canteens and outside?

Senator PEARCE:
Minister for Defence · WESTERN AUSTRALIA · ALP

– The replies to the honorable senator’s questions are as follow : -

1. Non-efficients* for year ending 30th June, 1907. -2, 812.
2. Non-efficients for year ending 30th June, 1908.- 3,424.
3. Inefficiency or non-efficiency during the last two years caused directly or indirectly through drink. - 4.
4. Number of men who have during the past two years been reprimanded or punished for being intemperate, distinguishing, if possible, the intemperance caused from drink obtained in the canteens. andoutside. - 76, 13 being through drink obtained from canteens, and 62 through drink obtained outside, whilst in one case recorded at camp, it is not possible to trace the source from which the liquor was procured.

*Note. - In the case of the Citizen Forces, to be classed as non-efficient practically means that the member has not attended the prescribed parades, or has not completed the gunnery or musketry course.

Senator DOBSON:

asked the Minister of Defence, upon notice -

1. To what extent do physical culture and gymnastic exercises form part of the compulsory training of the various branches of the Defence Force ?
2. Is any effort made, and if so, to what extent, to enable members of the Defence Force to make themselves acquainted with the conduct and characteristics of the Japanese soldiers during the late Russo-Japanese war?
3. Will the Minister read the book called Human Bullets, and decide whether it would not be desirable to place copies of such book in the club rooms and quarters of our soldiers?

Senator PEARCE:

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

1. Physical culture and gymnastic exercises do not form part of the compulsory training of the various branches of the Defence Force, but every encouragement is given to members of the Force to undertake this form of training, the necessary plant having been fitted upinthe majority of the drill halls.
2. Yes. The lessons learnt from the lute Russo-Japanese War are continually being brought to notice in the form of lectures given throughout the Commonwealth by officers of the Instructional Staff and others.
3. Yes, if time permits.

page 2246

QUESTION

PROGRESSIVE LAND TAX

Senator MILLEN:
NEW SOUTH WALES

– I desire to ask the Vice-President of the Executive Council, without notice, a question relative to a motion standing in his name on the paper, and reading -

That, in the opinion of the Senate, the best interests of the Commonwealth will be promoted by the imposition of a progressive tax 0.1 the unimproved values of land subjectto an exemption of £5,000 in the caseof each holder.

I desire to know whether, in view of the late period of the session, he will make a special opportunity in Government time for the consideration of the matter.

Senator McGREGOR:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– Every consideration will be given to the question during the recess.

page 2246

QUESTION

BRITISH RESERVISTS

Senator CHATAWAY:
QUEENSLAND

– I desire to ask the Minister of Defence the following question, which could not be answered when it was asked on the 29th October last : -

With reference to statement by Mr. Burns in the House of Commons to the effect that since 1906 some 6,000 reservists have gone to the colonies from Britain, is the Department of Defence aware how many, if any, came to Australia, and where these men are to be found?

Senator PEARCE:
ALP

– The answer to the honorable senator’s question is as follows : -

The only reservists concerning whom any information can be obtained are those who register their addresses with “the State officers whose duty it is’ to pay them their retainer- or pension from the Imperial Government.

The figures furnished are as follow : -

page 2247

QUESTION

PAPUA

Senator McGREGOR:
ALP

– I ask the honorable senator to give notice of the question.

Senator Sir JOSIAH SYMON:

– I give notice of the question for Wednesday next.

page 2247

QUESTION

DRAWING LOTS

page 2247

QUESTION

MILITARY OFFENCES

Senator TURLEY:
QUEENSLAND

– Some time ago a return relating rb military offences was ordered at my instance. When I inquired about its production just before the change of Government, I was told that it was not ready, but would be laid upon the table as soon as it was procurable. I desire to know whether the Minister of Defence knows anything about it?

Senator PEARCE:
ALP

– I am informed that the return is almost ready, and will be tabled very shortly.

page 2247

QUESTION

ADVERTISING AUSTRALIA

Senator STEWART:
QUEENSLAND

– Mr. President, the question of which I gave notice yesterday has been censored in such a fashion as to make it quite useless for my purpose.

Senator Givens:

– Who censored it?

Senator STEWART:

– I do not know. I handed in the question I wished to ask.

The PRESIDENT:

– Does the honorable senator desire not to put the question in its present form?

Senator STEWART:

– I want to know who has been tampering with mv work?

The PRESIDENT:

– Order. ‘ It is well known to the Senate that the President exercises what he considers to be the right and power of putting any questions in proper form before they appear on the noticepaper. One of the rules is that matters of opinion shall not be embodied in questions. In his second question the honorable senator asked whether “ the Minister would cause the advertisement to be recast so as to omit the misrepresentations.” The word “misrepresentations “ was eliminated, and the word “ representations “ substituted. The latter word conveys no expression of opinion as to the character of the advertisement, but the word used by the honorable senator did, and therefore I caused the alteration to be made.

Senator Findley:

– The advertisement does convey misrepresentations.

The PRESIDENT:

– I have not seen the advertisement, but even if I had, anything I said about it would be purely a matter of opinion on my part.

Senator STEWART:

– I beg to ask the Vice-President of the Executive Council the questions standing in my name -

1. Is it the intention of the Government to discontinue the Commonwealth advertisement now appearing in The Standard of Empire ?
2. It not, will it cause the advertisement to be recast so as to omit the representations with reference to land available for settlement in Australia, and prospects of employment for immigrants, which it contains?

Senator MCGREGOR:
ALP

– The contract with The Standard of Empire will expire in February .next. The Government have not yet taken into consideration the question of its continuance, but when they do everything will be carefully scrutinized, and nothing which is not in strict accordance with the conditions existing in Australia will be published.

Senator GIVENS:

– Arising out of the answer given to the question, I should like to ask the Vice-President of the Executive Council whether it is not a fact that although the contract referred to will not expire until a certain date, the Commonwealth Government have the right to say what matter shall appear in the space contracted for; and whether, that being so, they will not consider- the advisableness of changing the matter which now appears, and which, in the opinion of some honorable senators, and of many people in Australia, is in the nature of a misrepresentation.

Senator McGREGOR:

– As soon as the Government have time to consider the question, every attention will be given to it.

Senator FINDLEY:

– Arising out of the answer to the question submitted by Senator Stewart, I wish to ask the Vice-President of the Executive Council whether he will promise that inquiries will be made as to whether this publication, The Standard of Empire, had any existence prior to a contract being signed by the late Government.

The PRESIDENT:

– I remind the honorable senator that his question does not arise out of the reply given by the VicePresident of the Executive Council. It deals with a different matter, and notice of it should be given.

page 2248

NAVIGATION BILL

Senator DOBSON:

asked the Vice-Presi dent of the Executive Council, upon notice -

1. Is it the intention of Ministers to submit any new sections in the Navigation Bill now before the Senate differing from those contained in the British Merchant Shipping Acts?
2. If so, will they limit such sections to ves sels registered in the Commonwealth, or engaged in the coasting trade?
3. If the legislation in question is not to be so limited, will Ministers arrange such legislation by mutual agreement between His Majesty’s Government and the Commonwealth, in accordance with Lord Crewe’s despatch of 3rd September, 1908?.

Senator McGREGOR:
ALP

– In answer to the honorable senator, I may say that the Government have no intention at present to make any additions of the kind referred to in the Bill of which he speaks.

Senator MACFARLANE:
TASMANIA

– Arising out of the answer to the question, may I direct the attention of the Vice-President of the Executive Council to the fact that the Minister of Defence has submitted an amendment of the Bill.

The PRESIDENT:

– That is not a question.

page 2248

QUESTION

COMMONWEALTH AND STATES

Interpretation of Constitution

Senator GIVENS:

asked the VicePresident of the Executive Council, upon notice -

1. What was the total number of cases between the States and the Commonwealth, involving an interpretation of the Constitution, brought before and decided by the High Court?
2. How many of such cases were decided in favour of the States, and how many in favour of the Commonwealth ?
3. What was the total amount of costs in suck cases given against the States and Commonwealth respectively ?
4. Have all such costs been paid?

Senator McGREGOR:
ALP

– In reply to the honorable senator’s question, I may state that I intend, as soon as the opportunity arises, to lay upon the table, by command, a paper which will give him all the information he desires.

page 2248

QUESTION

EXPENDITURE ON IMMIGRATION

Senator ST LEDGER:
QUEENSLAND

asked the VicePresident of the Executive Council, upon notice -

1. What are the total amounts spent by the respective States (a) out of loan funds; (b) out of revenue, on immigration from the year 1875 to 1890, and from 1890 to1900?
2. What is the total amount (a) voted ;(b) spent, on immigration, or for immigration purposes, since the 1st January, 1901 ?

Senator McGREGOR:
ALP

– As soon as the opportunity arises, I shall lay on the table, by command, a memorandum which will give all the information the honorable senator desires.

page 2248

PUBLIC SERVICE

Compensation for Accidents

Motion (by Senator Stewart) agreed to-

That a return be laid upon the table of the Senate, showing -

The number of fatal and other accidents to Commonwealth employes in each Department since Federation.

Whether victims single or married ; if married, number and ages of dependents.

Compensation paid in each case, and to whom.

page 2248

ORDER OF THE DAY DISCHARGED

Senator Colonel NEILD (New South Wales) [2.45]. - It occurs to me that this is a most convenient time to secure, if possible, the withdrawal from the paper of an Order of the Day standing in my name, which has reference to the Prime Minister. As the reference is to a gentlemanwho is not now the Prime Minister, the appearance of this Order of the Day upon the paper is inconvenientand inappropriate, and I therefore move -

That Order of the Day No. 2, Private Business, be read and discharged.

Question resolved in the affirmative.

page 2249

PAPERS

MINISTERS laid upon the table the following papers -

High Court cases decided involving the interpretation of the Constitution, how decided, costs awarded, &c.

Immigration - Memorandum relating to expenditure.

Defence Acts 1903-1904. - Financial and Allowance Regulations for the Military Forces of the Commonwealth - Amendment of Regulation 143 - Statutory Rules 1908, No. 118.

The Clerk laid upon the table

Return to order of the Senate of 25th November, 1908 -

Defence Forces - Number of Men Under Arms, Cost of Administration in 1900-1 and 1907-8.

page 2249

MINISTERIAL STATEMENT

Order of Business

Debate resumed from 25th November (vide page 2154), on motion by Senator

McGregor -

That during the remainder of the present session, unless otherwise ordered, Government business take precedence of all other business on Thursdays, except questions and formal motions.

Senator MILLEN:
New South Wales

– In common with the rest of the Senate, I listened with some interest and with a good deal of care to the remarks made by the Vice-President of the Executive Council yesterday afternoon. I was struck, as I venture to think most other honorable senators must have seen, not so much by what the honorable senator said, as by the great wealth of matter which he so studiously suppressed. One might have expected that as, when recently we met here, the Treasury bench was occupied by other Ministers, and we are now confronted by a fresh Ministerial representation, the Senate would have been favoured with some explanation of the causes which have brought about the change. The VicePresident of the Executive Council appears to think that there is no obligation upon the Ministry to tell the Senate, much less the people, what happened to bring about the Ministerial change.

Senator Givens:

– The only thing that happened was that the last Ministry resigned.

Senator MILLEN:

– I do not claim to possess all parliamentary knowledge, but I say without fear of contradiction that honorable senators can. search the annals of political history as far back as they please, and they will not find another instance where a Ministry has been driven from office, or has left office, without its being possible to point to some specific cause for their action. The present Government may be prepared to treat the Senate in this cavalier fashion, and to ignore the rights of Parliament to information. On that I am not inclined to say anything; but they surely must recognise that the public outside has some right to know what transpires within these walls.

Senator Givens:

– There is a complete record in Hansard of what takes place here.

Senator MILLEN:

– Senator Givens and his friends have been very careful indeed to see that there should beno record of what has transpired.

Senator Givens:

– Does the honorable senator say that there is no record of what has transpired?

Senator MILLEN:

– The only record of what has transpired is written in the minutes, if any are kept, of the caucus meeting.

Senator de Largie:

– What caucus?

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– Does the honor able senator’s party not keep a minute book?

Senator MILLEN:

– No. And I do not think my honorable friends opposite do either. The Ministry may, and evidently does, intend to regard Parliament as unworthy of consideration; but I direct attention to the fact that a Government that professes outside to speak and act for the people ventures to give no word of explanation of what has brought about the Ministerial change to which I have referred. Surely it is not sufficient to say that one Government has resigned and another stepped into its place. What happened I ask, between the time when the Labour Party, with every opportunity of expressing its views, silently and solemnly voted ample confidence in the late Deakin Administration and the period when that Administration retired? So full and complete was that confidence that not one member of the Labour Party thought it necessary to publicly state the ground of its existence. Instead, its members voted solidly in favour of the late Deakin Administration. They did so without offering any explanation whatever, evidently assuming that none was required. Manifestly their confidence in the Deakin Government was so full, so complete, and so long standing, that not a single word was necessary to justify their action in continuing to support it.

Senator Turley:

– Members of Parliament are not compelled to make speeches.

Senator MILLEN:

– Certainly not. But there are times when considerations of decency require that the public should be informed of any political changes which may take place. Quite recently, we know that the party which is now in office voted full confidence in the late Deakin Administration. A fortnight later, they voted want of confidence in that Administration. I want to know what happened in the interim? Did the late Government put forward any policy which formed a reasonable ground for attack? Did they, by any act of administration invite censure? Were they guilty of any act of omission or commission which justified the withdrawal of the Labour Party’s support? If so,’ the public have a right to know it. If not, in the absence of any big principle dividing those who had previously been allies, I can only assume that there was one reason why this change has taken place, and, if my assumption be correct, it eloquently explains why my honorable friends opposite are silent regarding it. I can only assume that an arrangement has been arrived at under which, if I may quote the picturesque language of Mr. Deakin, they are to share the time in the “ tart-shop.”

Senator Turley:

– No one objects to the honorable senator assuming anything.

Senator MILLEN:

– But I strongly object to the secret arrangement made under the veil of the caucus - the arrangement by which the late Government were driven from power and the present Government installed in their, places. Nothing more nearly approaching a despotism has ever been witnessed than that which is being attempted to-day. Our parliamentary institutions belong to the people, and the latter have a right to know everything that transpires within these walls. They are entitled to know the underlying reasons why Ministries are made and unmade. But, upon this occasion, an entirely new system has been introduced. By means of a secret arrangement a change of Ministry has been effected-

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– And the honorable senator’s claim overlooked.

Senator MILLEN:

– It is not a question of personal claims at all. But if any individual has a claim and a fresh Ministry is put into power, the public has a right to know the reasons underlying the change. All this banter on the part of my honorable friends cannot conceal the fact that no spokesman on behalf of the LabourParty, and no member of the present Government has ventured to tell the publicwhat happened to cause the sudden withdrawal of . the confidence in the DeakinAdministration, which was so fully expressed only a fortnight before that Administration left office.

Senator Givens:

– Upon what occasion! was that confidence so fully expressed?

Senator MILLEN:

– It was so expressed when the Labour Party, in a solid body, crossed the chamber to defeat the motionof censure moved in the other Chamber by the leader of the direct Opposition. There is only one way in which we can interpret parliamentary procedure. In eachHouse there are only two lobbies when thedivision bell rings. The Labour Party, I repeat, voted solidly in support of thelate Government, and thus declared their full confidence in it. But within theshort space of a fortnight something happened. I wish to know what it was and where it happened? We cannot assumethat big principles can be tampered with, without the ordinary elector being told? something of it. What happened? My honorable friends opposite by their interjections clearly show that they are not prepared to give a straightforward answer tothat question. I have endeavoured to supply one. Apparently an arrangement wasmade by which they were to share thedelicate morsels in what Mr. Deakin hasso picturesquely described as the “ tartshop.”

Senator Turley:

– That ought to satisfy the honorable senator.

Senator MILLEN:

– It would if I wereprepared to see all our parliamentary institutions made the sport and toy of a. little party ambition.’

Senator Givens:

– The honorable senator’s party never did anything like that?

Senator MILLEN:

– The party to which: I belong has never so far forgotten itself as to express its confidence in a Government upon one day, and its want of confidencein it upon the next.

Senator Lynch:

– Men change their opinions.

Senator MILLEN:

– They do >when thereis an inducement to do so. I come now to what, for want of a better term, I must call the “ programme “ of the Government. I confess that I was rather struck when the Vice-President of the Executive ‘Council stated yesterday that “ since last we met the Government have- been doing all that they could to get the business in order.” That statement conveyed, to my mind, a picture of a body of earnest men studiously at work, consuming the midnight oil. But what is the result of their labours? With the assistance of the caucus, it appears that they have decided to leave the Navigation Bill upon the business-paper, and to proceed with a measure dealing with pills and nostrums. Of course, I know it may be said that the Government have had no time in which to prepare a programme. Ordinarily that would be a sound excuse

Senator Givens:

– Does the honorable senator overlook the Seat of Government Bill?

Senator MILLEN:

– That measure did not require any preparation. Ordinarily, I admit that Governments are entitled to a reasonable period within which to prepare their programmes. Any body of men who are called upon to administer the affairs of the Commonwealth should be afforded a reasonable opportunity to determine what business they will bring forward and the order in which it should be brought forward. The present Government are as much entitled to full consideration under that heading as are any other Government. But it appears to me that they occupy ai very peculiar position. They are the representatives of a party which has always claimed to have a cut-and-dried programme. Consequently, they ought not to have required five minutes to determine what was their programme. That programme has been prepared as the result of deliberations of conference after conference.

Senator Givens:

– And that programme remains.

Senator MILLEN:

– My honorable friend is perfectly right. The programme remains. His interjection reminds me of the American definition of a platform which was likened to the platform of a tramway car - something to get in upon, though one must not stand upon it afterwards.

Senator Givens:

– Our programme still remains.

Senator MILLEN:

– And the party of which the honorable senator is a member shows what it thinks of that programme by practically leaving it outside the walls of this chamber. Its members have not the courage to affirm their programme and to declare that as time and opportunity offer it will be proceeded with. But, instead, the Vice-President of the Executive Council intimated that the legislation which will be brought forward next session is a matter of speculation. What, then, becomes of this vaunted programme? If the legislation to be brought forward next session is merely a matter of speculation are the Labour Party prepared to leave their programme alone, if circumstances then do not render it safe to proceed with it? The honorable senator used another curious sentence. He said that next session the Government hoped honestly to redeem their pledges to the electors. Well, sir, as his was the declaration of a Government which had its programme already prepared, I should have expected from him as a Minister representing a party which has arrogated to itself a great deal of virtue in this regard, which has claimed to be the one party that scorns expediency, and which has a definite programme that it is at all times prepared to advocate, a statement somewhat to this effect - “ This is the programme of the Government ; the present session is too short to proceed with it all, but we intend next session to give effect to it as far as we can.” Bui the VicePresident of the Executive Council did not say that. Instead, he said, “ The business of next session is a matter of speculation.” So that I can only conclude that .the Government does not adhere to its programme, and does not intend to stick to its planks, but that it will continue to do as it is doing now, simply draw heavy drafts on the well of. expediency. What is to become of the various matters to which the members of the party supporting the present Government are all more or less pledged? We have first of all the matter to which I referred earlier in the present sitting, namely, the motion standing on the paper in the name of the Vice-President of the Executive Council. We also have the motion submitted in another place by the present Prime Minister, Mr. Fisher, affirming that the best interests of the Commonwealth would be furthered by the imposition of a progressive land tax. Are the Government now prepared to sacrifice the best interests of the Commonwealth by leaving that a matter of speculation for next session? All that I ask is that the Government shall tell us whether they are prepared to carry out that policy, or whether they do not intend to do so? If they think that the time is inopportune, they should let us know that; and I must admit that such an answer is what we might expect from a Government which is openly living on expediency. I come to another motion which has been submitted by another Minister, Mr. Mahon. He has moved that the cost of national defence should be defrayed from direct taxation on the wealth of the community. Honorable senators opposite applaud that sentiment now. But, in addition to their plaudits, I wish to know whether the policy contained in Mr. Mahon’s motion forms part of the policy of this Government, and whether they intend to take steps to give effect to it. But, instead of having a declaration to that effect, they only tell us that it is a matter of speculation as to what will be proposed next session ! Where is the honesty of purpose ? Where is the great strength of character which is supposed to mark this party, which went before the electors protesting that it had a programme by which it was prepared to stand or fall?

Senator Guthrie:

– Give us time.

Senator MILLEN:

– But the Government has not now pledged itself to any one of these things.

Senator de Largie:

– We will give the honorable senator an opportunity next session of .voting upon them.

Senator MILLEN:

– I venture to say that the present Government will never give us an opportunity until they know that their hour has struck. I come to another motion, submitted in the Senate by Senator Pearce -

That in order that the Parliament may be able to effectively protect the people from the depredations of trusts, combines, and monopolies, it is essential that power should be conferred on the Parliament so that it may, where it thinks necessary and desirable, own and control such monopolies in the interests of the people.

And he went on, in another motion, to affirm the desirableness of calling upon the Government to introduce the necessary legislation next session for giving effect to the declaration which I have quoted. Is Senator Pearce, now that he is a member of this Government, prepared to proceed with that proposition?

Senator McGregor:

– I expect so.

Senator Findley:

– If he does not, some other member supporting the Government will.

Senator MILLEN:

– It would have been nothing but common honesty on the part of the Government if they intended to bring these proposals forward next session to say to Parliament and the country, “ We intend to proceed honestly with the programme upon which we were elected, and to which we are pledged, although we recognise that there is not sufficient time this session.” But, instead of that, all that Senator McGregor had to say was that the work of the future was a matter of speculation ! I turn to another matter - the motion brought forward by Mr. Thomas in the House of Representatives in favour of the nationalization of shipping. As honorable senators are aware, a Royal Commission has dealt with that subject. I find that the report in favour of the nationalization of shipping was signed by Mr. Thomas, Mr. Mahon, Mr. McDonald, and Mr. Spence, two of whom are Ministers, whilst the other two may be called representative members of the Labour Party. In that report they affirmed that “ theprestige and welfare of the Commonwealth demand that we should no longer remain dependent upon private individuals for the carriage of mails.” I draw attention to the words “ No longer remain dependent upon private individuals.” That report was signed in 1906. Is it the intention of this Government to jettison that proposition also?

Senator Turley:

– Does the honorable senator want to see a Commonwealth line of shipping established?’

Senator MILLEN:

– The honorablesenator knows perfectly well that I donot, but I am trying to recall the Government to the platform to which they are pledged. I want to know whether they intend to carry out the programme which they submitted to the country.

Senator Turley:

– Does the honorable senator want us to break a contract entered into by the Commonwealth Government ?

Senator MILLEN:

– No one has askedfor that. I am simply inquiring whether the members of the Labour Party and the Labour Government intend to stick to whatthey have pledged themselves to.

Senator Turley:

– A contract has been’ entered into for ten years.

Senator MILLEN:

– Do the Government intend to give effect to the principle which I have quoted?

Senator Lynch:

– Does the honorablesenator want’ to see a fleet of steamers. established by the Commonwealth in addition to the vessels which will carry our mails under the contract?

Senator MILLEN:

– Of course I do not; but if honorable .senators opposite are of opinion that this principle should no longer be affirmed they should invite Mr. Hall, a member of their own party, to explain why he has tabled a motion dealing with the same subject in another place. The fact remains that the members of this Government are pledged to the nationalization of shipping, and when I first mentioned the subject my honorable and frank friend Senator W. Russell applauded the sentiment.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– I do now.

Senator MILLEN:

– My honorable friend is absolutely candid. He says, “ I still believe in it.”

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– So did the honorable senator at one time.

Senator MILLEN:

– I have been guilty of many follies, but of none so great as that. I also call attention to the fact that Senator Henderson as late as 1907 advocated the establishment of a Commonwealth fleet of mail steamers.

Senator Henderson:

– And will do so again to-morrow.

Senator MILLEN:

– So that I may take it that the honorable senator and those who support him will advocate a proposition while they are in opposition, but will take no steps to bring it into practical effect when their party is in power.

Senator Henderson:

– Not a bit of it.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– Have we the means to pay for a Commonwealth fleet?

Senator MILLEN:

– There was nothing said in the Royal Commission’s report or in Senator Henderson’s motion as to having the means to pay for the vessels. But there was an absolute declaration of principle in favour of a certain, course of action. The Government has also led us to believe that, they and the Labour Party are in favour, of the principle. But if they are in favour of it and honestly intend to carry it out, they should have told us so, and should have stated that they intend to stand to that platform and proposed to give effect to it as soon as Parliament reassembled, although to do so might jeopardize their Ministerial seats. But instead of that we are told that the business of next session is a matter of speculation ! Senator de Largie has also figured here as the advocate of certain propositions.

The nationalization of the iron’ industry is one that is associated with his name. Does he support that proposition now?

Senator de Largie:

– I do.

Senator MILLEN:

– Senator Givens also brought forward a proposal dealing with sugar. Does he propose, now that his party is in power-

Senator Givens:

– I was in favour of the nationalization of the sugar industry then and am in favour of it now. I only wish that I could compel the carrying out by Parliament of the expressed wish of this. Senate in the matter. If I could 1 would do so.

Senator MILLEN:

– It is not a matter of compelling, but of what the present Government is prepared to do.’

Senator Turley:

– Give them a chance.-

Senator MILLEN:

– I am prepared to give the Government every chance to do everything. I am prepared to give them every inch of rope they want. There will be no stint on my part. Even if it involves creating a dearth in the Manilla market I would give them all the rope they want. It has been said by interjection and otherwise that there is no time now to do all the work.

Senator Givens:

– Is not the honorable senator in favour of the nationalization of the sugar industry ?

Senator MILLEN:

– I am in favour of my honorable friend keeping quiet for a few minutes.

Senator Givens:

– The honorable senator allowed the motion to go without a vote being cast against it.

Senator MILLEN:

– I am quite prepared to admit that there is no time now to do all this work. All that I am complaining of is that the Government has not, in any sense or way, bound itself to either its platform pledges or the various motions which its members profess to be in favour of.

Senator Givens:

– Did the Opposition party carry out a free-trade policy when it got into power?

Senator MILLEN:

– I am not dealing with my party just now. All I can say is that it has never given such an exhibition of scuttling from principles and pledges as the Labour Party is giving on this occasion.

Senator Turley:

– It never had- any principles to scuttle from.

Senator MILLEN:

– I never knew before that the members of the Labour Party were such expert sprinters. It is unfortunate for them that they are in that position.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– Did not the honorable senator’s party meet Parliament without a programme?

Senator MILLEN:

– No. We met Parliament with a programme which my honorable friends opposite were frightened to face. Our simple programme was, “ Appeal to our masters, the electors.” I remember distinctly the look of horror, terror, and fear which overspread the countenances of my honorable friends. I also remember the way in which they intrigued to prevent that awful fate from overtaking them. I admit that now there is not time in which to do all this work, but why should we have arrived at the present stage before these questions were raised? There was ample time at the1 beginning of the session, and why was not the work undertaken then ? If any vital principles were at stake, why did not my honorable friends in the Labour Party make a move then? They have waited until the present moment, when they know that it i« not possible to do any work. It was not until the haven of recess was in sight that they evinced want of confidence in the late Ministry, lt reminds me very much of a phrase that I not infrequently see in the sporting columns of newspapers. It frequently happens that a horse has held a good position all round, but when it comes into the straight, the scribe proceeds to describe the event in this way : “ 1 he jockey of “ - such a horse - “ timed his rush splendidly.” My honorable friends in the Labour Party timed their rush splendidly. Well within sight of recess - the only thing which could insure them anything like continuity on the Treasury benches - they timed their rush, and have landed, as a consequence, the Treasury stakes during the recess. I do not think that even in their wildest dreams they claim that they occupy those benches by virtue of a majority in either House. That, of course, is not their fault, it is their misfortune.

Senator Guthrie:

– We have more supporters than the last Government had.

Senator MILLEN:

– The fact remains that the present Government cannot claim to have a majority at their back. We may well ask how they hope to carry on? They hope to carry on by reason of the precarious and slender support of those whose political throats they will seek to cut at the next election. They know, further, that even that slender support can only be retained so long as they fail to attempt to give effect to their electioneering pledges. The moment that they attempt to carry out their platform, the support on which they rely to-day must, and will, be withdrawn.

Senator de Largie:

– We are not asking the honorable senator’s party for support.

Senator MILLEN:

– No; my honorable friend need not waste time in doing that. He knows that those who are now giving the Labour Party a slender support will be members of the direct Opposition at the next election.

Senator de Largie:

– We shall all be in the melting-pot then.

Senator MILLEN:

– In view of that fact, it may be asked : Why should Ministers be allowed to remain in office? I admit at once that but for certain circumstances there might be every justification for challenging their right to occupy the Treasury benches. Not only can they not claim to hold them by reason .of their numerical strength, but they cannot even claim to be there by reason of any merits of their own. The fact may be as well stated, as it is well known, that their occupancy of the Treasury benches rests, not on their merits or principles, but on the unfortunate disunion which exists in the ranks of those who are opposed to them.

Senator de Largie:

– The honorable senator might say that of any Government.

Senator MILLEN:

– No. I have seen, and I hope to see again, the time when Parliament will contain two distinct parties with different platforms.

Senator de Largie:

– That state of affairs has gone for ever.

Senator MILLEN:

– My honorable friends opposite may try to perpetuate the division which they created, but I assure them that, before next session is very old, they will see that Parliament has reverted to its original type - a Parliament containing two parties. Referring to those in Opposition to the Labour Party, I wish to draw a broad distinction. Honorable senators on this side have no quarrel with labour, and are certainly not in opposition to anything which makes for the progress - social, economical, and political - of the whole community. All that we are in opposition to are those social extremists who mistake reckless experiment for steady progress, who build castles in the air, and imagine that they are solid edifices, and who) being merely iconoclasts, are pleased to regard themselves as social reformers.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– When I entered the chamber about an hour ago, I did not think that it would fall to my lot to speak this afternoon ; but, after listening to the very extraordinary remarks of the last speaker, and noting the attitude which he assumed, of “ who will tread on the. tail of my coat,” I feel impelled to address the Senate.

Senator St Ledger:

– The honorable senator will tread on it.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– I stand by the platform of the Labour Party, and any Government in power which does not carry out that platform cannot depend upon the support of William Russell. Senator Millen suggested that we are turn-coats, and have not the courage of our convictions.

Senator Findley:

– The honorable senator is taking him too seriously.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– I am not taking Senator Millen so seriously as my honorable friend may think. I take it that the object he had in view in delivering that speech was to draw us, because he displayed what I have never perceived in him before - a great anxiety to fight. It strikes me that he took a prominent position in a caucus which was held here today, and that a certain arrangement or honorable understanding is to be come to, that the Labour Party is to some extent to be annoyed or humbugged.

Senator Mulcahy:

– What a pity that it should be annoyed 1

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– The honorable senator knows that, in view of the policy of not only the present, but the late, Government to close this session before Christmas, it is quite impossible to press forward what he would regard as new-fangled notions.

Senator Mulcahy:

– It is not impossible to tell us what the Labour Party are going to do though.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– The honorable senator knows that the selection of a Federal Capital site is not a party matter. Would he like the Government to say at the present time that they are going in for a progressive land tax, and for other schemes which belong to the sweet by-and-by ? Having been in office only a short time they have not yet had an opportunity to arrange their policy. But, as a member of the Labour Party, I intend to stand by Ministers only so long as they adhere to its platform. Whatever my honorable friend opposite may say, we shall need money for the purposes of the Federal Capital, defence, and old-age pensions. Does he think that it is a fair thing to tax the food of our children in order to find powder and shot to protect the wealthy man’s property, and not tax the wealthy in some shape or form? If I had an opportunity, seeing that the leader of the Senate has dropped the question of a progressive land tax-

Senator Mulcahy:

– Has he dropped it?

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

- His notice of motion has been postponed until the 24th of December. Whether it will be reached or not this session I do not know, but if an opportunity be afforded, either now or in the future, I should like to have the honour of taking up the question and putting it in what I believe is the proper light. It is of no use to disguise the fact that we must impose direct taxation in some, form or other.

Senator Stewart:

– Hear, hear ! Let it be a land tax.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– We are committed to a progressive land tax. For twenty years I have been in favour of it, and have advocated it publicly. It is of no use for the honorable senator to get up and let off steam in the way he has done this afternoon. I never heard him to less advantage. I think that some honour must have been conferred upon him, that some vote of confidence must have been passed in him, or a duty laid upon him which he was expected to perform in conjunction with some leaders of his party in another place. I have often heard the honorable senator say that he would like to see the Labour Party on the Treasury bench, and that that was where they ought to be. He has said, ‘ ‘ You are practically masters of the situation, and you take no responsibility. You should occupy the Treasury bench.” But on the very first opportunity the honorable senator desires to kick the Labour Party off the Treasury bench. I hope that the honorable senator and those who sit in caucus with him will be a little more careful about throwing stones. “Those who live in glass houses should not throw stones ‘ ‘ ; and those who meet in caucus, as the honorable senator and his party do, should not condemn others who do the same. Senator Millen accused honorable senators on this side of insincerity. That stings.

Senator Gray:

– Then the honorable senator puts the cap. on.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– No ; I am not a leader of the Labour Party; but there is no insincerity about the members of the party, andI resent such statements as those which fell from Senator Millen. I think that perhaps the honorable senator had some object in view. He is very diplomatic. He desires, I think, to cause a little split between the members of the late Ministerial party in the Senate and the membersof the present Ministerial party. But,

The best laid schemes of mice and men

Gang aft agley.

I know the numbers of the late Minis terial party in the Senate, and I say, making the best of them, that they were grand men, led by Senator Sir Robert Best. This is the first time I have had an opportunity in this chamber to recognise the distinction recently conferred on the honorable senator. They were great and good men; but they were only three in number, except upon military matters, and then they numbered about three and a half. The members of the Labour Party in the Senate number fifteen. I wish honorable senators to remember that I am speaking as an independent labour member. I do not profess to speak for the present Ministry ; but I say that the party that sat behind the late Government for so many years, having the power if they had had the will, to bring about a change long ago, are surely, in the circumstances, entitled to some consideration ; and it should not be suggested, as Senator Millen has done, that they were after the loaves and fishes.

Senator Mulcahy:

-The honorable senator is giving the show away.

SenatorW. RUSSELL.- I am not giving the show away ; but Senator Millen seems to think that the party has been after the loaves and fishes. I believe that if the honorable senator and his party had occupied the same position, and had the numbers which the Labour Party has in both Houses, they would long ago have made a big attempt to remove the late Government. Referring to the action of parties, I think that one of the honorable senator’s grievances is this : The Right Honorable G. H. Reid, whorepresents East Sydney in another place, is a stout man. I admire the right honorable gentleman very much; but, being a stout man. he is slow in getting up, and he did not catch the Speaker’s eye. I have heard only to-day that there is great soreness amongst the members of the Millen, Reid, and Cook party against the Speaker because he called on the wrong man. This may to some extent account for Senator Millen’ s attitude. I wish to find some excuse for the honorable senator’s warmth and for the. little bit of abuse which he gave us this afternoon. I find it in the honorable senator’s disappointment because the Right Honorable G. H. Reid did not catch the Speaker’s eye instead of Mr. Fisher. If the facts had been otherwise possibly Senator Millen would to-day have been sitting on this side of the chamber. Is the honorable senator jealous? I am afraid that he is, judging by the manner in which he abused the Labour Party although he has so repeatedly insisted that they should occupy the Treasury bench. I object to the Senate being made a party House at all. We ought not to enter into party politics here.

Senator St Ledger:

– I thought the honorable senator said just now that he was a party man.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– I belong to the Labour Party, but with others I represent South Australia, and State rights. It is not our place to fightfor positions for ourselves, but for the good of the States we represent. I think that in the past I have at least shown myself able and willing to rise above party interests. I hope that honorable senators generally will do the same. I trust that Senator Millen, whom I esteem very much, will possess his soul in patience, and will just bide a wee. The honorable senator no doubt has great ability, and he has the ambition to occupy a seat on the Treasury bench.

Senator Needham:

– The honorable senator has the ability to wait.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– He will need to wait for some time yet. Although his object may be to get on to the Treasury bench, I hope he will not again so far forget himself as to make such an unreasonable attack as he has made this afternoon on the Labour Government for not taking a certain course when he is aware that they had no opportunity to do so. If the honorable senator would consult some of His colleagues from New South Wales, Ithink they would caution him to bide a wee. His time is coming ; but if he indulges the fighting mood in which he was this . afternoon, he will find that it will not help him when he wears the laurels on this side of the chamber.

Senator WALKER:
New South Wales

– 1 wish to ask the Vice-President of the Executive Council whether he has any objection to an amendment of the motion, adding the words “ from 3rd December next,” so as to permit of private members’ lousiness being taken this evening?

Senator McGregor:

– That might be done even though the motion is carried. The motion is only intended to give precedence to Government business, and I shall not object to private members’ business being taken to-night.

Senator WALKER:

– I am glad to hear the honorable senator say so. Some honorable senators who have preceded me have asked where the money is to come from for the payment of old-age pensions, and I wish to remind them that the States Governments of New South Wales and Victoria are willing that the amount required to pay old-age pensions in those States shall be deducted from their share of the threefourths of the Customs and Excise revenue. The New South Wales Government pay something like ^500,000 a year as oldage pensions, and the Victorian Government something like .£275,000. So that £775,000 may1 be made available from a source which has not been taken into account by some honorable senators for the payment of “old-age pensions after the 1st July in next year. I do not wish to take up the time of the Senate unnecessarily, and I shall not continue further, especially since the Vice-President of the Executive Council has been kind enough to say that he sees no objection to the consideration of private members’ business this evening.

Senator CLEMONS:
Tasmania

– I propose to try to soothe Senator W. Russell’s excited feelings, but I must begin by saying that I also have a somewhat serious grievance against the Labour Party, and it is that the step which they have taken now is one which they should have taken long ago.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– Senator Millen has said that also.

Senator CLEMONS:

– That is not quite the criticism which Senator Millen offered this afternoon. My principal grievance against the Labour Party is that they did only a few days ago what, in my opinion, it would have been infinitely better for the Commonwealth if they had done a year ago at least. Senator Millen, using a racing analogy, complimented the Labour Party upon having made their rush at the right time. I differ from the honorable senator entirely as to that. I think that, having regard to their own interests, they made their rush at the wrong time. The gravest difficulty confronting us at present is that of financing the Commonwealth, and the Labour Party; at their own risk, have assumed office at a time which, iri view of the financial position, is, I think, the most critical in the history of the Commonwealth. Speaking quite dispassionately, I am inclined to say that the Labour Government have assumed office at a most unfortunate time from their point of view. Trying to look ahead, I believe that they have undertaken serious responsibilities, and will be confronted with one or two very serious dilemmas. If they remain in office, they will have the responsibility, which is rapidly Becoming a very serious one, of financing the Commonwealth. I may be told that they are prepared to do that. They may assist the Commonwealth finances in one or two directions. They may bring about some improvements in the position - and I may say that I should be delighted to see 1hem do so, and am prepared to give them my most hearty cooperation - by the adoption of a system of greater economy. Whether they propose to effect financial reform by methods of saving, f do not know. I may say that I do not expect them to tell us during this session. I have no objection to their holding office for the remainder of the present session, nor shall I clamour at the present time to know the details of the policy they propose to bring into effect next year. If, after taking these matters into their careful^ consideration, they will next session make a serious attempt to .effect economies, I shall give them my hearty cooperation.

Senator Stewart:

– In what direction.

Senator CLEMONS:

– That, Senator Stewart will recognise, is not my business to indicate. I shall wait to hear what is their policy before pronouncing judgment upon it. No doubt, I shall criticise it, but I have already intimated that, if I approve of it, they can rely upon my hearty and continuous support in any effort which they may make to improve the condition of the Commonwealth finances. Of course, there is another way in which accounts may be squared, viz., by the imposition of fresh taxation. That alternative undoubtedly constitutes one of the dilemmas in which the Labour Party finds itself. I do not suppose that its members will quarrel with me when J say that if they attempt to remedy our financial position by bringing forward a definite proposal to impose a Federal land tax, they will find themselves in a very embarrassing situation.

Senator Needham:

– The sooner it is met, the better.

Senator CLEMONS:

– That is not for me to say. If the Government bring forward any such proposal they will, I think, seriously risk their continuance in office. On the other hand, if they do not effect savings, they will probably be in office when the climax in our Federal finances is reached. They must either attempt to give practical effect to some of the proposals which they have placed upon the businesspaper, or they must leave them severely alone. If they adopt the former course, they will probably be displaced from office, whereas if they fail to do so, they will be accused of unwillingness to put their opinions to the test when they are in a position to do so.

Senator Henderson:

– That is fair criticism.

Senator CLEMONS:

– ^Looking at the position dispassionately, I think that the Labour Party are deserving of sympathy rather than of congratulation. However, I am prepared to suspend my judgment- upon the Government policy at this juncture. I do not blame them for not declaring towards the close of the present session what they intend to do next session.

Senator Gray:

– They might give us an indication of their intentions.

Senator CLEMONS:

– To my mind, there is no particular reason why the Ministry should at this stage declare their intentions .for next session. I have embraced the present opportunity to point out, in a way that I hope will not be considered offensive, some of the dilemmas in which the members of the Labour Party must find themselves. I do not know that I need to proceed further with this kind of criticism’, and I have no wish to address myself to the question under consideration at any greater length, because it is the desire of every honorable senator that this session should terminate as early as possible. The Labour Party are asking nothing out of the way in preferring a request of that sort. My own view of the present situation is that the public will profit by the change which has been effected. Either the Labour

Party will put their principles to the test in this Parliament, or there will practically be a cessation from legislation - a condition* which, in my opinion, is often attended; with beneficial results. Either the public will get no further legislation, or they will be afforded an opportunity of seeing theLabour Party endeavour to give effect to its platform, from the planks of which somany of us strongly differ.

Senator STEWART:
Queensland

– This afternoon we had an exhibition of eager anxiety on the part of honorable senators in the Opposition corner to ascertain the intentions of the present Government. That Government and’ the Labour Party have been faced with all their proposals of the past, and havebeen asked why they do not at once put them into operation.

Senator Turley:

– Senator Millen’sfirst trouble was as to why the late Government left office.

Senator STEWART:

– Honorable senators who sit upon my right are mostly menwho have had a large experience in theeveryday affairs of life, and they know perfectly well that while it is necessary todraw plans and specifications of every human undertaking - if that undertaking is to be successful - time, labour, and’ patience are necessary to bring any project to completion. I do not think it was at all in good taste for honorablesenators - -more especially for Senator Millen - to exhibit such an indecent desirethat the Labour Party should at once proceed with the measures which are nearest to its heart. A certain amount of workmust be done this session. The sessionis approaching its close, and not a singlemember ot. this Chamber is, I believe, willing to return here immediately after Christmas. If Senator Millen had signified’ that the members of his party were prepared to come back here early in January for the purpose of tackling legislation, I am sure that the Government would have been very glad to accommodate them. But we know perfectly well that no honorable senator wishes toreturn here early next year if it can beavoided. Not only have members of Parliament work to perform in our legislativehalls, but they have to keep in touch with their constituents. That is as much a portion of their duty as is legislation, and’ some portion of their time at least must be devoted to it. Unfortunately, owingto the very great pressure of business, we have not had an opportunity, during the past year or two, of meeting our constituents in the way that we desired, and seeing that a general election is looming ahead the majority of honorable senators are naturally anxious to be brought face to face with the people to whom they are responsible. For that reason there is not any general desire to return here early next year. I would ask Senator Fraser, who has had a very large experience in the construction of railways and other great works, whether it is possible to do much in any direction in three weeks?

Senator Fraser:

– I quite agree with the honorable senator.

Senator STEWART:

– Then why all this querulousness ?

Senator Mulcahy:

– Apparently we ought not to say anything.

Senator STEWART:

– I do not say that ; but I think that honorable senators should recognise the position. Not one member of this Chamber will assertthat much can be done between now and Christmas, and yet a number of honorable senators have asked why this and that has not been done. For instance, Senator Millen asked why the Government did not proceed with the land tax proposal.

Senator Mulcahy:

– He did not do anything of the kind. He merely desired to know whether the Government intended to proceed with it.

Senator STEWART:

– A question of that kind was wholly superfluous. Everybody who knows anything about the Labour Party knows that it never turns its back upon its platform; that it always keeps its face to the foe; and that whenever the opportunity presents itself it is prepared to push its programmeto an issue. Senator Millen’s question was, therefore, entirely uncalled for. Then something has been said in reference to the sugar industry. It is perfectly true that some time ago the Senate carried a motion in favour of nationalizing that industry. But the legal advisers of the late Government declared that Parliament has no power under the Constitution to nationalize any industry. At the next general election I believe that power to nationalize industries will be, granted to us. Will honorable senators sitting upon my right assist us to get that power?

Senator St Ledger:

– We shall oppose the granting of it.

Senator STEWART:

– No doubt. Whilst these motions have been placed upon the business-paper for the purpose of educating the public mind, and for the purpose, if necessary, of educating honorable senators, everybody knows that until the Constitution has been amended, even if a majority of this Parliament be in favour of them, nothing can be done. Another honorable senator has levelled a taunt at the Labour Party in connexion with the shipping industry. But the remark which 1 have just made is equally applicable in that case. Nothing can be done in the direction that we desire until the Constitution has been amended, and I do not think any honorable senator contemplates putting the people to the expense of taking a special referendum upon these matters.

Senator Chataway:

– We have been wondering why the honorable senator’s party tried to hurry the new protection proposals from the Deakin Government.

Senator STEWART:

– We did not try to hurry on the new protection proposals, although we thought that the proposals of the Deakin Government in that respect were not satisfactory. The Deakin Government were of opinion that nothing definite could be done until the Constitution was altered, and any proposals that have been made hitherto have only been of a tentative character, paving the way for an alteration of the Constitution.

Senator Clemons:

– The Government might have collected the Excise.

Senator STEWART:

– I remind the honorable senator that, although the Labour Party supported the Deakin Government, it could not force them to do everything it required.

Senator Clemons:

– We think the honorable senator’s party could have forced them.

Senator Gray:

– The Labour Party could have done then what it has done since.

SenatorSTEWART. - We were in closer contactwith the Deakin Government than were the Opposition, and knew just how far we could force the hands of the Government. Probably we came to the conclusion for very good reasons that an attempt to force their hands would be premature.

Senator Gray:

– Not opportune.

Senator STEWART:

– Not opportune, of course. Life, inside and outside of Parliament, is made up almost entirely of seizing opportunities.

Senator Turley:

– If the Excise had been collected, we should have been in the same position, because the law was declared unconstitutional.

Senator Clemons:

– We should have known of the unconstitutionality much earlier.

Senator STEWART:

– In any case, I am sure that whether the present Government declare their policy now, or defer the declaration until the meeting of Parliamnt next session, there will be no running away from the platform. The Labour Party has never turned its back, so far as I know, upon any portion of its declared policy, and it does not intend to begin to do so now.

Senator Dobson:

– The party has hedged a little upon the nationalization of industries.

Senator STEWART:

– We have hedged on nothing. We have simply accepted the declaration of the Crown Law officials that we can nationalize nothing without an alteration of the Constitution. The people of Australia will be asked at the next election, I hope, to give Parliament power in that direction. That is to say, if the Labour Government is in power, or if any party supported by us occupies office, that authority from the people will be solicited. What more could even the Labour Party do than that? The Labour Party has, I maintain, been very successful in pressing its policy upon the Federal Parliament. It has achieved a number of reforms of an exceedingly democratic character. The curious thing is that almost every one of those reforms has been bitterly opposed by those honorable senators who art now apparently so eager for further reforms. How they can claim to be consistent is more than I can understand. Their conduct resembles that of a nagging woman, who sees a fault in everything,and is not slow to take advantage of it.

Senator Fraser:

– The honorable senator seems to have had some experience.

Senator STEWART:

– A man cannot live for half a century without having some experience. I suppose that Senator Fraser is not without experience in that respect.

Senator Fraser:

– Iam very happy.

Senator STEWART:

– I can assure the honorable senator that the Labour Party is also very happy. When the events of the last seven years are summed up by the historian of Australia, I have no doubt that he will come to the conclusion that the only political party that got anything out of the situation was the Labour Party. Every reform worth mentioning that has been placed on the statute-book of the Commonwealth has been originated, popularized, and pressed to a conclusion by the Labour Party. It has cause tobe proud of its record. Even if it went out of political existence to-morrow, it would have something to show for the period during which it has lived. But my honorable friends on the right have nothing to show. Not a single act for the benefit of the people has been passed at their instance.

Senator Givens:

– There is one measure of theirs - the Sea Carriage of ‘Goods Act - which is good.

Senator STEWART:

– The Labour Party suggested that to them. My honorable friends on the right have opposed almost every beneficent reform that has been placed upon the statute-book during recent years.

Senator Fraser:

– Mention a few.

Senator STEWART:

– The honorable senator can look up Hansard for himself. He was opposed to the Deakin Government.

Senator Fraser:

– Certainly.

Senator Chataway:

– Is the honorable senator favorable to the Deakin Government”?

Senator STEWART:

– I am not opposed to what they did.

Senator Chataway:

– The honorable senator helped to put them out.

Senator STEWART:

– We kept them in. power as long as it suited us.

Senator Fraser:

– The honorable senator’s party nursed, the Deakin Government and weaned them when they were old enough.

Senator STEWART:

– We supported them because we believed in their policy.

Senator Chataway:

– No.

Senator STEWART:

– For what other reason ?

Senator Chataway:

– Because it suited the honorable senator’s party, as he said just now.

Senator STEWART:

– What meaningis to be attached to those words except that the policy ofthe Deakin Government for the time being was our policy? But the Deakin Party got tired, and became too slow for the quick blood of the Labour Party. Consequently, they had to come down. But, with all their faults, the Deakin Party was very much superior to the party which I find on my right. That party has never even attempted to do anything of a beneficent character for the people of Australia.

Senator McGregor:

-What about Senator Walker’s Companies Reserve Liabilities Bill?

Senator STEWART:

– That is a measure which, while it may be good enough in itself, concerns only those who have money deposited in banks, or who are shareholders in financial companies. I do not happen to be one of those, and therefore I do not take much interest in the measure.

Senator Turley:

– And it is not the policy of Senator Walker’s party either. It is his own Bill.

Senator STEWART:

– I believe that some of the members of the party to which Senator Walker belongs will be found to be amongst its strongest opponents. In any case, I do not ask for anything for the Labour Party that it is not entitled to. I ask simply for a fair trial. The present Government has been in power only a few hours, and yet honorable senators in opposition express surprise that a new Heaven and Earth have not been created. They evidently think that the Labour Party is made up of magicians, who can, by the wave of a wand, bring about changes which in the ordinary course of events would take a very long while to accomplish. I have no doubt that early next session my honorable friends will have an opportunity of showing the people of Australia their attitude towards some burning questions which intimately affect the workers, and the prosperity and happiness of the people of this continent. We shall see.

Senator Chataway:

– Is this a Ministerial statement as to what the Government intend to propose?

Senator STEWART:

– No. I do not intend to propose anything. ButI think it very probable that honorable senators will have an opportunity of showing their attitude towards several very critical questions. I can quite understand that they are not particularlyanxious to place themselves in opposition to public opinion; but I assure them that in all probability they will have to declare their attitude. It is scarcely possible, however, for Parliament to do very much between now and Christmas. That being the case, the sooner we wind up the business of the session and get into recess the better.

Senator Chataway:

– Is the honorable senator in favour of doing away with private business?

Senator STEWART:

– I see no hope of passing any. I have had a Bill on the stocks for two years. I brought it forward last session, but withdrew it at the request of the Deakin Government, who said they would deal with the matter, but did not. I brought it up again early this session, but owing to adjournments, the change of Government, and so on, it has once more been relegated to the limbo of the lost. I have no hope of being able to pass it now. Probably the Government may take it up. If they do there will be very little difficulty in passing it.

Senator Chataway:

– Does the honorable senator refer to the Bill dealing with postage on Hansard?

Senator STEWART:

– Yes. It is a measure which ought to appeal to every member of the Senate. We all know that the press, and especially the provincial press, does not report the proceedings of Parliament at any length, and the only means that the people have of becoming acquainted with what we do here is through Hansard. But Hansard is so expensive now that only a comparatively small section of the people buy and read it. I think that other senators are as anxious as I am that those of our constituents who desire to know what is being done here should have an opportunity of getting that information.

Senator Clemons:

– How much better would it be to pass the motion standing in the honorable senator’s name, which, by limiting the duration of speeches, would reduce the size of Hansard? Then there would be no necessity for his Bill.

Senator STEWART:

– I also think that it would be a good thing to pass my motion, and I shall certainly bring it up. I have no wish to protract the debate, but I do not think that honorable senators who express such an eager anxiety for things to be done should show such indecent haste. Every one of the propositions which the Labour Party has given notice of, discussed here, and advocated elsewhere, will be dealt with if it gets the opportunity. Of course, if honorable senators do not care to give it that chance, then the matter is settled.

Senator FRASER:
Victoria

.- I crave the indulgence of the Senate for a minute or two. I do not intend to speak long; in fact, I am not allowed to do so.

I have been absent from the chamber a good deal owing chiefly to bad health, and I am very grateful to my honorable friends for not having drawn attention to my absence. This is an important occasion. I am very glad to welcome the Labour Party to power, because I consider that it is for the public good that they should occupy the Treasury benches. The position of. affairs to-day is, in my opinion, much safer and sounder than it has been for years. Now the Labour Party are responsible for their politics, but previously they ruled the Government, and were irresponsible. Many clauses of measures were altered in a way which I think was not creditable to us, but, of course, the Government were obliged to agree to the demands made or to retire. Better political conditions prevail now than in past years. In whatever direction the Labour Party may travel to uplift the man who is low down and poor, I shall be with them. I shall not help them, however, to keep on a pedestal a man who cannot, and does not, help himself. In a country like this, which experiences great prosperity, there will always be ne’er-do-wells. In my native country such persons have no chance of living, because the climate is too cold. But the genial climate of Australia really encourages indolence and that sort of thing. Statistics show that during the short time we have inhabited this country we have made progress at which the world may well marvel. I could dwell on this subject for an hour. Study statistics how you like, and you will find that our progress has been marvellous. Occasionally we suffer from severe droughts, but in a. short time we surmount them, and, thank God, forget them. If my friends in the Labour Party put into force the politics which they have always preached, then, as a man who has gone through pretty well all phases of political activity, I tell them that they will pull down very “ much more quickly than we have built up during the last century. I make that statement to them, and to the public, in all honesty and sincerity. If my honorable friends do anything to weaken the aspirations and activities which the Almighty has implanted in every individual, they will destroy the individual and the community as well.

Senator Pearce:

– That is just what we do not do.

Senator FRASER:

– That is exactly what my honorable friends do.

Senator McGregor:

– That is what we do not want to do.

Senator FRASER:

– Perhaps my honorable friends do not want to do it, but they do not see far enough. All men who think as we on this side do are in duty bound, if they are honest in politics, to unite for the common good. If they fail to unite, they are not true representatives of the people who sent them there. If there are many captains, it is the duty of some of them to stand down. I am verypleased indeed that one captain, who has rendered good service to his party, has stood aside. I am sorry for that fact, because I was the first man in Victoria who differed from the politics of the Barton Government.

Senator Pearce:

– There is one man who will not stand down.

Senator FRASER:

– I am sorry that there is. Now, 1 am not an office-seeker. I am not supporting any party for the sake of office or emolument. I have expressed similar sentiments in this State for the last twenty years. I am speaking as an honest man, who holds strong convictions. The man who stands out because he wants to be captain or mate is not true to the policy of this country.

Senator Givens:

– What is the policy of the country?

Senator FRASER:

– It is to give to every man the opportunity of rising subject to honest laws. I have been round the world twice and a half. and there is no country which presents less justification for the socialistic doctrine which is propounded than Australia. I know that this false doctrine is preached, and that many silly persons listen to it, but the Savings Bank and other records furnish overwhelming proof against the politics of my honorable friends opposite.

Senator Givens:

– But is not the honorable senator a Socialist?

Senator FRASER:

– The people of Australia know perfectly well what I am. I do not desire to see the Labour Party ousted from office this session. I am prepared to extend to them every possible fair play. They are not called upon now to propound their policy foi next session. Indeed, it would be unfair io ask. them to do so.

Senator Givens:

– The Honorable senator is disloyal, to his leader now.

Senator FRASER:

– Speaking now from a worldly stand-point. I think that the

Labour Party are entitled to a show. In view of the fact that they gave the other parties an innings for seven years, I consider that they are entitled to an innings for seven weeks.

Senator Millen:

– The honorable senator forgets that they gave us “ seven years’ hard.”

Senator FRASER:

– That is our misfortune, and we, as patriots, have to put up with it. I could speak at much greater length, but, in the present condition of my health, it would not be wise for me to do so.

Senator McCOLL:
Victoria

– I should not have risen but for the amusing contention of Senator Stewart that everything good and worthy which has been done in this Parliament has been due to the Labour Party. They have made that statement so very often that they are beginning to believe that it is really true. It is just as well that they should be reminded that all the reforms have been brought about by the liberal spirit in both Houses. The Labour Party alone could not possibly have effected those reforms. When an honorable senator rises and claims that a small party has done everything, and that other senators have done nothing, to help on any reforms, he is stating that which is absolutely incorrect. I have no complaint to make against the moderate programme put forward by the Government. If any other party had taken office, they would have done just the same thing. We could not have expected the Labour Party to do any more. If they carry out the programme which they have submitted this session, they will do extremely well. They have done a lot of hard work, and had no reward. If their proposals meet with approbation, they ought to receive from honorable senators all round a fair and generous support. I shall be very pleased to give a fair support to any proposals with which I agree. I shall do nothing factiously, or in a spirit of opposition, but so long as they govern the country wisely I shall be glad to assist them to gain experience, which will be useful to themselves and the country in the future.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– I congratulate the Vice-President of the Executive Council on the statement which he has made, because he only outlined a programme which he believes it is possible to accomplish this session. He did not give any cause for the complaint which has been wailed so often from the Opposition benches. Honorable senators opposite always complained that the Deakin Government brought down a long programme, or promised to introduce measures, which they knew it would be impossible to pass into law during a session. But the moment the Labour Party assume office, the leader of the Opposition becomes one of the most, revolutionary men I ever heard address the Senate. He wants the Labour Government in the short space of thirteen or fourteen sitting days to bring forward eleven or twelve measures.

Senator Millen:

– No, I do not.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– The honorable senator complained that no statement about those matters had been made, and yet he condemned previous Governments for promising what they could not possibly perform. I hope that the present Government will continue in ‘their present course, and will hold out no promises of legislation which they feel they will be unable to give effect to in the session of Parliament in which they are made. I rose chiefly to refer to one or two statements made by Senator Fraser. In making; some kindly remarks concerning the Government, the honorable senator said that he was particularly pleased with the outcome of the recent political crisis. He expressed himself as glad that the LabourParty should have come into power, because by doing so they accepted responsibility for the government of the Commonwealth, which they had previously carried on without responsibility. The honorablesenator went on to refer to the very considerable progress which had been madegenerally in the Commonwealth. He mentioned that every statistical work published dealing with the subject indicates that theprogress of Australia has been marvellous in spite of droughts, labour parties, and’ everything else. I agree with the honorable senator that the progress of Australiahas been marvellous. But I wish to point out to him, and to those who may read hisspeech, that the progress made in any other period of Australian history has not equalled the progress made during the last seven years.

Senator Fraser:

– What nonsense.

Senator Pulsford:

– There has often,, relatively, been greater progress.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

- Senator Fraser called the statisticians to his aid, and I refer honorable senators to-

Australian statistics to show that the progress of Australia during the last seven years was never previously equalled.

Senator Pulsford:

– The honorable senator is very much mistaken.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– Of course, any one who speaks from this side must be mistaken. The point is that the progress referred to by Senator Fraser has been made in the period during which the honorable senator has said this Parliament has been dominated by the Labour Party. If the honorable senator is a well-wisher to Australia and desires to see the progress to which he has referred continued, he should be sitting on this side helping the party that has dominated the politics of this country during the last seven years and has added so much to the progress in which he takes pride. I have no grievance against the Ministry on the ground that there is not promise of enough work for the present session. I believe that already we are promised’ rather more than we can expect to accomplish. I hope that if the Government continue in office honorable senators in opposition will be given an opportunity, not to complain that there are no new. proposals submitted, but to oppose and criticise, as I assume they will, the definite platform upon which the members of the Labour Party were elected to this Parliament.

Senator ST LEDGER:
Queensland

– After the deliverances of the leaders of the Senate I shall follow the example of other speakers and make but a few remarks on this motion. I take the opportunity to congratulate the leader of the Opposition on a speech which admirably expresses, not only the minds of those in direct opposition to the Government, but also, I think, the views of members of this Parliament who may be referred to as the corner Opposition in both Houses. The honorable senator has very properly expressed his surprise at the revolution in the Government, and has, I believe, admirably expressed the feeling outside and inside Parliament with regard to the attitude of the Labour Party. Notwithstanding the fact that Federal Ministries since the beginning of Federation have been in the hollow of their hands, and that they might, as they have done on this occasion, have turned out any Ministry whenever they chose to raise their fingers, it is only after they have had seven years ofpolitical eduction inside and outside Parliament that they have been prepared to make a stroke which fell upon the Deakin Government like “ a bolt from the blue.” They have come down to Parliament asking for six or seven months’ recess before they will give the slightest indication of themeans by which they propose to give effect to the policy about which they have been speaking for so long. There is one aspect of the situation to which the Ministry ought in decency, if I may use the term, to address themselves, and in connexion with which they should make their position clear. There are times when every honest man justifies his position by a judicious silence. Again, there are times in the life and conduct of every man when silence under charges made clearly and directly amounts to shame. Taking into consideration the remarkable circumstances associated with the recent change of Ministry,

I think that the present is an occasion when silence on the part of the present Ministry is a shame to them, and is not just to the public of Australia. I have no wish to introduce into the debate a bitter feeling, but I shall indulge in some straight speaking with regard to the change of Ministry, and the total absence of any indication of the policy to be pursued by the present occupants of the Treasury bench. The Vice-President of the Executive Council has informed the Senate of the measures which we shall be asked to deal with as expeditiously as we can. There is not one of. the measures indicated which could not be properly described as a noncontentious measure. There is not one in which every party in this Parliament is not equally interested.

Senator Henderson:

– And the honorable senator is sorry for that.

Senator ST LEDGER:

– Senator Henderson should not anticipate what I was going to say. As the Vice-President of the Executive Council has said that the Government propose to submit for our consideration only non-party measures, I ask the honorable senator now to say whether the last Government was not just as capable as the present Government of carrying in this Parliament merely adminstrative measures? Could not the work which the present Ministry are asking Parliament to do have been done just as effectively by those who originated the measures referred to?

Senator Henderson:

– But the honorable senator was continually girding at the last Government.

Senator ST LEDGER:

– Honorable senators opposite have brought about an extraordinary change in the Government of the Commonwealth, and a change which, in view of the way in which it has been brought about and the circumstances connected with it, is, as the leader of the Opposition has said, probably unparalleled in the history of constitutional government. Honorable senators opposite may have a complete justification for the launching of their extraordinary “ bolt from the blue,” but we are entitled to point out that as in the circumstances their action has been extraordinary, we should be given some reason # why it was taken now after seven years’ hesitation. We should know the reason for their dissatisfaction with the Government of whom they have been strong allies, and in respect of measures which they pro-, pose themselves to carry out. The present Government are not proposing to do one tittle more or less than the Administration that they have displaced said they would do. The members of the Labour Party were the faithful allies and strong supporters of the last Government, and although only a fortnight previously they gave them a unanimous support they suddenly struck them down, and took possession of the Treasury bench. They refuse to give Parliament or the public one reason why they delivered their blow ; why they stood triumphant with their allies a fortnight ago, and why for some extraordinary reason they then entered the arena, turned their thumbs down and spoke pollice verso to Mr. Deakin. The Government now occupying the Treasury bench appear to have no regard for the natural desire of the people to know how they are governed and why changes of Ministry are made. Surely if there ever was an occasion in the history of constitutional government when Parliament and the people should have been informed of the reasons for such a change, it is now.

Senator Findley:

– The honorable senator should not get so angry.

Senator ST LEDGER:

– The change which has been made must have been made with great deliberation, and the matter is of so much importance that the reason for it should be clearly stated. Ordinarily changes of Government take place only because Ministers have done something wrong. Here the faithful allies of the last Ministry have displaced them, and they have not the decency to tell the men whom they turned out of office why they did so, or to tell the public what they- contemplate doing themselves. There are some grave political questions confronting us. Members of this Parliament and a vast number of people outside are particularly anxious to know what are to be the future financial relations between the States and the Commonwealth. . It is a truism that government is practically finance. Honorable senators opposite have said that if they got into power they would alter the financial arrangements between the States and the Commonwealth - that they would find new and extraordinary means of providing for the finances of the Commonwealth. They have said that once they got on to the Treasury bench not only would the States not be deprived of sufficient revenue, but they would be able to provide amply for all the wants of the Commonwealth. . That has been their financial gospel for a long time. If they could carry out what they have promised in this respect they would be the saviours, and would be entitled to the gratitude, of this country.

Senator Henderson:

– Let them remain where they are and they will prove -it conclusively.

Senator ST LEDGER:

– I hope they will tackle the problem. The complaint of my leader and my complaint is that we are still asked to wait. We have waited during the last seven years, whilst the Labour Party have held Ministries in the hollow of their hand, and now, when they have taken ‘ possession of the Treasury bench, we are asked to wait for some further time. It is not, perhaps, reasonable to ask that the Ministry should come forward at once with a definite programme, dealing with all these difficult questions, but Parliament and the public have certainly a right to know when’ and in what form they propose to give effect to some of the more important planks of their platform and their objective.

Senator Guthrie:

– We will do that in good time.

Senator ST LEDGER:

– The Labour Party is always asking for time. Under existing circumstances we are abundantly justified in the taunt that a large portion of the socialistic, objective of that party merely represents goods which are intended for dressing the shop window. Its members wish to display those goods to the public, but they shrink from testing their value upon- the open market.

Senator Guthrie:

– Let the honorable senator attempt to purchase some.

Senator ST LEDGER:

– I hope that before very long I shall be associated with a party which will be occupying the Treasury bench-

Senator Henderson:

– I do not think that the honorable senator will.

Senator ST LEDGER:

– At any rate, I shall do my best in that direction. When that party comes into power it will not emulate the example set by the Labour Party in exclaiming, “ We require more time to put our programme in order.” How quickly the Minister of Defence interjected yesterday when the leader of the Opposition taunted the Government with having abandoned the principle of nonborrowing, which is one of the planks of the Labour Party’s programme, in connexion with their proposal to acquire a site for Commonwealth offices in London. They declared that if the Bank of England stood behind them, they would be able to finance the purchase of that site by means of an overdraft. When Senator Millen pointed out that, disguise that scheme as they might, it was one of borrowing and was therefore a violation of the Labour Party’s platform, the Minister of Defence interjected that a non-borrowing policy was not a part of that platform. The Labour Party, it seems to me, are adopting a policy of negation. They are now In a position to give statutory effect to their principles. But what do we find? They are extremely careful to point out that this, that, and the other, is not a part of their objective. Surely it is time that they informed both Houses of this Parliament, and the public, of the precise form of their essential proposals. In my judgment there was absolutely no justification for the change of Government which recently took place. I have waited patiently to hear an exposition of the reasons underlying that change, but I have waited in vain. In both Houses the Ministry have remained silent upon the subject, and I join with Senator Millen in declaring -that the change was a political lightning one which is unparalleled in the history of constitutional government. I speak strongly upon this matter, because I desire the public to thoroughly understand the position. I wish them ‘to realize the enormity of the action of some members of this Parliament, an action which almost amounts to a prostitution of the functions of constitutional govern ment. I hope that those responsible for the change will reap the reward which they merit. If the country is with them, 1 trust that they will continue to occupy the Treasury bench. But if it is not in favour of political thimblerigging, I am satisfied that as soon as the opportunity presents itself, they will be relegated to their proper places.

Senator Needham:

– The honorable senator himself will lose his seat in this Parliament.

Senator ST LEDGER:

– I- shall take my gruel standing up. I had to fight my way into this Chamber, and when I appear before the electors I shall say to them exactly what I have said here. It is only right that the present position should be thoroughly understood. I agree with Senator Fraser that that position has been brought about owing largely to the want of solidarity on the part of the Opposition. To my mind it is perfectly clear that in Australia there are two policies from which politicians cannot escape. I believe that the present occupants of the Treasury bench represent one of those policies, and that other honorable senators, including myself, represent the other. Sooner or later the electors must range themselves in one camp or the other.

Senator Needham:

– In which camp will the honorable senator be found ?

Senator Fraser:

– These interjections are very unseemly. The honorable senator ought not to be allowed to continue making them.

Senator ST LEDGER:

– 3 am prepared to allow Senator Needham and the party to which he belongs sufficient rope. If ever there was a time in the history of Australia when those who favour the Labour Party’s objective should stand together, that time is now. I am certain that the Ministry, when they appeal to the country, will demand that those who believe in their principles shall join their ranks.

Senator Needham:

– The honorable senator himself has no political policy, and never had one.

Senator ST LEDGER:

– If that be so, why is so much attention devoted to me personally ? The Government naturally desire to attract to themselves all the followers that they can, in order that they may be able to give effect to the programme of which they have been evangelists for the past eight years. Those who are opposed to the Labour policy should undoubtedly close up their ranks. Intriguing and vacillation will not overcome the difficulty, and I join with Senator Fraser in expressing the hope that the ranks of the Opposition will speedily become solidified. I credit my political opponents with being thoroughly loyal to their professed objective. I am perfectly satisfied that when the next appeal is made to the electors, the present Government will demand that their supportters shall be made to declare themselves. They will see that candidates array themselves under one banner or the other. I join with Senator Fraser in pointing out that Australia has derived great benefit from liberalism, and that the Mother Country lias also made signal progress under a liberal policy. At the forthcoming appeal to the people, the members of the Opposition will ask the public to stand firmly by those principles of liberalism which have done so much for the Old Country, and which will confer so much good upon Australia in the future. I hope that the ranks of the opposing forces in this Parliament will speedily become solidified in order that a clear and sharply-cut issue may be put before the electors.

Senator PULSFORD:
New South Wales

– - Mr. President-

Senator Needham:

– Stonewall.

Senator PULSFORD:

– During the last half-hour I think that the greatest stonewaller in this chamber has been Senator Needham, who has spoken almost every minute. I am sure that it will tend to the speedy termination of this debate if he will possess his soul in patience. I have risen specially to refer to one or two remarks which were made by . Senators Stewart and E. J. Russell, both of whom, having shot their little bolts, have left the chamber. It appears to me that the Labour Party is very much like the fly on .the wheel; which believes that it is the cause of the wheel going round. The Labour Party seeks to take credit to itself for every reform which has been brought about since its establishment. That is not a view which will commend itself to honorable senators, or to the historians of the present century. In the course of his remarks, Senator E. J. Russell challenged anybody to point to any direction in which Australia had not progressed at a greater rate during the past seven years than she has at any previous time in her history. I interjected that she had often progressed at a greater rate than she has done since

Federation. I wish now especially to point out that the greatest factor of progress inany nation’s history is in respect to population. I point to the solid fact that in many single years in the history of Australia a larger population has been added than during the whole time since Federation wasaccomplished. So that it would be wise for honorable senators opposite to mitigate somewhat their profound expression of satisfaction in the superabundant progress of Australia since they have been influential as a party. Senator W. Russell spoke about the Labour Party and its achievements. I suggest that that grand old term “ labour “ is being dragged in the mud. It is much too good a name to be attempted to bemonopolized by those who profess to be the opponents of all monopoly. Senator W. Russell not only claimed to be a Labour man, but to be independent. I do not understand that. His statement seemed to be a contradiction in terms. The public generally understand, as I do, that the Labour men are not independent, except here and there, and in regard to certainmatters outside caucus control.

Senator Needham:

– The honorable senator’s party had a caucus meeting to-day.

Senator PULSFORD:

– I understand the Labour Party to consist of a number of gentlemen bound together by an iron rule, who follow where the party as a whole decides to go. Therefore there is not such aperson as an independent Labour man.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– Nonsense.

Senator PULSFORD:

– Except apart from the subjects that come before the caucus.

Senator Needham:

– That shows the honorable senator’s ignorance.

The PRESIDENT:

– Order ! I. have several times called attention to the honorable senator’s interjections, which he must recognise as being offensive. I do not object to occasional interjections, so long asthey are pertinent.

Senator Needham:

– I did not hear youcall my attention to any.

The PRESIDENT:

– The honorable senator may not have heard me, but I called him to order two or three times while Senator St. Ledger was” speaking.. Perhaps he did not know that I was addressing him, and therefore I accept hisstatement. But I must again ask him not to make interjections which may be regarded as offensive.

Senator PULSFORD:

– I wish, in conclusion, to call attention to what, in my judgment, is a great political crime. We have a certain party in power, and we have an Opposition which exceeds in numbers the party supporting the Government. But, owing to the disunion of the Opposition, the Government is carried on by a minority. It is, in my opinion, a crime to the public that that should be the case, and that on account of personal reasons a large Opposition, or a body of oppositionists, should remain separated. They ought to unite and assume the duties which belong by right to the majority. I do unhesitatingly say now that it is the duty of every public man in this country to recognise the need of the times, to forget personal advancement, and to recognise that the public interest calls for rule by a majority. ‘

Senator DOBSON:
Tasmania

.- I wish to call attention to what I regard as a very important matter In doing so, I shall particularly address the Minister of Defence. My honorable friend knows that I take a great interest in the subject of universal military training; but I take a greater interest in the formation of character. Although I read many articles in some of our progressive newspapers about Australian nationhood, I do not see sufficient attention given to one great factor in connexion with the passing of legislation. We should ask ourselves how our enactments are going to affect the character of our young nation. I -am sure that we have all read with very great regret that there- have been two or three instances of larrikinism in Melbourne during the last few weeks. There has been a considerable amount of larrikinism! in other large cities. I am of opinion that that evil would decrease by at least 50 per cent, if we could have some form of universal training, teaching our citizens that it is their duty to learn how to defend their homes, and to conduct themselves as men and citizens. T will now come to the reasons which induce me to speak like this. If my honorable friend the Minister of Defence will read again the speech that he made about eight or ten days ago - a few days after he was appointed Minister I think - he will find that his words suggest a doubt as to whether the Labour Party, of which he is such an ornament and such a useful member, is considering the question of defence from the point of view of Australia or from the point of view of party interests. I cannot quite recall his words, and could not turn them up when I went to the Library just now. But I think that my honorable friend’s speech requires a little careful consideration. He will recollect that the same question was considered a few nights ago at a meeting of the Labour Council. The members of the council discussed the question of whether the plank in the party’s programme embracing the formation of a citizen army and compulsory military training was in the interests of the party. It was not discussed as a question of defending ourselves from a military and naval point of view, but solely from the point of view of whether .that particular plank would suit the Labour Party.

Senator Pearce:

– I was not at that meeting.

Senator DOBSON:

– I am aware that my honorable friend was not. But I have asked him to look carefully at the speech which he made a little time before, and to consider it in conjunction with the consideration of the question by the Labour Council from a labour point of view rather than from the point of view of Australia.

Senator de Largie:

– The labour point of view is the Australian point of view.

Senator DOBSON:

– I am very pleased to hear that; but the words that I read were as plain as they could be. They set out that the matter was being considered by the Labour Council, some of whose members desired to repeal that particular plank in the party’s platform because it was regarded as a mistake from the labour point of view. The Labour Party are sometimes accused of indulging in class legislation.

Senator Needham:

– The honorable senator must be hard up for arguments in ‘ using his last one.

Senator DOBSON:

– I am speaking wholly apart from party. It is quite likely that the party to which I belong may also be charged with looking at important matters from a class point of view. But we cannot afford to do that with the defence policy. ‘ We must, as Senator de Largie said, regard it from the national point of view only. I speak on the subject now because I desired to call the attention of the Minister of Defence to the remarks, made at the meeting to which I have referred, and at which very narrow views were expressed. With respect to the for- mation of character, there is a matter as to which I think we have’ made a serious mistake. My honorable friends opposite, as we all know, take a great interest in old-age pensions. But they are not the only people in this country who consider that a Christian and a civilized community and a wise democracy must look after its aged poor. But then comes the question - How are we going to do it? You can always find men in all ranks of life who will tell you what ought to be done. Very frequently they are right. But when it comes to finding the means you require men of brains, ability, and knowledge of economic law. I have said many a time that in providing for our aged poor we have not proceeded in the right way. The phrase that I used in England was that we had proceeded in “ the most rotten way,” and the Bulletin has accused me of having no Christianity simply because I did not believe in the Australian way of establishing old-age pensions. In the formation of character you have to take care to encourage people to be independent and thrifty, to have some regard for order and discipline, and to be self reliant. Our system of old-age pensions does not avoid, as the German system does, the tendency to breed a race who will be flabby instead of being independent and self reliant. On board the Empress of

China I was one day discussing this subject of old-age pensions in reference to Great Britain with an old American gentleman with grey curly locks, who, I think, had for thirty years been president of the Great Metropolitan Life Assurance Company of America. He said to me, “I am astonished that the English people, with their very great common-sense, have not caught on to some of the wonderful features of the German system of old-age pensions.” I desire to repeat his words, and to say that it is a matter of astonishment to me that the people of England, and that our clearer headed men in Australia, cannot see that, important as it is to pay old-age pensions, there is a right and n wrong way of doing it.

The PRESIDENT:

– The honorable senator cannot enter into a full discussion of the question of old-age pensions on this motion. I thought that he was about to make a suggestion to the Government, and therefore I. allowed him to proceed; but even then it would not be in order to enter upon a long statement regarding the matter.

Senator DOBSON:

– Perhaps I was going a little too far, but I intended to wind up with the suggestion which I believe Mr. Lloyd George has put forward after visiting Germany and making himself personally acquainted with the German system.

Senator de Largie:

– The honorable senator went to a doubtful source for information in going to a New York insurance agent.

Senator DOBSON:

– I was simply talking on board the steamer to this old gentleman, who knew a great deal about the subject, and who expressed his astonishment that the English people had not caught hold of the good features of the German system. With regard to the change of Ministry, I cannot say that the unexpected has happened. The expected has happened. 1 think that it might very well have been foreseen by all on this side that the Labour Party would tire of keeping the Deakin Party in office, and the time would come when Mr. Fisher would tap Mr., Deakin on the shoulder and say, “ Now, Mr. Deakin, it is our turn to govern.” That is what has taken place, and, with the consent of the Deakin party and the Opposition, the Labour Party are in office. I am prepared to allow them to go into recess. I think that the statement of the Vice-President of the Executive Council was quite as full a one as we could have expected from him. The Government will have, I presume, a few months in which to inaugurate a policy. Let them ha-ve full and ample time for that purpose, and when it is submitted it can be criticised.

Senator HENDERSON:
Western Australia

– I listened with considerable interest to several speeches this afternoon. With the exception of those nf Senators Dobson, Pulsford, and Walker, the whole of the speeches made on the other side have been one bitter complaint, with two objects in view. There has been a general complaint to the effect that the public and the members of the Senate are kept in pure ignorance as to the intentions of the Government in respect of the future.

Senator Chataway:

– The chief complaint was that the public are kept in ignorance as to the reason for a change of Government.

Senator HENDERSON:

– Not at all. The public are not ignorant on that point, nor is the honorable senator.

Senator Chataway:

– Well, I should like to know the reason.

Senator HENDERSON:

– The only reason why the Deakin Government are not in office to-day is because they were not strong enough to stop there. I believe that every person in the country knows that.

Senator Gray:

– They have been in the same position for the last two years.

Senator HENDERSON:

– Boiled down, the complaint from honorable senators on the other side has been : Why should a Labour Government have supplanted the Deakin Government in preference to a Government with G. H. Reid at its head. That is the only objection which they have to the change which has taken place. Ever since they were relegated to the left of the Chair they have been anxious for a change to take place, in order that they might attain office, but they have not succeeded. It is quite apparent, I am sure, to every elector that the Deakin Government went out of office simply and solely because they were not strong enough to stop there. The George Reid party were not anxious to help the Deakin Party to retain office; consequently they helped the other chaps to put them out, and helped them unanimously. This afternoon Senator Millen, who I am sorry is out of the chamber, made first a general attack, and then individualized several senators, and because of something which some other body had not done he took the liberty to accuse us of having foresworn some of the principles which we have advocated here.

Senator Chataway:

– Surely the honorable senator does not call that taking a libertv ? He had the right to do so.

Senator HENDERSON:

– Probably a man has the right to do so after a person has given way to the weakness of which he is prepared to accuse him. But I think that it is not lawful for a man to say that I intend to steal a loaf when he does not know my intention. We do hot propose, either under one pretence or another, to deviate one iota from any of the principles we have enunciated here. When the time comes for those principles to be considered here, it will be found that we shall be. prepared to act just as we have indicated. Senator St. Ledger accuses us of a desire practically to delude the public. Although he said that neither he, nor the Parliament, nor the people, understood the intentions of the Government, yet he declared that the Labour Party had put before the people a platform, and that that was the one which they should advocate. He said that it was the platform which they had advocated in past times, but that now they were absolutely silent on the subject. I do not know that there is any great need on this occasion to make any noise about the platform. Every one here recognises that it is utterly impossible to carry it into effect by Christmas. There are too many very large principles embodied in the platform, and too many conflicting elements, perhaps, in the Senate to enable us to achieve that end. But it is as clearly before the country as any platform has ever been. Let me point out the difference between the members of the Opposition and ourselves. They have never had a policy, except one word, whilst for the last twenty-seven or twenty-eight years we have had a policy which has been very largely adopted by the Legislatures throughout the Commonwealth. Senator Pulsford accused Senator W. Russell of stating that he was “ an independent Labour man,” and remarked that he could not understand what was meant by the phrase. I can quite understand the position of Senator Pulsford. For the last twenty-six or twenty-seven years he has been an absolute slave to a policy embodied in one word - free-trade. No matter who led the party, or what policy he was prepared to advance apart from that general principle, if he was a free-trader, the honorable senator was undoubtedly a slave at his coat-tail’s, as he is to-day. What Senator W. Russell meant to convey, 1 think, by the phrase was that he was a Labour man pledged to a platform, and that he was in honour bound to carry it into effect, but that outside of that he was independent. No greater independence is enjoyed by Senator Pulsford or other persons on the Opposition benches than is enjoyed by a Labour senator outside the limits of the platform. The difference between us is that we do not put before the people the word “ free- trade” or the word “ protection,” and then ask them to shut their eyes, open their mouths, and see what God will send them. We have submitted a well-defined policy, and that fact is clearly recognised by the people. We hope that the time will come when there will not be enough members sitting on the Opposition benches in this, or the other Chamber, to check the full achievement of our platform. Senator St. Ledger stated that the progress of Australia has been made at all times under the banner of liberalism. I have heard that word used by a good many members of the Senate and a good many politicians, but not one of them has attempted to define it. I have never yet been able to understand what it means. It is a blessed word, like Mesopotamia. A protectionist who has nothing else but protection to offer mounts a platform, and in the name of liberalism declares a protectionist policy. A freetrader is a liberal, and in the name of liberalism he gets up and proclaims’ a policy of free-trade and liberalism. I have had a few years’ experience in Australia, and I remember well that, just prior to the introduction of the Labour platform into its legislative halls, we had a taste of what Senator St. Ledger has proclaimed here as the progressive movement of Australia - liberalism. We had liberalism in every one of the Parliaments of Australia before the Labour platform was put before the people of this country; and before Labour representatives found their way into Parliament. And how much good did it* do for the people of Australia? Honorable senators may take whatever States they like prior to 1 89 1, and I venture to say that they .will find that the people were clamouring for domestic, social, and industrial legislation which would enable them to become what they felt they ought to be - a people who might embrace all the principles enunciated hy our friend, Senator Dobson ; ‘a people who might do something in the direction of thrift. At that time it was not possible for any man to be thrifty. He was a lucky man who could make a living at all- The exercise of thrift was beyond most people, and the people in all the States were seeking for an opportunity for the exercise of thrift. The principles of noble manhood and womanhood were all being clamoured for, but the so-called Liberals who graced the legislative halls of Australia never dreamed of placing legislation on the statutebooks which would enable the people to approach the ideals propounded by the honorable senator.

Senator Findley:

– They voted against one man one vote, and against all the political machinery which would have brought about such legislation.

Senator HENDERSON:

– Senator Pulsford knows something of the miners of New South Wales, and I claim to have some little acquaintance with their condition, and I say that for twenty-five years the so-called Liberals in the New South

Wales Parliament fought to defeat efforts which were being’ made to change the coal mines in the State from graves to tolerable places for men to work in. They fought against the workers in every industry of a similar character. It was only when the Labour and socialistic platform was put forward that, after twenty-five years of hard fighting, the so-called Liberals of New South Wales were compelled by sheer necessity to recognise that the Labour platform had come, that Labour representatives had come with it, and that the remedial measures so essential to the general welfare of the people must be given consideration. Then the Liberals stole, one by one, little pieces from the Labour platform. A Coal Mines Regulation Bill was passed embracing eight hours’ labour for coal miners, and provision for ventilation which would enable the miners to live, and would help to change the underground graves into places where men might earn a livelihood’ with some degree of comfort. All these things were done, I admit, with the assistance of the so-called Liberals in politics; but it was only when those terrible people, the Socialists, with their Labour programme and principles, entered’ the halls of Australian legislatures, and became a political power.

Senator Needham:

– That is true.

Senator Pulsford:

– It is not true. The eight hours’ system was adopted in Australia more than fifty years ago. Let the honorable senator look at the monument erected only a few yards from this building.

Senator HENDERSON:

– I will not say that it is not true that the eight hours’ system was advocated in Australia fifty years ago, but I will say that twenty-five years ago the eight hours’ system was not adopted in Australia. Senator Pulsford ought to know that himself. He should know that in New South Wales, in 1900, men were working, not for eight hours per day, but for eleven hours, and many of us for twelve hours per day. If the eight hours’ system had been adopted fifty years ago, no such thing would have prevailed in New South Wales in 1900. It was only when the socialistic programme became a live principle in politics in New South Wales, and only after the elections of 1891, that the measures of which I speak became measures of practical politics, and were attended with practical results to the people.

Senator SAYERS:
Queensland

– I think this is an occasion-

Senator Needham:

– For “ stonewalling.”

Senator SAYERS:

– An occasion when some expression of opinion should be given by honorable senators on both sides.

Senator Needham:

– We have had an expression of opinion from the other side.

Senator SAYERS:

– The honorable senator is always interjecting and interrupts every speaker.

Senator Needham:

– No. That is wrong.

The PRESIDENT:

– I ask Senator Needham to interject as little as possible.

Senator SAYERS:

– I think that my statement is correct. I do not greatly object to the honorable senator’s interjections, but when I commenced to speak the honorable senator said something about “ stone-walling,” and I should like to say that I have not taken up a quarter of the time of the Senate occupied by the honorable senator. During the last fortnight we have had a change of Government, and the country has heard nothing from the members of the late Ministry or of the present Government as to the causes which brought about the change. We are led to believe that it was the result of a mutual arrangement. When I was a boy a game used to be played between two in which each boy would in turn take a bite of a bun. That would appear to be the game played by the last and the present Government, but the position is hardly a dignified one. The ex-Prime Minister has said that he and his friends have played the game with tarts; but in’ my young days we were not rich enough to buy tarts, and we had to put up with buns. It is very strange that honorable senators opposite, who, while supporting the late Government, continually advocated socialistic measures, should immediately they assumed office themselves have dropped those measures for the occasion. 1 suppose it was a matter of expediency : that it does not suit their game to bring them forward now. I should like to know whether we are here to legislate for the people of Australia or in the interests of political parties. It seems to me that in this Parliament we are descending to legislation simply in the interests of parties. I am not personally annoyed to find honorable senators opposite in possession of the Treasury benches, because inside and outside this chamber, I have expressed the opinion that it was the proper place for them during the last two years. For a long time past, they have stood behind the late Government, which was represented in the Senate by three honorable senators, and they made the balls whilst the late Government had to fire them. I have been in another place to-day to discover, if possible, why the Labour Party withdrew their confidence from the late Ministry. But I was unable to discover the reason. The ex-Prime Minister has said that no political party can rule in the Commonwealth without the support of himself and his party. It has been said that the Opposition in this Parliament put the Labour Government into power.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– So they did.

Senator SAYERS:

– For the sake of argument I may admit that, but the Opposition are not keeping them there.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– They want to get there themselves.

Senator SAYERS:

– I do not think they ha’d any desire to get there. Personally, I have none. It is immaterial to me which party occupies the Treasury benches. If I were sitting behind the Government, I should probably be tongue-tied to some extent, and I prefer to remain a Tree lance.

Senator Needham:

– No honorable senator on this side is tongue-tied.

Senator SAYERS:

– There have been many occasions on which honorable senators opposite have been tongue-tied. When a motion of no-confidence in the last Government was moved only a little time ago, honorable members of the Labour Party in another place were stricken dumb. When we had under consideration a matter dealing with the Federal Capital site, and when the question was asked whether the ballot proposed should be a secret or an open ballot, Senator Givens very pertinently interjected, “ We are sent here by the people of the country to let them know how we act and how we vote.” If that were the view held by honorable senators opposite only a few weeks ago, I should like to know why they now refuse to tell the people how and why they voted to bring about the change of Ministry.

Senator Needham:

– What about the election of the Chairman of Committees ? That was conducted by a. secret ballot.

Senator SAYERS:

– That is a very different thing, and I was perfectly willing that that election should be by open ballot. I am referring to a very pertinent interjection by Senator Givens.

Senator Needham:

– The application is not very pertinent.

The PRESIDENT:

– Order !

Senator SAYERS:

– If Senator Needham continues his interjections he will only keep me here longer. I am not disposed to submit to his impertinence.

The PRESIDENT:

– I asked Senator Needham not to interject, and Senator Sayers now talks about submitting to impertinence. That, I think, is quite uncalled for, when I have just done what I could to protect the honorable senator from interjections. I ask the honorable senator not to aggravate the situation.

Senator SAYERS:

– I bow, sir, to your ruling, but on three or four occasions, since I began to speak, although you asked Senator Needham to refrain from interjecting, the honorable senator continued to interject. I think that Senator Givens very pertinently said that the people of the Commonwealth have a. right to know how and why we vote in this Chamber. They should certainly be taken a little more into the confidence of the Government, and should be told why the Labour Party, who three weeks ago, expressed the fullest confidence in the Deakin Ministry; only a week later apparently ceased to have any confidence in that Government.

Senator Findley:

– After this appeal, no doubt the Vice-President of the Executive Council will tell the honorable senator all about the matter.

Senator SAYERS:

– I have no doubt that the Vice-President of the Executive Council will do so, if it suits his purpose. On the other hand, if he thinks that it is in the interests of his party that these matters should be kept secret from the public, he will keep them secret. There may be good reasons why the Government consider that these matters should be kept secret, but I think that the public have a right to know why a change of Ministry takes place, and it is the duty of the Government to take the people into their con,fidence in such a manner. We have been told by the press that the matter was settled in caucus after it had been debated for two or three weeks, and that tlie Deakin Government were taken by surprise. But from the way in which things were managed I think that a great many persons outside will cling to the opinion that an arrangement was arrived at between the two parties. The whole proceeding is without a parallel in the history of parliamentary government. Under the circumstances we are justified in asking the Government to take the country into their confidence and to tell us what actually took place. The people are entitled to know in what way the late Deakin Administration fell short of the expectations of the Labour Party. We know that that Administration desired to get into recess at an early date, and that for the major portion of the session its members worked very hard. Yet their places have suddenly been taken by the present Government, whose members also wish to speedily reach the haven of recess in order that they may have six months in which to make up their minds as to what business they will proceed with next session.

Senator Needham:

– The notices of motion to which the honorable -senator has referred will still remain upon the businesspaper.

Senator SAYERS:

– The honorable senator cannot speak on behalf of the Government. If we decide to dispense with private members’ business for the remainder of the session we shall practically shelve those proposals. I am very pleased to note that responsibility has had the effect of cooling the ardour of my honorable friends opposite. It is very easy for them to bring forward theatrical motions when they are not in office, but it is consoling to find that when they arc saddled with responsibility their better judgment asserts itself. I should like to know whether they intend to drop the motions to which I have alluded. Very little practical work has been accomplished this session, and I fear that very little will be achieved during the remainder of the term of this Parliament. Personally, I should like the Government to bring forward their important measures instead of proceeding with only a few small non-contentious Bills. If their principles are good, they should endeavour to give effect to them with as little delay as possible. I am glad that the Labour Party at last occupy their proper position in this Chamber, because numerically they constitute the strongest party.

Senator Needham:

– No.

Senator SAYERS:

– Yes. The Labour. Party in this Chamber numbers fifteen members, and upon every occasion that they voted for measures introduced by the late Government those measures were carried. So long as the Deakin Administration were content to swallow the ideas of the Labour Party-

Senator Sir Robert Best:

– Put it the other way. The Government introduced their measures and passed them.

Senator SAYERS:

– Whenever the Labour Party deserted that Government the latter had to obtain support from the Opposition. That was a very bad system. Whatever Ministry may occupy the Treasury bench should be able to command a majority in both Houses. But, unfortunately, this Parliament is at present split up- into several sections. If the present Government were faced with a strong opposition they would be obliged to outline the measures with which they intend to proceed next session. Their minds must be pretty well made up upon the matter; if not, the news would come as a shock to their outside supporters. I trust that the Ministry will not ‘dispense with private members’ business. It is all very well to promise that, if time permits, an opportunity will be afforded honorable senators of dealing with that business, but we know that in practice effect is never given to that promise.

Senator CHATAWAY:
Queensland

– I recognise that there is a general desire to dispose of the remaining business of the session as soon as possible, and I do not intend to place any obstacle in the way of achieving that desirable result. But there are one or two motions of which notice has been given by private members which I think ought to be advanced a further stage before the session closes. Of course, we know that the Government intend to occupy any odd time which may be available in considering the Navigation Bill and the report of the Standing Orders Committee, but I venture to suggest that these are matters which might very well be allowed to stand over until private mem- bers’ business has been dealt with. If the Government cs’-n see their way to adopt the suggestion which I have made, I think that honorable senators upon this side of the chamber will be entirely satisfied.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

– - I feel grateful to honorable senators for the way in which they have dealt with my motion. I did not expect to find the Senate entirely unanimous with regard to the measures and methods of the Government. But the statement which I made has been received in’ a very kindly manner, for which I am thankful. There seems, however, to be some misconception as to the attitude of the Government in regard to the Labour Party’s programme. Yet it is well known that the Labour Party is the mainstay of the Government. It is the Government, in fact. This is a Labour Government. That being so, the policy of the Government must be the policy contained in the Labour platform. But it has been made a grievance that we have not stated what policy we intend to pursue next session. Was it reasonable to expect that we should? It has also been made a grievance that, during the no-confidence debate in another place, none of the Labour men said anything. Was not that awful ! I am entitled to say, in reply, that the gentlemen sitting in Opposition in another place have never been unanimous enough to resolve upon such a self-sacrificing act. I am very pleased to observe the number of honorable senators who are reasonable enough not to expect more from a Labour Government than’ from any other Government at this stage of the session. Senator Clemons was very considerate. So was Senator Walker. In fact, I have not heard a single senator say that the Labour Government should be expected to do more than they are doing at the present time.

Senator Sayers:

–We want the country to know what the Government propose to do in future.

Senator McGREGOR:

– The’ country has the- Labour platform before it in print. There is no necessity for us to go to the top of the Grand Hotel, and to call out what we are going to do.

Senator Millen:

– Are we to understand, then, that the Labour programme is the Government programme for next session?

Senator McGREGOR:

– I am telling the honorable senator that he has the Labour platform in his possession, and he knows that every member of the Government believes in that platform. No one would have expected the half-and-half Government led by the Right Honorable G. H. Reid to state, at the end of one session, what it proposed to do next session. Therefore, it will not be expected that this Government shall do so. But I can assure the Senate, that the Government will, next session, bring in a programme that it considers to be in the best interests of Australia : and 1 can further state that when we bring in our programme we shall stick to it. I think that that is a statement which ought to satisfy every one. I was quite surprised to hear Senator St. Ledger’s speech. He was almost in harmony with the policy of the Government, and was prepared to support it in almost everything. In fact, he was ready to propound a policy for us, and I believe that if we had taken up his declaration he would have come over to help us to carry it out. I was glad to hear him express himself so magnanimously.. Senator Sayers, also, is prepared to propound a policy for the Government, and no doubt he would support us if we would take up his proposition. But, leaving aside such considerations, and after again thanking honorable senators for the way in which the motion has been discussed, I desire to slate that we wish to consult the convenience of all honorable senators in the way in which business is taken. The original intention was that, after this debate concluded, my colleague, the Minister of Defence, should move the second reading of the Manufactures Encouragement Bill. Then Senator Millen, or some other member of the Opposition, could have secured the adjournment of the debate; after which I was prepared to postpone Government business, in order to allow private business to occupy the rest of the sitting. But the debate has lasted so long that it would not be fair to expect my colleague to attempt to deliver a second-reading speech before the time for taking private business arrives. The better course will, therefore, be to postpone the Manufactures Encouragement Bill until to-morrow. But, although the resolution which is about to be put gives Government business precedence over private business, I can assure honorable senators that the Government are anxious to afford facilities for private business to be dealt with, and that, unless important Bills come up from another place, we shall offer no objection to the time being utilized for that purpose.

Senator Chataway:

– The Government will not bring forward the Navigation Bill?

Senator McGREGOR:

– We shall not obtrude that Bill, because no senator can expect it to be passed this session. I believe that all honorable senators are anxious, as the Government are, that the session should come to a conclusion before Christmas. We shall endeavour to arrange business to that end.

Senator Chataway:

– Does the remark that the honorable senator has made apply to the report of the Standing Orders Committee ?

Senator McGREGOR:

– The Government are not likely to be unreasonable in respect to that report. In the other House, a similar motion is being discussed. It has also to consider a Bill which has been dealt with here, and one or two new Bills, and to put through the Estimates. It will be some time before any measures are transmitted to the Senate, and, in the meantime, there will be ample opportunity for dealing with private business here. If this motion is carried, Government business will take precedence when that is absolutely necessary, and in other respects private senators will be treated as they always ought to be - in a most reasonable manner.

Question resolved in the affirmative.

page 2275

ORDER OF BUSINESS

Motion (by Senator McGregor) proposed -

That Order of the Day No. 2, “ Government Business,” be made an Order of the Day for to-morrow.

Senator MILLEN:
New South Wales

– I do not wish to interfere with any arrangement which the Government are making, except so far as it may further the object which Senator McGregor has announced of expediting business, and at the same time considering the convenience of honorable senators. If, as I understand, the Minister of Defence is prepared to move the second reading of the Manufactures Encouragement Bill, may not an opportunity to do so present itself after the dinner-hour? If this motion is carried, the opportunity will be taken away.

Senator Pearce:

– I am prepared to move the second reading of the Bill now. if the Senate is agreeable.

Senator McGregor:

– If honorable senators prefer that course to be taken, I am quite agreeable.

Motion, by leave, withdrawn.

page 2275

MANUFACTURES ENCOURAGEMENT BILL

Second Reading

Senator PEARCE:
Western AustraliaMinister of Defence · ALP

– I move -

That this Bill be now read a second time.

The Bill was introduced elsewhere by the late Government. When the present ‘Government came to consider what measures should be’ adopted and proceeded with, we, of course, were influenced by the fact that very little time was left for dealing with any business, and it was decided to bring forward only those measures which were of the first importance, or were of a pressing character, and which we knew largely commanded the support of all sections in the two Houses. This Bill, in our opinion, came within that category. I suppose that no other measure has received so much attention from, at any rate, one branch of the Legislature as it has. The idea of paying bounties was first raised in this Parliament in connexion with the Tariff of 1902, and, as the result of that discussion, a Bill for the purpose was introduced by the Minister of Trade and Customs, the late Right Honorable C. C. Kingston. Its. second reading . was carried in the other House by twenty-four votes to eighteen, and on one of the clauses a motion was carried to refer the measure to a Select Committee, which was afterwards converted into a Royal Commission. It reported practically in favour of the establishment of the iron industry by means of bounties. It said -

3. The evidence has satisfied us that all the materials necessary for the manufacture of iron from its ores are to be found in various parts of Australia in large quantity and of good quality, and under, conditions suitable for the successful establishment of the industry under proper encouragement.
4. Little attention has hitherto been given to iron mining in Australia, and your Commissioners are of opinion that future operations are likely to result in further valuable discoveries of iron deposits.
5. Encouragement is especially needed in the initial stage of the industry to secure the requisite capital. The existence of powerful rival vested interests elsewhere, and the novelty of the enterprise, so far as Australia is concerned, .induce some hesitation in investing on the part of capitalists.
6. Your Commissioners are of opinion that the necessary encouragement can best be supplied in the form of a bonus on the manufacture of iron and steel from Australian ores.

During that session, the Bill was not taken beyond that stage. In March, j 904, it was re-introduced by Sir William Lyne; it was read a second time. by twenty-seven votes to six, but it had not got beyond the Committee stage when Parliament was prorogued. It was again introduced in 1905, and sent up, tor the first time., to the Senate, when its second reading was negatived by a majority of one. In 1907, it was re- introduced here, but the Parliament was prorogued before it was dealtwith”. The Bill has been unfortunate in this respect, that many members of both Houses are anxious to see the industry established, but are not agreed as to the method by which that shall be done. There are some who have favoured the imposition of a Customs duty ; there are some who have favoured the grant of a bounty ; and there are others who have preferred to have a State or Commonwealth industry. Owing to the difference of opinion between those three sections, no agreement has yet been possible. This Bill affirms the principle of bounties, and, if the people of any State should express through their Legislature a desire that the industry should be taken over, or become a State-owned one, the machinery for that purpose is provided.

Senator Millen:

– Does that apply to an industry already existing?

Senator PEARCE:

– That is one of the conditions under which any industry will receive a bounty. It will have to enter into a bond, as I shall explain later. It is scarcely necessary to state that the present Government are heartily in favour of that portion of the measure. Not only that, but they go further, and say that it is eminently desirable that that optional power shall also be placed in the hands of the Commonwealth Parliament. When we take into consideration the fact that it maintains a great Defence Department, that it is proposing to launch out into certain manufactures, that it is contemplating railway development - and we all know how important the iron industry is to railway development - and that iron is the basis of all manufactures, we see that a good case can be made out for the Commonwealth taking power in the Bill to resume^ if it should think fit, works which have been established by means of a bounty.

Senator Sir Robert Best:

– That means an alteration of the Constitution, though.

Senator PEARCE:

– Not necessarily. I am sure that my honorable friend will agree with me that, without any alteration of the Constitution, the Commonwealth has full power to establish iron works if their establishment is incidental to the exercise of any of the powers therein conferred. He will, I am sure, admit that our legislative powers include railway construction and defence, that the production of iron ore is incidental to the exercise of both powers, and that if the Commonwealth cared to acquire works for that purpose, it has full power under the existing Constitution to do so.

Senator Millen:

– They would not keep Lithgow going a fortnight.

Senator PEARCE:

– The railways of Australia, I venture to say, would keep Lithgow going for more than a fortnight.

Senator Millen:

– But they are not Federal.

Senator PEARCE:

– No. They belong to the. States, and under the Constitution it is possible for the Commonwealth to acquire the railways of a State with its consent. When Mr. Deakin was AttorneyGeneral, he looked into this question from the legal stand-point, and he was by no means convinced that it was not possible for the Commonwealth to own iron works and produce iron not only for its own requirements, but also for sale.

Senator Millen:

– Mr. Kingston’s opinion on that point is very clear.

Senator Gray:

– Does the right which the Minister asks for in this Bill cover that which New South Wales already enjoys?

Senator PEARCE:

– I would prefer my honorable friend to allow me to develop my argument in my own way. I did not propose to deal with that aspect of the question just now, but merely mentioned it incidentally, to show why the Bill has not yet been passed. That fact has been due not so much to the opposition to the Bill as to the divided opinion amongst its supporters as to the best course to be adopted. That Australia is a great consumer of all the products enumerated in the schedule to the Bill is proved by the following return of our importations for the year 1907 -

That was the Australian importation of the articles for one year. Various attempts have been made to establish the production of pig-iron in Australia. What has been done at Eskbank is related in a paragraph in the Lithgow Mercury of 14th October -

Pig Iron. - The blast furnace has now been running about 18 months, and continues to produce pig-iron of excellent quality. The Rail ways Commissioners order this material regularly, and it is used with success for locomotive and other purposes at Eveleigh workshops. For the first 12 months of the contract about 6,500 tons of the Lithgow pig-iron was used on Government works alone.

Previous efforts on a more or less smaller scale have been attempted in that locality, but that is, I think, the most determined effort which has hitherto been made to establish the industry in Australia. Other countries have found it necessary to establish the industry, and in the case of Canada and the United States the bounty system was adopted. In 1906 Canada produced 550,618 metric tons of pig-iron, but the production of steel is not given in the list from which I am quoting. In that year the United States produced 25,712,106 tons of pig-iron and 23,738,587 tons of steel. The other great producers are the United Kingdom, with 110,210,178 tons pig-iron and 6,565,670 tons of steel, and Germany, with 12,478,067 tons of pig-iron and 11,135,085 tons of steel.

Senator Findley:

– Can the honorable senator give the production in the national workshop of Japan?

Senator PEARCE:

– No figures for Japan are given in this list. The history ofl the iron industry in Canada “is of interest to us, because its conditions are somewhat similar to ours, with one exception. We are more favorably circumstanced because our formidable competitors will be at a greater distance, whereas Canada’s most formidable competitor is a neighbour. Now, as to the bounties paid in Canada, I find that in respect of pig-iron manufactured from ore on the proportion from Canadian ore produced during the calendar years, the bounties paid were, in 1907, 2 dols. 10 cents per ton, that is, about 9s. In 1908 the same bounty was paid. In 1909, the bounty payable will be 1 dol. 70 cents, or about 8s., and in 1910, 90 cents per ton.

Senator Pulsford:

– That is on Canadian ore.

Senator PEARCE:

– Yes, these are the bounties given “ on the proportion of Canadian ore.”

Senator Millen:

– What is the present bounty ?

Senator PEARCE:

– The bounty payable in 1908 was 2 dols. 10 cents per ton -

In respect of pig-iron manufactured from ore on the proportion from foreign ore produced during the calendar yeaTS : - 1907, Si. 10 per ton; 1908, $1. 10 per ton; 1909, $0.70 per ton ; and 1910, $0.40 per ton.

I understand from that that the bounty is calculated according to the quantity of local and foreign ores in the pig-iron, and that it increases as the quantity of local ore is increased, and decreases as the quantity of foreign ore used is increased -

On puddled iron bars manufactured from pig-iron made in Canada during the calendar years 1907: - $1.65 per ton ; 1908 $1.65 per ton; 1909, $1.05 per ton; and in 1910, $0.60 per ton.

In respect of rolled round wire rods not over three-eighths of an inch diameter manufactured in Canada from steel produced in Canada from ingredients of which not less than 50 per cent of the weight thereof consists of pig-iron made in Canada, when sold to wire manufacturers for use in making wire in their own factories in Canada, on such wire rods made after 31st December, 1906, six dollars per ton.

Sitting suspended from 6.30 to 7.45 p.m.

Senator PEARCE:

– I was referring before the adjournment to the bounties paid in Canada. Theonly other quotation I desire to make from the Canadian Almanac will be found at page 130, and is as follows -

In respect of steel ingots manufactured from ingredients of which not less than 50 per cent of the weight thereof consists of pig-iron made in Canada, on such ingots, made during the calendar years: -1907, $1.65 per ton;1908, $1.65 per ton; 1909, $1.05 per.ton; and 1910, $0.60 per ton ; provided that bounty shall not be paid on steel ingots from which steel blooms and billets for exportation from Canada are manufactured.

After that short survey I propose to ask honorable senators to turn their attention to the Bill. I shall not refer to its provisions in detail, but I direct attention to the fact that the Bill is affected by the provisions of the Tariff Act of 1908. The second paragraph of clause 3 reads -

Provided that no payment of bounty shall be authorized under this Act on any of the goods mentioned in the schedule manufactured after the issue of a proclamation under any Customs Tariff bringing into operation ‘any duties of Customs on such goods.

That refers to Division VIa., Metals and Machinery, in the Tariff, the preamble to which reads -

To come into operation (and any then existing bonus to cease) on dates to be fixed by proclamation, and exempt from duty in the meantime. Proclamation to issue so soon as it is certified to Parliament by the Minister that the manufacture to which the proclamation refers Was been sufficiently established in the Commonwealth, but no proclamation to issue except in pursuance of a joint address passed on the motion of Ministers by both Houses of Parliament stating that such manufacture is sufficiently established.

The duties follow this preamble, and provision is made for a duty of 121/2percent. on scrap iron and steel and pig-iron, ingots, blooms, slabs, billets, puddle bars, and loops, and like crude manufactures, bar, rod, and angle iron ; a duty of 171/2per cent. on machinery - mowers, reapers, and’ reapers and binders; and a duty of121/2 per cent. on iron and steel tubes and pipes..

Senator Millen:

– The effect of clause 3, I take it, is to provide that no bounty shall be running concurrently with a duty ?

Senator PEARCE:

– That is so. Clause 5 proposes another limitation. It provides that -

1. The total amount of the bounties authorized to be paid in respect of any particular class of goods shall not exceed the amount set out in the third column of the schedule opposite the description of that class of goods.
2. The maximum amount of bounty, which may be paid in any one financial year in respect of goods specified in class 1 of the schedule shall not exceed Thirty thousand pounds.

Senator Pulsford:

– That would allow of£60,000 being paid next year.

Senator PEARCE:

– That is if the whole amount were claimed, but it would not be obligatory on the Commonwealth Government to pay , £60,000 next year, because, as the honorable senator is aware, if the. maximum amount were not paid in one year, the balance might be set apart tobe added to the amount payable in the next: year.

Senator Millen:

– Still, the fulllegal obligation for each year is the amount stated in the clause quoted.

Senator PEARCE:

– Yes. £30,000 is the maximum amount payable in any one financial year, but the amount left unpaid is at the discretion of the Government of the day, as clause 5 of the Bill says -

Provided that where the maximum amount has not been so paid in any year the unpaid balance, or any part thereof, may be paid in any subsequent year in addition to the maximum amount for that year.”

Senator Dobson:

– It might be argued that the word “ may,” in clause 5, should be read as “ shall,” as an applicant for bounty might contend that he had a contract with the Government.

Senator PEARCE:

– I do not think that could be argued. This Bill does not propose to appropriate money for the payment of bounties, except to the amount set out in the clauses. The Crown Law officers say that it would not be obligatory, but would be purely discretionary with the Government of the day in submitting their annual appropriation. Clauses 8 and 9 are interesting, because they are the clauses in which power is taken, if required, to transfer works for the manufacture of iron to any State in which they are established. The transfer is accomplished by the claimant for bounty entering into a bond which is to be voidable if his plant and works are transferred to the State.

Senator Chataway:

– Compulsorily, it required ?

Senator PEARCE:

– Yes; And the lionel is to’ provide for that. ‘Honorable senators are aware that I have circulated an amendment, by which I propose to ask the Senate, when in Committee, to agree to give the same power to the Commonwealth. I should like to read what the Royal Com.mision of 1904 had to say on that question, but perhaps I had better, first of all, quote Mr. Deakin’s opinion, which will be found at page 384 of the report. Mr. Deakin furnished this opinion at the request of Mr. Kingston -

You ask for my opinion for the information of the Bonus Commission as to the powers, if any, of the Commonwealth, to establish iron works. In my opinion no such power is included in the express gift of legislative power to the Federal Parliament.

He then goes on to describe the trade and commerce power, and, later, he says-

Nor can I find in any other part of the Constitution any express authority for the course suggested.

Hie implied powers of legislation remain to tie determined, but include (under sub-section 39 of section 51) matters “incidental” to the exercise of the expressed powers.

The manufacture of iron may be incidental to the execution of many such powers, e.g., defence or the construction of railways. The Commonwealth might clearly undertake the manufacture of any goods for its own use ; and probably if it did so, and it were incidentally advantageous to the interests of the economical working of the undertaking that it should also manufacture for other consumers, such manufacture’ would also come within its implied powers. Except as above, it does not appear that any power to establish and conduct manufactures can be implied from the Constitution.

Yours faithfully,

Alfred Deakin.

So that it will be seen that Mr. Deakin, at the request of the. Bonus Commission, gave an opinion that under our implied powers it might be possible for the Commonwealth Government to enter upon the production of iron.

Senator Chataway:

– Is Mr. Deakin recognised as a constitutional lawyer?

Senator PEARCE:

– I am aware that he is not recognised as an authority on any question by some people, but I am prepared to take Mr. Deakin’s opinion on a constitutional question as readily as that of most of the other leading legal gentlemen in the Commonwealth.

Senator Millen:

– I suppose that the present Attorney-General is satisfied on the point ?

Senator PEARCE:

– I have not the slightest doubt that the present AttorneyGeneral is thoroughly satisfied. If any State Government ‘ has (his power, seeing that it may be necessary, and no one will argue that it may not be necessary for the Commonwealth Government at any time to exercise this implied power, I do not see why it should not be done. The power will not be exercised by the passing of such a provision in this Bill, but the enactment of the provision will enable Parliament to exercise the power whenever it becomes necessary to do so. Surely this Parliament is not afraid to take unto itself a power which it does not fear to intrust to a State. In my judgment, it would be stultifying itself if it did not say in this Bill that it would make the same condition applicable to itself that it makes applicable to a State. That is only a common-sense proposition.

Senator Millen:

– The Minister is assuming that Mr. Deakin’s opinion is conclusive, whereas it appears to me to have a limitation.

Senator PEARCE:

– Those who do not regard Mr. Deakin’s opinion as conclusive have to assume that the Commonwealth can establish a factory in which it can manufacture its big guns, but that it cannot manufacture the metal for those guns from iron ore.

Senator Millen:

– It can manufacture iron for its own use, but the Constitution prevents it from undertaking the manufacture of iron for general commercial purposes.

Senator PEARCE:

– That is quite another matter. The honorable senator flits so quickly from point to point that it is difficult to follow him.

Senator Sir Robert Best:

– I do not think anybody will dispute that we have the power to manufacture iron for our own purposes.

Senator PEARCE:

– If that much is conceded we ought to take unto ourselves authority to exercise that power, and to make it a condition of the “bounty. Of course, before that power can be exercised, Parliament must be consulted. The only other provision to which I desire to direct attention is clause 11, in which an attempt is made to lay down certain conditions, which are intended to insure that employes in this bounty-fed industry shall be paid reasonable wages, and enjoy fair labour conditions. That principle has already been affirmed by this Parliament in the Sugar Bounties Act, and I do not anticipate that any objection will be raised to the insertion of a similar provision in this Bill. If we are going to apply the money of the taxpayers to the support of the iron industry, we have a right to enforce the observance of proper labour conditions.

Senator Colonel Neild:

– There is no such provision contained in the Bounties Act which was passed last session.

Senator Lynch:

– Yes, there is.

Senator PEARCE:

– At any rate, I know that such a provision is embodied in the Sugar Bounties Act.

Senator Chataway:

– That Act provides that the Minister must be satisfied that the rate of wages paid in any district accords with the standard wage in that district.

Senator PEARCE:

– The original weakness of the Sugar Bounties Act was that whilst Parliament expressed a pious wish in regard to the observance of proper labour conditions, it did not provide the necessary machinery for giving effect to its desire. But some time ago a. very practical measure - the Excise Procedure Act - was piloted through this Chamber by Senator Best, and that measure provides us with all the machinery that we require. Under this clause we propose to avail ourselves of the provisions of that Act, and by that means we shall be able to give effect to the will of Parliament that fair labour conditions shall be observed. Throughout the’ stormy career of this Bill it is worthy of note that the schedule has remained practically unaltered. It is the schedule which was recommended by the Royal Commission which inquired into the advisableness or otherwise of granting a bounty to the iron industry, except that the item spelter has been eliminated.

Senator Millen:

– There has been a reduction of the amount) of the bounty payable, I understand.

Senator PEARCE:

– Not on the first two items. They have remained the same throughout. The only alteration in the schedule that we think is necessary has reference to the second item, namely, galvanized iron made from Australian ore. The necessity for the alteration is due to the fact that the object of this Bill is to authorize the payment of a bounty upon the production of certain articles which for various reasons’ have been subjected either to a very low duty or to no duty at all.. We seek to make up for that deficiency without injuring any other industry. Now,, galvanized iron may be held to include many articles, some of which have been subjected to a very substantial duty under the Tariff. But this measure aims at two main lines - galvanized flat iron or steel, and galvanized flat or corrugated iron or steel. Those were the lines which were in the minds of the framers of the Bill, and? of the Commission. The duties upon those lines have not proved effective, and I am sure it is not the desire of the Senate that bounties should be paid on galvanized iron products which are already receiving a substantial measure of protection. I wishalso to point out that the largest customers for the chief articles enumerated in this schedule are the States Governments, and1 the largest prospective customer is the Commonwealth Government. I hope that honorable senators will bear that fact in mind. The largest customers will not be private manufacturers, .but the States and Commonwealth Governments. As iron anc? steel form the very basis of our defence, and as their manufacture will largely affect our defence policy, we hope that if the Bill. passes, not only will this industry be established in the near future, but that it will be established under such conditions that either the Commonwealth or the States; will be in a position to safeguard the very big interests which they have at stake. In conclusion, I have only to say that the Government certainly favour the Commonwealth itself control-ling this industry. We are not satisfied’ that the Bill provides the best method for securing the establishment of the iron industry. We would muchrather see the industry nationalized. But we have to recognise that the other House has repeatedly, and by large majorities, affirmed its desire that this Bill should become law, and we must bow to its decision. We are impressed with the value of the iron industry, and with the necessity for taking steps; to secure its effective establishment at anearly date. These considerations have impelled the present Government to adoptthisBill, which was brought forward by the late Government. It will be our duty toendeavour to pass it and I appeal to hon- orable senators to join with us in that effort, and to give favorable consideration to :he various amendments which I have Clr.culated, and which, I believe, are in the lest interests of the industry itself.

Debate (on motion by Senator Millen) adjourned.

page 2281

PHOSPHATIC DEPOSITS BOUNTY

Senator LYNCH (Western Australia) “8.8]. - I move -

That, in order to provide a cheaper and more plentiful supply of fertilizers of a better quality For the encouragement of production throughrat the Commonwealth, the Senate is of opinion :hat the Bounties Act should be amended so is to provide for the payment of a substantial bonus for the discovery and working of phosphatic deposits in the Commonwealth and the stands under its jurisdiction.

When the Bounties Bill was under consideration last session, I endeavoured to secure the payment of a bounty for the working of phosphatic deposits within the Commonwealth and in the islands under its control. I found, however, that my proposal was out of order, and that, if agreed :o, it would have altered the destination of he Bill. Consequently, I had not an opportunity of moving in the direction that [ desire. My object is to insure the setting aside of a substantial sum to provide for he payment of a bounty for the discovery >f phosphatic deposits, as well as for their subsequent working. I have little fault o find with the Bounties Act except that t provides for the payment of bounties upon commodities which will never be produced in this country. Seeing that we have : large area situated within the temperate nd sub-tropical zone, we ought to devote nore attention to bringing that area under effective cultivation instead of endeavouring to produce coffee “and numerous other articles in the tropics. ?he Government of the day” obtained the advice of a number of experts from the various States, who were called together or the purpose. But in my opinion these len absolutely failed in their duty in losing sight of the object which my motion is founded to achieve. They should have viewed the situation in a broad spirit ; and should have recognised that the production f cereals in Australia depends in a very large measure upon the cheap production f fertilizers. Although the experts were apposed to be possessed of some knowledge qf the requirements of the various states, instead of giving due attention to the need for the cheap production of fertilizers they left out of consideration the need for assisting the production of cereals in the colder parts of Australia. The production of wheat is one of our principal industries. Referring to the records, I find that the value of the wheat crop for last year for the whole of the Commonwealth was no less than ^9,700,000. The value of the wool crop was ^26,000,000. So that, although wool is our principal staple, the wheat industry ranks second. It is just as well for us to face the fact that, although Australia is very rich in certain respects, it is very far behind the leading wheat-producing countries of the world in the production of cereals. According to the Commonwealth Y ear-Book Australia comes last but one amongst nineteen of the principal wheat-producing countries of the world. The United Kingdom stands at the head of the list with an average production of 30 bushels to the acre. Germany <and Canada, as well as most European countries, are well represented, and the lowest country on the list is Algeria. (Australia stands next lowest with an average of only 9 bushels to the acre. It is not creditable to the Commonwealth that we should be eighteenth on the list. It would seem on the face of the facts that there is something radically wrong in Australia.-

Senator LYNCH:

– The facts seem to show that by the use of manures we could show better results.

Senator Colonel Neild:

– It is rainfall that is wanted.

Senator LYNCH:

- Sir William Crookes, a very high authority on the subject, has prophesied that within twenty years the wheat consumption of the world will overtake the production. By that time we shall have a positive scarcity of wheat, if that eminent authority is to be relied upon. It is desirable that before that condition of things is reached, Australia should be able to do her share fe supplying the world’s requirements. She cannot do that without cheapening production, and to insure cheapened production, I submit that we must have a better and cheaper class of fertilizers. The principal reasons for proposing to grant a bounty for the discovery and work of fertilizers of this kind’ are as follow : - In the first place, mineral superphosphates, which will be refined from the crude ore as it is discovered and worked, are the best possible kind of fertilizers for our purpose. It is well known from the experience of the several States that by the use of mineral superphosphates it is possible to get a very much larger return and a healthier crop than by the use of’ any other fertilizers such as are in common use. This, if there were no other reason, should actuate honorable senators in supporting my proposal. It has been suggested by Senator Neild that one of the principal reasons for our very low average in production is the lack of rainfall. If we adopt means of securing a more plentiful and better crop by the use of fertilizers, we shall to some extent overcome the evils caused by droughts which so often beset many of the States. It is recognised that mineral superphosphates by reason of their qualities being easily assimilable as plant food, enable the farmer to get his crop out very much earlier than he would do by the use of other fertilizers. Another reason for my proposition is that mineral superphosphates form the basis of other kinds of fertilizers which are in common use, and which are employed for the production of other cereals. These fertilizers are used by the orchardist, by the viticulturist, and in some instances as topdressing for grass lands. If we can, by any means, increase the supply of mineral phosphates, we thereby open the road to a more fruitful production and a cheaper price. Another reason for supporting my proposition is that when mineral superphosphates are used in wheat cultivation or employed in the growth of other cereals, it is afterwards very much easier to produce a better crop of grass than is possible when other fertilizers are employed. The universal experience of farmers is, that by the employment of this particular form of fertilizer, pasturage, after the cereal crop is reaped, is much improved. In order to show the extent to which mineral superphosphates are used I shall briefly refer to the State of South Australia, where, in the year 1898, the total area under cereal crops was ‘ 2,148,000 acres. Out of that total 230,000 acres were manured with fertilizers. From 1898 until 1908, a period of ten. years, the increase in the area of land manured with mineral superphosphates was from 230,000 acres to 1,456,000, showing an increase from 12 per cent, ten years ago to over 60 per cent. last year. These figures indicate the increasing use of mineral superphosphates in South Australia, and the beneficial results from their employment can be inferred.

Senator Gray:

– Were the climatic conditions the same?

Senator LYNCH:

– I should imagine they were the same, because the drought conditions that prevailed in 1902-3 made their unfortunate visitation in South Australia as well as in the other States, excepting only Western Australia. As to the quality- of this kind of fertilizer, honorable senators only need to be informed that out of the total use in 1906 of 68,000 tons of manures, no less than 56,000 tons of mineral superphosphates were used. That is to say, the particular kind of superphosphate that would be manufactured out of those deposits which we hope would be worked under a bounty of this kind, amounted to 56,000 tons out of a possible 68,000 tons in one State ; the other manures employed being neutral superphosphate, bone-dust, guano, and Thomas’s phosphate. It will, therefore, be seen that this particular form of fertilizer is the most popular one used. Asio the effect of mineral superphosphate ascompared with other forms of fertilizer, I have again to rely upon the experience of South Australia. I am glad to notice that in that State trouble is taken to ascertain the relative values df several forms of fertilizers. There is an AgriculturalBureau which enables the Director of Agriculture to come in close touch with agricultural centres throughout the State, and” whenever an experiment is about to be tried the farmers in particular localities are communicated with and requested by this State officer to assist, in order that the people, -not only of South Australia, but of adjoining States, may reap the value of the experiment. We find that by this means mineral superphosphates have been tried with very satisfactory results. I do not wish to quote more than a few examples of the experiences of different farmers throughout South Australia. Mr. Potter found that by the application of 84 lbs. of mineral superphosphate the yield per acre was 19 bushels, the cost of manure per acre was 3s. 3d., the increase;! yield per acre due to manure was 15 bushels, and the profit per acre over the unmanured plot was £5 16s. 3d. I have not the slightest doubt that if the experi- ence of making such an extraordinary profit as is there shown were general, the farmers could afford to pay a very reasonable price for the article, i am thinking particularly of that very much larger section of farmers who are barely able to make ends meet, and to whom a reduction in the price of a fertilizer means the difference between success and failure. I recognise that by the granting of bounties, or, in fact, by any action we may take here, certain individuals will benefit in a far greater ratio than others, but it is our duty to see that the large section to whom some relief can be given are” considered. I am thinking, chiefly, I repeat, of that very large section of farmers -who are engaged in the dry areas of the States, and to whom a cheap form of fertilizer means the difference between retaining their holdings and leaving them, perhaps, to crowd into the towns, and there to compete in the already overstocked labour market. It should not be the policy of this Government by any measure, either directly or indirectly, to encourage population to drift from country areas into the cities. Mr. Potter goes on to state that by the use of 112 lbs. of mineral superphosphate the yield per acre was 26 bushels, the cost of manure per acre was 4s. 4d., the increased yield per acre due to manure was 23 bushels, and the -profit per acre over the unmanured plot was £5 12s. 8d. The experience of Messrs. Churches was that by the use of 84 lbs. of mineral superphosphate the yield per acre was 17 bushels, the cost of manure per acre was 3s. 3d., the increased yield per acre due to manure was 11 bushels, and the profit per acre over the unmanured plot was 15s. 6d. These are fair samples of the experience of those who have tried the virtues of this form of fertilizer in South Australia. The comment made on the experiment by Mr. Summers, the officer in charge of that “branch of the State Agricultural Department, is as follows -

These results emphasize the demand of the wheat crop for the water-soluble phosphate.

He goes on to say -

The concentrated super gives a considerably smaller return than the corresponding amount of mineral super (plot 5). Thomas phosphate again compares badly with mineral super; comparing plots 1 and 2 it gives 7^ bushels per acre less with equal quantities of manure. ‘ Comparing plots 9 and .3 with practically the same value of manure, the ‘difference is gi bushels against the Thomas phosphate.

It can be seen that, in point of production and fertilization, phosphate, so far as those experiments are concerned, is far behind mineral superphosphate. I propose now to quote the experience of New South Wales, and what affects that State must necessarily affect other States. According to its Agricultural Department, there was practically no superphosphate used there in 1890. The Department was established in that year, and the educational work done by it soon stimulated the use of artificial manures. During last year, 351,000 cwt. of bone superphosphate was made in the State. A portion of it was sent to New Zealand, but a similar quantity, made from rock phosphates, was imported from Japan. This shows the very serious handicap which producers in Australia have to bear as compared with producers in America. According to the same authority -

If rock phosphate could be found in this Continent it would, of course, make superphosphate much cheaper than it is at present, provided it could be cheaply conveyed to market and was not too remote from a railway. At present we are using the charred bones of the Colonial Sugar Company’s Refinery, and our superphosphate costs 60 per cent. ‘ more than the similar article of equal value made from rock phosphate in Florida, United States of America. If this manure could be made cheaply, say, at £3 5s. per ton, instead of £4 io’s. per ‘ton as at present, it would, undoubtedly, stimulate the use of it. I estimate that if the wheat-growers in the colder districts where the soil is somewhat impoverished after from 20 to 40 years cropping, would use dressings of about 60 lbs. per acre, the total used in the State would amount to 100,000 tons.

That quotation shows that the wheat farmers of New ‘South Wales have to pay 60 per cent, more than is paid by the wheat farmers of America, according to the authority of its Agricultural Department. The next quotation I propose to make deals with the prices of the different kinds of manures. The head of the Agricultural Department of New South Wales concludes his communication to me with this statement -

I may add that Thomas’ phosphate or basic slag, as it is sometimes called, which is a byproduct in the smelting of steel, can be purchased in Europe for £1 10s. a ton, and is used in enormous quantities; therefore, it can be readily seen the great advantage European wheat-growers have over those in Australia where the cheapest phosphatic manure is three times as dear.

It’ can be seen that for this very necessary element of a cheap fertilizer the farmers of New South Wales are charged ‘three times as much as are the farmers in European countries. Having regard to the cost of transporting our surplus wheat to the Old Country, it is very necessary that we should make some effort to provide our producers with a cheap form of fertilizer which will counterbalance that extra expense. The experience of all the States in this regard is about the same.” The Agricultural Department of Victoria reports a marked increase in the use of fertilizers. According to a computation, their use has increased from 16,052 tons, in 1898, to 60,871 tons, in 1906. In other words, in the course of eight years there -has been an increase of over 400 per cent. The experience of the Agricultural Department of the State as to the virtues of this fertilizer is stated in the following extract-

Reliable figures indicate that by the use of manures a permanent increase of 3 bushels of wheat per acre can be secured from manured land over unmanured land in Victoria.

The evidence of a witness before the Immigration Commission of Western Australia goes to show that the use of fertilizers has produced the same results in that State as in the other States. I propose to quote a short passage from the evidence of Mr. Henry James Brown, who had been farming there for six years, and who previously had lived’ all his life in the Goulburn Valley, of Victoria -

Mr. Rason.Do you use fertilizers? Yes. For these last three years I have been using Thomas’ phosphates from 50 lbs. to 75 lbs. to the acre.

Has it a good effect on the yield? - Yes. 1 have been well satisfied with the returns.

Have you ever tried to prove the difference in the yield by putting in some land without fertilizer and some with? - Yes. For my first two years on the place I did not’ use fertilizer; and I cannot say that the yields were quite so good as with it, except for the first year, when I got a yield from an exceptionally .good piece of ground. The cost of fertilizer is only about 3s. an acre, and I reckon I get back ?1 an acre for that expense.

His evidence simply goes to show that the experience of the eastern States is amply borne out by the experience of the western State.

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

– And the productive capacity of the land continues for several years.

Senator LYNCH:

– Yes. That is a fair sample of the evidence which was given before the Immigration Commission as to the special merits of this form of fertilizer. As I did not have an opportunity when the Bounties Bill was under consideration, I now bring this very important matter before the Senate. So far as wheat produc tion is concerned, it should not be lost sight of, because a serious injury to the fertility of our wheat-growing lands is going on According to the Commonwealth YearBook, a recent calculation shows that no less than ?100,000 a year is lost to the Commonwealth by the export of phosphoric acid in our wheat. It is a very serious; thing that our wheat-producing lands should be drained of so much productivity when that could be avoided very easily by the conversion of the grain into flour. I hope that this proposal will meet with the sympathy of honorable senators, because it will mean the placing at the disposal of our producers of a very much larger supply of this cheap and! popular fer- tilizer than has hitherto been available. We may expect to overcome to a certain extent the disadvantages under which our producers in most of the States labour owing to the lack of sufficient rainfall by the free use of cheap fertilizers. Their use in the forcing of crops might prevent the ravages which now follow the occurrence of a very dry season. I believe that there would be very little difficulty in obtaining these fertilizers on the mainland or on some of the islands of Australia.

Senator Clemons:

– On the mainland? I should think it would be a marvellous thing to discover phosphatic rock on the mainland.

Senator LYNCH:

– I do not see why a vote of this kind should not stimulate persons to discover such deposits in the same way that a reward offered for the discovery of gold induces people to prospect in the hope of discovering a gold mine.

Senator Clemons:

– The honorable senator has not understood me. I should regard as marvellous the discovery of phosphatic rock on the mainland of Australia.

Senator LYNCH:

– Phosphatic deposits are being worked on the mainland of Australia at the present time, and I do not see why diligent search should not lead to the discovery of more valuable deposits than those which are ait present being worked. We might be guided in this matter by the example of New Zealand, where a substantial sum appears on the Estimates for the discovery and working of such phosphatic deposits. I take it that the payment of a bounty in the way proposed would stimulate activity in the search for these deposits, and their extensive working would relieve the producers of the country of a considerable burden they have at present to bear. I am aware of my own knowledge that the use of fertilizers is at the present time the means of keeping under cultivation a large area in the drier portions of the Commonwealth. That in itself should be sufficient inducement for honorable senators to support my proposal. I do not say thatwe should always be guided by precedents, which are sometimes very stale ; but we are sometimes called upon to consider the wisdom of the action taken by other people.

Senator Gray:

– Does the honorable senator suggest that some of the money should be spent to enable people to make voyages of discovery around Australia?

Senator LYNCH:

– I am not so foolish as to ask honorable senators to vote money for the discovery of phosphatic deposits on islands in the Indian Ocean that are not under the jurisdiction of the Commonwealth. I am asking them to agree to support a bounty for the discovery of such deposits on territory within our own jurisdiction. Our producers suffer very greatly from dry seasons, and the responsibility rests upon us, if possible, to find some means of overcoming the difficulties with which they have to contend.

Senator Gray:

– Does, the honorable senator know of any phosphatic deposits that have been discovered inland?

Senator LYNCH:

– We can never tell whether such deposits are to be found inland until we try. Deposits in South Australia are being worked at the present time. If this Parliament agrees to a vote of £2,000 for the discovery andworking of phosphatic deposits of certain richness, that will clearly be an incentive to people to search for such deposits in islands and other places which up to the present have received no attention in this respect. In the interests of keeping our land in the drier areas under cultivation honorable senators will agree that there is wisdom in my proposal, and that it has at. least as much to recommend it as some of the bounties to which we agreed in passing the Bounties Bill. I leave the motion in the hands of honorable senators believing that it must commend itself to their judgment. They desire that the producers of the Commonwealth shall be given a fair field in the markets of the world, and they must recognise that if a bounty were of fered hidden treasures in the shape of phosphatic deposits might be brought to light in the Commonwealth.

Senator PULSFORD:
New South Wales

– I have listened with interest to the remarks made by Senator Lynch. I expected that the honorable senator would give us some information in regard to his own State, because I believe that within quite a recent period certain discoveries have been made in Western Australia of such deposits as he desires people should be induced to search for.

Senator Lynch:

– Those discoveries were made since I gave notice of my motion.

Senator PULSFORD:

– That may, be so, but the honorable senator made no reference to them. He told us that Sir William Crookes predicted some time ago that we are verging upon a wheat famine. That is quite true. But I suppose Senator Lynch is aware of certain discoveries made by Sir William Crookes which have made his name famous, including a system for securing the fixation of atmospheric nitrogen, by which he says that an unlimited supplyof nitrates for the production of wheat crops can be assured. Whilst it is true that the supply of nitrogen, so far as ordinary commerce is concerned, is. liable to be exhausted within a given number of years, I believe I am correct in saying that within the last twelve months enormous deposits have been discovered in South America. I do not know whether the estimate of the quantity discovered is 1,600,000,000 tons or 1,600,000,000,000 tons, but it is so vast that it is estimated there will be enough to supply, at present rates, the consumption for 250 years. If that be so, we are not; quite so near to a wheat famine as Senator Lynch appears to think. The whole matter is a very interesting one, and in view of the discoveries which have been made in Western Australia, and which I believe are at the present time engaging the attention of the Western Australian Government, I recommend the honorable senator to permit the debate to be adjourned.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

– I should prefer to have the motion dealt with to-night. Senator Walker is anxious that we should get to the next order of the day, and the Government do not intend to offer any opposition to this motion. I see no necessity to discuss it at great length. I am sure that honorable senators realized long ago the value of artificial manures to the farmers of Australia. If the motion is carried and any amendment of the Bounties Act is submitted to Parliament, I have no doubt that the matter dealt with in the motion will receive every consideration. In the circumstances honorable senators might permit the motion to pass and let us get on to other business.

Debate (on motion by Senator W. Rus sell) adjourned.

page 2286

COMMONWEALTH COMPANIES RESERVE LIABILITIES BILL

Second Reading

Debate resumed from 5th November (vide page 2034),on motion by Senator

Walker -

That this Bill be now read a second time.

Senator GIVENS:
Queensland

– This Bill introduced by Senator Walker is on the face of it a small and rather a simple measure. But it deals with an” exceedingly big subject, which I venture to say involves the interests not only of thousands of people in Australia who have relations with and are customers of the various banks, but of every individual in the Commonwealth, because every individual is more or less concerned with the solvency and standing of the banking institutions of the country. Senator Walker will not deny that I have fairly stated the magnitude of the interests involved, and, that being so, I have no hesitation in saying that such a measure should be introduced by a Government occupying a position of responsibility in regard to the legislation of the country rather than by a private member of the Senate. I think that the honorable senator should have moved in the first instance by way of motion in order to bring the matter before the attention of honorable senators, and particularly of the Government. He should then have used his utmost endeavours to induce the Government to take the matter up, if he could convince them of the desirableness of doing so. Further, I do not think that it is at all desirable to deal with the vast banking institutions of this country in this piecemeal fashion. The subject-matter of this Bill should be dealt with as part of a comprehensive measure dealing with the whole subject of banking. It is a very intricate and. difficult subject, and we should be in , 1 position to discuss it in all its bearings.

I should like to draw the attention of honorable senators to what the Bill aims at accomplishing. In the first place, it proposes to vary the contract which has been entered into between the banks and the country in which they carry on their business. It also proposes to vary the agreement entered into between the banks and their customers. Now, when an individual senator, acting on behalf of the bankers, asks us to take a serious step of that kind he ought to be in a position to support his proposal by facts which cannot be disputed. Under the laws of the country these banks have been permitted to carry on their businesses for their own benefit, and incidentally for the welfare of the community. But the banks are not philanthropists - primarily they are out for ‘their own profit - and they have entered into a contract to carry on their business operations in a certain way. Yet they now come forward in the person of Senator Walker, and ask us to vary that contract. For whose benefit ? For the benefit of the banks’ customers, or of the general public? Senator Walker may reply, “Yes,” to the former, but I say emphatically.. “No.” It is for “the benefit of the bank shareholders alone, as I shall be able to prove. That is a very serious step to ask this Parliament to take. I repeat that, not only does the Bill propose to vary the contract entered into between the banks and the country in which they conduct their business, but it also aims at varying the agreement entered into between the banks and their customers. We all know that every bank has an enormous number of depositors who are continually doing business with it. Periodically these institutions are compelled to publish their balance-sheets which set forth the conditions under which their businesses have been carried on. The depositors transact business with the banks upon the faith of the solvency of the latter, as disclosed by their balance-sheets. Senator Walker, by a piece of special pleading, may seek to escape from these facts, but he cannot do so. Clause 3 of this innocent little measure provides that the banks may, from time to time, set aside as much of their net profits as they please to a special reserve fund, such special reserve fund to be vested in trustees for a particular purpose. What is that particular purpose? It is to free the shareholders of banks of their proper liabilities.

Senator McGregor:

– But they could only free themselves out of their individual profits.

Senator GIVENS:

– To me that interjection provesconclusively that if the VicePresident of the Executive Council has given thisBill any consideration at all, that consideration has been of the most cursory character. Had he waited till I had completed my argument, I feel certain he would not have made the inter-: jection. What are “ net profits ? “ As a matter of fact, the banks could sell every bit of property that they possess, and after deducting from the proceeds their expenses for the year, could call the balance net profits, “ inasmuch as the legal definition of “net profits “ is the surplus of, money realized over that paid away, even although it was only realized by the sale or conversion of assets, and yet be within their legal rights. They could, under this Bill, place those profits to a special reserve fund for the purpose of relieving shareholders of their liability. That position was clearly put by Senator Best, when he was discussing the measure, and in support of his contention he quoted legal decisions by the very highest British authorities.

Senator McGregor:

– If the money were placed to a special reserve fund, that fund would be at the disposal of the bank’s customers.

Senator GIVENS:

– If the VicePresident of the Executive Council will restrain his impatience, perhaps he will be able to make more intelligent interjections.

Senator McGregor:

– But the honorable senator is not a banker, like Senator Walker.

Senator GIVENS:

– Is the VicePresident of the Executive Council willing to trust bankers to enact their own banking legislation? That is a startling doctrine to preach’ at this hour of the day. Why, we shall presently have the burglars coming along and pleading that they ought to be intrusted with the framing of legislation in regard to burglary !

Senator McGregor:

– They would have to get into Parliament first.

Senator GIVENS:

– And probably some of them would reflect as much credit upon Parliament as some bankers have done in the past. What is the nature of the contracts which have been entered into by the various banks in Australia ? All such institutions carry on their businesses under one of two distinct systems. Those which stalled operations before the establishment of constitutional government did so under charter from the British Government, and those which sprang up later commenced operations under the companies laws and the banking laws of the various States. Let me take the Bank of New South Wales, with which I understand Senator Walker has been so long and honorably associated. That institution is, I believe, one of the soundest banks in the Commonwealth and it conducts, perhaps, the largest business. It was started under charter from the British Government with a certain capital, and a certain uncalled liability upon its shareholders. From the Australian Companies Year-Book I learn that it has a paid-up capital of £2,000,000, in £20 shares, with a reserve liability of £20 on each share.

Senator Walker:

– Its present capital is £2,500,000.

Senator GIVENS:

– Then the additional £500,000 has been forthcoming during the past eighteen months or so. Its reserve liability of £20 per share cannot be called up unless the bank goes into liquidation. I think that Senator Walker will say that I am right in making that statement.

Senator Walker:

– The honorable senator is not right. I thought it was so at one time, but I find that, under certain circumstances, a portion of that reserve liability can be called up without the bank going into liquidation.

Senator GIVENS:

– Accepting Senator Walker’s statement in full, he will agree with me that the largest proportion of this reserve liability cannot be called up unless the bank goes into liquidation. What does that mean? It means that the directors are always aware that if they do not manage its business upon solvent lines, if they indulge in reckless speculation, they and the shareholders will be faced with the payment of the uncalled liability in respect of their capital. That is a penalty which always confronts them, and it is a most valuable safeguard from which we should not relieve them. Senator Walker proposes to relieve the shareholders of banks of that penal liability.

Senator Walker:

– The honorable senator is quite mistaken.

Senator GIVENS:

– No matter what he may intend, that is what this Bill would accomplish. The honorable senator wishes to provide that the shareholders shall, year after year, out of their net profits - and it is important to bear in mind the legal definition of the term “net profits” - set aside a sum, so that by-and-by they will be in a position to entirely wipe out the legal liability upon their shares.

Senator Walker:

– If the shareholders, out of their profits, placed £2,500,000 in the hands of the Government, or of trustees, for a specific purpose, does the honorable senator reallythink that that would not be better than the existing arrangement?

Senator GIVENS:

– I propose to show that it would be infinitely worse, and that the shareholders already have practically that amount in Government securities. They could transfer the whole of it under this Bill to a so-called- reserve fund, and the shareholders would be relieved of their liability. All this penal liability would be taken away, and the depositors of the bank would not have a cent more security than they have at the present time. With regard to the amount that Senator Walker wants the banks to have power to put away to a reserve fund, let me point out what that reserve fund would be. True, according to Senator Walker, it would have to be invested in Government securities in thenames of trustees. Bub those trustees would be the mere creatures of the directors, removable at will by the directors, and appointed at will by them. At any time when the directors were pinched they could force- those trustees to sell out, and give up the whole of the reserve fund. If Senator Walker were really in earnest about this Bill, and would provide that the trustees should be nominated by the Government, there might be some safeguard in it.

Senator Walker:

– We could alter the Bill in that respect in Committee.

Senator GIVENS:

– But to appoint as trustees mere creatures of the directors is simply farcical. Now, the Bank of New South Wales has at the present time a reserve fund of £1,500,000.

Senator Walker:

– £1,600,000.

Senator GIVENS:

– I am quoting from the figures for the year 1907, when the reserve fund of the bank was £1,500,000. At that time the bank had no less a sum than £1,796,210 invested in Government securities. Under this Bill the bank could at once transfer the whole of that money to the special reserve fund, to free their shareholders from their penal liability. The bank could do that within twenty-four hours after the Bill became law. But would the depositors of the bank have any more security than they hare at present? Not one farthing. Not only would they have no more security, but the reserve security they formerly had in the form of the liability of the shareholders would be entirely swept away. I say that this is a monstrous proposal, which, if the members of the Senate gave a moment’s serious consideration to it, they would not entertain for a single moment. I do not cavil at the Bank of New South Wales in any way, because I believe that it is one of the best and most solvent banking institutions in Australia. It is not, however, singular in regard to its reserve liability, or as to the amount which it has invested in Government securities,or . with regard to its reserve fund. Almost every bank in Australia has a reserve fund invested in Government securities. I have taken out the figures with regard to one or two other representative banks. Take the Bank of Adelaide, a South Australian institution. That bank had invested in Government securities at the end of 1907, the year for which the volume from which I quote was issued, no less a sum than £458,000. The bank had also a reserve liability on. shares of £500,000.Senator Walker would enable the directors of the bank to transfer the whole of the £458,000, in order to sweep away the reserve liability of the shareholders, and then all that the depositors would have as security would be the reserve liability of £40,000 odd. How any man having any pretentions to honesty could introduce such a Bill, unless he was absolutely bull-dosed by interested persons outside, I cannot for the life of me understand.

Senator Walker:

– I rise to order. Do you think, sir, that the phrase that Senator Givens has just used was a proper one for him to employ ?

The PRESIDENT:

– I did not take it that Senator Givens intended to convey the impression that he considered that Senator Walker was bull-dosed. I think he was speaking in general terms. I do not think that he would apply such a term to Senator Walker.

Senator GIVENS:

– I say that it is wonderful to me how such a proposition could be made in this Parliament unless certain things had happened outside ; but I was speaking in general terms.. I have quoted the case with regard to the Bank of Adelaide. Take another great bank carrying on business in Australia. I could quote figures to the like effect all night to bear out the same contention ; but honorable senators can look up the facts for themselves. I will take the Bank of Australasia. . That bank has a reserve liability of £40 per share, and there is a ‘reserve fund of £1,250,000. The bank has invested in British Government debentures no less than £967,141, and in Australian Government debentures £175,980, making a total sum invested in debentures of £1,143,121. The total capital of the bank is £1,600,000, and the reserve liability of the shareholders is also £1,600,000. This bank is also working under a charter. Senator Walker’s proposal means that the Bank of Australasia could transfer the whole of the £1,143,121 which it now has invested in Government securities, to a special reserve fund, to relieve the shareholders of the amount of their liability, leaving them with only about £450,000 of their reserve liability instead of the £1,600,000, which is the present amount. This is therefore a very pretty little scheme for the relief of bankers; but what about those people who have deposited their money on the faith of the balancesheets issued by the banks? While it is all very well for Senator Walker to say that it is better for the creditors of the banks to have the money actually there . than to have the security of the liabilities of the shareholders, I maintain that under present conditions the depositors have the security not only of the money invested, but also of the liability ; but under Senator Walker’s Bill they would have only the money placed to the reservefund, whilst the shareholders would be relieved of the whole of their reserve liability. The customers of the banks have done business with the banks on the faith of the position disclosed in the various balance sheets is sued every half year, or at other periodica; intervals. That being so, to ask Parlia ment to vary the contract and to remove a portion of the security under which the customers of the banks have been doing business, is nothing less than a monstrous proposal. I am sure that if Senate Walker were thoroughly seized of theenormity of what his Bill proposes to do,he would be one of the first to scout itout of the Senate. I am assuming that designing people outside have tried to mislead him, and I am sorry to say that they have apparently succeeded. There is , another exceedingly important feature in connexion with this matter which should not be overlooked by the Senate. It is this. Apart from their ordinary liabilities, there is a further and greater liability upon those who conduct banking business. Banking, as every one knows, is an exceedingly risky business sometimes. But it is also an exceedingly profitable business, and therefore shareholders are willing to embark upon the risk for the sake of the large profits which they almost invariably realize in carefully conducted banks. That being so, the shareholders of banks having embarked in this business, and being willing to accept the large and handsome profits which accrue year by year, must also be willing for the safeguard of their customers to accept their due’ share of the risk. Senator Walker’s Bill, however, desires to relieve them of that risk . Apart from the reserve liabilities of shareholders there is, under the British Banking Law, and under the banking laws of the States of Australia also; a further liability which ispracrically unlimited; and that is the liability to redeem the note issues of the various banks. In the State of Queensland my remark would not apply, because no bank in Queensland is authorized or permitted to issue bank notes. All the. notes in circulation there are State bank notes guaranteed by the Government, and payable on demand at the Queensland Treasury in gold. But my remark applies to every other State in Australia. For their issue of notes- which are merely promissory notes - the banks are liable not only to the extent of their reserve liability on shares, but their shareholders also have a practically unlimited liability up to their power to pay the last shilling they possess if ever the bank in which they hold shares should become insolvent. But it is exceedingly doubtful whether, under Senator Walker’s

Bill, the shareholders would not be re- lieved of that liability also.

Senator Stewart:

– In every State the notes of the banks are a first charge on th e assets in every case.

Senator GIVENS:

– But suppose I have a note that has not been presented for five or ten years, and the assets haveall gone in the meantime? The honorable senator has come in at the last moment and has not been listening to my argument. Suppose the assets were not there to meet the notes?

Senator Stewart:

– Well then, the bank would not pay.

Senator GIVENS:

– Does the honorable senator propose to support a Bill which would relieve the shareholders of that liability ? What nonsense ! At present the shareholders have this liability imposed upon them. It appears to me, however, that under this Bill, which is, I must say, most carelessly drafted - probably purposely - the shareholders would be relieved not only of their ordinary liability, but also of their practically unlimited liability with respect to note issue. The Bill says that the special reserve fund is for the purpose of relieving the shareholders of their liability on their shares.

Senator Stewart:

– Ought they not to be relieved?

Senator GIVENS:

– I am not going over that argument again.

Senator Stewart:

– It is proposed to relieve them by buying Government stock with profits.

Senator GIVENS:

– But all the Banks hold Government stock “now, and could transfer it to-morrow, under this Bill. The shareholders would thus be relieved of the greatest security which they now have.

Senator Clemons:

– Undoubtedly.

Senator GIVENS:

– Undoubtedly that is so. Senator Stewart should not dispute an argument that he has not listened to.

Senator Stewart:

– I have had enough.

Senator GIVENS:

– As I have tried to point out, a single additional security would not be given under the Bill to the customers or depositors of a bank. On the contrary the very large security which’ they now have would be taken away. What appears to me to be the most important feature of all is that the penal liability which now rests upon the shareholders and the directors acting for them would be entirely removed by the Bill. We know that within very recent years alarge number of the banks of Australia were in temporary difficulties. Many of them were in difficulties which were more than temporary, and the State Governments had to come to their assistance. These matters are within the knowledge of the youngest men in the different States, and we have no reason to hope that owing to a commercial crisis or to various causes such a state of affairs may not recur. That being so I think that it is the duty of every one who has to consider legislation of this kind to walk warily and see that he does nothing to relieve the shareholders of their liability or make it any less easy for them to tamper with the funds of their customers, and, to say the least of it,go in for reckless speculation. Whilst that reserve liability remains on the shares - and I have pointed out that in the case of some banks it cannot be called up at all, but must always remain until the bank goes into liquidation - the directors, acting for themselves and their fellow shareholders, know that if they recklessly manage the affairs of the bank, if they go in for anything but the most careful management there may come a time when they will be forced into liquidation and then this penalty will he staring them in the face. That I maintain is a most valuable provision to deter them from indulging in reckless speculation, and to rather encourage them to be most careful in their management of the bank and their customers’ funds so that they shall not incur a penalty which may spell ruin and disaster to themselves and other shareholders. If, however, this Bill should become law they can safeguard themselves at the expense of their customers. Theycan take and use the customers money, and free themselves of their liability; they can indulge in reckless management ; they can play ducks and drakes with the customers money, and beyond the money which they have embarked in the business of the bank there will not be a single penalty staring them in the face. It is most dangerous to remove the penal liability from them. In every country with a sound banking law it has been the custom to make a penal liability rest on the shareholders in connexion with the business of the bank, because it is acting as a trustee for its depositors and customers. It can only carry on business successfully by having the confidence of the public in its management, its solvency and the soundness of its business methods.

Senator Clemons:

– Further, it has a licence to borrow, and it ought to show good security for having it.

Senator GIVENS:

– Undoubtedly it should show good security. But Senator Walker and others, who support the Bill, want to take away that penal security which the customers of a bank now have, and enable the bank to vary the contract to the extent of transferring all its present reserve funds to a particular fund in order to free itself of that reserve liability. There is another point which I referred to- in a cursory way a little while ago, and which is deserving of very serious consideration. Senator Stewart and others seem to be impressed with the fact that it will be a valuable thing to have this fund always invested in trustees, so that the bank’ cannot look at it and touch it, and that it will be always available when wanted. But if the Bill in its present form should become law we should have no guarantee that it would be there, because under its provisions the trustees will be the mere creatures of the directors. The directors can make and unmake the trustees without assigning any cause. At their own sweet will the directors can tell the trustees to go about their business and make any understrapper in the bank a trustee. In times of stress the bankers might see that if they could not reach out and grab this special reserve fund immediately insolvency would stare them in the face. The temptation would be too strong for human nature to resist, and undoubtedly the directors would have recourse to that remedy to tide them over what they might consider a temporary difficulty. Therefore we should have absolutely no security, and when a bank went finally into liquidation, if it were forced that far, there would not be a single shilling of the special reserve fund available. If there would be any value in a special reserve fund undoubtedly it should be invested in the State Treasurer, or the Commonwealth Treasurer, or some such person as trustee, but we might as well not have any trustees as have the mere creatures of a bank. I think I have said enough to show that the Bill touches exceedingly dangerous ground which should not be meddled with except after the most careful and serious consideration. It is a measure which, in view of its grave importance, should not be fathered by a private member of the Senate. The Government of the day ought to assume the responsibility which attaches to them of seeing that the Commonwealth has a proper banking law for the protection of its people. I do not think that even they should bring down a piece-meal proposal of this kind. If it is advisable to enact any legislation pf this sort, it should be embodied in a large comprehensive measure dealing with the whole subject of banking.

Senator CLEMONS:
Tasmania

– It must be quite obvious to every honorable senator who listened to Senator

Givens that he has given to this Bill a serious and careful consideration. If all the members of the Senate give to it a like consideration, its end will be rapid and well deserved : it will go forthwith into the paper-basket. I have, studied the Bill recently, and have not the slightest hesitation in saving that the result of its enactment would be to most seriously and dangerously weaken the security which banks ought to give to all their depositors. I agree with every word that Senator Givens has said as to the effect of the measure on the security to the public and the depositors. It is quite true that the Bill, as it now stands, would enable any bank in Australia to take its present reserve fund, which stands as a safeguard to the depositors, and use it to wipe out the uncalled capital.

Senator Pulsford:

– Present funds cannot be touched at all.

Senator CLEMONS:

– Under the Bill, present funds can be taken at once and placed in a reserve fund.

Senator Pulsford:

– The honorable senator is mistaken on that point, I think. Is it not future profits with which the Bill deals,, not present accumulations? Senator Dobson. - Reserve funds are not profits.

Senator CLEMONS:

– In the case of practically every bank in Australia, a reserve fund Has been built up out of profits, as the honorable senator ought to know ; it represents merely an accumulation of profits.

Senator Stewart:

– Where are they?

Senator CLEMONS:

– That is a question info which I do not wish to enter. There are banks whose funds come under the generic description of being “ employed in the company’s business.” On the other hand, there are many sound institutions which have, so to speak, a properly earmarked reserve fund - a tangible sum which could be got at by the trustees to be appointed under the Bill and applied by them in order to wipe out the existing uncalled liability which shareholders ought properly to be called upon to meet. What has surprised me more than anything else about this Bill has been the amendment which have been circulated, and which practically mean putting the word “ not “ before every verb that is used in a clause.

Senator Henderson:

– They mean a recasting of the Bill.

Senator CLEMONS:

– Exactly. They are called amendments by virtue of the fact that they propose to insert the word “ not.” The other day, a question arose here as to whether the reserve fund would wipe out the uncalled liability of the shareholders or whether in the process of time it would be gradually substituted for it, or should always exist in addition to it. Perhaps I have not explained the position quite clearly. But I shall try to put it in a shorter way, so that honorable senators will see what I mean. The Bill purports to create a reserve fund. If such fund were to be added to the call liability of shareholders, it is quite obvious that it would, to that extent, add something to the security to the public and the depositors. Clause 7 sets out that it shall be. and remain, intact until all the uncalled capital for which shareholders are liable has been called up, and concludes with this provision - nor .shall the same be available for the payment of any of the liabilities of the company unless and until the whole amount due bv the shareholders to the company in respect of uncalled capital and statutory reserve liabilities (if any) on the shares respectively held by them in the company shall have been previously paid to the company or its liquidator.

That looked all right, and it would, have been, I admit, a slightly better protection for the depositors and the public. But an amendment to the clause has been circulated, and it is to leave out the words I have read, and to insert the following words -

All payments out of such reserve fund to the . company or its liquidator must be applied pari passu in satisfaction of the uncalled capital and reserve liabilities (if any) on all the shares of the company.

That will absolutely destroy the cardinal feature of the clause. But I have not finished with this, so-called amendment. I ask honorable senators to remember that it provides that all payments out of such reserve fund must be applied in the way I have read. But another amendment has been circulated, and it is to insert after clause 13 a new clause, which provides that the directors may, with the sanction of the shareholders given at a meeting, do what they like with the whole of the reserve fund.

Senator Walker:

– But clause 7 is only for a ‘Specific purpose, re’member.

Senator CLEMONS:

– It uses the word “ must,” which is not used in a measure without intending to impose some absolute obligation beyond any possibility of evasion or doubt. Clause 7 declares that all payments out of such reserve fund! must be applied in satisfaction of the uncalled capital, and then new clause 13 sets out that the directors may call a meeting of the shareholders, who may immediately resolve that thisprevious reserve fund - which sometimes weimagine is going to protect the public, and which sometimes we imagine is going to beused for some specific purpose by the shareholders themselves, as indicated in theBill - may be applied in any way they like, for it is couched in the widest possible terms. This is what the new clause provides - ‘

The directors may, with the sanction of an. extraordinary resolution as hereinbefore defined of the shareholders of the company, apply the whole or any portion of such reserve fund as aforesaid for such purposes or objects as the shareholders shall by the extraordinary resolution direct.

There is the widest possible scope to the shareholders to do what they please with this precious reserve fund. First of all, the Bill is to protect the public and the depositors, secondly, by virtue of the amendment, it is to protect the shareholders themselves, and now the honorable senator, by the proposed clause 14, desires to widen the scope of the Bill to enable the shareholders to do what they please with the reserve fund. I join with Senator Givens, in saying that the object of this Bill may appear to be a very desirable one for the shareholders of existing banks, and for future shareholders of future banks, but it is most undesirable for the public of Australia. I think it would be almost criminal to permit such a measure to pass into law. I can see at once that one of the results of the passing of such1 a measure would be to facilitate the establishment of innumerable mushroom banks in the Commonwealth.

Senator Walker:

– The honorable senator has a very lively imagination.

Senator CLEMONS:

– I do not need a lively imagination to see that if we permitted persons to form what they call a bank, and avoid any of the ordinary liabilities of shareholders of institutions trading with the public, we should soon have any number of such banks established in the Commonwealth. I say, further, that a result of the passing of such a measure ‘ would be any amount of wild speculation in banking shares. That would be a most undesirable thing. It is an evil which inci- dentally arises in connexion! with every company, and one of the greatest securi- ties we have to prevent it is that intending shareholders recognise that if they purchase shares) in a bank they incur very heavy liabilities.

Senator Mulcahy:

– Is there no bank whose shares are fully paid. up?

Senator CLEMONS:

– I know of no bank of any standing in Australia at the present time whose shares do not carry with them a tremendous liability. I point out another extraordinary financial effect which the Bill purports to induce us to support. Speaking in general and wide terms, a bank is solvent when it is not overtrading, but when the business it is doing bears some proper proportion to the amount of its capital. It is a common practice in Australia for banking companies, when they require more capital - which really means when they require more stability, or that they see opportunities for further enlarging their business, and do not care to take advantage of them at the risk of the stability of their institution - to issue their shares at a premium. They issue their shares at a premium in order to add to their trading capital. Under this Bill they could sell their shares at any ridiculous premium to the public, and wipe out all the liabilities of their shareholders with the money obtained in that way. The Bill provides for a banking company putting into the precious reserve fund provided for, not merely an accumulation’ of profits made in trading, «but whatever the company could make bv inducing the public to buy their shares at a premium, and to the extent to which they were successful in selling their shares at a premium they would be able to wipe out the shareholders’ liability.

Senator Walker:

– The shareholders themselves buy shares issued at a premium, and they should be allowed to do what they like with their own money.

Senator CLEMONS:

– The shareholders do not always buy shares issued at a premium.

Senator Walker:

– They do. I know what I am speaking about.

Senator CLEMONS:

– Then I am afraid the honorable senator does not know very much about his Bill.

Senator Walker:

– The Bank of New South Wales issued to its own shareholders new £20 shares at £40. Every one of the shares was taken up, and the amount went to the reserve fund.

Senator CLEMONS:

– We know all that. It is a common practice to issue shares at a premium, and they are not always taken up by existing shareholders.

Senator Dobson:

– As a general rule they are.

Senator CLEMONS:

– Senator Dobson ought to have some banking knowledge, and as a solicitor the honorable senator should have some knowledge of law.

Senator DOBSON:

-And I say that Senator Walker is right, and that the honorable senator is in error.

Senator CLEMONS:

– I can tell Senator Dobson without hesitation that whilst new shares issued at a premium by a bank may be to a certain extent taken up by existing shareholders, they are also to a large extent taken up by the public. This Bill offers an opportunity for what almost represents a fraud. It offers to shareholders a distinct inducement to bolster up> the price of their shares, and if they did so, without a doubt a result under this Bill would be that the shareholders would know that if their shares were issued at a high premium, the premium might be utilized to wipe out their own liability. That would be an excellent result from their point of view.

Senator Stewart:

– They could unload on the public.

Senator CLEMONS:

– I am coming to that point. They would also know that if they were themselves prepared to pay £10 each for a new issue of £5 shares, they, would be assisting to create a constant market value of £10 for those shares. A shareholder by the method proposed in this Bill of building up profits by the sale of shares at a premium would know that while he would take money out of one pocket, he would relieve himself of the possibility of some one else taking it out of another pocket, because he would wipe out his liability, and an opportunity would at the same time be afforded him to sell his shares at considerably above the fair market value.

Senator Givens:

– A new bank might start with a nominal capital, and, under this Bill, a large uncalled capital, and might it not pay up the whole of the uncalled capital out of its customers’ money ?

Senator CLEMONS:

– I do not like toanswer Senator Givens specifically, but I have not the faintest doubt that if this Bill were passed into law, a direct result of it would be the promotion in Australia of a- lot of insecure, unsound, and undesirable banks. I have not the faintest doubt either that it would weaken the position of the public and would strengthen the position of the shareholders of banks. The Senate has its choice. I agree at once that if honorable senators believe it to be desirable to protect the shareholders of banking companies in Australia at the expense of the public and their depositors they should pass this Bill, and nothing can be more certain than that they will secure that result.’ If, on the other hand, honorable senators believe that it would be a dangerous thing commercially to weaken the security of our banking institutions, which must take such an important part in the whole of our trading, they will pass this Bill into the waste-paper basket with the utmost expedition. I shall help it there with my vote.

Senator STEWART:
Queensland

– I do not agree with very much that has been said by Senator Givens and Senator Clemons.

Senator Givens:

– The honorable senator heard very little of what I said.

Senator STEWART:

– I know the honorable senator’s complete argument, and if clause 14 were not to be a part of the Bill, that argument would be founded on a fallacy. Without the proposed clause 14, the Bill would be a good one.

Senator Walker:

– Honorable senators can’ negative that clause when the time comes.

Senator STEWART:

– I should like to know why the honorable senator seeks to introduce such a clause into the Bill.

Senator Walker:

– I shall explain that.

Senator STEWART:

– If Senator Walker were willing to have the proposed clause 14 negatived I should be prepared to review my decision.

Senator Clemons:

– What is to be negatived; clause 7 or the amendment of it?

Senator STEWART:

– I can promise to keep my eyes fixed as keenly on the Bill as Senator Clemons. I did not intend to argue about the measure, because when I rose I had my mind made up to vote against the Bill, if it is to include the proposed clause 14, but if that clause is to be negatived, I am prepared to vote for the second reading. Senators Givens and Clemons have been at great pains to persuade the Senate that this Bill will in a measure destroy the security of depositors in banks. My opinion is that it will add to their security. Senator Clemons dealt with the reserves. I ask the honorable senator, “Where are the reserves?” Can any one tell me where the reserves of the banks are?

Senator Givens:

– I told the Senate just now that a large proportion of the money is invested in Government securities.

Senator STEWART:

– A very small proportion is invested in that way.

Senator Givens:

– No less than .ninetenths of the reserves are so invested.

Senator STEWART:

– What nonsense.

Senator Givens:

– I can give the honorable senator the figures. The reserve of the Bank of New South Wales amounts to £1,500,000, and it has over £1,700,000 invested in Government securities.

Senator STEWART:

– That is only one bank, and if we take the whole of the banks in the Commonwealth we shall find that only a very small proportion of their reserves is invested in Government securities. I believe that nine-tenths of the reserves of the banks are used in their businesses, and to that extent w.e do not know where they are. They are subject to the same chances and dangers as the ordinary capital of companies.

Senator Clemons:

– The honorable senator will not ask Senator Walker to agree with that statement.

Senator STEWART:

– I think the honorable senator would agree with it.

Senator Chataway:

– Senator Walker will not agree that the banks are using their reserves for trading purposes.

Senator STEWART:

– The honorable senator might not admit it, but it is the case, as every one who has much connexion with banking must know. We know perfectly well that the reserves of banks and of other financial companies are used in the way I have stated. The Bill before honorable senators proposes to put a substance in the place of a shadow or what might turn out to be a shadow. The whole argument has turned on what is termed the uncalled liability. If we take the Bank of Australasia we shall find that its shares are £40 paid up and £40 uncalled. What would happen if this Bill were passed, and 1 may say that I do not think there is much danger that it will pass? The uncalled capital is something which the shareholders are bound to meet, if they can, when they are called upon to do so. At present we do not know whether they “ can meet it or not. A large number of them may not be ableto pay a single £1 of the £40 of their uncalled liability. But if we adopt the scheme that is em- 1 bodied in this Bill, the £40 willbe available in Government securities.

Senator Givens:

– They may take it out of their customers money.

Senator STEWART:

– If they ran steal the customers money under this Bill, they can steal it at the present time. The honorable senator is assuming that every bank is an institution of rogues and thieves. I am not basing my remarks upon that assumption. I do not think that any good purpose can be served by prolonging this discussion ; but if the game were worth the candle it could very easily be shown that Senator Givens’ argument was based upon a fallacy.

Motion (by Senator Pulsford) negatived -

That the debate be now. adjourned.

Senator MACFARLANE:
Tasmania

– I think that we might very well allow this Bill to get into Committee. At the same time, I wishit to be distinctly understood that I do not approve of its provisions as a whole. There are oneor two amendments which are very necessary. For instance, the Bill should providethat a majority of the shareholders of any bank, both in number and value, should be necessary to enable them to take advantage of . its provisions. It is a permissive measure, and, if they choose, the shareholders can do at present what it aims at enabling them to do.

Senator WALKER:
New South Wales

– It is somewhat surprising to me to learn that I am attempting to bulldose the community by means of this Bill. The strongest point made by Senator Givens was that the banks might possibly be so dishonorable as to transfer money from their present reserve funds to another reservefund. But if he really believes that a bank is capable of doing that, he has a very simple remedy. Let him insert in the Bill a provision that none of the present reserve funds shall be available for that purpose. Perhaps 1 may be pardoned for saving that favorable notices in respect of certain portions of this measure have appeared in the Argus, Sydney Daily Telegraph, Bulletin,andotherjournals.Iintend to quote a few extracts from the financial columns of these newspapers, with a view to showing that they see much good in it. Senator Best, in hisremarks upon it, seemed to assume that a financial concern like a bank was conducted upon the same principle as is a mine. Now, the Mount Morgan mine has a paid-up capital of £1,000,000, and it has paid dividend amounting to something like £7,000,000, so that the shareholders have had their own capital returned to them and muchmore. But in the case of most mines the shareholders have barely got their own money back. Sensible men know that every ounce of gold that is taken out of a mine makes that mine so much the poorer. But it is not so with banks. Senator Givens appears to doubt the honesty of all bankers. I have before me the last published balance-sheets of the Western Australian Bank and the Bank of New South Wales. The former has a paid-up capital of £175,000, a reserve fund of £450,000, and a reserve liability on shares of £175,000. In its advertisements these amounts appearone after the other, and to attempt to transfer amounts from one fund to another would, I maintain, be to trade under false representations. There is no necessity for the Senate to accept all the amendments which I have outlined. I happen to Occupy a very peculiar position in regard to this measure, in that I have received suggestions from a great many persons for whom I entertain a sincere regard. From these gentlemen I have accepted suggestions upon which the Senate may decide, in order that other honorable senators might not be asked to secure their insertion.

Senator Stewart:

– The honorable senator has ruined his chance by clause 14.

Senator WALKER:

– Take the Bank of New South Wales as another illustration. It has a paid-up capital of £2,500,000, a reserve fund of £1,600,000, and a reserve liability on shares of £2,500,000. Its advertisement shows that its total capital and reserve is £6,600,000. Does any honorable senator’ believe that that bank would dare to mislead the public by transferring a portion of that £1,600,000 to the reserve fund which it is proposed to establish under this Bill? If they do, it will be a very simple matter in Committee to insert a clause forbidding any of the. present reserve funds to be used for that purpose.

Senator Lynch:

– Would the banks, as at present constituted, take advantage of this Bill?

Senator WALKER:

– Here is a letter which I have received from the General Manager of the Western Australian Bank. It is dated 5th November of the present year -

Dear Mr. Walker,

I duly received your letter of the 19th ult., but the documents accompanying the letter did not reach me in time to give the matter consideration and reply by. the following mail. I think the Bill which you are bringing before the Senate should be very acceptable to banks and companies who desire to relieve their shareholders of any possible liability in connexion with the unpaid capital or liquidation liability. The Bill appears to me to cover allthat is required, and, if permissive, should be readily accepted by all the companies. If the Commonwealth in its wisdom decides to adopt this Bill, I certainly shallrecommend it to our directors for their careful consideration, and 1 feel sure that nearly’ all of our shareholders will accept it readily, more especially as a large number of them are ladies, who are dependent more or less upon the dividends, and would be seriously inconvenienced by having to pay calls. As you know, we’ have no unpaid capital, and the only liability of the shareholders is£10, the nominal amount of each share. I wish you every success in your endeavour to relieve unfortunate shareholders of an undue liability, and probably the experience of 1893 will be sufficient justification for all members of Parliament to pass the Bill and make it effective. I telegraphed you to-day, as I note that the matter was being brought before Parliament on 5th instant, so that you might feel assured that this bank in Western Australia sympathises with you in your efforts.

Senator Lynch:

– What about the banks with preference shares?

Senator WALKER:

– The Bill is a permissive one. The banks cannot come under its operation without the permission of their shareholders. Personally, I do not think that any bank will avail itself of its provisions unless it has only one class of shareholders. Clause 14, which Senator Clemons regards as so objectionable, was inserted practically at the instance of a leading solicitor in Sydney who’ is known to him, and who writes -

My dear Senator,

I am obliged to you for your letter of the 18th. The clause which you propose to insert in the Bill overcomes any objection that I see to it. Such a clause will enable the shareholders of a company, in case of some special emergency, to resort to the fund in order, perhaps, to maintain the stability of the institution. The minority shareholders in such a case should bow to the wishes of the majority.

If I thought’ that the Bill would open the door to all kinds of roguery I should be the very last to countenance it. The argument of Setnator Givens might at one time have been applied to banks atHome with an unlimited liability. It is very dangerous for persons to hold shares in an unlimited liability bank there. From 1857 onwards I have known of cases in which, when banks have failed in the Old Country, persons who were previously welltodo have been absolutely ruined. The honorable senator’s argument that under this Bill the security of creditors would be reduced applies with much greater force to the creditors of unlimited liability concerns which come under the Limited Liability Act of theMother Country.

Senator Clemons:

– But because unlimited liability is not good, . it does not follow that there should be no liability at all.

Senator WALKER:

– In Committee I shall be quite willing to accept an amendment providing that no ordinary reserve fund shall be available to meet the uncalled1 capital. The shareholders of any bank which accepts this Bill will practically agree to a self-denying ordinance. , Take the Western Australian bank’ as an example. If it were to set aside £3,500 a year for investment in Government stocks at 3 per cent., in311/2yearsthe£175,000 reserve liability would be provided for. Does anybody mean to suggest that a bank of that description could not set aside such a sum each year? I have no desire to rob bank creditors of any securitywhich they at present possess. On the contrary,I wish to provide them with absolute security in case of accident. If I thought that the Bill wasnot an honest one in the interests alike of the shareholders of the banks, and of their’ creditors, I would have nothing to do with it.

Senator Clemons:

– But unfortunately the honorable senator’s amendment contradicts the Bill in its original form.

Senator WALKER:

– In Committee honorable senators will be afforded an opportunity of dealing with any amendments which may be submitted. At present we are discussing the Bill itself. I merely ask the House to pass the second reading of the Bill and let it get into Committee. I do not propose to proceed any further with it this session. I may state that I was never asked to introduce the measure by any bank, nor was any pressure put upon me for the purpose. I propose, before sitting down, to read a few extracts from newspaper criticisms.

Senator Dobson:

– If the Bill were passed in its present form, might it not become the practice not to add to ordinary reserve funds, but to devote surplus profits to special reserve funds?

Senator WALKER:

– No bank is legally obliged to create any reserve fund.

Senator Dobson:

– But all the banks do, knowing that it is- a safe thing.

Senator WALKER:

– I cannot say what banks will do in the future. But I think they would be justified, after having established a fair reserve fund, in applying profits to a special reserve fund, rather than to increase dividends. The first extract I shall read is from the Melbourne Argus, which said -

With a liability fund there would be less haste to realize shares, though a falling market always brings out sellers. Should the company, with such a reserve, go into liquidation; there would be no question as to the share liability being met out of the proceeds of the fund. The knowledge that there could be no default on the part of shareholders would add to Hie sense of security of creditors, and especially of depositors with banks, because of the additional security provided. The fund would be created out of profits, which otherwise would be divisible among shareholders. Whether these would be so self-sacrificing as to permit directors to lock up profits for the purpose of the fund is not at all certain, because such reserves to be effective would have to represent a very large sum of money. The question arises also whether the knowledge that a liability exists on shares does not tend to careful trading, and to the building up of substantial inner and disclosed reserves. The calls that have had to be paid in Victoria since 1893 on insolvent “boom “ companies have exerted a sobering influence not only on investors, but on the managements of the companies that lived through the crisis. The proposed fund would certainly afford an outlet for the disposal of profits by directors who might wish to keep dividends down to the ordinary limits during a period of exceptional prosperity; but are the advantages sufficient to justify this change? It will have to be demonstrated that directors may not build up the fund to the disadvantage of the creditors. In any case, if such a departure is to be made, it will be well to proceed slowly. Therefore, if the Bill should be accepted, “the best plan would be to at first limit its scope to companies having shares carrying a reserve liability.

The Sydney Daily Telegraph criticised the measure as follows: -

Companies deciding in general meeting to establish such fund may contribute thereto out of net profits, premiums on the sale of shares, proceeds of forfeited shares, and debt recoveries previously written off. In regard- to’ this two points ought to be made clear. Existing reserve funds should not be encroached upon for the purpose, and debt recoveries should only be available when the paid-up capital is intact. There is,, too, a question as to clause 7, where it provides - “ Nor shall such reserve fund be available for the payment of any of the liabilities of the company unless and until the whole amount due by tlie shareholders to the company in respect of uncalled capital and statutory reserve liabilities (if any) on the shares . . shall have been previously paid to the company or its liquidator.” Why must the whole amount of uncalled capital De previously paid ? If against a reserve liability of £20 a share, a» statutory reserve of £10 per share were accumulated, and that £10 were adequate to cover the liabilities, there would be no need to call up. the remainder. The rest of the Bill is clear, though whether directors should at any time have the right to remove the trustees if theyconsidered it “ desirable or expedient “ is questionable. 1 shall next quote from the Bulletin. Whatever we may think of that newspaper politically we must all admit that the “ Wild Cat Column “ of the Bulletin isexceedingly able. I do not think there isa more able financial newspaper in Australia.

Senator Millen:

– Does the Bulletinsupport this Bill?

Senator WALKER:

– Yes.

Senator Millen:

– That settles me !

Senator WALKER:

– The Bulletinwrote -

The whole question has to be looked at from, three points - those of (1) the bank, (2) the individual shareholder, (3) the creditor. (1) Senator Walker’s scheme allows the bank to practically capitalize reserves without paying a dividend1 on the new capital. Thus the rate of dividend can be kept high - and very evidently the publiclikes dealing with a bank whose rate of dividend is high. (2) The individual shareholder is not fully protected, no matter how large the reserves are, so long as they are merely reserves. The creditors have the first claim upon them. The first thing that happens when heavy losses are made is the writing off of reserves. If they are not sufficient, capital is reduced. If things are not even then balanced, some of the uncalled capita] is got in. Oh the other hand, if reserves are ear-marked for the protectionof shareholders, and are invested in Government stock, the earnings will be ordinarily less than they are from reserves used in the business, as at present. (Certainly one or two Australasian banks, mostly managed in England’, keep their formal reserve fund even now in Government stock; but that is not common.) (3) Creditors have a first claim on the reserves at present ; therefore, it would seem that, if they lose that preference, their position will be changed for the worse. But that doesn’t follow at all. The reserves, when they are, as now, used in the business, are liable to ‘ be lost, and’ there is no guarantee whatever that the shareholders will be able to part “ up the uncalled’ capital. The new idea certainly takes away the creditors’ preferent claim to the reserves (which may not be there when wanted), but it guarantees that calls at least to the amount of the ear-marked reserves will be met ; and that is an advantage they don’t have now. On the whole, then,’ there seems to be a good deal to be said for Senator Walker’s scheme, and the small criticisms that so far have been mostly passed upon it don’t anywhere near meet the. case.

I will next quote a letter which was published in the Sydney Morning Herald -

1. B. S. writes:-

A number of criticisms of Mr. Walker’s Bill, which proposes to provide a fund to secure shareholders in some stock companies against their reserve liability, have appeared in the press, and one and all seem to miss the point in the proposed legislation. Most writers see no necessity for an Act, as they contend that the directors of such companies can make adequate provision to safeguard their shareholders under existing laws, or that it would be better to capitalize the amount, even though it might affect the rate of dividend.

I am of opinion that, to take the latter course, would only accentuate the danger to shareholders which Mr. Walker proposes to remove, as they would, in the event of a liquidator taking charge, after the exhaustion of other assets, be called upon to find an amount equal to the capital already subscribed, which had been increased by such action. The idea is to make legal the formation of a reserve equal to the contingent liability of shareholders, and from which such liability would be met if occasion arose. As the law stands at present, I take it that any reserve that might be made for this or any other purpose could be appropriated by a liquidator, who could afterwards, if necessary, call up the reserve liability. If this Bill becomes law the shares of any company taking advantage of it will be considerably strengthened in the market, as one of the principal objections from a trustee’s point of view will be removed.

I am afraid we have not many companies which will find themselves in a position to take advantage of it; that we have got one which evidently desires it is a matter for congratulation, as itindicates financial stability more clearly than published report of auditor’s certificate could hope to do.

I have done my duty in introducing this Bill. I am, however, quite willing to adopt the precautionary measures suggested by Senator Givens. Senator Best’s remark was very much to the point. He said that there ought to be a general measure brought in by the Government. He also expressed some doubt about the constitutionality of the Bill. But if it would be constitutional to bring in a general Bill it must be constitutional to pass a partial measure. The Bill was originally introduced on the 17thSeptember. We are now at the end of November, and the measure has been under the consideration of honorable senators in the meantime.. Even if it be thrown out no harm will be done, because the discussion will cause people to think about the subject. Some of the remarks that were made were altogether too strong.

It is not fair to suggest that theBill is intended to assist rogues. It is meant to assist the public. It is doubtless true that no Bill was ever introduced through which a coach and six could not be driven. But I can honestly say that the measure is intended to give additional security to the shareholders and creditors of banks and other financial institutions. It has the personal approval of Mr. Deakin, Mr. Reid, and of the officers and managers of every bank whom I have spoken to, with one exception. The objection taken by the one bank officer who objected to it was, “ There is no chance of our bank ever going into liquidation, and we do not like the possibility of any of our funds being under the control of trustees over whom we would have no authority.”

Senator Givens:

– Under this Bill the bank would have control over the trustees.

Senator WALKER:

– I am quite willing to have the Bill amended in that respect.

Senator Clemons:

– Why not withdraw the Bill and introduce a new one?

Senator WALKER:

– I have gone so far now that I would rather see the Bill defeated than withdraw it to-night. I should not like to introduce a measure and then not see it through its second reading.

Question - That this Bill be now read a second time - put.

The Senate divided.

AYES: 19

NOES: 9

Majority … …10

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In Committee -

Clause 1 agreed to.

Progress reported.

Senate adjourned at 10.32 p.m.

Cite as: Australia, Senate, Debates, 26 November 1908, viewed 22 October 2017, <http://historichansard.net/senate/1908/19081126_senate_3_48/>.