25 June 1930

12th Parliament · 1st Session

The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.

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– On Thursday night I drew attention to a report that increased customs duties on Australian produce had been imposed by the United States of America, and sought information from the Leader of the Government in the Senate. I should like to know if the information is yet available?

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

– A few moments ago I learned from the Acting Minister for Trade and Customs that the information which I promised to obtain for the honorable senator is not yet to hand.

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Topographical Survey

Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– On 20th June,

Senator E B Johnston:

asked the following questions, upon notice -

  1. Is it a fact that incorrect maps or lack of information of the northern parts of Australia have either caused disaster to or hampered the flights of such distinguished aviators as Hinkler, Cobham, Kingsford-Smith, and the late Keith Anderson; also that Miss Amy Johnson has stated that she found her air maps of this region to be quite unreliable?
  2. Is it a fact that accurate and detailed surveys of North and North-West Australia would considerably assist in the settlement and development of those areas?
  3. In view of the example set by the McKay expedition, and the great value of the information to be obtained, will consideration be given to the employment of a portion of the air force organization on an aerial survey of. North Australia and North-West Australia, as an alternative to any retrenchment in that service?

I am now in a position to inform the honorable senator as follows: -

  1. No comprehensive topographical survey of the northern parts of Australia has as yet been undertaken, and for that reason any maps of that area now obtainable are not entirely reliable. No aerial disaster has been occasioned on that account, and if any pilot flying in the Northern Territory has been hampered during his journey, the reason is rather on account of the lack of natural features which could be included in any topo graphical map compiled. Although the present area maps are not, for the reason stated, as satisfactory as might be desired, they have been used successfully by many pilots.
  2. Yes.
  3. The question of carrying out an aerial survey of Northern and North-West Australia has been under consideration, but so far it has not been possible to make the necessary financial provision to enable such survey to be undertaken.

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Reduction of Salaries

Senator BARNES:

– On 19th June, Senator H. E. Elliott asked the following questions, upon notice -

  1. Is it a fact that officers and warrant officers of the Defence Forces are to have their salaries reduced by one-sixth, or nearly 17 per cent., by being compelled to take two mouths’ leave without pay?
  2. Is it a fact that these officers and warrant officers have never had a cost-of-living allowance granted to them at any time?
  3. Is it a fact that members of the Public Service have had three successive rises of £6 each granted to them during the period that the cost of living allowances have been in existence?
  4. When was the last of such allowances granted?
  5. What was the total cost tor the” Commonwealth taxpayer involved in respect of each of such increased allowances, and whenwere they made operative?
  6. What is ‘the estimated saving to the taxpayer by the reduction in salaries of members of the. military forces?
  7. How long does the Minister expect that the rationing provisions will apply, in view of the permanent reductions of the members of the forces?
  8. Is it a fact that a discrimination has been made in reducing only the salaries of members of the permanent forces, and that no attempt at curtailing allowances topublic servants has been attempted by amendment of the arbitration acts or otherwise; ‘ if so, why ?
  9. Will the Government arrange for the absorption into the Public Service in the Defence Department of as many of the officers and warrant officers as cannot be fully employed, in place of the ordinary members of the Public Service who are there?
  10. How many of such officers and warrant officers are returned soldiers?

I am now in a position to inform the honorable senator as follows : -

  1. The maximum loss of pay will be approximately 15.4 per cent., being two weeks without pay in each three months. It is provided, moreover, that any saving that can be made in any branch of the Defence Department during 1930-31 will be applied towards the reduction . of the enforced leave without pay to be borne by members of the Permanent Military Forces. It is confidently expected that the result of the application of this principle will be that the maximum period of eight weeks’ enforced leave for 1930-31 will be very considerably reduced.
  2. No. 3 and 4. Adult male employees receiving classified salary not exceeding £600 per annum have been granted £6 per annum, cost of living increase from 1st July, 1926. Adult females received £4 per annum, and minors £3 per annum from the same date. Similar increases were granted from 1st July, 1927. Employees in receipt of salaries above £600 per annum were paid £12 per annum from 1st July, 1927.
  3. The annual cost of the increase granted from 1st July, 1927, was approximately £193,000. The annual cost of those to be paid from 1st July, 1930, will be some £180,000. The cost of those paid from 1st July, 1926, is not ascertainable as cost of living payments could not be separated from other adjustments of salary -made from the same date following the classification of the service.
  4. If it be necessary to apply the maximum of eight weeks enforced leave without pay the saving therefrom would be £62,000 approximately.
  5. For the period as already mentioned in my statement to Parliament on 12th June, viz.: - During the financial year 1930-31 for periods varying from eight weeks to one week, according to the salaries received.
  6. Any discrimination is due to the conditions being dissimilar. The civilian staff is being adjusted to the requirements of the service boards, and any surplus of permanent civilian personnel are being absorbed by other departments. The Permanent Military Forces, on the other hand, contain personnel in excess of requirements and are, generally speaking, not eligible for transfer to other government departments.
  7. Clerical officers of the Commonwealth Public Service employed in the Defence Department have been trained in , the duties they are performing, and no advantage would be gained by transferring them to other departments with a view to their replacement by officers and warrant officers.
  8. Of the total number of’ officers and warrant officers affected by the rationing proposal 211 officers and 395 warrant officers are returned soldiers.

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Reports of Conference and of Commonwealth Representative

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– I lay on the table of the Senate the report of the conference on the operation of dominion legislation and mer chant shipping legislation, and also the report upon the conference by the Commonwealth representative, Sir Harrison Moore, and move -

That the reports be printed.

The Imperial Conference of 1926 declared that the dominions are “ autonomous communities within the British Empire, equal in status, in no way subordinate one to another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown, and freely associated as members of the British Commonwealth of Nations.” It then went on to state as principles that it was the right of the Government of each dominion to advise the Crown in all matters relating to its own legislation, and that legislation by the British Parliament should only apply to a dominion with the dominion’s consent. It decided that it could notwith safety take more definite action until it had obtained expert guidance. It accordingly recommended that a committee should be set up to report on various aspects of the operation of dominion legislation, and that a subconference should inquire into the subject of merchant shipping’ legislation. It was later decided that the committee and subconference should be organized as a single conference, and it met in London from the 8th October to the 4th December, 1929. The terms of reference were -

To inquire into, report upon and make recommendations concerning -

Existing statutory provisions requiring reservation of dominion legislation for the assent of His Majesty or authorizing the disallowance of such legislation.

(a) The present position as to the competence of dominion parliaments to give their legislation extra-territorial operation; (b) the practicability and most convenient method of giving effect to the principle that each dominion parliament should have power to give extra-territorial operation to its legislation in all cases where such operation . is ancillary to provision for the peace, order, and good government of the dominion.

The principles embodied in or underlying the Colonial Laws Validity Act, 1865, and the extent to which any provisions of. that act ought to be repealed, amended, or modified in the light of the existing relations between the various members of the British

Commonwealth of Nations as described in this report (i.e., the report of the Inter- Lmperial Relations Committee of the Conference).

To consider and report on the principles which should govern, in the general interest, the practice and legislation relating to merchant shipping in the various parts of the Empire, having regard to the change in constitutional status and general relations which has occurred since existing laws were enacted.

The conference was an advisory body, and its recommendations, contained in the report now placed before the Senate, are recommendations to the Governments of the various parts of the British Commonwealth of Nations, and as such will be considered by the representatives of those Governments at the Imperial Conference this year. The Constitutions of the selfgoverning dominions of the British Commonwealth of Nations are contained in acts of Parliament of the United Kingdom, and it is from this source that legal power exercised by the dominions under those Constitutions flows. The paramount power of the Parliament of the United Kingdom to make legislation binding on all the King’s dominions exists in law, although its exercise is regulated by constitutional conventions. The implementing of the report of the Imperial Conference of 1926 resolves itself into a question of the Parliament of the United Kingdom formally renouncing the exercise of its legislative powers in respect of any or all of the dominions, except at the request of the latter. This, generally, expresses the major conclusions reached by the conference.

Taking the recommendations rather more in detail, the conference first of all pointed out that the deletion from the Australian Constitution of the provision for disallowance by the Crown of legislation passed by the Commonwealth Parliament, and reservation of legislation for theRoyal approval, are internal matters for the Australian Commonwealth itself. The conference next recommended that an act should be passed by the Parliament of the United Kingdom, with the consent of all the dominions, declaring that the parliament of a dominion has full power to make laws having extra-territorial operation. This recommendation was made . to meet the point of view of the other.- dominions, for the Commonwealth Parliament has, by its Constitution, power to make laws with effect outside the Commonwealth. Theprovisions of the Constitution with respect to external affairs, the relations of the Commonwealth with the islands of the Pacific, fisheries in Australian waters beyond territorial limits, immigration and emigration, and naval and military defence, give the Commonwealth Parliament a large measure of power in this respect. Section 5 of the Commonwealth Constitution Act declares that the laws of the Commonwealth shall be in force on all British ships whose first port of clearance and port of destination are in the Commonwealth. So far as the Commonwealth is concerned, such’ an act would be subject to the Commonwealth Constitution, and would apply only to those subjects over which the Commonwealth, has jurisdiction.

The third subject which was referred to the conference for investigation, namely, the extent to which the provisions of the Colonial Laws Validity Act of 1865 should be amended or repealed in the light of the existing relations between the various members of the British Commonwealth of Nations, may be regarded as the central point of the work of the conference. The report of the Commonwealth Government’s representative sums up the position in this respect, as follows: -

The general application of the principle of equality laid down by the Imperial Conference in 1920 was at once accepted, and with’ the result that the unqualified paramountey of the legislation of the Parliament of the” United Kingdom must go. That involves that no future legislation of that Parliament should apply to a dominion without its consent, and, secondly, that dominion legislation should no longer be invalid or inoperative by reason of repugnancy to Imperial acts extending to a dominion. But the precise manner in which these applications of principle should be given effect to was the subject of long andanxious debate.

The conference adopted the view that the only way to give effect to the principles laid down by the 1926 Imperial Conference was to repeal the Colonial Laws Validity Act in so far as it applies to laws made by the parliament of a dominion, and recommended that legislation be enacted by . the Parliament of the United Kingdom to this effect. To guard against this purely negative solution of the problem leading to confusion. the conference recommended that this legislation shall also provide that dominion legislation shall not be held invalid on the ground that it is repugnant to the law of England or British legislation, and that the dominion parliament shall be empowered to repeal or amend a British statute, which forms part of the law of the dominion.

The conference recommended that the most desirable method of giving effect to the principle of the equality of status of the United Kingdom and the dominions, in so far as the legislative power of their respective Parliaments is concerned, is for the forthcoming Imperial Conference to place on record a constitutional convention, expressed as follows: -

It would be in accord with the established constitutional position of all members of the Commonwealth in relation to one another that no law hereafter made by the Parliament of the United- Kingdom shall extend to any dominion otherwise than at the request and with the consent of that dominion.

It is. recommended that this convention should be inserted in the recital or preamble of the proposed. ..act of the Parlia-ment of the United Kingdom referred to above. In order ,to meet practical difficulties it is recommended that this proposed act should contain a provision that no act of the Parliament of the United Kingdom shall in’ future extend or be deemed to extend to a dominion unless it is expressly .declared therein that that dominion has requested and. consented to the enactment of such legislation.

The establishment of a number of parTliaments in ,the British Commonwealth of Nations with what will be in practice equal legislative authority raises the question how uniformity is to be secured with regard to the several matters as to which uniformity throughout the British Commonwealth is desirable. The succession -to the Throne, nationality, naval prize law and prize courts are the outstanding examples. The conference recommended that a constitutional convention should be agreed to by the different governments of the Empire that any alteration in the law touching the succession to the Throne or the Royal Style and Titles shall require the assent of the Parliament of the United Kingdom as well as the assent of the parliaments of all the dominions. It is suggested that this constitutional convention should be also included in the recital or preamble of the act of the Parliament of the United Kingdom referred to above.

The acquisition of equal legislative authority by the different parliaments of the British Commonwealth of Nations, and conferring on those parliaments of the power to give their laws extraterritorial force, gave rise to a discussion of the question of the nationality of British subjects. The problem which . will confront the various governments of the British Commonwealth of Nations will be that of reconciling the general rules providing for a single nationality for all British subjects with the particular rules which the parliaments of the different parts of the British Commonwealth may find it desirable to lay down in respect of the status of their own citizens. The conference did not come to any conclusions on this difficult question, which will require further examination.

The recommendations of the conference in respect of merchant shipping legislation are of a particularly technical character. . The disappearance of the paramount power of the Parliament of the United Kingdom in- respect of this subject will. give rise to questions of a somewhat special nature. The recommendations of the conference on the matters touching merchant shipping legislation are not exhaustive, and it is likely thai further consideration w.ill be required to be given to various points in connexion with them.

Finally, the conference realized that if in the future the’ principle of agreement between the various members of the British Commonwealth is substituted for the paramount authority of the” British legislature, differences may arise between the Governments concerned’ with regard to these agreements.

Honorable senators will remember that when Australian and other members of the British Commonwealth accepted the optional clause of the Statute of the Permanent Court last year all, except the Irish Free State, made the reservation that their acceptance did not apply to differences between themselves. Some method of settling such differences there must be, and the conference gave some consideration to the proposal for a tribunal to deal with differences between the different governments of the British Commonwealth.

What I have said will give honorable senators some idea of the many important matters dealt with in this report. Some of them affect the States as well as the Commonwealth, and it will be understood that careful examination here and further discussion at the Imperial Conference are necessary before the Government brings down detailed proposals for giving effect to them.

Debate (on motion by Senator McLachlan) adjourned.

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The following papers were presented : -

Commonwealth Bank Act - Regulations amended - Statutory Rules 1930, No. 60.

Public Service Act - Regulations amended - Statutory Rules 1930, No. 62.

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Assent reported.

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Rationing of Military Section: Formal Motion for Adjournment

The PRESIDENT (Senator the Hon W Kingsmill:

– I have received a communication from Senator Pearce, intimating that, in accordance with Standing Order 64 (1), he intends to move the adjournment of the Senate to discuss a matter of urgent public importance, viz., “ The rationing of employment of permanent officers and other ranks of the Military Forces.”

Four honorable senators having risen in their places in support of the motion,

Senator Sir GEORGE PEARCE (Western Australia) [3.27]. - I move -

That the Senate at its rising adjourn till to-morrow at 10 a.m.

I submit this motion for the purpose of directing attention to the rationing of employment in the military section of the Defence Department. It will be said, probably, by those who defend this action of the Government, that the alternative to rationing of the military section in the department is dismissal. I think I shall be able to submit to honorable senators a number of facts which will prove that that is not the alternative. The Minister for Defence (Mr. A. Green) in a statement to members of another place yesterday, set out the particulars of the rationing scheme which, he said, was based on the decrease in military activities due to economies that had been effected in that department. I put it to the Senate, however, that if rationing is due to the lessening of military activities, the scheme must affect the whole of the department, for it is obvious that if a certain amount of employment is given on the military side by holding of camps of training, these camps and similar military activities are the raison d’etre ofthe civilian staff. What is the duty of the civilian staff in the Defence Department if it is not to do the clerical work associated with military camps of training, and other administrative matters? Civilian employees are engaged on the administrative work of the Defence Department. From this it is clear that if the reasons given by the Minister are correct and if there is a decrease in military activities, there must ensue a lessening in the amount ‘ of employment on, not only the” military side, but also on the civilian side of the department. Every one regrets the need for rationing employment as an alternative to dismissal or any other form of sacrifice by any section of the Government employees. But if sacrifices are to be made, they should be made equally by all sections of employees in the department. There should be no discrimination. One section, comprising men who are unable to speak for themselves and defend themselves, should not be called upon to make a sacrifice while another section of employees, who have powerful organizations and associations to speak for them, escape. Employees in the military section in the Defence Department are quite properly forbidden to form or join associations or unions,

Senator Rae:

– Why?

Senator Sir GEORGE PEARCE.Because we do not wish to see repeated in Australia certain happenings that have been reported in Russia. Civilian employees in the Defence Department, on the other hand, are entitled to form themselves into unions and associations, and they have behind them the Public Service Association with which they are affiliated. That, however, should not influence the Government when faced with the stern necessity of having to make savings.

In order to show that it is possible to effect economies, and to maintain something like equality of sacrifice, I propose to place some facts before the Senate. According to the latest report available, the permanent military forces in the Defence Department number 1,718, and their salaries amount to £520,554, or an average salary of £303 per annum. The civilian employees, who, as I have said, are employed almost entirely on military work on the administrative side, number 709 andtheir salaries amount to £257,239, or an average salary of £362 per annum, so that the average annual salary on the civilian side is more than the average annual salary on the military side. Under the British army system those occupying civilian positions in our defence department would be sworn in as soldiers, and would not be entitled to be members of unions or organizations. Those working under that system in England are doing exactly the same work as for the most part is done by these 709 civilian employees. This matter was raised to-day in a series of questions submitted by Senator H. E. Elliott, who asked why any discrimination is being shown. The questions numbered 8 and 9 read -

  1. Is it a fact that a discrimination has been made in reducing only the salaries of members of the permanent forces, and that no attempt at curtailing allowances to public servants has been attempted by amendment of the Arbitration Acts or otherwise: if so. why ?
  2. Will the Government arrange for the absorption into the Public Service in the Defence Department ofas many of the officers and warrant officers as cannot be fully employed, in place of the ordinary members of the Public Service who are there?

The answers were -

  1. Any discrimination is due to the conditions being dissimilar. Thecivilian staff is being adjusted to the requirements of the Service Boards, and any surplus of permanent civilian personnel are being absorbed by other departments. The Permanent Military Forces on the other hand contain personnel in excess of requirements and are, generally speaking, not eligible for transfer to other Government Departments.
  2. Clerical officers of the Commonwealth Public Service employed in the Defence Department have been trained in the duties they are performing, and no advantage would be gained by transferring them to other departments with a view to their replacement by officers and warrant officers.

The policy of the country is preference to returned soldiers, other things being equal.

The great bulk of these men who have been dealt with by this unfair discrimination are, with the exception of a few who were too young to enlist even at the close of the war, returned soldiers. The total number of officers and warrant officers affected by the rationing proposal is 211 officers and 395 warrant officers, or a total of 606. If we are to have a rationing system, and if economies are to be effected that will result in loss to some members of the Service, returned soldiers should not be the first to be affected. I understood that the Government had given an undertaking that in carrying out its policy, the principle of preference to returned soldiers would be observed. Yet this body of men, practically all of whom are returned soldiers, has been singled out to bear the whole cost of the economies to be effected in this department. It is a fact that not all of those employed on the civilian side are returned soldiers, because that staff was necessarily recruited and kept in Australia during the war. A number of them have been on active service; but quite a number did not serve abroad, because their duties kept them in the department. If a sacrifice has to be made it should not be borne by this department only, it could be spread over the whole Public Service. But if it is to be borne only by this department, obviously it should apply to both sections of its employees. If we are to observe the principle of preference to returned soldiers, the rationing system should apply also to the clerical portion, and not only to the military staff that consists largely of returned soldiers. It is said that their duties are dissimilar; but from my knowledge of that department with which I was associated for many years, I challenge the accuracy of that statement. The clerical staff does a good deal of the administrative work in connexion with military camps and home training; but in many places throughout the Commonwealth that work is done entirely by members of the military staff. At headquarters it is more convenient for the work to be done by the civilian staff. Some sergeants-major and adjutants do exactly that class of work as a portion of their military duties, and therefore it is incorrect to say that the duties are dissimilar. The only difference is that while the clerical employees devote the whole of their time to clerical work, the military employees, particularly those associated with the training of the army, occupy part of their time on military work and a part on clerical work. To that extent their work is similar to that performed by civilian employees.

Senator Barnes:

– Are they paid for it?


– It is part of their ordinary duties for which they are paid. Under this system of rationing the Government aims at saving £60,000 a year; but, let us consider the individual sacrifices to be made. An officer receiving a salary of between £500 and £600 a year will be called upon to make an annual sacrifice equal to £80 a year. That is a savage, and, I feel tempted to say, vindictive victimization of such unfortunate officers. Because of the necessity for economy, a military officer with a salary of between £500 and £600 a year is to sacrifice £80 of his salary in one year, while others in the same department are not to make any sacrifice at all.

Senator Hoare:

– What are the salaries of such officers?

Senator Sir GEORGE PEARCE.I am speaking of civilian employees receiving the same salaries as those received by officers on the military side.

SenatorO’Halloran. - How many civilian officers are there?

Senator Sir GEORGE PEARCE.About 700 civilian officers and 606 military officers are affected. A warrant officer in receipt of £250 a year will have to contribute approximately £40 a year; but a clerical officer who

Bits alongside him and who perforins the same work - the only difference being that he is not in the military section - is not to contribute a penny or lose an hour of employment.

Let me proceed to show the way in which this sacrifice, if it has to be made - and I admit that it probably will have to be made - could be spread over a much wider field. If we are to consider the question of sacrifices, we must explore a much wider field than the one department, and consider whether such sacri fices should not be spread over all the departments, in which case the loss to the individual would be negligible. A perusal of the Public Service Board’s report for the year ended the 30th June last, shows that on that date there were 28,764 permanent officers in the Public Service, and 2,591 vacant positions. Certain deductions bring the total down to 30,738 positions. If sacrifice is called for, surely it would be fairer to spread it over the whole Service than to single out 600 men to bear the whole burden.

Senator Barnes:

– The others are bearing their shave of the burden by being “ fired “.


– That is not so. Excess civilian officers have been transferred to the Public Service. The report referred to also shows that new appointments to the Public Service for one year represented salaries amounting to no less than £213,063. I suggest that ifwe have this plethora of educated men - and these men to whom I have referred have had to pass a stiff educational examination - they could be appointed to vacant positions instead of appointments being made from outside the Service. They would do as well in those positions as the men who have been appointed to them. Last year, the salaries, wages, and allowances of permanent and temporary officers of the Public Service amounted to £10,160,875. Extraneous payments, which I shall itemize presently, amounted to £573,439. The total salary payment for the year, therefore, amounted to £10,734,314.No great sacrifice would be demanded of the public servants generally to save £60,000 out of that amount. Among those extraneous payments are the following: - Travelling allowances, £162,551; overtime, £91,957; Sunday, duty, £97,348; higher duties allowance - that beautiful system of musical chairs to which I referred when dealing with a Public Service bill some time ago - £92,971. In the previous year, the higher duties allowance was £84,000. Perhaps honorable senators do not thoroughly understand the nature of this allowance. In practice, it works out somewhat as follows: - If a highly paid officer goes on leave, every person in the department below him moves up one position, and automatically receives the salary of the man whose position he takes during the period that the man first referred to is on leave. That is the blissful system introduced by the Public Service Arbitrator which cost the country £92,971 last year. Other extraneous payments for the year mentioned, were : - Away from home allowances, £9,291; district allowances, £46,649; holiday pay, £46,976; travelling time, £25,696; making up the total of £573,439 to which I have already referred. I suggest that even a 10 per rout, reduction of those extraneous payments would effect the saving desired without hurting a single officer. They would still be in receipt of the highest salaries of any government employees in the Commonwealth, and probably in the world. Certainly, their salaries are higher than those of State officers. I emphasize that these payments are merely extraneous.

During the year with which this report deals, 1,764 new appointments to the Public Service were made. If new appointments are to continue at that rate, it would be necessary to suspend new appointments for only six months to absorb these 600 men in the Public Service.

The report also shows that in the Public Service on the 30th June, 1929, there were 8,882 temporary and exempt employees. What is 600 among that number ? Merely by suspending the engagement of temporary employees, those 600 men could be absorbed easily. The Public Accounts Committee has called attention to this matter in a report which has been presented to Parliament. I am quoting these figures in order to show that the saving desired could be obtained without the public servants being called upon to make any real sacrifice. By doing away with overtime payments, the Government could save one and a half times as much as these officers are called upon to give up. Surely honorable senators opposite have no objection to doing away with overtime, seeing that to do so would be to act in accordance with trade union principles.

Senator BARNES:

– Overtime has been dispensed with in all departments.

Senator Sir GEORGE PEARCE.I make bold to say that the next Public Service Board’s report will show that the expenditure for overtime has been muchthe same as in previous years.

If other avenues of saving one and a half times as much as these 600 men are being called upon to sacrifice are sought, they can be found by doing away with the higher duties allowance, by a reduction of 1 per cent, in the salaries of public servants generally, or by reducing the extraneous payments mentioned by 10 per cent. The average salary of public servants, including 8,000 boys and girls, is £286 per annum. If those youths are excluded, the average salary would be much higher than the average salary of the military officers who are called upon to make these heavy sacrifices. According to the Public Service Board’s report, the average salary of adult males in the Public Service is £335 per annum. Of course I know that public servants are numerous in the community and that these military officers form a minority. I know also that the public servants represent votes; but that fact ought not to guide the Senate, or even the Government. The underlying principle should be to mete out justice evenhandedly. I am not concerned about the votes of the public servants. I stand for a. principle. In the long run the public will see that justice is done. I remind the Senate that these military officers are not allowed to form a union or to exercise their political power publicly. Seeing that they are unable to protect themselves it is our duty to protect them from victimization. There can be no question that, as between dismissal and rationing, the latter is the more humane system ; but rationing of the savage and vindictive character proposed by the Government is not justified. If rationing is necessary, it should be universal.

I know that it will be said that the Defence Department is the only section of the Public Service in which there is a falling-off of work; but the latest figures relating to the post office, as published in to-day’s press, indicate that that is not so, for it appears that the revenue of that department has decreased by £368,000. That decreasing revenue suggests that it would be possible to decrease the’ number of employees in that department. I do not want to see any one dismissed, whether a military or a civil officer ; but I see no reason why these men should be dealt with in this savage! and discriminatory fashion. The civilian staff of the Defence Department should be removed to other Public Service departments, and these military officers and warrant officers should be given clerical duties in the Defence Department. If any one has to be dismissed, it should be the men. who are not returned soldiers. That is the only way in which effect can be given to the principle of preference to returned soldiers, and if it were done, the services of these men could be retained.

This Government appears to me to be out to destroy our defence forces. From the commencement, it seems to have had that end in view. As ohe who had the responsibility of building up the Defence Department, I know the work and time it took. The present Government is victimizing 396 warrant and noncommissioned officers of the instructional staff. Let me tell honorable senators what had to be done as a preliminary to get our scheme of universal military training going. “We had to borrow warrant officers from India and Great Britain and bring them here-; we had to put into a camp for .twelve months or more, the Australians who were selected to be warrant and instructional officers of our future forces. They. had to be trained, not merely for. military work, but also so that they would be able to carry on the clerical or administrative side of the work. Because it was urgent to’ get the scheme of compulsory military training going, we had to ‘send these men , out to the various districts, but they were being continually brought back to “ camp for’ further’ courses of instruction. If it had not been that Duntroon had already been going for some little time, we would have been at our wits end to- secure the necessary instructional officers. As it was; we had to improvise by utilizing citizen force officers to act as area officers until Duntroon could supply a sufficient number of instructional officers.

Senator Sampson:

– The services of militia adjutants were also requisitioned.

Senator Sir GEORGE PEARCE.That is so. Some people think that it is a simple matter to establish a system of universal training; that it can be done by the mere passing of an act of Parliament. That is merely the commencement; it takes years to bring the scheme into being, and ours was barely going when war broke out. The initial stages had to be continued and completed during the war. When the Government has done what apparently it is out to do - when it has destroyed the military forces of this country entirely - and this country sets out again to rebuild them, it will take at least five years and probably longer to get back to the stage of efficiency we had reached by 1913-14. Any one can destroy or pull down, and this picking out of certain men, this unequal, sacrifice, is one of the most fatal blows -that could be struck at our defence policy. What does it say to these men ? It says, “ You are fools to fit yourselves for the defence of your country. If you want to have an easy time, do not become military officers; do not try to become instructional officers in the defence forces; get a clerical job and join a union and nothing will be done to you. If you are fools enough to qualify as commissioned officers or as sergeantsmajor to train the Australian youth to defend their country whenever the time comes, should we ever be hard-up or find it necessary to save money, we shall take it out of your hides ; because you will not have a union to protect you”.-

Senator Rae:

– Is the right honorable senator a returned soldier?


Senator Rae:

– Then why does not the honorable senator give up his job to a returned soldier?

Senator Sir GEORGE PEARCE.My life during the war is an open book. This country has passed its judgment on the work 1 did at that time, and I have no . need to apologize for not. being a returned soldier. I stand here to-day to defend men who are returned- soldiers, and to say that the Government’s policy is one of savage victimization. It is utterly uncalled for, and, in my judgment, is a deadly blow at the effectiveness of our defence forces.

Senator BARNES:
Assistant Minister · Victoria · ALP

– The matter of the rationing of work in the military forces is necessarily wrapped up with the alteration of Government policy in regard to military training. The two things are so intertwined that it is impossible to deal with the one without referring to the other, and I think it my duty to make the position clear to Parliament and to the people of the country. The Leader of the Opposition (Senator Pearce) from his point of view has put forward a reasonable case. Other honorable senators outside the chamber have criticized the Government on the rationing of work and on the change of policy from compulsory to voluntary training. Any reply to the case set out by the Leader of the Opposition must necessarily involve a reply to the criticism which recently has been levelled at the Government’s policy. Senator Sampson is reported in the Hobart Mercury on the 9th June, 1930, to have said that -

The position in regard to the defence of Australia was an extremely grave and serious one. Since the war, the Commonwealth had backed down considerably on its defence policy. Last year there were 48.000 men in training, and. on top of that there were 17,000 or 18,000 cadets who would have been signed on in due course. However, the new regulations did away with ail these men. and it was thought that 35,000 men, which was the number hoped for by voluntary enlistments, would be sufficient for the needs of the country. But the objective which had been set for the authorities last November had by no means been reached by a long way, and there were only 26,000 in training. “ We read in the papers,” said Senator Sampson, “ that voluntary enlistments have exceeded the most sanguine expectations, and that everything is going very well. But I want to give the lie direct to these statements, which are damnable, rotten, mean lies.”

That is a very serious statement. It was followed at a later date by a questionnaire forwarded to the Melbourne Herald on the 21st June, 1930, by Senator H. E. Elliott. I think honorable senators have read it. Indeed, the greater part of it was included in a question submitted by the honorable senator, to which a reply was furnished in the Senate to-day. I therefore do not propose to weary honorable senators by reading it.

Senator Sampson:

– What has the change of system to . do with rationing?

Senator BARNES:

– Rationing was found necessary for more than one reason. One was the altered military system of the country. I have a report on the situation from the point of view of the Government, which I shall now place on record for the information of the Senate- and the public generally. It is as follows : -

page 3152



Substitution of Compulsory Training by Voluntary Scheme.

In accordance with the present Government’spolicy, the questions of the organization and of constitution of the Australian Military (Citizen) Forces and Cadets generally on a basis of voluntary (in lieu of compulsory) enlistment and enrolment were, on the 12th November, 1929, fully considered by the Council of Defence the decisions being briefly summarized as follows: -

  1. That the existing organization and distribution of the Forces will continue to be maintained in nucleus as at present - with revised training establishments.
  2. That the establishment of such military forces will be approximately 35,000.
  3. Senior Cadets. - Volunteer regimental detachments (the strength of which will not exceed 20 per cent. of establishment of the relative Citizen Force unit) to be attached to each unit,- while the formation of voluntary cadet corps associated with colleges, schools, and institutions was approved.
  4. Physical training to continue as at present.
  5. Period of Training. - Training to consist of sixteen days annually - made up of eight days’ home training in whole days, half-days, and night parades, and eight days’ continuous training in camp - such training to. be supplemented by courses, schools and classes of instruction as at present.

Voluntary enlistment will similarly operate in connexion with Naval Citizen and Citizen Air Forces, the approved establishments of which are 5,500 and 350 respectively. “Rationing” Scheme, i.e., Enforced Leave without Pay to the Members of the Permanent Military Forces.

  1. The change from compulsory military training to voluntary enlistment from 47,000 Citizen Forces to 35,000 Militia, and Senior Cadets from 10,000 to 7,000, has left the Permanent Military Forces with a considerable excess of personnel.
  2. Owing to the financial situation, curtailment in defence expenditure is imperative. There will be a “ cut “ for the coming financial year of £500,000.

The Government wishes to avoid dismissals at the present time, when there is so much unemployment; therefore rationing was determined upon, and this was suggested by the Military Board.

  1. It is to be clearly understood that this period of maximum enforced, leave among the members, of the Forces is a temporary ‘ expedient only, and not to he regarded as a permanent- reduction in the present rate of’ salaries or wages. 4.I wish to stress the point that any savings that can be made in any branch of the Defence Department during the next financial year will be applied towards the reduction of the period of enforced leave, without pay, to be borne by members of the Military Forces. It is confidently expected that the result of the application of this principle will be that the maximum period of eight weeks enforced leave will be considerably reduced.
  2. The number of permanent men who will take enforced leave is - Members on £260 per annum and upwards, eight weeks; members on £247 to £259 per annum, six weeks four days; members on £241 to £246 per annum, five weeks four days. ‘

Men who are on the basic wage will suffer no reduction.

  1. Pay for superannuation contributions will be paid to the Superannuation Board by the department whilst members are on leave.
  2. Child endowment will continue to be paid during leave.
  3. Enforced leave without pay will count as continuous permanent service in order to preserve all existing rights and the resulting accruing benefits, including superannuation.
  4. It will be applicable to all officers on duty, exchange and training abroad, and to seconded officers of the permanent officers employed in. other branches of the Defence Department.
  5. It will be in addition to the annual recreational leave on full pay provided for under the regulations.
  6. Members living in quarters will be required whilst on enforced leave without pay to pay existing rates for rents; that is, the deduction in those cases will be increased by a deduction for rent based upon their normal rate of pay.
  7. In no case will any period of enforced leave exceed fourteen days in any one quarter.
  8. Enforced leave without pay will not apply to members who for any reason whatever are retired or discharged between the 1st July and the 30th September, 1930.In such cases full pay will be granted up to the date of retirement or discharge.

The general conditions just quoted are contained in a circular memorandum issued by the Military Board.

To summarize the position, this Government, facing a serious financial impasse, has had to reduce expenditure in the Defence Department. It has had to make a curtailment for the current year of over £150,000, and of the huge sum of £500,000 for the coming financial year. Every avenue that it was possible to explore with this end in view was examined, and the spectacular savings that are now being made are a proof of the wastefulness that has been sadly in evidence over many years of previous administration.

The cost of the Naval College, by its transfer to the Flinders Naval Depot, will be reduced from £64,752 to £15,000, or thereabouts, per annum. The cost of the Military College, if it is to remain where it is, can be cut down by £11,000, but the position is still being investigated to see if a much larger reduction than this can be made. It is confidently hoped that some . means may be adopted whereby the two colleges will be run at a total cost of not more than £40,000, at most, although they were costing the country, under the late Government, £117,000 per annum, thus effecting a saving of £77,000 without any reduction, of efficiency. The transfer of the Naval College to Flinders was recommended by the First Member of the Naval Board. This, and the other striking savings, have been made without any reduction of efficiency.

The basis of 35,000 of an establishment of troops was agreed to by the Council of Defence, and it is a nucleus which can be expanded to 180,000 men to repel any prospective invader. That wasall the previous Government had provided for.

These necessary savings in our dire extremity have been made difficult by certain members of the Opposition who have used the opportunity to decry the present defence system. In spite of these petty attacks, the Government will go on with its task. . Its platformprovides for adequate defence of the country against aggression, and itstands four square to that principle. Ministers feel that the real ‘ cause of the chagrin of their opponents is the fact, that the voluntary enlistment system is proving a success, although with their bitter attacks and sinister whisperings, they said that the Government was destroying the defence system.

The following recruiting figures to the end of May bear eloquent testimony to the success of the voluntary system : -

Honorable senators will realize that the new policy has been in operation for only five months, but during that time the Government has reached its objective to the extent of 77 per cent., and at the rate at which enrolments are taking place - about 2,000 a month - we shall have considerably exceeded our estimates within another five months. So much for the gentlemen who say that the new system has been a failure. The figures that I have given completely refute the statements that are made owing to a lack of knowledge of the facts. I have given this information to honorable senators so that they will not continue to go round the country telling the people what is untrue. I recognize that they have done this in ignorance, and the Government is pleased to enlighten them on the matter.

The Leader of the Opposition, speaking of overtime in all the departments, estimated that, if it were cut out, it would effect a saving as great as that which the Government hopes to make by rationing employment in the Defence Department. As a matter of fact, every department has had instructions to eliminate overtime. In all departments men have been kept out of employment in the past, owing to the operation of overtime. The Leader of the Opposition sa”id that 600 men was too big a proportion of the employees in the Defence Department to whom to apply the rationing proposal. Considering that there will be 35,000 men in the forces when the voluntary scheme is completed, as against the 47,000 before the reductions were made, 600 is not a very great percentage, having in mind the fact that there are ‘200,000 men in other occupations outside the Public Service on the unemployed market. Therefore, employees of the Defence Department ought to feel particularly fortunate in that so many of them have retained their positions in the Service.

Senator BARNES:

– The Leader of the Opposition, in concluding his remarks, said that it was easy to pull down, but it required ability and efficiency to build up anything that was worth constructing. The present Government is faced, with a task that no other Ministry in this country, and, I think, I can safely say, no other government in any part df the world, has been asked to undertake. Certainly the present Government is confronted with the problem of dealing with a greater percentage of unemployment, with the misery and hunger that follow in its train, than any other Commonwealth Ministry has had to face.

Senator Reid:

– Why not extend the rationing to the clerical branch?

Senator BARNES:

– The number of employees in both government and private establishments has been curtailed, so far as possible.

Senator Sir William Glasgow:

– Why restrict the rationing to one branch?

Senator BARNES:

– In every department of the Public Service men are being put off daily. In my department, alone, hundreds of men have been dismissed in the last few months, because the Government has insufficient money to keep them in employment. This serious situation must be faced. The present Government is not responsible for it, and I am not wholly blaming the late Government for it, although I believe that the fault lie’s with it to a large extent. Nobody regrets more than members of the Government the great misery that obtains in the community, and the inability of the Ministry to do what it would like to do to alleviate it. In the Department of Works and Railways we could go on with millions of pounds worth of work, if we had the necessary funds. I have no desire further to depress the spirit of the people, but, perhaps,, we have not yet reached the limit of the sacrifice that they will be called upon to make before they see a silver lining through the dark clouds that now hang over them. Every member of the community must feel the deepest regret in finding the country in this unhappy predicament, and the Government would be prepared to take some risk to alleviate the sufferings of the people if it could, see its way clear to do so. Ministers are as alive as anybody else to the needs of the situation, and are prepared to go as far as they possibly can to improve the position.

Senator Sir WILLIAM GLASGOW (Queensland) [4.19]. - The Assistant Minister (Senator Barnes), has not satisfactorily replied to the arguments presented by the Leader of the Opposition (Senator Pearce), whose case was unanswerable. He devoted a considerable portion of his time to the repetition of the statement made in the other branch of the legislature yesterday, not in reply to the case built up by the Leader of the Opposition, but by way of an attack on two honorable senators. I say immediately that if we are to choose between rationing and dismissing employees, I much prefer rationing, because the permanent officers of the Defence Department have devoted the whole of their lives to fitting themselves for positions as specialists. As Senator Pearce has indicated, it will be exceedingly difficult for these men to find other employment in the Commonwealth. The right honorable gentleman properly emphasized that thi3 rationing scheme, as applied to the military section in the Defence Department, is a severe tax upon a very small section of the community. The following figures show just what sacrifices must be made by certain officers of the department in order that the Government may effect a saving of £62,000:-

These figures indicate that the rationing scheme is a severe tax upon about 750 officers and’ non-commissioned officers many of whom, as Senator Pearce pointed out, could be employed upon clerical work in the department.

The Assistant Minister (Senator Barnes), in a reply to a question asked by Senator H. E. Elliott this afternoon, said -

The maximum loss of pay will be approximately 15.4 per cent., being two weeks without pay in each three months. It is provided, moreover, that any savings that can be made in any branch of the Defence Department during 1930-31 will be applied towards the reduction of the enforced leave without pay to be borne by members of the Permanent Military Forces. It is confidently expected that the result of the application of this principle will be that the maximum period of eight weeks enforced leave for 1030-31 will be considerably reduced.

That is a dangerous principle. If the Government intends to ask the department to effect further economies on the military side, there is the risk that, the savings will be in directions in which expenditure is absolutely necessary to ensure efficiency. All those who have been associated with the department realize how essential is an adequate expenditure on the militia side. If military training is defective practically the whole of the expenditure on the military side of the department will be wasted. Senator Barnes said, also, that this rationing scheme was the result of the Government’s policy, and took to task certain honorable senators because they had directed public attention to the fact that the voluntary system had not, up to the present, proved as successful as was anticipated. If one may judge from the administrative acts of the Minister for Defence (Mr. A. Green), this Government is out to destroy the defence of the Commonwealth. The Prime Minister (Mr. Scullin), iu his policy speech, declared that the Government stood for the adequate defence of this country; hut its actions, since it has been in office, suggest that its purpose is to destroy defence.

Senator BARNES:

– Does the honorable senator direct that accusation against the Council of Defence ?


– Certainly not, because, as the Assistant Minister knows, the Council of Defence was not consulted with regard to this GBvernment’s “policy. The first statement made by the Minister for Defence was to the effect that the Government did not propose to take precipitate action to substitute voluntary enlistment for compulsory military training. But a few days later a- prominent member of the Labour party made another declaration, and the Government then precipitately suspended compulsory training and substituted for it the voluntary system. Had the Government been sincere in its purpose to make voluntary enlistment successful, it would have provided for a transition period, and the lads undergoing training could have been transferred to the voluntary system. The Prime Minister stated further that there would he no reduction in the staff of the Defence Department.

Senator Payne:

– He said that definitely.


– We were told also by the Minister for Defence that, to encourage enlistments under the voluntary system, he intended to provide more attractive uniforms for the recruits. As a matter of fact, we had a number of statements from the Minister informing us of his intention to build up the defence system by voluntary enlistments and provide for the future administration of the military and naval colleges. On every occasion the Minister emphasized that, notwithstanding proposals to reduce expenditure, he intended to ensure the then high standard of efficiency in the forces. These statements were, of course, ludicrous. The Dun- ,troon and Jervis Bay Colleges have no equal in the world for efficiency. Both institutions have turned out boys able to hold their own in competition with boys trained at any other military or naval colleges in the British Empire. In the year before last three boys from Jervis Bay, who were doing certain courses in England, competed with boys from the British colleges. Two secured first place in their courses, and the third boy was second. It is absurd to say that it is possible to maintain defence efficiency with a reduced expenditure. The Minister for Defence protests too much. Every time he makes a statement with regard to military matters he tells us that the efficiency of the forces is being maintained. We all know that it is not.

The Assistant Minister (Senator Barnes) this afternoon stated that at the present time our defence forces could be expanded to a strength of 180,000 in the event of an outbreak of war. If we continue the present voluntary system for a few years more it will be impossible to do that. Under the system approved by the previous Government, our defence organization was being built up on a nucleus basis. Each year 45,000 men were undergoing training, and we were turning out a reserve of 15,000’ men. In the course of a few years we would have had a fine reserve of men well trained in military tactics. The present voluntary system will not train a single reservist. Every man who enlists will either remain in the forces for perhaps twenty years or go out at the end of six months. Consequently, we shall be unable to build up a reserve, so the statement of the Minister about the efficiency of the Army under the voluntary system is absolute nonsense.

The Government’s action is breaking the spirit and morale of the Permanent Forces. What greater blow could be struck at any small section of the community comprising, as I have shown, only 750 men, than to compel them to make such enormous sacrifices in their incomes ?

Senator Guthrie:

– It has been done with a purpose.

Senator Rae:

– They are lucky they have been able to keep their jobs’


– I agree with Senator Bae that, in these times, any man is fortunate to be kept in employment. But why has the Government refused to spread this sacrifice over a greater area in the Public Service ? Senator Pearce has pointed out that many of the officers in the Defence Department could be absorbed in clerical posts, which at present are filled by civilian public servants. The latter need not lose their positions, because they could be transferred to other branches of the Public Service.

Senator Dooley:

– And other people would lose their jobs, then.


-No, because there is an enormous wastage in the Public Service and, if recruiting in the Service were suspended for a time, the officers transferred from the Defence Department could be fitted into positions in other branches. This course presents no difficulty whatever, and it would have this advantage: It would retain in the Defence Department, officers who have devoted the whole of their lives to the study of military science ; men with special qualifications who would be available in the event of trouble to provide the necessary staff for the Australian army. At the outbreak of the war, we were forced to take on the various staffs of our units a large number of British officers. I sincerely hope that it will not be necessary to do this again should trouble occur.

Senator Rae:

– Does the honorable senator anticipate international trouble?


– No one can foresee war. It conies down like a thief in the night. No one can predict how soon Australia may be embroiled in another serious conflict. I sincerely hope that the Government will reconsider its decision, and that the period of enforced leave for these officers will be further limited.

Senator H E ELLIOTT:

– The Minister, in his reply to the right honorable the Leader of the Opposition (Senator Pearce), successfully sidestepped all the issues raised by the right honorable gentleman. The questionnaire which I submitted this afternoon had nothing whatever to do with the motion submitted by Senator Pearce.

Senator Daly:

– Or with anything else.

Senator H E ELLIOTT:

– It seemed to have caused consternation in the Minister’s mind.

Senator Daly:

– Sympathy would be a more suitable word.

SenatorH. E. ELLIOTT.- Evidently it did cause some consternation, because the Minister for Defence threatened to review my appointment. According to answers supplied to questions which I asked on the 19th June members of the Public Service were, over a period of three years, granted increases which amounted to £193,000 annually and the increases to be paid from the 1st July next will amount to £180,000. If these increments were to be suspended for one year a saving equivalent to more than three times that proposed would be made. A reduction of salaries would not be involved as these officers could continue at the rates they are now receiving. It is difficult to understand why the Government should single out the unfortunate returned soldiers when reductions are to be made. Where is the justification for the Government’s action, particularly in view of the flourishing of trumpets with which the voluntary system was introduced before Christmas, when we were informed that the services of not a single officer of the department would be dispensed with?

SenatorRae. - Their services are not being dispensed with.

Senator H E ELLIOTT:

– They have either to leave the Service or accept a salary which in some cases is to be reduced by £100 a year, and at a time when there is unprecedented difficulty in obtaining employment. This Government, which pretends to be opposed to all forms of sweating and reducing salaries, has singled out these unfortunate men whose salaries are to be cut down to the extent of 15 per cent.

Senator Dooley:

– Their salaries are not being reduced below the basic wage.

Senator H E ELLIOTT:

– It is poor comfort to a man receiving considerably more than the basic wage, to be informed that he is still entitled to receive the basic wage. At great sacrifice to themselves many of these officers have entered into obligations with respect to the education of their children and in other respects, which they will not now be able to carry out. Many of their children who are being educated in order to qualify for professional or commercial careers, will now be compelled to discontinue their educational studies and will be left in a “ half-baked “ position. These unfortunate soldiers are not in the happy position of the members of the clerical staff who leave their offices at 5 o’clock, and who have regular hours. Their services are always at the disposal of citizen force officers, who, in carrying out other work, cannot attend to their military duties during ordinary hours. Military officers attend drills during the evenings, on Saturday afternoons, and on holidays. For this they do not receive any overtime payments or travelling expenses such as are paid to other public servants.

Senator Dooley:

– Neither did the compulsory trainees.

Senator H E ELLIOTT:

– They were paid for attending drills on Saturday afternoons and during the evenings. If the honorable senator had served in that capacity he would realize that in doing so they made considerable sacrifices. Under the compulsory system there was equality of service and sacrifice; every youth had to serve for a specified period. It is amazing to find the Government departing from those principles which it said it would always observe.

Action in this direction is apparently being taken in an endeavour to get even with the returned soldiers. It is determined to get down on them in some way.

Senator Hoare:

– The honorable senator should not be so vindictive.

Senator H E ELLIOTT:

– I have searched in vain to discover its reason for acting in this way. Shortly after this Government assumed office it, was said that the compulsory system of military training was to be retained at least for a time, but a little later an announcement was made by the honorable member for Ballarat (Mr. McGrath) that the system would cease to operate before Christmas, and it did. The Assistant Minister (Senator Barnes) said that the voluntary system of training has been in operation for five months, but as a matter of fact it was introduced before Christmas and a majority of the recruits now in training were enrolled by that time. Although the system has been in operation fully seven months, we have not yet reached the full quota.

Senator Daly:

– How many more are required to complete the quota?

Senator H E ELLIOTT:

– Nine thousand in a force of 34,000.

Senator Daly:

– The honorable senator should study the latest figures.

Senator H E ELLIOTT:

– The Minister for Defence (Mr. A: Green ) who has had the temerity to accuse Senator Sampson and myself of discouraging voluntary recruiting, should know that I have, at my own expense, consistently attended recruiting meetings and urged those in control of local -governing bodies to assist recruiting in every way possible.

Senator O’halloran:

– I - Is that why the enlistments are lower in the State which the honorable senator represents than in other States?

Senator H E ELLIOTT:

– The figures in my division are the highest; but those in the electorate represented by the right honorable the Prime Minister (Mr. Scullin) are so low that training there has been discontinued. We have appealed to the right honorable the Prime Minister, the Minister for Repatriation (Mr. Anstey) and the Minister for Defence (Mr. A. Green) to arrange for local councils to assist, but they will not even convene public meetings. Notwithstanding the assistance I have given to the voluntary system, the Minister for Defence accuses me of discouraging recruiting. My only son is a private in the volunteer forces. Can the Leader of the Senate (Senator Daly) say that the son of any supporter of the Ministry has joined the defence forces?

Senator Daly:

– I have not a son who has reached the eligible age.

Senator H E ELLIOTT:

– The Minister will see that no male member of his family joins our defence forces. It is a scandal that these men who have served their country so loyally and efficiently should be asked to make such a substantial financial sacrifice while others performing similar work in the same department are not to suffer any reduction in salary.

Senator DUNN:
New South Wales

– The Leader of the Opposition (Senator Pearce), who has condemned the action of the Government in introducing the rationing system in the Defence Department, should remember that this system was first adopted by the Bavin Government of New South Wales. No attempt was made by that Government to give preference to returned soldiers, many of whom were compelled to either leave their positions or submit to a substantial reduction in salary. Owing to the world-wide depression, the rationing system has been introduced in many countries. The Leader of the Opposition, when in charge of the business of this chamber, intimated that 1,200 postal en>ployees were to be dismissed and that linemen receiving £4 10s. a week had, in consequence of the allowances made to them, been able to purchase farms. But when the present Government came into office it decided that. -there should be no dismissals. The Leader of the Opposition, in speaking on a motion moved by Senator

O’Connor, in 1902, said-

The PRESIDENT (Senator the Hon W Kingsmill:

– Order! The honorable senator must confine his remarks to the question before the Chair.

Senator DUNN:

– I was about to quote a statement made by the right honorable senator who has accused this Government of disloyalty.


– The question before the Senate is the rationing pf officers in the Defence Department.

Senator DUNN:

– Statements can be made by members of the Opposition, but, apparently, supporters of the Government cannot say anything.


– Order. !

Senator DUNN:

– The statements were made in your absence.


– I ask the honorable senator to remember that in no circumstances is he entitled to reflect on the Chair.

Senator DUNN:

– In the Melbourne Harold of the 21st June last there appeared the following letter from Senator H. E. Elliott-

page 3159


General Elliott Asks Questions

Answers Wanted from Army Leaders.


The subject of Australian defence is greatly exercising the minds of the most thoughtful of our citizens, but the multitude who find the latest Test match scores of absorbing interest seem to regard defence as entirely a matter to be left to Providence.

With a view to arousing some thought on this subject, I invite the undermentioned authorities to answer through your columns the following questionnaire: -

Sir Harry Chauvel,

Sir John Monash,

Sir Brudenell White,

Major-General Coxen,

Brigadier-General Dodds,

Captain G. J. C. Dyett

These eminent gentlemen are members of the Australian War Council. When Senator Elliott asked them those questions ke knew that, according to the army regulations of other countries, they would have been shot if they answered them. Judging by some of the interjections by honorable senators opposite, a steel bullet would not make any impression on them. Senator H. E. Elliott said that we should find employment for some of the navy officers who have been dismissed. The honorable senator receives £250 per annum from the Scullin Government asa retainer for his military services. I ask him whether he is prepared to forgo that amount in order that these dismissed officers may share it.He would still have his £1,000 as a member of this Senate, and, in addition, a comfortable practice as a lawyer. I suggest that the honorable senator write a note to the Minister for Defence along the following lines: -

In view of the state of the finances rendering necessary a scheme of rationing in the

Defence Department, I hereby authorize you to retain the £250 per annum which I now receive from the Commonwealth for my military services, and to use the amount to employ dismissed naval officers.

Senator Sampson, who also receives a retainer for his military services, might write a similar letter. Indeed, as I watch the honorable senator’s benevolent countenance, I feel sure that he will do so within the next 48 hours.

There is justification for rationing in the Navy, as the following figureswill show. In 1920, when we had 32 ships, 262 officers were employed; whereas in 1929, when we had only sixteen ships, the number of officers had increased to 270. The majority of those men receive big pensions from the Imperial Government. Their salaries are not inconsiderable, as a perusal of the following statement will show : -

Captain J. C. Stevenson, Captain Superintendent, Garden Island, £1,400

Captain H. P. Cayley, Commonwealth Naval rep., London, £1,369.

Captain C.J. Pope, Director of Naval Intelligence, central administration, £1,095.

Engineer-Commander A. E. Creal, H.M.A.S. Cerberus, £821

Engineer-Lieut.-Commander P.. W. Sims, H.M.A.S. Penguin, £657

Lieut.-Commander F. Ince, H.M.A.S. Cerberus, £560. ,

Paymaster-Lieut. W. J. Pearce secretary, Mobilization Committee, central administration, £511.

Electrical-Lieut. R. C. Burke, H.M.A.S. Cerberus, £511

Commissioned . Boatswain A. J. Haberfleld, Cerberus, £420

Commissioned Engineer, H. B. Broomhead, Cerberus, £438

Paymaster-Commander C. A. Parker, Naval Assistant to Second Naval Member of Naval Board, £768

Paymaster-Commander C. H. Spurgeon, head of Naval branch, central administration, £684.

And so the list goes on. These men receive special grants which would enable them to live in comfort on the retired list, even if dismissed from the Australian Navy.

Senator DUNN:

– If I had my way I would “sack” them all and put Australians in their places.

Senator Glasgow:

– A lot of the men mentioned belong to the Australian Navy.

Senator DUNN:

– They are pensioners of the British Navy.

Senator Glasgow:

– They are nothing of the sort; they belong to the Royal Australian Navy.


– Honorable senators must accept the assurances of one another.

Senator DUNN:

– These men-


– The honorable senator has exhausted his time.

Senator DALY:
Vice-President of the Executive Councils [4.59]. - I sincerely hope that the Senate will not pass this motion. I do not propose to traverse the ground which has already been covered by various speakers or to support the statements of any honorable senator in particular. Any government must regard, as serious a motion by a private member to adjourn the Senate. I therefore propose to confine myself to the subject contained in the motion before the Senate. The adjournment of the Senate is sought on the ground that the Government has discriminated unfairly between its employees in the Defence Force and those in other departments. I remind honorable senators that, at the present difficult time, the policy of the Government is to reduce expenditure to a minimum. In order to do so it has already made considerable reductions in every department. The clerical staffs of the various Public Service departments have already been reduced to a minimum. In dealing with the Defence Department the Government had to decide between dismissals and rationing. The men with whom this motion deals could not be transferred to the Public Service because, as honorable senators know, the Public Service Act ties the hands of the Government in connexion with employment therein. The Minister for Defence (Mr. A. Green · South Australia · ALP

has been subjected to some criticism because of his action. I point out that the particular step to which objection is now raised was not taken before the Minister had conferred with one of the leading members of the Opposition in another place concerning it. I am instructed by the Minister that when a deputation met him in connexion with the rationing, he was approached by the Deputy Leader of the Nationalist party in another place (Mr. Gullett), and advised that, if the Government introduced a system of rationing into this particular section of the Defence Department, in preference to dismissing the men, such action would meet with the approval of the Opposition in another chamber. That intimation was made in another place last night by the Minister for Defence to the Leader of the Opposition (Mr. Latham). I ask honorable senators to look at this question from the point of view from which Mr. Gullett saw it when he spoke to the Minister for Defence. Honorable senators will realize that this statement is not one to which a reply cannot be given. It is my duty to communicate to this chamber the statement supplied to me by the Minister for Defence in this connexion. Mr. Gullett realized that these men were trained for a special class of work, and that, if dismissed, they would find it difficult to obtain work.

Senator Sir William Glasgow:

– We all agree that rationing is preferable to dismissal.

Senator DALY:

– Seeing that we all agree regarding the principle, I have no doubt that I shall be able to convince the Senate that it would have been impossible to make room for these men in other departments by dismissing men therein, as suggested by the right honorable the Leader of the Opposition (Senator Pearce). The position in the Commonwealth Public Service to-day is that the staffs of the several departments have been reduced to a minimum consistent with efficiency. If, instead of rationing their employment or dismissing them, it was proposed to employ these men in the Public Service-

Senator Sir William Glasgow:

– The honorable senator must know that the annual wastage in the Public Service would make it possible to absorb them.

Senator DALY:

– During its seven months of office, the Government has endeavoured to discover wastage. If the honorable senator can show where it exists, the Government will take steps to remedy it.

Senator Sir William Glasgow:

-i referred to the natural wastage, by which a number of officers leave the Service each year because of death, resignations, and other causes.

Senator DALY:

– The right honorable the Leader of the Opposition (Senator Pearce ) referred to the system of higher duties allowances as a beautiful system of musical chairs. I remind him that this Government was not responsible for the introduction of that system; that it must administer the Public Service in accordance with the legislation governing it. In administering the Public Service, we must have a sufficient staff to allow for the fact that throughout the year, some men are away, on leave or holiday. It is, therefore, necessary so to arrange the personnel as to fill up any gap and avoid the possibility of destroying the efficiency of any particular .department. The Leader of the Opposition (Senator Pearce) has not shown that there are positions in the Public Service which the men in the defence forces can fill. There are, of course, certain duties in the Public Service they could perform, and as a matter of fact, wherever it has been found possible to transfer ‘ to positions in the Public Service any of the men who have been retrenched because of the defence policy of the Government, they have been so transferred. One of them is now working, in the particular department administered by me. . In other departments, too, there are men who have been thus transferred. But the Government is really at its wits’ end to know what to do with the staff it has at present. We know that we cannot go on without a defence staff capable of coping with peak periods. We must maintain our defence forces at a point of efficiency; otherwise we might as well hand over our country to some one else to govern. But if we had adopted the policy pursued by the previous Government we would have dismissed all those who were not actually required-.

Senator Reid:

– The Government has dismissed a lot of men.

Senator DALY:

– We have been forced to do so.

Senator Reid:

– :That is what the Government at election time said it would not do.

Senator DALY:

– Of course we said that we would not do it, and we did not intend to do it.

Senator Reid:

– Of course not !

Senator DALY:

– There are times when an honorable . senator’s assurance should be accepted. I would accept Senator Reid’s assurance, if he gave it to me, that he did not intend to dismiss men. We believed that we could carry on without dismissals and we have dismissed men only when it has been found absolutely necessary to. do so.. The rationing system has been introduced in order to reduce dismissals to an absolute minimum. The Leader of the Opposition (Senator Pearce) asks why it is not being applied throughout the Public Service. Apart from the fact that the numbers in the Public Service have already been reduced to what is necessary to maintain efficiency, the Public Service is covered by arbitration awards. We could not have rationed the men of the Defence Department if they, had been covered by an arbitration award. We would have had to dismiss all beyond the required number. It was because the men in that department were not bound, by an award that .we were able to accede to their request that the sacrifice should be shared among them.

Senator Ogden:

– That is a condemnation of Public Service arbitration awards.

Senator DALY:

– It is not. I am not condemning the system that operates in the Public Service. I am answering tie contention of the Leader of the Opposition. Honorable senators opposite may feel that, instead of rationing over a small area, we could have rationed over a large area; and having a majority in this chamber they would be within their rights in attempting to enforce that policy upon the Government; but even if the Leader of the Opposition (Senator Pearce) were in power, he could not do what he has suggested should be done. The Government cannot be condemned for hot carrying out a policy which the Opposition itself could not enforce.

Senator Ogden:

– Could not amending legislation be brought down?

Senator DALY:

– The question before the Chair now is the adjournment of the Senate and not the matter of amending legislation. All that I am called upon to do is to defend the Government against the proposed adjournment of the Senate.

If the honorable senator desires an amending bill so that the Public Service may be rationed, there is no doubt that the majority of honorable senators could take action in that respect despite the protestations of the minority representing the Government.

It has been suggested that some of the defence officers might possibly be transferred to the postal service, but I can assure honorable senators that the PostmasterGeneral is already at his wits end trying to keep his present staff in employment. When the principle of preference to returned soldiers was discussed in this chamber some weeks ago, it was shown that the number of returned soldiers in the Public Service was by no means small. Honorable senators must realize on reflection that if the policy they are now advocating were carried into effect, it would mean forcing some men, possibly returned soldiers, out of employment. As we cannot ration the Public Service, it is impossible to bring these defence officers into the Public Service and indulge in a general rationing scheme. There is nothing, therefore, for which the Government can be censured. I can assure honorable senators that had we dismissed men we should still have maintained the defence staff at the efficiency point. For the time being we are now above that point, but, as the Assistant Minister (Senator Barnes) has indicated, the new recruits we expect to receive during the balance of the year will create more work. The Government will maintain the defence instructional staff at the efficiency point and, at the earliest moment, will’ rid the Service of this rationing system. I trust that the Senate, in its wisdom, will reject the motion.


– In this matter we must recognize the sign of the times - economies are absolutely necessary - but I think we must also recognize that discrimination has been displayed against a very deserving class of public servants, if they can be so called. They are, in any case, in the service of the Commonwealth, and among them are quite a number of sergeantsmajor who, as my long experience in the defence4- forces, extending from commander of a company to that of a brigade, has led me to conclude, are really the backbone of our defence forces. It is very unfair to discriminate against them in the way the Government has done. The Assistant Minister has shown that already 77 per cent, of the required numbers under the voluntary scheme have been enlisted. The scheme seems to be going ahead satisfactorily enough, and the fact that all organizations have to be maintained as a nucleus indicates that the same work is required from non-commissioned officers and instructional staff. A reduction of the forces from 47,000, or whatever the number was, to 35,000, does not mean that any one’s services can be dispensed with. The organization must remain practically the same; just as many instructional staff officers, commissioned and non-commissioned, will be needed to instruct the reduced number as were required to cope with the larger number.

The need for economy is reflected in commercial life. Rationing has been adopted in commercial life. In one case which has come under my notice, employees have been given one week’s holi-day without pay in four. They would rather have that than have a reduction of hands. I would not raise my voice’ against this proposal if the whole of the Public Service were to be rationed. From a hasty calculation, it seems to me that the rationing of one week a year throughout the Public Service would save at least £200,000.

Senator Sir George Pearce:

– Rationing of one day would give £60,000.


– It would be less onerous on the whole of the Public Service to give up one week per year than it is’ for the section of the community I have mentioned to have to give up one week in four.

Senator Sir George Pearce:

– The Government does not want to save more than £60,000.


– I presume that it wants to save more than £60,000 if it can do so; and I am showing how it can almost quadruple, that amount.

Senator Daly:

– Would there be no complaints about non-delivery of letters? The honorable senator is aware that letter-carriers cover a certain area each day.


– I think that the rationing of one week in a year would not lead to any lack of efficiency on the part of the Service. I heard the Leader of the Government (Senator Daly) say that it was impracticable to ration the Public Service, because of arbitration awards, but it has not been found impracticable to have rationing in the railway service of New South Wales. If there is anything in the Commonwealth Public Service Act to prevent its being done, surely it is worth while to introduce a short amending bill to give the necessary power, I advise the Government to adopt that system., and I would go further and include members of both Houses of Parliament. They could give up the equivalent of one week a year in order to assist the Government in this trying financial time. I protest most strongly against the rationing system as applied to the defence staff only.

Senator REID:

.- The statement made by the Leader of the Government in the Senate (Senator Daly) as an excuse for reducing the salaries of officers in the Defence Department is the most extraordinary I have ever heard one in his position offer. The men in this department are prohibited, by law, from becoming members of a union, and being thus deprived of the opportunity to use the Arbitration Court as a means of defending themselves, they have been treated shamefully by the present Government.

Senator O’Halloran:

– D - Despite their disability, they are all getting over the basic wage.

Senator REID:

– That is beside the question. The Government has victimized these men because the law prevents them from combining to protect their own interests. The Leader of the Government said that the fact that the Public Service was working under Arbitration Court awards was the very reasonwhy the Government could not have recourse to rationing generally. I point out that the Government, like any other employer, can approach the Arbitration Court. This has been done in Queens-‘ land and New South Wales, and, in my opinion, it will yet be done throughout Australia. These men have been victimized because they are defenceless. It. is a most despicable act. I cannot find words strong enough to express my feelings. The Government has taken a cowardly advantage of its position. The Leader of the Opposition spent years at the head of the Defence Department, and he has spoken of the value of the services that these officers render. Why should they be treated in this unfair manner? We do not know how soon they may again be called upon to defend this country. I would vote for the adjournment of the Senate if the carrying of the motion would result in any benefit to these men. I have every sympathy with Ministers in the position in which they find themselves owing to the present economic conditions ; but I strongly object to injustice being done to men who cannot defend themselves. I hope yet that the Government will approach the Arbitration Court and have the rationing system applied to the whole of the Service, so that all its members may ‘ assist in extricating Australia from its unenviable position.

South Australia

– We on this side regret, to as great an extent as honorable senators of the Opposition, the necessity that has arisen for interference with the conditions enjoyed by the military staff of the Defence Department. We recognize the valuable services that they gave to the nation during the late war, and have given since, and we repudiate the suggestion that the. action of this Government in introducing the rationing system, at the request of the men themselves, is. a savage attack upon them. That suggestion is not justified by the circumstances, if they are viewed dispassionately. Much of the indignation that has been expressed by honorable senators opposite is due not so much to sympathy for the men as to a desire to enhance the prestige of themselves and the party to which they belong.

Senator Sir William Glasgow:

– That is an unworthy remark.

Senator Sir George Pearce:

– Is an honorable senator in order in imputing motives.

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator is out of order, and must withdraw the imputation.


– I w I withdraw it. I shall say that honorable senators opposite have an entirely mistaken idea of the motives of the Government, and their action this afternoon may result in those motives being misunderstood by the people. Their desire is to detract from the prestige of the Government. Senator Reid became angry, and said that it was making a vicious attack on men who were prevented from banding themselves into a union for their protection. Will that honorable senator support an alteration of the military regulations to permit permanent officers to enjoy privileges similar to those afforded to the civil staff of the department? If he will not do so, there is no justification for indignation on his part.

Other honorable senators desire to create the impression that the Government has taken this action in order to suit its own convenience, because, owing to the change over from the compulsory to the voluntary system of enlistment there is a temporary shortage of work for the permanent military officers. I point out, however, that there may be sufficient work to keep them fully employed when the voluntary enlistments have produced the quota desired by the Government. The inference has been drawn by some honorable senators this afternoon that the Government is victimizing these men; but it was explained by the Assistant Minister that the reorganization of the department had been effected, not to strike a blow at the defence system, but to exercise the economy that the present straitened condition of the public finances demands. This reorganization has reduced the volume of work to be done by the permanent officers, and the Government’s expert advisory board has drawn attention to the fact that the services of a number of officers are not required at the present time. Rather than turn these men adrift, after years of valuable service, into civil life, where it would be particularly difficult for them to find a niche, the Ministry agreed to the rationing system, and we have the assurance of the Leader of the Government that it is merely a temporary expedient, because steps will be taken to remove the hardship imposed on them as opportunities occur. He pointed out that some of these men had already been transferred permanently to other branches of the Public Service. Eur- ther opportunities for their absorption in other departments will occur from time to time, and they can then apply for transfers in the usual way. Therefore, the general conditions in the Public Service need not be disturbed. As permanent military officers reach the retiring age, vacancies will occur from time to time, and to that extent, too, the difficulties will be minimized. I have already mentioned that this action has been forced upon the Government by the deplorable condition of the public finances; This is not the only government which has reduced defence expenditure in recent years. The Bruce-Page Administration, of which the Leader of the Opposition was the leader in this chamber, last year made a sweeping cut in the defence vote, and applied the reduction to certain branches of the Service. Were protests then made by honorable senators opposite? Were indignant speeches delivered in this chamber or in another place about the victimization of returned soldiers - men who had spent their lives in fitting themselves to serve the nation in this particular sphere? No. Honorable senators opposite were “ stone cold.” The Standing Orders prevent me from saying exactly what I think of their attitude towards this matter.

Let us examine the policy of the previous Government as disclosed in the report of the Defence Department, which is available to all honorable senators. In explaining the defence policy of the Bruce-Page Administration for the year 1929-30, the report states that because of the difficulties of the financial situation the Government found it necessary to abandon all idea of immediately developing its policy. It was obliged to restrict expenditure on defence by £544,000.

Senator Rae:

– Who was Minister for Defence then?


- Sen Senator Sir William Glasgow occupied the position. In pursuance of its policy the personnel of the navy was reduced by 600. I presume that some of the officers, retrenched had spent many years in training to fit themselves for their positions.

Senator Sir George Pearce:

– All officers retrenched received adequate compensation.


– I - I cannot see the force of retrenching men in order to save money, and then pay them adequate compensation. I assume that, although the officers concerned were compensated, they felt aggrieved at the Government’s action, because the compensation paid would not be the equivalent of the pay which they would have received had their services been retained.

Senator Sir William Glasgow:

– No naval officer was retrenched.


– Nav Naval ratings were retrenched, at all events, and I suggest that a private in the army or an able seaman in the navy is entitled to the same consideration that is given to an officer. The Bruce-Page Administration also dispensed with the services of between 120 and 130 men employed at the Lithgow Small Arms Factory, as well as 80 men and women in the munition factories at Footscray and Maribyrnong. These employees would be covered by awards and could not be rationed. I have no doubt that many of those dismissed at Lithgow and Maribyrnong were returned soldiers, and to-day are still unemployed. As I have said, honorable senators opposite did not then raise their voices in protest against the action of the Bruce-Page Government. These men served their country in war, as in peace, and were entitled to the fullest consideration; but because of the financial difficulties then confronting the Government their services were dispensed with, and we now have the spectacle of these men in the army of unemployed. The majority oil them never enjoyed more than the basic wage. It was pointed out this afternoon, in defence of the Government’s action, that although ‘ the men rationed will lose a fairly substantial sum individually not one will be brought down to the basic wage level ; and none will be worse off than the great majority of those whose services were dispensed with by the previous Government. If one may judge ‘ from statements that have been made during the debate, one might be pardoned for believing that honorable senators opposite desire a smashing attack to be made on wages all round. This suggestion has been made by adherents qf the Nationalist party, and by the press which supports it.

Senator Sir George Pearce:

– I desire to make a personal explanation. When the Vice-President of the Executive Council (Senator Daly) was speaking he said that Mr. Gullett, the Deputy Leader of the Opposition in another place, had been consulted with reference to the Government’s rationing scheme, and expressed himself to be in favour of it. The Minister stated also that Mr.- Gullett said he- believed it would be acceptable to the members of his party in’ another place and in the Senate’. I have had ari opportunity to speak to Mr. Gullett on the telephone. He told me that the Minister’s statement is not a correct record of the’ informal Conversation which took place. ‘ -He said he was advised that the Government would be forced to either ration or dismiss a considerable number of employees, and he expressed the opinion that rationing would be preferable to dismissal. He did not, nor was he asked to, express any opinion as to whether the scheme should be confined to the’ two sections of the Permanent Forces.

Senator SAMPSON:

– Before addressing myself to the motion I should like to refer to a matter which was mentioned by the Assistant Minister (Senator Barnes), since it relates to a statement which was made by me. I have no intention of dealing with it now, but I shall, do so fully and frankly at the proper time and in the proper place.

We are told in the official memorandum issued by army head-quarters to the various units that, consequent on the reduction in establishments from 49,000 to 35,000 in the militia, and from 16,000 to 6,000 in the senior cadets, it has been necessary to either dismiss a certain number of the Permanent Forces or ration them. The honorable senator who has just resumed his seat (Senator O’Halloran), said that this rationing scheme was adopted at the request of the persons concerned. I suggest that his statement is a slight exaggeration of the truth. Naturally j if employees were given the option of rationing of work Or dismissal, they would prefer rationing, but to say that this rationing scheme was adopted at their request is rather wide of the mark. With them it was’ a case of “ Hobson’s choice.”

It appears to me that the Government has not given sufficient consideration to the dangerous consequences of its scheme. In paragraph 11 of the memorandum issued by the department, it is stated that the Government has approved of the principle that any savings effected in any direction by the Defence Department may be applied to a reduction of the period of leave without pay to be taken by members of the Permanent Forces. At first blush it seems to be a sound and safe rule, that if economies can be effected inside the units the expenditure saved should be applied to reducing the periods of enforced leave without pay to be taken by those who have been rationed. But the danger lies in the temptation to effect so-called economies which, in actual fact, would not be economies at all, in order that the personnel could reap the benefit of the money saved. I have had considerable experience in defence matters during the last 30 years, and I know that in many directions opportunities will be presented to effect economies in units in connexion with corps contingency allowances and the training vote. I know also that if the expenditure is not adequate the standard of efficiency will be seriously impaired. It is contended by those who support the Government’s action that, because of the reduction in establishments, there will be less work of a military nature for the military staff. In actual practice this will not be the case in my own unit. Although Our training strength is now considerably below what it was under the compulsory system last year, the same administrative work will have to be carried out. It should be remembered, also, that under the compulsory system we got the cadets for training in a body in July of each year. We knew the number that would be coming on to the strength, and we could go ahead with our arrangements. That condition does not obtain to-day. In my own unit we are doing everything possible to stimulate recruiting, but the best we can hope is to get recruits in, at the most, three or four at a time. This irregularity makes the administrative work and . training more difficult.

I do not know what is likely to happen in two. small country towns in Tasmania, where I have detachments of the 12th

Battalion, when the warrant officer is absent on a fortnight’s leave every quarter. I do not know who will be able to carry on. I shall not be able to send one of the other warrant officers from head-quarters staff as on the score of expense alone there would be his rail fare and other costs associated with the change over. It is not easy. I have worked out a pro forma roster of my permanent staff, which numbers six, four of whom are members of the head-quarters staff in Launceston and the other two at country centres. I am not imputing motives, but to my mind it is a most inequitable way to treat these men. Why should one section be singled out for a drastic cut in the form of rationing? My adjutant is a keen young officer with a good record who received his training at the Royal Military College at Duntroon, and who has now had fourteen and a half years of service. He was too young to go to the war, but after completing his training at Duntroon he served in India, and was badly wounded on the frontier in 1919 or 1920. He has been with me for five years and ever since taking up military work has devoted a tremendous amount of time to the study of his profession. He is a most valuable officer, and his training has cost the Commonwealth quite a lot of money. Recently he received his captaincy and married, and his salary is now to be reduced by approximately £70 a year. What a reward for meritorious service! It takes years of hard work and patient study to make a really good soldier. I suggest that the Government should dispense with this musical chair game under the higher duties’ allowance system in the Public Service, which is’ unsound, as an officer temporarily filling a higher job is learning work which he will ultimately “have to undertake.

Senator Rae:

– This Government did not introduce that system.

Senator SAMPSON:

– I did not say that it did. I am suggesting that it would be more equitable to dispense with that system than to introduce the rationing system to one small section alone. A higher duties allowance is an incubus on the Public Service. For the life of me I cannot see how this rationing system is to be effectively carried out, particularly in two country towns which I have in mind. I do not see how efficiency is to be maintained, and, after all, a defence force is not of much use unless it is efficient. When economies have to be effected the burden should,, as pointed out by the Leader of the Opposition in his able speech, be more evenly distributed. It is grossly unfair to confine the system to a small body of professional men who cannot speak for themselves. I trust that some other method will be found because we cannot afford to lose the services of these men, on some of whom a mint of money has been spent in fitting them for their profession. The business ‘of trying to build up a well-equipped and controlled military force is a long and weary one. That was what was being attempted when the present Government practically wrecked the whole system.

Senator COOPER:

– I sympathize with the Government in its attempt to defend its action in this connexion. The repeated attacks which have been made upon the defence, system by this Government give the impression that its policy is to undermine the. defence system of Australia. Its latest act is in the direction of rationing the work amongst a number of specialized men who form a portion of the personnel of the Defence Department. As stated by Senator Sampson and Senator Glasgow, the officers to be affected have spent years of arduous work to reach their present stage of efficiency. Moreover, they have to incur greater expense than others on the civilian side of the Defence Department, as they have to maintain two complete outfits, and have always to present a smart appearance when carrying out administrative work and when training troops. They receive a small allowance for military clothing, which, I contend, is insufficient to provide them with all that is necessary in that respect. They have always to set an example to the trainees under their control. Their hours are unlimited, as, in addition to their administrative work in the department, they occupy a good deal of time in the training of troops and in giving instruction to trainees requiring special assistance. As pointed out by Senator Sampson, it will be exceedingly difficult to replace officers on leave, who, on returning, will be compelled to work much longer than members of the clerical staff, who receive similar remuneration, and “who will not be affected by this scheme. It should be the policy of any government to encourage the young men of this country to become officers of the Permanent Forces ; but, under the present system, the service of officers, which would be valuable in time of war, will not be available. The action of the Government appears to be a deliberate onslaught upon the permanent officers of the Military Forces, who are not permitted to become members of an organization or association, which would protect their interests. When it was suggested that rationing should be introduced throughout the Public Service, Senator Daly said that the Public Service Act rendered that impossible. I draw his attention to section 70 of that act, sub-section 1 of which provides -

The chief officer, in cases of illness or other pressing necessity, may grant to any officer leave not exceeding three months, and may, with the concurrence of the Board, and on such terms as are prescribed, extend such leave to a period not exceeding twelve months.

I take it that the term “pressing necessity” would meet any contingency, and that, therefore, the Leader of the Senate is wrong in saying that the rationing system cannot be applied to the Public Service.

Senator BARNES:

– The section quoted by the honorable senator aunties only to the members of the Public Service. These men are not in the Public Service.

Senator COOPER:

– That is so; and the honorable senator by his interjection bears out my contention that rationing could apply to the Public Service under this section. If it were so applied to the personnel of the Defence Department as a whole the hardship would be very much, lighter for the few who, because they are not .allowed to be members of the Public Service, have to bear the whole burden of rationing in this department at the present time.

Senator DALY:

– If- granted leave, it would have to be on full pay.

Senator COOPER:

– No; the section says, font such terms as are prescribed.” Full pay is provided for by regulation.

Senator Sir George Pearce:

– A new regulation could be. framed.

Senator Daly:

– Let us keep to the motion.

Senator COOPER:

– If the Government wanted to ration the whole Public Service, it could easily do so under the provision I have quoted. But rather than apply the rationing system to the Public Service generally, the Government prefers to penalize these men. That is most unfair to permanent officers of the military forces, who ask only for similar treatment to that meted out to other officers in the same department. Senator Barnes said that there was a great deal of unemployment . through the country. Unfortunately, that is so. No one sympathizes more with the unemployed than do honorable senators on this side. But there is a difference between the general body of the unemployed and these men. A world depression has caused universal unemployment, due chiefly to the lack of private capital. The first men to be affected by that depression are those who have had no special training. The men referred to in this motion have been trained in highly specialized and necessary work; they have put in years of study and hard work to qualify for their positions; their position is entirely different from that of the ordinary worker, whose employment is subject to market fluctuations and other considerations. In times of prosperity men employed by private enterprise frequently earn large incomes. Public servants have no such opportunity.

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator has exhausted his time.

Senator PAYNE:

.- I support the . motion, which is important, while at the same time I recognize the great need for economy on the part of the Government. In its attempts to economize the Government should take pains to see that no one section shall be called upon to bear the whole burden. As pointed out by the right honorable the Leader of the Opposition (Senator Pearce) the men whom the Government has singled out for heavy sacrifices have had no opportunity of presenting their case through any organization, as public servants generally have had.

Senator O’Halloran:

– W - What about the wharf labourers ‘ and the navvies who have no work at all?

Senator PAYNE:

–Many of the officers affected by the Government’s decision have spent four years in training at Duntroon, and, possibly, a year abroad, in order to qualify for the positions which they hold. Honorable senators who have seen active service have shown how essential to an army is a nucleus of welltrained officers.

Senator O’Halloran:

– S - Some men have been sleeping under wire fences for years.

Senator PAYNE:

– The Government hopes to save £60,000 per annum by rationing the work in the Defence Department. The same sum could be saved by an all-round reduction of less than5/8 th of 1 per cent, of the salaries of public servants. The Government should find some other way of effecting this economy.

Senator Rae:

– Such as a general lowering of wages!

Senator PAYNE:

– By a reduction of less than 1 per cent, of the salaries of all public servants, including members of Parliament, £100,000 per annum could be saved. But rather than make that reduction, the Government prefers to penalize a body of men who have proved their fitness for their positions, and, moreover, have had no opportunity of adding to their income by earning overtime, notwithstanding that they have worked many hours overtime during their career. I know that some of the men in question work very long hours. They have to be at call at any time. If they had had the privileges enjoyed by ordinary public servants, they could, perhaps, better stand the application of the rationing system than they can now.

Sitting suspended from 6.15 to 8 p.m.

Senator PAYNE:

– I have only a few more words to offer in support of the motion. I am of opinion that rationing is certainly a far better method of dealing with the situation as we find it today than a series of wholesale dismissals, but rationing, unless it is applied generally, is not fair. Why a particular section of men who have served their country well should be selected to bear the whole of the burden passes my comprehension. Without being uncharitable, I can remember a short time ago when an effort was made -to remove the policy of preference to returned soldiers that has been in operation in Australia for many year’s. Evidently the Government is now determined to give preference to returned soldiers - preference to bear the burden. It is unfair and unjust., and I hope that the feeling of the people of Australia when they hear of this will be so evidenced that the Government will re-consider its decision and seek some other way out of the difficulty rather than penalize a deserving section of men to whom we owe a great debt for the service they have rendered to their country.

Senator Daly:

– Does the honorable senator mean that the Government should dismiss them?

Senator PAYNE:

– -I have already said that rationing is preferable to dismissals, but I do not think there is any need for dismissals. Surely there are other ways of relieving the financial position than by penalizing one section of men.

Senator Daly:

– Even if there is no work for them to do?

Senator PAYNE:

– It has been pointed out during the course of this debate that there is a danger that this rationing will lead to inefficiency in our defence force. I can well understand its having that effect. A diminution of enlistments does not mean that there should be a diminution of staff. The same staff may be required to supervise and control a smaller body of men. I think the Minister understands that.

Senator Daly:

– Yes; but I think that the Military Board understands it better than I do.

Senator PAYNE:

– I appeal to the Government to re-consider its attitude and refrain from imposing this burden on a particular body of public servants who have served their country well.

Senator Daly:

– The honorable senator means that the Government should give them a heavier burden by dismissing them.

Senator PAYNE:

– Nothing of the kind. I do not want the Minister to put words into my mouth that I have not uttered. Honorable senators of the Op position have no desire to dismiss anyone. It is, however, intolerable that one section of the community- a section that has served .the country well, but has no means to .protect itself - should have to bear the whole burden, while others in “cushy” jobs, using words that I heard used this afternoon, work full time. The men who are now being rationed have not had the advantage of drawing overtime pay; yet they are the first section of the Public Service on whom this penalty of rationing is visited. I hope that the Government will re-consider the position.

Senator GUTHRIE:

,- I endorse what other honorable -senators have said about the wonderfully valuable service rendered to Australia, not only during the war, but since then by the specially trained men who are now to be specially penalized. The very fact that 77 per cent, of the required number of enrolments under the voluntary enlistment system has been obtained is due to their efforts and ‘ also to. the enthusiastic way in which men like Senator H. E. Elliott and Senator Sampson have worked to induce loyal young fellows to volunteer for military training. I do not think that there has been any enthusiasm on the part of members of the present Government to assist these gentlemen in obtaining recruits.

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator is scarcely speaking to the subject of the motion.

Senator GUTHRIE:

– The annual average pay of members of the Permanent Military Forces is £303, whereas in the civilian department it is £362. There is no suggestion that in the clerical division there should be rationing or dismissals, but the salaries of the soldiers who, during the war and since, have done wonderful service for their country are, by the rationing system, reduced by over 13 per cent. I cannot help asking: “Is it because the soldiers are not unionists and have not the protection which the clerical staff have through the Arbitration Court?” Temporary assistance in Government departments costs £428,000 a year. . There are 28,000 public servants, and the salaries of the Public Service entail an expenditure of over £10,000,000 per annum. If the Government is anxious to economize it could save very much more than the £60,000 which it expects to save by rationing among the defence staff. A half day’s holiday without pay to each civil servant would effect a saving of £100,000 a year.

Senator Daly:

– That is assuming that the scheme would be practicable.

Senator GUTHRIE:

– Overtime paid in the Public Service amounts to £90,000. Why is that overtime paid when a handful of men have been rationed to save £60,000?

Senator Daly:

– If the honorable senator would not stone-wall the motion he would be told why.

Senator GUTHRIE:

– I am speaking very briefly. I have been waiting all the afternoon to speak. No section of the community in Australia is paid higher wages than the civil servants. I am not blaming them. It is their good luck if they can get good salaries. Rut when they are not rationed even to the moderate extent I have indicated, which would mean much more than the £60,000 the Government expects to save by rationing the soldier members of the defence staff, I cannot help thinking that the Government’s policy amounts to one of victimization of returned soldiers. It seems to me that the Government is ruining the defence system. These are hard words but I believe they are true. The Government has scrapped compulsory military training, which’ was introduced by a Labour Government for the good of the country and every trainee.


– Again I remind the honorable senator that he must keep to the motion._

Senator GUTHRIE:

– The Government is now relying’ on loyal youngsters and enthusiastic officers to carry on the defence of the country, but the hearts of the men who are the very backbone of the defence system of the country are being broken by the victimizing treatment meted out to them.

Senator RAE:
New South Wales

– In the few moments available to me I desire to say that if the Government has made any error at all in this matter it has been on the side of mercy.

It was in April last, that the Military Board recommended that leave for eight weeks without pay should be granted to all members of the Military Forces in 1930-31 in order to avoid retrenchment; and I am assured by the Minister that the statement he made in reference to Mr. Gullett, the Deputy Leader of the Opposition in another place, having agreed that rationing is the only course to pursue, is exactly what was said by Mr. Gullett to Mr. Green. The highest military authorities who recently visited Australia and made an inspection of our defence forces stated that our expenditure of £6,000,000 per annum was absolutely wasted because there was no efficiency to be found in any arm of the Service. That was during the regime of the previous Government, supposedly more sympathetic with the forces than the present Government. A statement has been made about the application of a system in the Public Service described as musical chairs. It has been said that in the event of a senior officer going on holidays every officer below him steps up and gets extra pay. The fact is that no officer draws extra pay until he has been doing additional work for 26 days, which means practically a full month. A full month’s leave of absence may thus be enjoyed by a higher officer before a lower officer who is filling his office draws the higher rate of pay. These facts were suppressed by honorable senators opposite.


– Order! The time allowed by Standing Order 64 foi this debate has now expired.

Senator Sir GEORGE PEARCE (Western Australia) [8.12]. - I ask leave to withdraw the motion.

Leave granted; motion withdrawn.

page 3170




asked the Minister representing the Prime Minister, upon notice -

  1. Is it a fact that a fraud is being perpetrated on the American public by the continued exhibition at Baltimore, in the United States of America, of a ship alleged to be the Success ?
  2. Is it a fact that this ship is being widely advertised by the proprietors as “the last relic of the British prison fleet which brought convicts to Australia “?
  3. Is it a fact that the ship being paraded in the United States of America is not identical with the warship Success, which played a prominent part in early Western Australian history?
  4. Has the Commissioner-General for Australia in Washington advised the United States Secretary of State that the hulk being exhibited in the United States of America is a faked convict ship, of which an American showman has obtained possession?
  5. Has the Government of the United States of America brought the matter under the notice of the Governor of the State of Maryland, United States of America, “with a view to ending this illegitimate use of a faked ship, which reflects discreditably on the people of Australia “?
Senator DALY:

– The records of the Prime Minister’s Department show that in 1920 the Commissioner for Australia in the United States of America (Sir Mark Sheldon) brought under the notice of the Commonwealth Government a booklet which was in circulation in the United States of America, regarding a vessel which was being exhibited there for private profit. The vessel was described on the cover of the booklet as “ The last of England’s Famous Felon Fleet “-The Convict Ship “Success,” and it was represented to have been built in 1790, and to have been chartered by the British Government in 1802 “to transport to Australia the overflow of the Home gaols.” In addition to a catalogue of exhibits, the booklet contained a description of incidents alleged to have taken place on the vessel from the year 1802 onwards. In 1925, the matter was again brought under notice, by the then Commissioner (Sir James Elder), and a comprehensive report, which was prepared by the Investigation Branch of the Commonwealth Attorney-General’s Department, elicited the following information : -

  1. That the vessel being exhibited was probably identical with a vessel called the Success, which, after being engaged in trade between England and Australia, had been purchased in 1852 and converted into a supplementary - prison at Melbourne, at a time when there was a very large influx of people into Australia, due mainly to the discovery of gold in Victoria. This vessel was, however, never a convict transport ship.
  2. That such vessel was constructed at Moulmein, Burmah, in 1840, not 1790, as stated in the booklet.
  3. That such vessel was not chartered in 1802 “ to transport to Australia the overflow of the Home gaols,” as stated in the booklet, as it was not built until 1840.
  4. That such vessel was not identical with H.M.S. Success, a British warship in which Captain James Stirling, R.N., visited Western Australia and founded the Swan River Settlement in 1829.

The matter has been the subject of attention from time to time by the Australian office in New York. The CommissionerGeneral for Australia (Mr. Herbert Brookes), some few months ago, in bringing under notice an advertisement which had appeared in an American newspaper regarding the vessel, informed the Prime Minister that, during a visit to Washington, he had taken the matter up with the Secretary of the United States of America Law Department, who had subsequently advised that he was bringing the CommissionerGeneral’s representations informally to the attention of the Governor of Maryland, in which State the vessel was then being exhibited. The Secretary of the Law Department stated that, in view of the protest made, the Governor might deem it proper to cause the management of the enterprise to discontinue the exhibition, or at least to refrain from advertising it, but added that, while the feelings of Australians in the matter were appreciated, there did not appear to be any other action open to his department. The Commissioner-General stated that, if successful in Maryland, he would make representations to the authorities in any other State to which the vessel might proceed with a view to similar action being taken. The Prime Minister has . asked the CommissionerGeneral to keep the Commonwealth Government advised of any further developments in this matter.

page 3171



Senator PAYNE:

asked the Minister representing the Minister for Markets, upon notice -

  1. Is it a fact that freight on timber from New Zealand to South Australia is lower than the rate of freight on timber from Tasmania to South Australia?
  2. If so, can the Minister explain why the timber exporter from Tasmania is so handicapped ?
  3. Is any shipping service from New Zealand engaged in this trade subsidized; if so, what particular line benefits therefrom?
Senator DALY:

– The answers to the honorable senator’s questions are as follow : - 1 and 2. No. Freight on hardwood timber from New Zealand to South Australia is 2s. 6d. per 100 super, feet higher than freight on similar timber from Tasmania to South Australia. As Tasmania ships no softwood to South Australia, no freight rate has been fixed for this class, and transport charges are therefore not comparable.

  1. No.

page 3172



Appointments - Overtime


asked the Minister representing the Prime Minister, upon notice -

  1. What waa the number of new appointments made in the Public ‘Service during the six months ended 31st May last?
  2. What was ‘the number of temporary employees on the pay-sheets of the Commonwealth Public Service at 31st May last?
  3. What was the amount paid for overtime in the Public Service during the six months ended 31st May last?
Senator DALY:

– –The particulars required by the honorable senator are being obtained from the Public Service Board - and the several departments of the Commonwealth, and a reply will be furnished to him as soon as possible.

page 3172



Senator CARROLL:

asked the Minister representing the Minister for Works, upon notice -

  1. Is it a fact that when the contract was let for the erection of the Commonwealth Bank premises, Perth, an undertaking was given that local material would bc used wherever possible?
  2. Is it a fact that there arc manufacturers of fire-proof safes and strongroom doors in Perth whose manufactures arc extensively used by Western Australian Government departments, as well as by some of the associated banks trading in that State?
  3. If so, is it true that these manufacturers have received an intimation that it would be useless for them to tender for the bank’s requirements, as their tenders would not be considered?
  4. If it is true, will the Minister have inquiries made with a view to having such discrimination removed?
Senator BARNES:

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

  1. No definite undertaking was given that local materials would be used. The specification’s for the erection of the building provided for the use of local materials wherever possible. Local firms will be given an opportunity for tendering for all provisional items under the contract. 2, 3 and 4. The installation of safes and strongroom doors is a’ matter entirely controlled by the Commonwealth Bank authorities, to whom the honorable senator’s questions will be referred.

page 3172




asked the Minister representing the PostmasterGeneral, upon notice -

In view of the Government’s promise- toprovide an improved shipping service between Tasmania and the mainland, will the Minister make a statement to the Senate as to when this promise will be given effect to, and when an improved service may be expected?

Senator BARNES:

– It is not possible at the present juncture to make a final statement on this subject, all aspects of which are receiving the fullest consideration of the Government. The honorable senator may be assured that no time will be lost in bringing the matter to finality.

page 3172


Motion (by Senator Daly) proposed -

That the report be adopted.

Senator PAYNE:

.- I move- -

That the bill be recommitted for the reconsideration of clause 13.

My object is to eliminate the words “ seed cotton or “. I submitted an amendment to this effect when the bill was in committee on Friday last. A division was taken and my amendment was lost, but since then I have been making further inquiries into the matter, and I think that I am fully justified in trying to have this obnoxious portion of the sub-clause struck out. In addition to the reasons I advanced on Friday in favour of this amendment, I draw attention to the 1926 report of the Tariff Board on seed cotton. This deals with the bounty then proposed, not on cotton lint or cotton yarn, but purely on seed cotton. At page 26, the report states -

In its consideration of this matter the Tariff Board was seised with the importance of making the payment of any bounty subject to such conditions as would ensure that any money paid by the Commonwealth Government in that direction shall actually be received by the growers of the seed cotton.

The Tariff Board can foresee that in the event of a bounty being granted over a long period it is almost inevitable that the Queensland Government, if in its present mind will bring the cotton industry under the Arbitration Act with a view to fixing increased wages.

For example, judging by its past action, the Queensland Board of Trade and Arbitration would almost certainly fix 2d. per lb. as the minimum rate for picking seed cotton, seeing that the rate was first adopted and is strongly desired by the Australian Workers Union. At present in many districts cotton-pickers will accept11/2d. per1b., and at that rate earn up to 1 8s. per day. Further, cotton-growers would probably be subjected to a variety of expensive restrictions such as are found in other Queensland awards.

The effect of this obviously would be to increase the costs of production with the result that the money paid as bounty by the Commonwealth Government, and which was intended to assist the growers, would go to meet the increased wages, and thus the object which the bounty was designed to achieve would be defeated.

For the reasons given the Tariff Board is of opinion that there should be attached to the payment of any bounty such a condition as will effectively prevent State interference with the cotton industry, either in the form of increased wages or railway freights, &c. (except any increase as may be the result of an alteration in the basic wage) during such period as the Commonwealth Government may be supplying funds, through the bounty system, to assist the industry to carry on and develop. In the opinion of the Tariff Board any such interference might vitally prejudice the successful operation of the bounty.

I also draw attention to the following remarksby the board on page 21 of its report : -

The PRESIDENT (Senator the Hon W Kingsmill:

– In moving for the recommittal of a bill, an honorable senator should discuss the reason for its recommittal rather than the virtues of the proposed amendment.

Senator PAYNE:

– It would be impossible for me to give reasons why the bill should be recommitted, without advancing arguments in support of my proposed amendment.


– The amendment is not yet before the Senate. The motion for the recommittal of the bill alone is under consideration. The arguments that the honorable senator is advancing could properly be submitted in committee.

Senator PAYNE:

– I hope to be able to induce some of those honorable senators who opposed my amendment last week to change their views regarding it.

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

will reject the motion. The evidence which the honorable senator wishes to bring under our notice was before us when the bill was under discussion and the matter was debated from every conceivable angle. I submit that it would be an abuse of the Standing Order which permits the recommittal of a bill, if this motion were carried merely because the honorable senator feels that there is a possibility of inducing certain members to alter opinions previously expressed by them. The mere fact that certain evidence was submitted to the Tariff Board in 1926 is not sufficient reason why the bill should be recommitted. It would be impossible for any government to carry on the legislative business of the country, if, after an honorable senator’s amendment had been defeated, and he had spent the week-end amusing himself by reading reports of the Tariff Board, he could have a bill recommitted for the purpose of reconsidering that amendment. Unless some better argument than that can be advanced in favour of the motion it should be defeated.


– I support the motion. In view of your ruling, Mr. President, I understand that the full merits of the case may not be discussed on the present motion, but may be debated when the bill is recommitted. If, on the motion for recommittal, the honorable senator were allowed to give reasons why the committee should adopt his amendment, we should be in a better position to decide whether or not the bill should be recommitted. The honorable senator could test the question on the motion for recommittal.


– A motion to recommit a bill for the reconsideration of a certain clause is generally moved for reasons which are given, such as the clause having previously been passed in a thin House, or that circumstances having arisen to cause honorable senators to change their views, they should have a further opportunity to consider the matter. Honorable senators must see that a discussion of the proposed amendment on the motion for recommittal would be anticipating the debate in committee, and. would be irrelevant to the motion.

Question - That the amendment be agreed to - put. The Senate divided. (The President. - Senator the Hon. W. Kingsmill.)

AYES: 12

NOES: 16

Majority . . 4



Question so resolved in the negative.

Amendment negatived.

Original question resolved in the affirmative.

Report adopted.

page 3174


Second Reading

Debate resumed from 19th June (vide page 2899) on motion by Senator Daly -

That the bill be now read a second time.

Senator Sir GEORGE PEARCE (Western Australia) [8.38].- This bill has attracted more public attention probably than any other measure that has come before the Federal Parliament. I have received a large number of communications concerning it. Without exception, all the persons or bodies who have communicated with me are opposed to the bill. The communications which I have received are from the following: - Individual farmers - W. Ledbrooke, Gabbin, Western Australia; G. H. Dunn, Tamworth, New South Wales; F. Summers, Latham, Western Australia; H. Hattom, Gabbin, Western Australia; J. C. Anderson, Gabbin, Western Australia ;

  1. Syme, Wubin, Western Australia; P. Freeman, Grass Patch, Western Australia; G. A. Thomas, Tamworth, New South Wales; H. Flitcroft, Gabbin, Western Australia; F. S. Alford, South Australia; F. Myers, Wubin, Western Australia; also a circular from eighteen South Australian wheat-growers, c/o Henry T. Gray, Toorak, South Australia. Organizations - Adelaide Corn and Produce Exchange, Adelaide; South Australian Wheat Producers Freedom Association, Adelaide ; Western Australian Flour Mill-owners Association, Perth; Joint Grain Committee, Perth and Fremantle Chambers of Commerce; The Town and Country Union, Melbourne; The Poultry Farmers Co-operative Society, Limited, Brisbane; H. Joseph, Mercantile Broker, Sydney; Sydney Chamber of Commerce, Sydney. This afternoon I also received the following telegram -

We farmers of Konongorring strongly protest against federal wheat pool. - W. Hewson; L. Bowen; M. Bowen; H. Bowen; T. Lewis; G. Whitfield; M. Pilkington; D. Robertson; J. Findlater; C. Tucker; G. Gorteen; T. Brickford; H. Jones.

The long list of communications shows that the bill has aroused considerable interest and strong opposition throughout Australia.

The Leader of the Senate (Senator Daly) in moving the second reading of the measure quoted figures relating to the production in, and the value of wheat exported from, Australia. I suggest, however, that those figures do not supply a reason for the establishment of a compulsory wheat pool. They have relation merely to results that have been achieved in Australia without a compulsory pool. The Leader of the Senate said, also, that he felt certain that, with a more scientific method of handling wheat in Australia, better results to the growers would follow. What the honorable senator has to prove is that a compulsory wheat pool would lead to the more scientific handling of the crop. What is meant by scientific methods in relation to the handling of wheat ? Surely it must mean the most effective and economic system. In my view, competition between the voluntary pools and private buyers has proved to be both effective and economic. Senator Daly did not attempt to prove otherwise. He went on to say that the establishment of a compulsory pool would do away with the competition between the voluntary pools and private buyers. This, he said, would be a good thing. Surely reasoning of that kind is against common sense. Competition between buyers must be good for the seller, who should be able to exact a higher price for the commodity which he has for sale. The Minister went on to say that there were in Britain only two overseas buying firms and that they fixed prices for all Australian, wheat. I am advised that the honorable senator’s statement is incorrect, and that there “are at least three large buying firms in Great Britain.

Senator Sir GEORGE PEARCE.That pool was established because it was impossible to sell our wheat owing to the lack of sea transport facilities. Senator Daly has also made the discovery that wheat gains by storage, and he has suggested, by some strange process of logic of his own, that the voluntary pools paid the farmer for this added weight, but the private buyers did not. Considering the results of purchases by pools in competition with private firms, it is extraordinary to find that that is not borne out by the facts, and that where in some States they are in competition, private buyers have given higher prices than those given by the pool. In one State, however, the pool has given a higher price than private buyers. It is obvious that both the voluntary pools and private buyers have always taken into consideration, in offering the prices they do for wheat, this question of added weight.

What is meant by the suggestion in regard to regulating the selling of wheat overseas? Has the Government behind this compulsory pooling system the idea that it is going to hold wheat overseas - that it is not going to sell it for a time, but will endeavour to ration the world’s market? Is that the idea behind this compulsory pooling scheme ? Is that what the Minister meant when he said that under this scheme we would be in a better position in selling wheat overseas? If that is the Government’s intention I remind the Minister that both the United States of America and Canada tried that system and failed dismally with severe repercussions upon their own wheat-growers, and with most disastrous results to their financial resources. The financial resources of the United States of America and Canada are infinitely greater than ours, and we should be fit subjects for a lunatic asylum if we had behind this proposal for a compulsory pool the idea of rationing the world’s market for wheat when two such gigantic corporations failed so dismally. I believe that a large number of farmers throughout Australia have been induced to plant larger areas under wheat by reason of the appeal which has been made to them to come to the assistance of the nation by producing more, and so assisting to adjust our adverse trade balance. Quite apart from that I believe it is desired to give every possible encouragement to those engaged in wheat-growing. Our wheatgrowers produce a commodity which cannot receive any of the benefits of our protective policy. They have to pay the price of protection in this community and at the same time sell their product in the markets of the world. They have to compete with wheat from all other countries, including wheat grown by cheap labour and, in some cases, with black labour, at the lowest wages ruling in the world, and they certainly deserve every consideration and assistance we can legitimately give them. We have had a plethora of bounties, and I understand that there are others looming on the horizon. I contend that if there is one industry in this country which could justifiably be given a bounty on production it is the wheat industry. If the Government really desires to help the farmers and does not want to saddle itself with complications between the States, and between the interests of the States, that will arise under this proposal, the best course for them to follow is to withdraw this bill and introduce a measure providing for the payment of a bounty on the production of wheat, at any rate for this year. Before I conclude I propose to move an amendment in that direction to the motion now under consideration, but I sb all not discuss it further at this juncture.

The significant fact in connexion with the scheme which we are considering is that a guaranteed price has been fixed for one year, but the proposed compulsory pool is to remain in operation for three years. The reason given is the necessity to encourage the production of wheat in Australia. There is no doubt that a guaranteed price will .encourage production; but I submit a compulsory pool is not an encouragement. We could have a guaranteed price or a bounty on the production of wheat without a compulsory pool. If it is the sole desire of the Government to give encouragement to the growers of wheat a compulsory pool is not required - and if that is the sole motive the bill should be ‘withdrawn and a bounty bill substituted. Moreover, a bounty of 3d. a bushel on wheat Would represent a sum of money equal to that which the Government contemplated having to find in paying a guaranteed price. It would represent £2,000,000 on the average acreage. On the figures which have been submitted as to the probable loss that may be incurred under the guarantee, so far as one can see, under present market prices, the loss would range from £2,000,000 to £6,000,000. We have no indication from the Government as to how it proposes to make up that amount. We have not been informed whether it proposes to make it up by a grant from revenue or by increasing the price of wheat sold to local consumers, which would mean an increase in the cost of living in Australia. That would be a disaster at this juncture. If a bounty were paid the cost would be spread over the whole of the taxpayers of the community and would not have the same repercussion on the cost of living. In these circumstances the proposal for a bounty is quite as generous as that of the Government and does not possess any of the objections inherent in a compulsory pool. A guaranteed price and a compulsory pool have no connexion whatever.

Let us consider some of ‘ the objections to a compulsory pool. There is, in the first place, the financial aspect. Probably at the peak period, when the great bulk of wheat is being harvested’ and sold, a credit of ‘ between £20,000,000 and £30,000,000 will be required. By a series of questions which I submitted to the Minister, I endeavoured to ascertain the amount of our overdraft at the banks under the compulsory pooling system at the peak period during the war years, but the Government was unable to supply me with the information as the records have been destroyed. Speaking from memory, I think in one year our overdraft at the banks ranged from £18,000,000 to £20,000,000.

Senator Sir GEORGE PEARCE.I am not suggesting that they are, neither is any other business firm a philanthropic institution; but because of that we should not discard a system under which business firms are providing financial resources for this country. The Government of which Senator Hoare is a supporter has been going around the country, almost accompanied by a brass band, boasting that British and American capital is being attracted to this country by reason of its new protective tariff. Here is a proposal under which the Government will- send out of the country these wheat-buying firms which have at their, command an enormous capital to assist us to finance the wheat crop. It means that if this source is eliminated, Australia will have to provide from its own resources, either through- the Government agency or through the Commonwealth Bank and other banks, £10,000,000 more than it had to find last year to finance the wheat crop. In view of the present financial position of the Commonwealth, is that a wise thing to do ? Is it not stupid, indeed mad, to adopt such a course? Ye; that is what is to be done under the pro posed compulsory wheat pooling system. These financial resources will be driven out of the Commonwealth, and they will not be available for the purpose of financing the wheat crop.

Senator Sir GEORGE PEARCE.From their own financial resources, or their own credit with the banks. Under this proposal, the Government will be eliminating those resources, and thereby placing an additional burden on the Government finances, or upon the resources of the Commonwealth Bank or other bonks. That is likely to have a serious effect, particularly in a period of depression such as we are now experiencing.

An even worse factor which has to be considered is the possible effect of a compulsory pool upon the cost of living. The wheat board to be appointed will have power to fix the price of wheat sold for local consumption. At the conference held in Canberra some time ago, the Minister for

Markets (Mr. Parker Moloney) intimated that the Wheat Board would have the power to fix the price of wheat for local consumption. I ask the Senate to carefully consider »what it is doing before it decides to hand over to a body of men not elected by the taxpayers of this country the power to tax the people. The Australian Wheat Board will be elected by the State Wheat Boards, and the State Wheat Boards will presumably, although the bill makes no such provision, be elected by the wheat-growers in the States. The wheatgrowers are a section, but only a small section of the people, and it is proposed to give to that section, through their elected representatives on the Wheat Board, the power to tax the people of this country. Let us consider what that taxation may mean. If there is a loss of 6d. a bushel on the guaranteed price of wheat the board will have the power to fix such a price for local consumption as will cover that loss. This would mean an increase in the price of bread, flour, pollard and bran. When Senator Daly was speaking he suggested that there would be no increase in the price of bread. Senator Colebatch asked him by interjection where the money was coming from, and I suggested it was coming from the air. Of course it must come from somewhere. Is it suggested that this money is coming out of the pockets of the bakers, or the millers of this community? The only conclusion which we can reach in this connexion is that the additional amount which will have to be made up will undoubtedly increase the cost of living.

Let us examine the position. The exports of Australian wheat in recent years ranged from 53,000,000 bushels in 1927-28 to “103,000,000 bushels in 1924-25. Let us assume that the export of wheat this coming season is 75,000,000 bushels - a very conservative estimate - and that there is a loss of 6d. a bushel. In that event no less than £1,875,000 would have to be made up from somewhere. If there is a loss of ls. a bushel on that quantity a loss of £3,750,000 will have to be met. The Com- . monwealth Year-Book shows the local consumption of wheat for food purposes at about 30,000,000 bushels. If a loss of 6d. a bushel on export is to be made up on the wheat sold for local consumption, the local price will have to be increased by ls. 3d. a bushel; but if the loss on such wheat is ls. a bushel, the wheat for local consumption will have to be sold at 2s. 6d. a bushel above the world’s price. The per capita consumption of wheat in Australia is five bushels a year. A loss of 6d. a bushel would necessitate a charge of 6s. 3d. on every member of the community. If the loss were ls. a bushel, the amount to be made up would be 12s. 6d. per head of the population. In other words, a family comprising a’ man, his wife, and three children would have to meet an annual charge of £1 lis. 3d. to meet a loss of 6d. per bushel, or in the case of a loss of ls. per bushel £3 2s. 6d., which is equivalent to a tax of ls. a week on wages. That is the power we are asked to hand over to a body that is not representative of the people of Australia. If that is followed by an increase in the cost of living, our economic difficulties will also be increased. The cause of our economic difficulties is the high cost of production. Unless that cost can be reduced there can be no rehabilitation of industry.

A bounty on wheat is not open to any of those objections. A compulsory pool will not be so effective as is the present system. I make that statement advisedly as a result of our experience of compulsory pools. I was a member of the Government in power after the war, and I know that there was a tremendous clamor from every State to end the compulsory wheat pool. That clamour did not arise from the wheat-buying firms alone, but from practically every section of the community. It arose because of the abuses that had sprung up in connexion with the compulsory pool. Those abuses led to general dissatisfaction, with the result that the people practically demanded that the compulsory wheat pool should cease.

The compulsory pool scheme, as set out in this bill, will operate unfairly as between the States. Western Australia, a big producer and a small consumer of wheat, will probably have to bear a loss of £500,000. The following statement gives the position of the several States on an estimated loss of 6d. a bushel on wheat, 3d. to be borne by the Commonwealth and 3d. by the States : -

When honorable senators compare the £1 3s. 6d. for Western Australia with the 9.7 pence for Queensland, they will see how impossible it is so to harmonize conditions as to treat all the States equitably. Those figures are based on the States having to make up 3d. a bushel. They would have to be doubled if the States were called upon to make up 6d. a bushel.

Some time ago the Government invited us to form ourselves into an economic committee to consider the problems with which we are faced. There are not many political economists in the Senate, but there are some political economists in this country who have given this question close study. I ask the Government to name one political economist who stands for this scheme, and says that it is sound.

The professor went on to say -

Under the compulsory pool it would be possible to fix an Australian price to meet the cost of the guarantee of 6d. a bushel. Assuming a crop of 160,000,000 bushels, of which 16,000,000 were held back for seed and other purposes, and 32,000,000 used for local consumption, it would be necessary to increase the local price by 2s. 3d. a bushel to pay6d. a bushel on the 144,000,000 bushels sold.

This scheme had been frequently mentioned in recent discussions on the wheat industry, and it was merely an application of the Paterson butter scheme to wheat. There were two very objectionable features to” any such arrangement. First, the increased local price for wheat would be passed on to the consumer, through the price of bread, and an increase in the cost of living would follow. This again wouldbe reflected in wage rates, and so all industrial costs would be increased, a contingency most undesirable under present conditions. Secondly, the costs of the arrangement would fall unequally upon the several States. The total cost would amount to £3,600,000, and this would be distributed among the States according to the amount of locally produced wheat offered for sale. The States would, however, pay the increased 2s. 3d. a bushel of wheat upon the whole of their local consumption. With a crop of 160,000,000 bushels, he had estimated that the loss to Queensland would be about £440,000, and to Tasmania £100,000. New South Wales would lose about £330,000, and Victoria about £60,000, but Western Australia would receive £570,000 on balance, and South Australia £360,000. These figures were based upon average yields in the States for an estimated crop of 100,000,000 bushels, but they would naturally be altered by a change in the relative yield of the harvests in the different States. The tariff and the Federal Arbitration Court already created inequalities among the States, and a permanent arrangement of this nature would accentuate these inequalities. South Australia and Western Australia were already receiving direct grants, and they would under this scheme get substantial additional assistance, while Tasmania would incur a loss.

Inequalities would also be experienced with a bounty or guaranteed price met from the Consolidated Revenue, but they would be less inequitable in their incidence.

I have no hesitation in saying that the Government has brought forward its proposal to establish a compulsory wheat pool in order to give some effect to that portion of its platform which provides for the socialization of industry. Let us examine the proposal in the light of the experience of other countries. In the report of the Empire Parliamentary Association for January and February, 1930, honorable senators will see, on page 76, the following statement in relation to Russia : -

page 3180


Collective Farms

Following on his declaration at the Congress of “ Marxist Agrarian Experts,”-

Not the conference that met in Canberra

  1. Stalin, Secretary-General of the Communist party, in an article published on the anniversary of Lenin’s death, expounded the Soviet Government’s decision to abandon the “N.E.P. “ (New Economic Policy) in the countryside and proceed with all due energy with the collectivization of peasant holdings and “the extermination of the kulaks (welltodo peasants) as a class,” their number being given as approximately 5,000,000. A decree was issued jointlyby the Central Executive Committee and the Council of People’s Commissars empowering local authorities “ in districts of mass collectivization “ to confiscate the property of the kulaks without compensation in favour of the collective farms, and banish the owners outside the. village or even province. Thousands of families are now being deprived of their belongings and turned out of their homes. All attempts at resistance are punished by arrests or shooting. Nevertheless, according to the Soviet Press, the Government policy is meeting with “fierce resistance” from the despoiled peasants, who prefer to destroy their property rather than hand it over to the State. Particularly pronounced is the opposition to the collectivization of live stock. In spite of stern government measures wholesale slaughter of cattle and horses is going on, including pedigree stock, so that some districts have been depleted of nearly 50 per cent, of their live stock. The process of collectivization, however, is developing far more rapidly than was anticipated. According to the latest returns of the Commissariat for Agriculture, on 10th February, over 45 per cent, of the total peasant holdings in Russia proper, the Ukraine and “ White “ Russia, covering, an area of 7,000,000 hectares of arable land, and 70 per cent, of the live stock were collectivized. The Government is now faced with the problem of organizing the work of the millions of peasants involved in the collective farms. The scheme now being drawn up is based not on the principle of proportionate ownership or cooperation, but virtually on that of hired labour, the idea being to divide the population in categories with either fixed wages or payment for piece-work. This policy, according to the Soviet press, is being extensively taken advantage of by various “obscure elements, marauders and counterrevolutionaries “ for spreading rumours of a return to serfdom, and the legend of the advent of a “ Red master “ appears to be widespread.

One of the first cares of the Government was to organize the collection of seeds for the spring sowing in order to bring the cultivated area up to plan. According to the official returns for 20th February, over 80 per cent, of the seed grain quota has been collected throughout the U.S.S.R., some districts hav- . ing collected a surplus while others are still lagging behind.

On page 78 of that report, the following appears: -

As a great demand for labour is expected with the advent of the spring season, the Commissariat of Labour has concluded a contract with the Kolkhozcentre (Central Collective Farm Department) for drafting 1,500,000 peasants from the collective farms for work in various branches of State industry, particularly in the building trade. This measure appears to be in the nature of a conscription.

My reason for reading these somewhat lengthy reports is that I now propose to read an extract from an Australian Labour newspaper which has commented on the state of affairs in Russia, in order that honorable senators may know the opinion of at least one section of Labour in -this community upon the collectivization of farms in Russia. On the 13th March last, the Labor Call - the official organ of the Labour party in Victoria - contained the following statement: -

That greatly maligned country, Russia, is undergoing another savage attack. This time it is religion, and there are those who would raise another crusade in the holy cause.

It then proceeds to deal with that phase ; but I do not propose to do so. It continues -

It has been apparent for some time that any attempt to understand what is going on in the Soviet Union in terms of foreign and domestic policy, or to catch the temper of Russian opinion, must use as a point of departure the momentary success of the five-year programme. No single fact in Russian current history compares with this in importance. At first the peasants rebelled sporadically throughout the country districts, and the Government abandoned its coercive measures against them in the interests of harmony. Professor Furniss points out the results of the first year of the five-year programme, Which is just now becoming -known, and accounts for the peasants’ change of attitude.

It gives the figures which Professor Furniss has supplied, and, after dealing with the industrial side, speaks of the agricultural position as follows: -

In agriculture, the programme calls for a moderate increase in total crop, a cautious extension of the State farm system and the system of peasant collectives, and some extension of tlie cultivated area. Recognising the great hazard involved in any attempt to hustle the peasants out of their stubborn notions of private property and their antiquated methods of cultivation, the Communist leaders had only partial confidence in the success of this part of their programme, but the record of achievement lias far outstripped their hopes.

This year’s crop, despite bad weather conditions, exceeds last year’s by 4,000,000 tons, and is equalled only by the bumper crop of 102G. The seeded area has increased by 13,000,000 acres; 45,000 tractors arc in use throughout the country districts, as compared with 500 at the time of the revolution, and 30,000 more ure to be added during the next few months.

Perhaps the most spectacular development has been the spread of State and collective farms. The number of collectives has doubled during i;he year, and now embraces 1,000,000 peasants.’ households, representing in some cases whole villages, or even groups of villages, who have pooled their land and machinery in a co-operative undertaking in agriculture. These collectives furnished 12 per cent, of the commercial grain. The State farms have experienced a similar process of growth. Fifty-five enormous farms, owned by the Government and operated with scientific agricultural methods by Government employees, were established during the year, and sixty-five more will be added during the next few months. These farms have a double purpose. They are the beginning of socialization in agriculture, and “are also experimental stations in modern agriculture technique.

The article goes on to deal with the progress that has been made, and concludes -

It is only a year ago the Communist leaders set out to achieve what most foreign observers, and a large section of their own party at home, believed to be the impossible to industrialise a vast agrarian nation in the space of five years; to revolutionise an agricultural technique 000 years old; to double the productive capacity of the average man on the farm and in the factory; and to .raise the standard of living of scores of millions of people by an amount commensurate with the gains of’ other nations over a period of half a century.

The only comment I wish to make on the success of that scheme is that, under the ineffective, .out-of-date and reactionary administration of the Czars, Russia produced 28 per cent, of the world’s export trade in wheat, whereas, under this magnificent, successful, so-called collec tivization scheme for the socialization of the wheat industry of Russia, it has produced only 3£ per cent. of the world’s wheat exports. We have the first step now being taken towards the collectivization of the agricultural industry of Australia. A compulsory wheat pool means the socialization of the buying, and selling of wheat. Once the wheat-growers, attracted by the bunch of carrots, in the shape of a guaranteed price, have put their neck in that noose for three years, the Government of the Commonwealth, with the socialization of industry as its declared objective, has the farmers absolutely in its grasp, and can then proceed as in Russia to the ultimate objective of collectivization.

It is generally assumed that if we pass this bill we are only giving the farmers an opportunity to determine this matter for themselves, but there is no provision in this bill for the taking of any ballot of any farmers in any State. It is true that we hear statements made by Ministers that “it is understood” that the ballots will be taken and that certain States have legislation dealing with the matter. But so far as the Federal Parliament is concerned no farmer will be given an opportunity to say by his vote whether he will or will not come under this scheme. Even if the farmers are given votes in the States under State legislation and three of the six States by a majority decide to enter the pool, although their votes may represent a negligible proportion of the total votes in Australia, they will have the right to bring the other three States into the scheme. It is a most extraordinary proposal. If Tas, mania, Queensland, and Victoria, by a majority, agree to accept the scheme, what right have they to fix the condition!* for the other three States in which tb» total number of wheat-growers may be more than double that majority of wheat-growers who vote for the scheme in Tasmania, Queensland, and Victoria? Under this bill the wheatgrowers of the enormous States of Western Australia, New South Wales, and South Australia - enormous from a wheat-growing point of view - are brought into the pool whether they want it or not, and their wheat is socialized; because the Commonwealth Government has the power to prohibit the export of wheat except under the terms of the hill. As I say, it is an extraordinary proposal, one of the most extraordinary that has ever been brought forward in this Parliament, and I venture to say that the Senate, if it is what it was intended to be - the guardian of the rights of the States - will not allow the measure to pass in its present form.

It is argued that the bill will not involve any increase in the price of bread. I want to anticipate an argument that Senator O’Halloran will certainly advance, that the price of bread was soandso when wheat was high, and there has been no fall in its price, although there has been a big fall in the price of wheat. It is a familiar argument; we have heard it many times. I quote the following from the Canberra Times of the 20th June: -

page 3182


Rages in Sydney.

Sydney, Wednesdny

A bread war is in progress in some suburbs of Sydney and in many instances grocers are selling bread cheaply.

The president of the Master Bakers Association said to-day that the Necessary Commodities Commission had fixed a certain basis for arriving at a selling price and the present price of 53/4d. represented the lowest at which the industry could carry on.

The Acting-Premier (Mr. Buttenshaw), when questioned on the subject to-day, said that legislation to deal with the price of bread was not considered, but if instances were found where a reduction in costs were not followed by a fall in prices the Government would certainly consider taking action.

I have quoted that news item in order to supplement something which I am now about to quote to show that the price of bread in New South Wales is fixed, not by the master bakers but by a commis sion.

page 3182



An Instructive Discussion at the National Convention.

At the National General Convention, last month, Mrs. E. F. Canning moved and carried a motion that “ The cost of wheat should regulate the price of bread.” The discussion brought out many details that proved very informative and interesting to a large audience.

Mrs. Canning prefaced her remarks by saying that, in her opinion, the price of bread was out of all proportion to the cost of wheat and that bread should be cheaper to the consumer. “ The price of flour to-day,” she said, “ is £11 10s. a ton. The price of mill offal - i.e., bran and pollard - is £7 10s. a ton. A ton of flour makes approximately 1,400 loaves of bread. Hence, a loaf at6d. equals a return of £35 a ton to the baker. At Bondi, Newtown, Redfern and other industrial areas, bread is being sold at 41/2d. a loaf, or two loaves for Sid., while the householders in other areas pay 6d. a loaf.

TheCase for the Bakers.

Among the delegates to the convention was

Mr. Frederick Reed, of Croydon, a master baker of long experience and high standing in the trade. He explained the position from a different viewpoint, taking his hearers back ten years, when the Profiteering Prevention Court fixed the price of bread at63/4d. per 2-lb. loaf for cash. The price of flour then was from £19 7s. Cd. to £21 2s. 6d. a ton - an average of £20 5s. a ton. Since then, he declared, the price of bread has been fixed to accord with the decision of that court.

The variations have been influenced by changes in the price of flour, wages, altered working hours, payment for holidays, workmen’s compensation, child endowment, and costs incidental to increased prices of goods used other than flour. For instance, whereas in 1921 bakers’ wages were £5 3s. 6d. a week of 441/2 hours and carters’ £4 17s. for 54 hours, they now are respectively paid £6 8s. 6d. for 44 hours and a week’s holiday on full pay and £5 8s. 6d. for 48 hours and a fortnight’s holiday each year.

In 1926 the Lang Government passed the Day Baking Act, and this again inordinately increased the price of bread.

Mr. Reed further stated that from 1921 to 1930 the price of flour had been reduced by £8 15s. a ton. In the same period the reduction of1d. a loaf was relatively equal to £5 10s., but the increase in wages and alterations in conditions involving expense were equivalent to another £3 5s. 6d. a ton of flour. There was, therefore, a comparative loss to the baker, even though only a small one; but as carters’ wages have since been reduced by 2s. 6d. a week a drop of 10s. in the price of flour will enable bakers to charge a farthing a loaf less, and they admit that now they have a slight advantage.

Referring to the companies quoted by Mrs. Canning, Mr. Reed said he had positive information that one of these did not average more than 61/2 per cent, in dividends, while another bread-making firm, it was well known, lost £7,000 during the year ended, 30th June last.

In conclusion, Mr. Reed said that the actual manufacturing cost of bread was 3.04d. per 2-lb. loaf, plus 1.88 per loaf for delivery, .33 per cent, for rent of bakehouse or interest in lieu thereof, making a total of 5Jd. per loaf. And he added : “ Surely 5)d. cannot be regarded as exorbitant, particularly when it is known that a discount has to be allowed to institutions, colleges, &c.” “ Bread can,” he declared, “be purchased in Sydney at less than cost.”

These figures will bear examination, and I hope that those honorable senators who propose to use the argument to which I have referred will rebut them, if they can. I have said that in my judgment this scheme should be examined as if we were an economic committee. I propose to make another and final quotation. It is from one of a series of articles published by Professor Copland in the Melbourne Argus of the 28th, 29th, 30th and 31st May last. Dealing with the subject of wheat marketing, he said -

What, then, should be the measure of relief afforded to wheat-farmers at the present time? The first and simplest method is to allow the exchange rate to rise to its “ natural “ level. Every increase in exchange would give an additional bounty to exporters, and wheat producers would thus be relieved of some of the disparity between costs and prices. Secondly, the Government might announce that it was prepared to grant assistance without disturbing the prevailing marketing methods. This could be done in the following way: - Let the pools and merchants proceed with the marketing of wheat in the usual manner. If on the completion of the sale of the wheat the pools showed a return to the farmers of 3s. 9d. a bushel the bounty payable to all growers, whether members of pools or not, would be 3d. a bushel. The Government might give such assistance to a maximum of Gd. a bushel, and any favorable movement in prices or freights would reduce the bounty required. Such a proposal has many advantages. It maintains the present marketing methods without favour to pools or merchants and without disturbance of prevailing financial arrangements; it avoids the necessity of making a doubtful experiment in compulsory pooling; it reduces both the inequalities among the States and the indirect economic effects to a minimum; it eliminates the need for an artificial Australian price; it is a temporary measure, because it involves taxation; and it keeps down the financial assistance to the minimum required in the circumstances. Alternatively it is open to the Government to offer a straight-out bounty of not more than 6d. a bushel.

I have not by any means exhausted all that may be said regarding the bill. I have expressed my individual views; other members of the Opposition must speak for themselves. If the motion for the second reading of the bill is put to the Senate I shall vote against it, but I wish to have an opportunity of testing the opinion of honorable senators on the desirability of a bounty as against a guaranteed price for wheat and a compulsory pool. In order to do that, I move -

That all the words after the word “That” be left out with a view to insert in lieu thereof the following words : - “ in the opinion of the Senate, in order to give definite encouragement to the growing of wheat, and to avoid the disadvantages and difficulties of a compulsory pool, the bill should be withdrawn, and a bill be introduced providing for the payment of a bounty up to an ‘amount not exceeding 6d. per bushel on all wheat of the 1930-1931 crop of f.a.q standard, delivered at prescribed points of delivery within the Commonwealth.

The PRESIDENT (Senator the Hon *W Kingsmill:

– Since the Leader of the Opposition announced that he intended to move an amendment to the motion for the second reading of this bill, I have consulted the authorities on this matter, and have decided that I cannot accept the amendment proposed by him, for the reason that it is not in conformity with the Standing Orders or parliamentary practice. The Standing Orders relating to the motion for the second reading of a bill and the amendments which may and may not be moved thereto are very explicit. Standing Order 193 states -

On the order of the day being read for the second reading of a bill, the question shall be proposed “that this bill be now read a second time.”

Standing Order 194 reads -

Amendments may be moved to such question by leaving out “ now “ and adding “ this day six months,” which, if carried, shall finally dispose of the bill; or by referring the bill to a select committee; or the previous question may be moved.

Standing Order 195 is as follows -

No other amendment may be moved to such question except in the form of a resolution strictly relevant to the bill.

In my opinion, the amendment submitted is not strictly relevant to the bill. So much for the Standing Orders. Coming to the question of parliamentary practice, I refer honorable senators to Volume 1 of Rulings of the President of the Senate, 1903-1906. The President at that time was Sir Richard Chaffey Baker, a gentleman of whose ability I have the very highest opinion. I propose to read to the committee two rulings which he gave on questions such as the question now before me. At page 8 of the. volume to which I have referred, the following rulings appear -

  1. An amendment to the motion for second reading must be strictly relevant to the subjectmatter of the bill.

On a second-reading debate on a bill to determine the Seat of the Government of the Commonwealth, it was proposed to move the following amendment: -

That all the words after “be” be left out, with a view to insert in lieu thereof the words “ laid aside for the present in order to save the taxpayer from a large and, at present, unnecessary outlay, and to enable senators to consider the additional reports recently obtained by the Government, and to enable Ministers to arrange with the Government of New South Wales for the surrender by that State to the Commonwealth of the land which the Parliament may desire to acquire in the locality, which may be selected as a site for a capital, and to arrange with the States interested the terms and conditions upon which the railways necessary to give access to the Capital and to the port (if any) of the proposed site should be constructed and open for traffic “.

Ruled not in order on two grounds -

  1. 1 ) That the amendment contained several propositions’ irrelevant to each other.
  2. That some of the propositions were not strictly relevant to the subjectmatter of the bill.

    1. On a subsequent day, it was proposed to move the following amendment on the motion for the second-reading of the same bill: -

That all the words after “that” (line 1) be left out, with a view to insert in lieu thereof the following words : ‘ “ In view of the expense of carrying on the Federal Government, and the financial position of the Commonwealth, the Senate is not prepared to proceed with the bill at present.”

Ruled not in order; one reason being that as the bill did not authorize any expenditure, the amendment was not strictly relevant to the subject-matter.

For the reasons I have stated - and I askhonorable senators to recollect that the necessity for relevancy is emphasized by the use of the adverb “ strictly “ in Standing Order 195-I do not consider that this amendment is in order; and I rule accordingly.

Senator CHAPMAN:
South Australia

– Generally, I support the principle embodied in this bill. I have listened attentively to the arguments advanced by the Leader of the Opposition (Senator Pearce), and I must confess that I am rather surprised at the manner in which he put forward one of them. He referred to the “bugbear of socializaton”, but I do not consider that this measure is socialization in any form. The principle that it involves is purely cooperation, which is very different from socialization. Movements of this description are made, . not only by the farmers, but also by the representatives of “ big business “ throughout the world, who have combined to fix prices and have gone a long way in the direction proposed by this bill, which is designed to give the farmers a voice in the fixing of the price of their product. I hear nothing about the bugbear of socialization with regard to “ big business “ ; but when the farmers endeavour to obtain the benefits of organization, the cry of socialization is raised. If I thought the present proposal would result in the socialization of the wheat industry, I should have nothing to do with it, and I am sure that the Leader of the Country party (Dr. Earle Page), the honorable member for Gippsland (Mr. Paterson), the honorable member for Echuca (Mr. Hill), and others of my party who supported the bill in another place, would not have done so if they had had such a fear. In order to become effective, ‘this scheme must be passed, not only by this Parliament, but also by the State Parliaments, and a majority of the wheatgrowers in at least three States must agree to it. Senator Pearce mentioned that the provision for a ballot of the growers was not in the bill. I. am, however, satisfied that it will be observed. The question whether it should be inserted in the measure may be considered when the bill is in committee.

Senator Herbert Hays:

– It is important.

Senator CHAPMAN:

– I agree with the honorable senator ; but, as I have said, I am satisfied that a ballot of the growers will he taken.

Senator Herbert Hays:

– Under what authority ?

Senator CHAPMAN:

– Under the State authorities.

Senator Guthrie:

– Nevertheless, the provision should bp in the bill.

Senator CHAPMAN:

– The bill is in keeping with a number of other marketing acts which have been passed by this Parliament. Senator Pearce said that this measure would give the farmers, through their organizations, the right to fix the price of. wheat for local consumption and in that way to levy a tax upon the general community. I remind the right honorable gentleman that the former Government, of which he was. a member, pioneered this principle in certain legislation which it passed. For example, clause 18, which prohibits the export of wheat without licence, is identical in its terms with section 14 of the Dairy Produce Control Act, with section 13 of the Dried Fruits and the Canned Fruits Export Control Acts, and also with a section in the Wine Export Control Act. The powers conferred on the Wheat Board in clause 18, which relates to the interstate trade in wheat, are similar to the powers given to the dried fruits industry in 1928 by the Bruce-Page. Administration. Under the act the growers of dried fruits, through their organization are entitled to obtain art agreed upon price . for all dried fruits marketed in Australia. For years our farmers have been. asking that prices of the commodities which they use should be reduced. Legislation has increased prices. The manufacturers, through legislation, are enabled to get an Australian price for their goods, the workers get Australian rates of wages, and if the farmer cannot get costs reduced,, surely he is entitled to get what others get - an Australian price for his product. Are they to be denied the treatment meted out to other sections of the community?

A good deal has been said in . this debate about compulsion. It has been objected that the farmers should not be compelled to market their wheat through the proposed pool. As a matter of fact, the principle of compulsion is to be found in practically the whole of our Commonwealth and State legislation. The people are compelled to obey. For example, the land-holder is compelled to destroy rabbits, to rid his property of noxious weeds and to do many other things’, and in South Australia he is required to make a contribution towards the maintenance of district hospitals without his consent being asked.

This proposal for the establishment of a compulsory wheat pool will be decided by the vote of the farmers themselves. I amprepared to abide by their decision. I have to confess that in recent years I have been driven to the conclusion that, because of the trend of world events, a compulsory wheat pool for the orderly marketing of the surplus Australian wheat, is. inevitable and desirable. On every hand we see powerful organizations oversea. We read of the operations of the steel trust, the chemical combine and many other huge business concerns. The oil trust comprises three great organizations which, while, they fight for supplies and territories for distribution, have an agreement as regards prices. The same business development is to be seen in importing countries.

In his well-known publication, The Bread of Britain. Mr. A. H. Hurst, formerly an employee of Dreyfus &. Co., discusses the wheat position in Great Britain from the point of view of millers and merchants. He says -

It is the object -of this book to demonstrate that basic changes have taken place in both the supply situation and the demand situation in respect of wheat, and that, as a result, it is necessary to adopta wholly different, manner of facing the volume of supplies and the direction of demands from that which obtained prior to the war.

Dealing with the economics of the wheat trade, Mr. Hurst . states -

In 1838 Cournot recognized that a monopoly of economics was entirely different ‘ in scope from one of pure competition, and that quasimonopoly economies changed the character of the curve of demand.

Mr. Hurst gives the percentage of wheat controlled by three firms in Great Britain, who buy in bulk and distribute to the smaller millers, as follows: - Joseph Bank Ltd., 20 per cent.; Spillers Ltd., 20 per cent.; Co-operative Wholesale Society, 22.5. per cent.; Associated London Flour Mills, 5 per cent.; independent concerns 32.5 per cent.

Senator Sir Hal Colebatch:

– Those figures do not agree with figures quoted by the Minister.

Senator CHAPMAN:

– The Leader of the Senate omitted the percentage milled by the co-operative society.

Senator Sir Hal Colebatch:

– He omitted also the percentage milled by the independent concerns.

Senator CHAPMAN:

– I understand that the Leader of the Senate stated that the business of wheat-buying in England was controlled by two firms instead of three. Mr. Hurst, in his book, goes so far as to state that the wheat merchants as an economic factor are being eliminated, owing to concentrated buying on the one hand, and concentrated selling on the other, and that transactions will tend to become between the principal buyers and the organizations of growers. Mr. Hurst goes on to state -

This table is based upon inside trade estimates. By severe competition these big mills and combines threaten the existence of the smaller ones, and the 62.5 per cent, now in the hands of the three large units might very easily become 80 per cent, or even more, by the process of combination or, what is more likely, by the elimination of weak competitors. Every industry shows a tendency towards concentration and rationalization. The flourmilling industry is one of those in which an accelerated tendency towards concentration has shown itself in Great Britain. The pace reminds one rather of heavy industry combinations in Germany and the United States. . . . Hence, we may easily expect that the aggregation of large capital will manifest itself in its full monopolistic form in the flour-milling trade. We may soon expect, therefore, - that the 80 per cent, concentration of flour trade will be realized.

It is obvious that if there is efficient organization among the buyers and no organization of wheat-growers, the primary producers in all countries will suffer severely.

On page 50 of his book, Mr. Hurst states that in France two gigantic milling units are extremely powerful and dominate the situation, and that as the other countries of Europe are becoming industrialized the process is being accelerated.

To show how the wheat farmers inAustralia were treated by the merchants prior to the war and before voluntary pools were operating in competition with them, I purpose quoting from a report of a royal commission, appointed by the Government of South Australia in 1908, to inquire into the position of the industry in that State. The commission comprised Mr. E. H. Coombe (chairman), Hon. R. Butler’ (father of the ex-Premier of South Australia), Messrs. A. McDonald, L. O’Loughlin, J. (now Sir John) Newlands, Crawford Vaughan, and Clarence Goode. ‘ Evidence taken by the commission indicated that there was practically no competition between the merchants, and that prices were fixed by what was known as an honorable understanding between them.

Senator McLachlan:

– Was the South Australian Farmers Co-operative Union in existence then?

Senator CHAPMAN:

-I believe it was, but I cannot say whether or not it was joined with the wheat merchants in the honorable understanding referred to. When I was a member of the South Australian Parliament I quoted certain extracts from the report and recommendations of the commission in order to disclose the disadvantages under which the wheat-growers of that State were suffering. I wish also to place it on record now for the information of honorable senators. The report states -

According to Mr. W. Steele, who acts in a clerical capacity for the gentlemen connected with the agreement, and as umpire in cases of complaint between them, the combination has no name, meetings are rarely held, there is no chairman and no minutes are taken. The only book contains a record of prices. Mr. Steele stated: “I think it (the price) is fixed up between certain members, who telephone to one another. One or other of the traders intimates to me that they have arranged an alteration of price, and then I formally advised the gentlemen in the ‘honorable understanding ‘.” Mr. Steele added that in about eighteen months he had investigated about 100 complaints of departures from that agreement, and that there was a penalty attachable to each offence. As the appointment of Mr. Steele as umpire and correspondent took place at the beginning of February, 1907, that may be assumed to be the time when the honorable understanding was arrived at.

Appendix K gives a list of weekly prices at Port Adelaide, Melbourne, and Sydney, for three months before the appointment of Mr. Steele and three months after. It shows the Port Adelaide price was only once under Sydney prior to Mr. Steele’s appointment, and that to the value of id. per bushel. In three instances Port Adelaide quotation was in excess of Sydney by Jd. per bushel. During the three months subsequent Port Adelaide was below both Melbourne and Sydney in each list of quotations.

The commission, in giving a finding in regard to the price for 1907-08, stated -

For 1907-1908 Port Adelaide quotations ranged from 3Jd. to 74d. below Sydney, and from Id. to 6d. below Melbourne. Allowing for the special conditions which have applied to Sydney and Melbourne, your Commissioners are of opinion that had it not been for the agreement between the leading traders the price of wheat at Port Adelaide would have been at least 2d. per bushel higher.

I have a further quotation which shows the difficulties which firms would labour under if they did not join the honorable understanding. It reads -

One Melbourne operator with Adelaide experience stated that it was difficult for a shipper not in the “honorable understanding” to obtain steamer space at Port Adelaide; because one firm in the “understanding” are the agents for” a large proportion of steam vessels which call at that State.

Another statement in respect to that particular phase of the subject states -

Most of the wheat produced in the State is exported in sailing vessels, and it is in evidence that 90 per cent, of the sailing tonnage of the world is controlled by the Shippers. International Union. This “ combine holds meetings and fixes a minimum freight, and if it cannot get the freights thus fixed it ties the vessels up.

Senator Thompson:

– Are those British sailing vessels?

Senator CHAPMAN:

– The organization is named the Shippers International Union, and the word “ international “ indicates the extent to which the combine operates. There are world-wide arrangements between these organizations.

The Leader of the Opposition (Senator Pearce) referred to the propaganda in connexion with this proposal, and I, in common with other honorable senators, have received communications from those in favour and those opposed to a compulsory pool. I have before me a circular signed by eighteen prominent wheatgrowers in South Australia, a portion of which reads -

We, as wheat-growers expressing what we believe to be the opinion of the majority of growers in South Australia, submit the enclosed “ review “ of the war time pools and a frank “ criticism “ of Mr. Parker Moloney’s compulsory wheat pool scheme for your consideration. We ask you to read it carefully. It contains facts which will astonish you.

That was circulated among the members of the Federal Parliament and State Parliaments and wheat-growers with the idea of influencing votes, and many of the arguments which it contains were used by honorable members in another place. It contains a statement relating to the wartime Government pooling losses to this effect: -

Appalling Losses.

The real administration of the pools was carried out by the State wheat boards, comprised, for the most part, of civil servants.

In dealing with the statement of losses it is not mentioned that the wheat merchants were the handling agents and cannot avoid their responsibility in this respect. The circular, which was issued with the intention of influencing the farmers and politicians whose votes will eventually decide this important issue, continues -

A Political Sale.

The wretched story does not end there. In July, 1919, owing to pressure from the growers’ representatives on the Australian Wheat Board, Prime Minister Hughes Bold 56,000,000 bushels to the British Government at 5s. 6d. f.o.b. The growers’ representatives had insisted on him selling even at 5s.

At the very time the wheat was sold, grain experts knew that the 1,250,000,000 bushel crop forecast in the United States of America would not yield within 300,000,000 bushels of that estimate. European crops, then maturing, too, were also suffering appreciable damage. A world shortage was then not only imminent, but inevitable. But politicians like Mr. Hughes did not know this, nor did the growers’ representatives on the board. They knew nothing of grain marketing, which is a highly specialized job. Within a month of that big, hasty, political sale at 5s. 6d. wheat was worth over 8s. f.o.b. - the difference involving a monetary loss of £7,000,000 to Australian growers, or about £1,750.000 to South Australian growers.

I have read criticisms of that statement by honorable members in another place, but the most effective reply was given in the Liberal Leader of July, 1919, the official organ at that time of the Liberal party in South Australia. It reads -

The announcement early this month that the Prime Minister (Mr. Hughes), on the eve of his departure from Great Britain, had effected the sale of 1,000,000 tons of wheat to the Imperial Government at 5s. 6d. per bushel, f.o.b. at Australian ports, was received with the keenest satisfaction. Two further parcels of 500,000 tons each have been placed under offer at the same price, and it is to be hoped that the sale for these, too, will be completed at an early date. A satisfactory feature of the big sale is that the responsibility for securing the freight is again accepted by the British Government.

Further, the Liberal Leader, speaking of this sale of wheat at 5s. 6d. a bushel, said -

Prior to the sale being effected, statements by the Acting Prime Minister (Mr. W. A. Watt) and the chairman of the Australian Wheat Board (Senator Russell) were pessimistic, and gave little promise of a satisfactory realization of the unsold surplus. America is expecting a yield of 1,200,000,000 bushels of wheat this year,, which would exceed the previous record by about 200,000,000 bushels;

Canada anticipates the huge crop of 325,000,000 bushels; while Argentina has about 9,000,000 tons of grain awaiting shipment. Accordingly, there was no commercial demand for a large portion of the Australian surplus at an acceptable price to local growers. And although Mr. Hughes is deserving of the utmost credit for this achievement - which is a fine consummation of the distinguished services he has rendered to Australian interests at the Peace Conference - it is obvious that the latest purchase by the Imperial authorities is a sympathetic one, and can only be regarded as a practical appreciation of the wonderful work of Australian troops on the battlefields of Gallipoli, France, and Palestine.

My remarks as recorded in the South Australian Hansard at that time show that the Liberal Leader was edited by Mr. F. S. Alford, a brother of Mr. Alford, the manager of Dreyfus and Company, a large wheat-buying firm in South Australia. I have already referred to a circular letter which has been sent to federal members and signed by eighteen farmers, and when in Adelaide I saw a covering letter sent by Mr. Alford, asking a South Australian farmer to sign the letter. I took a copy of the communication, and as I studied it very carefully, I can vouch for its authenticity. It reads -

Dear Sir,

I am enclosing for your consideration a review of the Parker Moloney scheme and of the war-time pools, also a covering letter to accompany same.

It is proposed to forward a copy of each to every member of Parliament in Australia. Also to prominent bankers and business men.

I am asking about twenty prominent growers in South Australia to put their names to the covering letter. If you will make one to do this, please sign the covering letter and return to me as early as possible.

I have made all arrangements to have the “ review “ forwarded to those mentioned. There will be no cost to you. The “ review” should make them think and pause-

Thanking you in anticipation,

Yours faithfully, (Signed) F. S. Alford.

I think I am justified in assuming that Mr. F. S. Alford prepared the matter in the review which was enclosed. One of the statements to which I have referred is a condemnation, apparently written by Mr. Alford, of the contract made with the British Government by Mr. Hughes, the same contract which the Liberal Leader, when Mr. Alford was: the editor, applauded. ,

The fate of this scheme will dedepend upon the votes of the farmers. I have witnessed some very keen political struggles in this chamber which have always been fair and aboveboard; but I do not think propaganda of the type which I have quoted is a fair way of influencing the farmers or members of this legislature. In these circumstances I feel it my duty to state exactly what has happened. I propose to show the different treatment which the farmers may expect under the proposed compulsory pool as compared with that which they received from the merchants at the end of the previous compulsory pooling system. The merchants wished to end the pooling system. Many people, knowing that finance was not normal, wanted the pool continued for another year. - Farmers’ committees were formed throughout South Australia to bring about the termination of the compulsory pool. Mr. T. H. Webb, who is a grain buyer, was chairman of those committees. Two other prominent members were Mr. E. AAnthoney and Mr. McEwin. The secretary, pro tern, was Mr. F. S. Alford, a brother of the manager of Dreyfus and Company. After those committees were established in South Australia an advertisement appeared in the Melbourne newspapers calling a meeting of farmers at Scott’s Hotel for the purpose of ending the compulsory pool. Only three farmers attended that meeting. It is significant that Messrs. Webb, Anthoney and McEwin were staying at Scott’s Hotel at that time. A representative of The Farmers Advocate asked for a report of the meeting, and, later, it published a statement that it had been informed that, owing to the poor attendance, nothing formal had been done excepting that Mr. Berrett had been appointed secretary, pro tern,. Later, it was found that Mr. Berrett was an agent for Dreyfus and Company at Quambatook. Notwithstanding that practically no business was done at the meeting, a couple of days later the manifesto of the Victorian Farmers Committees was published. In view of the facts I have mentioned, we can safely assume that that manifesto was notdrawn up by the farmers of Victoria. That manifesto occupied one column an the Melbourne Age. The Argus gave it three-quarters of a column.

A large sum must have been spent in Victoria in propaganda and in forming these so-called farmers’ committees. Subsequently, the compulsory pool came to an end. Had it. not been for the voluntary pool, Dreyfus and Company would have secured a very big grip of the Victorian wheat crop.

I wish now to refer to a report of the Victorian Royal Commission on wheat which appeared in the Advertiser of October, 1912 -

Mr.Rees, M.L.C., who has just returned from South America, placed some interesting evidence before the Wheat Commission yesterday relative to the growing and marketing of wheat in the Argentine Republic. , The elevators were leased to practically two people. There wore only two really great firms operating wheat in South America, namely, Dreyfus and Company, and Bunge and Bourn. The firm of Dreyfus and Company was already operating in Melbourne.

Mr. Rees went on to show the danger of the wheat market in Victoria becoming controlled by two or three firms. He said -

One of the biggest operators in the world was already here, and had been established here for two years. The other firm, Messrs. Bunge and Bourn, would be here shortly, and when the two operators were on the scene it would be a bad lookout for the merchants who were in Australia at present.

On page 18 of his book, The Bread of Britain, Mr. Hurst gives some interesting information regarding the position in the Argentine to-day.

The Argentine, or, rather, the River Plate country, is another great source of British bread supplies. The entire situation there has now become concentrated in the hands of two gigantic international firms, one of Belgian nationality and the other French. Competition is offered, to some extent, by. another French firm and by a German concern, but the first two firms are known to control from 60 per cent, to 70 per cent, of the average export of wheat of -the country. Despite the fact that, prior to the war, England had placed more capital in the Argentine than all others combined, it did not find its way into the grain business. Here, too, the British bread supply is subject to concentrated’ organizations which are not in British hands. These often work in concert.

Lord Beaverbrook recently referred to the position of wheat in the Argentine. In the following letter to the Montreal Herald Lord Beaverbrook exposes the fallacy of cheap wheat giving cheap bread : -

In your leading article of 18th October you put a direct question to me. In the course of this article you ask - “ If there were a tax on foreign grown wheat, would the English buyers be compelled to pay the price demanded by the Canadian Wheat Pool? If they did, could Lord Beaverbrook maintain his position that England’s supply of food would not rise in price?”

I still hold to my declaration, for the following reasons: -

The freetrade market of Great Britain is being flooded with wheat from the Argentine and Germany.

Wheat is produced in the Argentine at less than 25s. a quarter (3s.11/2d. per bushel), a price with which farmers, neither in, Canada nor in Britain, can compete. Further, 340,000 tons of this wheat entered our ports in September of this year. This is ten times the amount imported from the Argentine in September of last year. British imports of Argentine wheat are, therefore, growing rapidly.

We are also receiving quantities of grain from East Prussia. This wheat is subsidized by the German Government to the extent of 13s. a quarter (1s. 71/2d. a bushel), which enables it to be sold at 40s. to 44s. a quarter (5s. to5s.6d. per bushel), in the English market. This, again, is a price lower than that demanded by the Canadian or British farmers if they are to cover their expenses.

These are the facts on the wholesale side. On the retail side is the further fact that the quartern loaf now costs 81/2-9d.

But Sir Charles Fielding, a recognized authority in England on agricultural questions, has shown conclusively that the quartern loaf can be, and has been, profitably sold at not exceeding this figure, even when the wholesale price of wheat advances to 55s. a quarter (6s. 101/2d. a bushel).

If Sir Charles is right, and there is no doubt of that, how is it that the loaf is now sold in London at 9d., when the wholesale price of Prussian wheat is 40s. to 44s. a quarter (5s. to 5s. 6d. a bushel), or when the cost of production of Argentine’ wheat is less than 25s. a quarter (3s.11/2d. a bushel).

The reason is that the middleman is not passing the benefits of low wholesale prices to the consumer. He is mulcting the public, pocketing the proceeds, and growing rich as the result.

Might I mention further that the three firms most concerned -with the sale of Argentine wheat in Britain are respectively French, Belgian, and Dutch.

In order to influence members of Parliament, as well as the wheat-growers of Australia,- a great deal has been said regarding the failure of the Canadian wheat pool. That pool controls about 60 per cent, of the wheat produced in Canada and has about 140,000- members. It is estimated, that in February, 1930, that pool held 148,000,000 bushels of wheat. Honorable senators know - that there is a world surplus of wheat; We are told that in the Chicago wheat pit, the total transactions in wheat are many times greater than the actual production of wheat. Let me again quote from Mr. Hurst’s hook to show the effect of this speculation on world prices -

In the United States speculation in wheat is widespread among all classes; in Canada, it is almost a universal obsession among the people, and is comparable only with the gambling on horse-racing in Great Britain. This vast wave of speculation in Canada beats against a fortress of from 55 to 60 per cent, of the Canadian wheat supply in hands of a pool.

Further on in his book, Mr. Hurst said -

The fact is that the option markets in Chicago and in Winnipeg, and, therefore, to a lesser extent, in other grain markets, have been divorced from the actual statistical supply of wheat, however composed, as to carry-over, present crop, &c. The actual demand for wheat (both in the present and in the near future) is subject to interference by political and trust manipulators.

Senator Sir Hal Colebatch:

– Like this bill.

Senator CHAPMAN:

– That was written long before this bill was introduced. Unless the primary producers of Australia meet organized buying with organized selling, they will be undone. Again, Mr. Hurst says -

For example, the May monthly future sales in 1929 in Chicago amounted to 1,040,212,000 bushels, whereas the entire United States crop is 840,000,000 bushels for the entire year.

In one month, the speculators in future sales dealt with 1,040,212,000 bushels of wheat, whereas the entire crop for the United States of America amounted to only 840,000,000 bushels! Mr. Hurst’s article continues -

It can certainly bc generalized from much other experience that future sales in Chicago alone are eleven times the United States crop per’ annum. A still more interesting commentary is revealed by a study of the figures published by the Grain Futures Administration of the United States Department of Agriculture, which show that during September and October, 1929, the average open trades on a single day in Chicago amounted to more than 232,000,000 bushels. This single day’s open position represents 58 weeks’ import requirements of the United Kingdom. In other words, the open commitments on a single day in Chicago alone represent about thirteen and a half months’ bread requirements of 50,000,000 people of Great Britain and Ireland. We may say that the 200,000,000 bushels imported by Great Britain in the course of a year represents merely one fortyfifth of the future transactions per annum in Chicago alone, without regard to those in other markets. Great Britain is far and away the greatest importer of wheat of any country in the world.

Senator Sir Hal Colebatch:

– There seems to be a good deal of competition in the buying of wheat.

Senator CHAPMAN:

– These people do not legitimately buy wheat. Combinations of capital are formed to depress values and bear down prices. There is also combination and speculation to get a profit as between the legitimate wheatgrower and the consumer of wheat. In regard to Canadian wheat, I ask what would have happened to world’s prices if the 148,000,000 bushels held by the Canadian pool in February, 1930, had been thrown on the market regardless of price. Speculators would also have sold, thus breaking the market, in which case, Australia would have received many millions less for her wheat. The Canadian pool acted in the interests of the farmers. It realized that it would not be wise to dispose of the wheat it held regardless of price. The provincial parliaments of the great wheat-producing States of Canada supported the pool. The position would have been much worse had the 565,000,000 bushels of Canadian wheat produced in 1928-29 been dumped in the world’s market regardless of price. Had that been done, Australian farmers would probably have . received not more than 2s. 6d. a bushel for their wheat. The provincial governments of Canada foresaw that the flooding of the market would mean disaster.

On the 27th February a bill was introduced into the Parliament of the province of Alberta, Canada, to enable the Government to guarantee advances made by the banks to the wheat pool. This action was taken after conference with the governments of the two other wheatgrowing provinces, Manitoba and Saskatchewan, both of which were introducing similar legislation. The Premier of Alberta, Mr. Brownlee, explained that the action his Government proposed had become necessary owing to the large holdings of wheat not in the pool, which threatened to endanger the market. Mr. Brownlee, speaking on the first reading of the bill, said -

The financial position was even more reassuring than we had previously anticipated. As a result of the margins already established by the sale of wheat at substantially higher prices than ‘at present existing, the unsold wheat will have to hesold at considerably less than one dollar per bushel before’ any loss can result to the provinces on the guarantees. It will thus be seen that at the lowest price to which wheat has so far declined the guarantee has not been endangered. As a matter of fact, wheat would have to sink to’ a level never reached on Canadian markets before the Provincial Governments would suffer any loss.

Pool not Gambling.

As the wheat pool has been subjected to the most severe propaganda of an adverse nature since its inception, a word or two might not be out of place to assure the public that a very great part of this propaganda is misleading. For example, the pool has been accused of gambling in wheat. The statements submitted showed that the pool has conducted its business this year in accord with its established methods as approved by its membership from year to year, and the public need have no alarm whatever that its position has been endangered by any improper methods.

It has been consistently urged in this propaganda that the pool is engaged in a huge gamble in holding back wheat from the market, and that the present situation is a struggle between importing countries and the Canadian wheat pool.

These facts should be kept in mind -

That year by year since its establishment the export sales of. the pool have been well in keeping with its proportion of handling of Canadian wheat.

That its carrying-over at the end of any year has been within its fair proportion of Canada’s total carry-over.

That for the crop year, 1929-30, Its handling is slightly over50 per cent, of the total crop, so that the other 50 per cent is held by other interests, and yet the export sales for this year show that no larger percentage of non-pool wheat has been exported than pool wheat,. so that if there is any huge gamble all holders of Canadian wheat, non-pool as well as pool, have been equally responsible, and yet the propaganda is directed only at the wheat pool.

Pool Policy Justified.

The simple fact is that there was a large over-surplus of world wheat in the 1928-29 crop, and that much of this was dumped on the market at sacrifice prices, particularly from the Argentine, and that the wheat pool, as a matter of policy, refused to compete in these slaughter prices. Bad it done so the situation to-day in Canada would have been considerably worse.

The misrepresentation to which Mr.’ Brownlee there referred has been broadcast throughout Australia for political purposes. A little while ago a gentleman named Mr. Sandford Evans attempted to discredit the Canadian pool, and his statements were broadcast throughout Australia. A cable was sent to America by the Victorian Wheat Corporation, asking for authentic information. To this the following reply was received: -

Evans is the only member of three provincial legislatures to oppose the pool bill. No word of truth in his contention that pool is beaten. It is in sound financial condition. The morale and membership are the best in the history of the organization. Many new members every day. Only relying upon provincial governments for moral support. Guarantees solely precautionary measure to avoid any possibility forced liquidation in case our collateral with banks, which is still valued in excess of 15 per cent, over and above amount of bank loans, should temporarily fall below 15 per cent, surplus security required by banks.

Senator Sir Hal Colebatch:

– What is the date of that cablegram?

Senator CHAPMAN:

– I have not the exact date, but it was received quite recently. The Regina Board of Trade, a body corresponding to our Chambers of Commerce, recently appointed a special committee to investigate the grain situation, and the committee made the following statement regarding the Canadian wheat pool : -

In view of certain criticism of the marketing operations of the wheat pool, we feel that it is in the public interest . to state our conviction that from all the information supplied, the pool is functioning normally and carrying out the orderly marketing for which it was brought into existence, and that the present condition is attributable to other causes, including the stock market collapse, and liquidation of huge speculative holdings, aggravated by the failure of certain large brokerage houses and the dumping of large quantities of wheat on the market. The statistical situation points to the wisdom of the pool policy of refraining from dumping wheat on the market.

A resolution endorsing the report of the committee and re-affirming its faith in the directorate of the pool was passed unanimously by the Regina Board of Trade at a general meeting on the 7th February, 1930. In the United States of America also legislative action has been taken. A huge fund has been provided to prevent a collapse of prices. The functions of the Farm Loan Board of the United States of America were outlined recently in a very interesting statement by the chairman of the board. He said -

The Farm Loan Board has extensively financed large holdings of wheat, and has itself bought surpluses off the market. Generallyspeaking, the policy of the board has been to enable growers to get a stable price internally.

Lastly, in regard to the Canadian pool, I have an official statement,, dated the 7th February, 1930, which sets out very clearly the position and objectives of the pool. It is as follows: -

Winnipeg, 7th February, 1930.

During the last few days there has been a great deal of comment concerning the wheat pools in Canada; our position, the wheat situation, financial matters and the troubles of Canadian stock-brokers have been so intermingled under startling newspaper headings that the general public may have a confused idea of the present position of the wheat pool.

In order to make’ our members in the country fully aware of the facts, we are now giving a summary of our present position with reference to recent action of the provincial governments.

As a background, it should be stated that the Canadian wheat pool, as an organization acting in the interests of the producers, is convinced that prices quoted for wheat at present are below a fair valuation of the wheat and not a just return to the producer. ‘ It should be distinctly understood, however, that the pool is not following a policy of attempting to hold up supplies of wheat. We are still following the same basic marketing policy of previous years, of always offering to sell when there is an actual demand for wheat. While we have not been selling substantial quantities at the present low levels, we have been offering wheat to foreign buyers and domestic mills consistently throughout the present crop season.

Factors in Situation.

A number of factors have entered to cause the present depression of wheat prices, notably the huge carry-over of last year’s wheat, the unbridled dumping of Argentine wheat on the European market, and just recently the unstable financial situation resulting from governmental investigations of the brokerage business in Canada. The wheat pool has fortunately been in a position to avoid liquidating its wheat upon an unfavorable market. In order to do this and at the same time pay pool members for this year’s crop on the basis of one dollar . for No. 1 Northern, we have naturally had to borrow heavily from the banks. The banks have always loaned on the security of our wheat in store. The basis of these loans requires that the value of our wheat security shall always be 15 per cent, greater than the amount of money advanced by the banks. We have always maintained this margin of safety and are doing so to-day.

During the past ten days an element of uncertainty and weakness has been introduced into the financial situation in ‘ Canada as result of some of the provincial governments seizing the accounts and books of certain stock and grain brokerage firms.

Some of these brokerage houses are carrying large, speculative grain accounts on behalf of clients, accounts based on margin payments only. The wheat market reflected the disturbing situation in the brokerage business and wheat prices were unable to pull themselves up to: better levels. There was a possibility of speculative margin-holders of wheat being sold at any minute, which would involve the dumping, on an already weak market, of millions of bushels.

To prevent such an unfortunate occurrence, the Governments of the various provinces considered the release of these accounts from, the - general seizure, so that the margin accounts of wheat speculators could be negotiated in the customary way. This was done.

Action of Banks and Governments.

At this time the Canadian banks became, concerned. They sensed a danger of wheat prices being forced down still lower as a result of the general unrest, and feared that the wheat pool margin of 15 per cent, might be impaired; accordingly the banks, called upon the pools to take some action to insure the maintenance of the margin. [Extension of time ‘ granted.’] I ask leave to continue my remarks to-morrow. Leave granted; debate adjourned. .

page 3192


Voluntary Enlistment System - Senator H. E. Elliott and Senator Sampson: Statement by Minister for Defence.

Motion (by Senator Daly) proposed -

That the Senate do now adjourn.

Senator H E ELLIOTT:

– I desire to mention a matter affecting my honour as a soldier and my position as a senator.. The Minister for Defence (Mr. A. Green) is reported to have said’ in another place yesterday - “ These two gentlemen,” he. was referring to Senator Sampson and myself, “made statements which are entirely, ‘incorrect and require a definite reply.” The Minister actually did not quote any statement made by me, but went on to say that in Victoria, where Senator H. E. Elliott had been speaking against the recruit-, ing system, the response had been the lowest. Actually, 8,291 recruits have volunteered in Victoria, out of 11,587 asked for under the voluntary system, whereas in Western Australia, where the Minister resides, the total response has been only 1,730. Moreover, if. the Minister had really cared to examine the figures submitted he would have found that in Nationalist constituencies in Victoria, where my influence might be expected to have some weight, the response has been the best, showing, if it shows anything, that my influence has been in favour of recruiting; whereas. in constituencies represented by Labour members, where my influence would not amount to much, the response has been the worst. In fact, I think that the lowest response has been in the constituencies represented by the Prime Minister and the Attorney-General. Although appeals were made to the municipal councils in those constituencies to call public meetings in aid of recruiting, most of them refused in a contemptuous manner even to consider the matter, and those who replied to the officers who submitted the request gave them a. rude rebuke for venturing to address them on such a subject. Although urgent and repeated requests were made to both those Ministers to address meetings in their constituencies in support of recruiting, they and supporters of the Government have invariably refused to do so. In this matter, of course, they are absolutely consistent; they do not want a defence system. If the Minister for Defence would go into the matter further he would discover that the failure of voluntary enlistment, so far as it has failed in Victoria, is due largely to the misfortune that great and populous constituencies are represented by gentlemen who make it their boast that under no circumstances would they take up arms, even to defend their country or to prevent outrage of their women folk. If those who live in constituencies that return to Parliament gentlemen animated by such sentiments ever joined a defence force, they would be declared “ black “ by their friends.

Senator Daly:

– Why not talk common sense ?

Senator H E ELLIOTT:

– If we march troops through those constituencies, they are jeered at, and referred to as “Australia’s last hope.” The Minister has chosen to attack me; but he should also be aware if he does his job that I myself have gone upon the public platform repeatedly in Nationalist constituencies, where I am welcome, and I have urged that, no matter what the feeling may be regarding the new system of training, our young men should join the service and maintain the forces, so far as the Government will allow, in an effi cient condition. ‘ The Minister should also know that, although the area under my command includes the constituencies represented by the Prime Minister (Mr. Scullin), the Attorney-General (Mr. Brennan), the Minister for Repatriation (Mr. Anstey) and the honorable member for Flinders (Mr. Holloway), and although the recruiting in those centres is the lowest, yet the total percentage of enlistments for the divisional area under my charge is the highest in the State. Part of the failure must be attributed directly to the Minister who has repeatedly broken faith with his officers with regard to the provision of uniforms. In one instance, the troops had been led to expect the issue of kilts, and, in other cases, other ornamental uniform, but they have been humbugged, and, so far, only a few bandsmen have been measured for their new uniform. As I have already said, my only son who was serving as a compulsory trainee joined up as a voluntary cadet, and now, having attained the age of18 years, is a private in the infantry. I challenge the Minister to say whether any member of the Government, including himself, has done more’ to help recruiting than I have done, even under his own scheme. The new system has been in force, not for five months, as the Assistant Minister (Senator Barnes) said this afternoon, but for nearly eight months. During the first two months before Christmas we had our greatest response, because we then had the compulsory trainees under our hand, and were able to make a direct appeal to them. “ I now come to what appears to me the real complaint that the Minister has against. me. I understand that he said -

Another critic has appeared in the person of Senator H. E. Elliott, who commands the 3rd Division in Victoria, and who is paid £250 a year for his services. He displays either a lamentable ignorance in regard to the’ responsibilities of his position, or is doing something which he knows to be wrong, and which is eminently prejudicial to our defence system.

My offence is that, anxious to arouse interest in this subject, I wrote the following letter to the Melbourne Herald: -

The subject of Australian defence is greatly exercising the minds of the most thoughtful of our citizens, but the multitudes who find the latest test match scores of absorbing interest seem to regard defence as entirely a matter to be left to Providence. With a view to arousing some thought on this subject, I invite the undermentioned authorities to answer through your columns the following questionnaire: -

Then I named Sir Harry Chauvel, Sir John Monash, Sir Brudenell White, Major-General Coxen, Brigadier-General Dodd and Captain Dyett. The following are the questions that I submitted, and I leave honorable senators to say whether there is anything harmful in them: - 1, Is it a fact that a body of experts after the war laid down that a force of approximately five divisions of infantry and two divisions of cavalry, with their proportion of technical arms, is necessary for the defence of Australia? 2, In round numbers what would be the strength of such a force.

There is no secret about that question. The Minister himself has given the answer. He has put the number down at 180,000 men. 3, Do you agree that such a force is reasonably necessary for our defence?

Again the Minister has supplied the answer. He admits that such a force is necessary. 4, Sir Harry Chauvel, in the last report, stated that a nucleus of some 50,000 organized as at the date of such report was the minimum strength of the nucleus that would be required to keep our forces in such a state as would enable them to be mobilized in the event of war. Do you agree with that estimate ?

  1. If you do not, state your own estimate of the minimum strength required.

According to the Minister the Council for Defence does not agree with that estimate, but puts the number down at 35,000.

  1. The present establishment is 35.000. Do you consider that, with a force of such a strength, mobilization would be delayed, and to what extent?

According to the Minister the answer is that it would not be delayed.

  1. Does the absence of a partially trained reserve, as supplied by the compulsory system, in your opinion affect the matter?

There is no direct reply to that, but the answer by inference is that it does not do so.

In the event of a sudden attack by a hostile force upon, say, the coast of Fremantle, what forces would at present be available to act against them?

The answer supplied by the. Minister is 1,700 men.

How long would it take to despatch a. force from the eastern States to reinforce that force, and would it. be desirable and practicable to send any force away from Melbourne or Sydney to their assistance?

There is. no reply to that.

If Western Australia is dissatisfied with this position, and desires to make better provision for her own safety, has she any power to raise armed forces for her own defence?

We know that there is no such power under the Federal Constitution, which differs from that of the United States of America, where the States have the right to raise militia and the federal authorities provide only the regular forces of the army and navy. There is no secret about any of the questions which I raised, and there should be no objection to the experts answering them for the enlightenment of the public. I understand that the Minister, again referring to me, went on to say -

He is anxious that the great western State should be protected, but he should devote his attention to recruiting in his own State. If he studied the records he would find that the naval depot of Western Australia was the first to get the full quota under the voluntary system, and that, from a military point of view, it is well up in the list; but in the State which he represents matters are not so satisfactory, for which this gentleman is, to some extent, responsible.

I have pointed out that the total number of enlistments is four or five times greater in Victoria than in Western Australia. I understand that the Minister further said -

The Council of Defence agreed that 35,000 trainees would be the necessary nucleus, and that 180,000 troops could be quickly called to arms in the event of invasion. That is all that is provided for under the old compulsory system, and such a force, it is considered, would be a sufficient defence against any invading force that could be landed in Australia. Senator Elliott must know all this.

I say that I did not know that the Council of Defence had agreed that 35,000 men was a sufficient nucleus. I was under the impression that that body was not allowed to express any opinion on that point. I certainly did not know that 35,000 trainees would be sufficient to enable 180,000 troops to be raised in an emergency. That statement, is in direct conflict with the report of . Sir Harry

Chauvel, who said that the 4S,000 or 50,000 troops under arms at the date of his last report was the smallest possible force that could function as a nucleus. I want to know whether he has altered his ideas since the present Government assumed office. I ask the Minister to reconcile those statements, unless that be the case. I should have thought that inasmuch as under the old system the men first called up would be the men who had been discharged, and who were in just as good a condition of training as, or perhaps better than, the men still under arms. Agreater number will now be required in the nucleus than under the old scheme, because the men who would be called up under the new scheme would be raw recruits. Under the old system every man. was- registered, and he knew where he had to go when summoned. Under the present system we do not know what men reside in an area, or where they can be found. The best means of refuting my statement, and. the best way to relieve my patriotic anxiety, would be to request the authorities whom I have named to reply to the questions that I submitted. On the Minister’s own statement there is nothing secret about the matter, I have the greatest respect for these authorities. If they answer the questions I shall accept their assurance, and cease to ask further questions on this matter.

The Minister went on to indulge in what ia, in effect, a threat that, if he is in office when my present term of service expires, he will see that it is not renewed. If I have committed any offence, the Minister has ample power to have me dealt with under the Defence Act. Under the Constitution Act it is clear that I am justified in what I have done.Section 44 provides, inter alia, that any person holding an office of profit under the Crown shall be incapable of sitting as a senator, but this provision does not apply to the receipt of pay as an officer or member of the military or naval forces of the Commonwealth, by any person whose services are not wholly employed by the Commonwealth. That is my case. It is clear that when the Constitution was drafted, the position of a military officer . was fully realized.

Surely the Minister does not contend that it was intended that an officer occupying a place in this Parliament, should be gagged and bound simply because he was not sitting upon the same side of the House as the Minister for Defence. I throw back in his teeth the accusation that I have in any way made use of information derived from my military position. No one could be more scrupulously careful than I have been in that respect throughout my service. I challenge the Minister to substantiate that charge in Parliament or outside.

I am anxious about the position of Western Australia. It lies nearer than any other State to the path of danger. Under our Constitution the State is forbidden to raise an armed force, even to protect itself, without the consent of the Commonwealth. In this respect our Constitution differs from that of the United States of America where the States control the militia. Does the Minister contend that 1,700 men are ample to protect that great State? It is certain that we could not spare out of this scheme a single man to go to its assistance from the eastern States.

I propose, at a later date, if the Minister does not allow the officers to reply to these questions, to ask the Senate to appoint a select committee to take evidence from them, so that the public may at least know where they stand in the matter of defence.

I further deny that I desire to make any political capital out of this matter. To illustrate my own real position, I quote the following report from the Auckland Weekly News, of the 11th June, 1930:-

page 3195


National League Revived

Support for Movement

Steps have been taken during the past fortnight to revive the National Defence League of New Zealand, and this has been accomplished.

Major-General Sir Andrew Russell is president of ‘the league, and a campaign will shortly bc opened for establishing the organization throughout the Dominion and engaging in educational work.

It is stated that the movement is receiving widespread support, particularly in view of rumours regarding changes in the defence scheme and the Government’s announcement that it hopes to save £500,000 this year by cutting down the normal vote of £1,000,000 for the naval, air and military forces.

The constitution of the league provides that the league shall be non-party politically, except that it will oppose any political party which aims at weakening the national defence forces of New Zealand, or which would dispense with the compulsory training system or in any way impair the efficiency of the defence forces. No professionally-paid soldier in the employ of the Defence Department or any other professionally-paid member of the naval, military or air forces can, under any circumstances whatever, be an officer of the league, and the same restriction applies to shareholders and officials of any ammunition manufacturing company.

The objects of the league are to maintain a white New Zealand, to secure the immunity of the country from invasion, and to educate citizens upon such measures of defence as may be considered necessary. The. league accordingly advocates universal defensive training, the embodiment of the lessons of the late war in the training systems, the adequate equipment of the defence forces, and the immediate consideration of providing machinery in the dominion for the manufacture of shells, small arms and ammunition, such plants to be Stateowned. The league also seeks the provision of at least two safe harbours for the protection of shipping, the fuller training of territorial officers and N.C.O.’s, and the removal of the control of recruiting of defence forces from the defence authorities and placing it in the hands of a. civil department of State.

I have placed that report on record to show that a movement is being instituted in New Zealand where the party corresponding to the Nationalist party in Australia is in power, and proposes to take measures on similar lines to those of this Government with regard to the defence system of the dominion. The ‘best known general in New Zealand has become president of the League, the object of which is to direct public attention to the situation, so as to prevent the threatened weakening in the defence forces of the country. In what respect does his position differ from mine? I trust that what I have said will be ample refutation of any charge which the Minister has made against me.

Senator SAMPSON:

. -I crave the indulgence of the Senate to reply to a statement which, I understand, was made yesterday in another place impugning my honour, both as a soldier and a member of this Senate. I am informed that I have been accused of conduct unworthy of an officer and a gentleman. I emphatically deny that charge. I thank the Assistant Minister (Senator Barnes) for his reference to the matter this afternoon. I believe that I was charged with making an incorrect statement. That I deny absolutely. I believe, further, that the Minister’s charge concerning me was based on a press report.- I should have thought I would receive treatment such as I would accord to other people. I would no more dream of making a mean and a malicious attack on any man on the strength of a press report than I would do anything dishonorable. Had I been the Minister I would have cut out the press report, sent it to the gentleman concerned and asked him whether or not it was a correct report of his utterances. In that way, I would have given him a chance to justify himself. But I understand another charge was made against me. I believe the Minister alleged that I have been speaking against the voluntary system of enlistment with the object of discouraging it, simply because, so the Minister says, it is proving successful. I wish to God it was successful. Success, like failure, is relative. I regret to say that the voluntary . system is not a success. I dislike having to refer to what I am doing for the military defence of the Commonwealth, because it may savour of self-praise, and is distasteful to me; but Ifeel that, in justice to myself, I must take advantage of this opportunity to state the facts.From the moment that universal training was suspended or abolished, call it what you will, and the voluntary system of enlistment substituted for it, I have done what I could to make it a success. I was one of the first of the citizen force officers at a conference in Melbourne with the second chief of the Imperial General Staff to consider the steps that should be taken to give effect to the Government’s policy. I said then that it was our duty, and certainly I considered it my duty, to do all that is possible to ensure its success. I assured him that I would do everything in my power to make the new policy go, and I have carried out that promise to the letter. Since then I have spent a greatdeal of my own time travelling about in my own car, and using my own petrol in order to address meetings, interview business people, and impress upon the people the need for recruits. I have been connected with the defence forces of the Commonwealth for over 30 years. As a youngster of seventeen years, I went into my first camp as a stretcherbearer, in my father’s unit, which was established in the ‘seventies, when there was a scare about a probable Russian invasion. The cream of the jest lies in the fact that the statements which it is alleged i made for the purpose of discouraging recruiting, were made at a meeting of the Old Comrades Association in connexion with the Launceston Volunteer Artillery Corps, an organization that lias an unbroken record for over 70 years. I went to that meeting for the express purpose of enlisting the good offices of that organization to obtain recruits for my unit, and made a special appeal to them to assist with recruiting. T feel, therefore, that the Minister’s allegation is contemptible in the extreme. There was never a more rotten lie uttered than that, because I have done all that is possible for me to do to make voluntary enlistment successful, and I shall continue to do so because I wish my unit to be up with the others.

It is unfortunate for the gentleman concerned that he should have selected as his target the only three officers on the active list who are members of this Parliament. One officer, a member of another place, commands the 6th Battalion, and has the highest enlistment in his own State for any infantry unit. Similarly, I have the highest enlistment for any infantry unit in my State and Senator H. E. Elliott has the highest enlistment of any Division in Australia. The attack made upon us in another place on insufficient data, was mean and contemptible. I resent it very much indeed. It is absurd to say that I am annoyed because the voluntary system is proving a success. Much depends upon the view of what constitutes success. I remind honorable senators that the irreducible minimum for all ranks is fixed at 35,000. We were expected to get that number by voluntary enlistment by the end of this month. The figures quoted by the Minister show that we are still a long way off the total - some 8,000 - and no provision has been made for wastage, which is an important factor and must not be overlooked. In my own little unit in. Tasmania the wastage is considerable. Men get out of employment and have to leave the State, or go to other parts of it. In this way we lose a fair number of our recruits. In every respect we have to fight an uphill battle, and I submit that instead of being accused of unworthy motives, we are deserving of at least consideration if not some praise for what we are doing. It is a hard and thankless task. As I have said, I have been associated with the defence forces for over 30 years, and although I am not weary, I think it is time that others came in to get ready to take my place, and the places of others in positions of responsibility. I feel my position very keenly, and deplore the pitiable ignorance displayed by the Minister in his attack. I regret that a responsible member of this Parliament should go out of his way and, on insufficient data, make,a very mean, contemptible and unjust attack upon me and the other members of this Parliament who are on the active list.

South Australia

– We have been informed that, in the main, the principles contained in the Wheat Marketing Bill now before the Senate have received the endorsement of certain State Governments, and particularly the South Australian Government. There was, I understand, some difficulty with the Government which occupied the treasury bench in that State prior to the election held in April last, but on that occasion there was a great change in the personnel of the House of Assembly, and a resultant change in the Ministry. We have been informed that the Hill Government wholeheartedly approves of a compulsory wheat pooling system, which is a plank of the platform on which it was elected, and that it will co-operate with the Commonwealth Government in the establishment of an Australian-wide wheat pool.

Senator Plain:

– Was that one of the planks upon which the Labour Government in South Australia was elected?


– Y - Yes. I direct the attention of the Minister (Senator Daly) ‘ to the following paragraph which appeared in the Argus of to-day : -

page 3198


Risk of State Loss

South Australia Hesitant

Adelaide, 24th June

Consideration of the compulsory wheat pool from the aspect of State finance has caused furious discussion at cabinet meetings recently.

The Government favours the principle of co-operative marketing as strongly as ever, but the financial position of the States has opened another phase of the question.

Some Ministers fear that there is a grave danger of wheat not averaging 4s. per bushel at Port Adelaide this season. That amount is the equivalent of the proposed guarantee of 4s. per bushel by the pool on which any loss must be shared by the Commonwealth and the State Governments.

The view has beeu taken that it would he unwise to take a risk of adding to the present burden on the Treasury by even a relatively small amount.

Mr. Cameron in the House of Assembly today asked the Premier whether the Government had altered its view in regard to the pool, and Mr. Hill replied that the Government had to consider the serious financial position of the State - that shadowed everything else at present.

The Leader of the Opposition. - The farmers do not want the pool.

Mr. HILL. The position is anything but satisfactory. The Government may desire to do many things but there were some that it could not do. It would consider the position. No decision had yet been reached.

In view of the wide publicity given by the Premier of South Australia and by the members of his Government to the fact that it supports the policy of the Federal Government and will co-operate with it in this matter, that is a. startling report, the accuracy of which I can scarcely credit. Will the Minister indicate if the South Australian Government has informed the Commonwealth Government that it has changed its views, or whether the report is accurate or otherwise?

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

. - I have no knowledge of any change of policy on the part of the South Australian Government in connexion with a compulsory wheat pool. I know that the South Australian Government pledged its support to such a pool and cannot believe that the report which the honorable senator has read is correct. I know that the Premier of South Australia is in favour of the pooling system proposed by the CommonwealthGovernment.

I presume that the basis of the complaints of Senator H. E. Elliott and Senator Sampson are that the Minister for Defence (Mr. A. Green) has not court-martialled them. Personally, I regret that there has been any necessity for these two honorable senators to ventilate this matter in the Senate. I appreciate the point raised by Senator Sampson, and I am sure the Minister for Defence is magnanimous enough to realize that probably the better course for him to have pursued when he saw the report of his remarks was to ascertain if the honorable senator had been correctly reported. I think Senator Sampson will admit that if he has been correctly reported, the Minister for Defence would naturally be incensed at the ‘ tone of his speech, which contained a very strong adjective. The Government and the Minister for Defence have had to submit to strong condemnation in consequence of such reports, but I shall bring under the notice of the Minister what Senator Sampson has said, and I am sure the Minister will be able to straighten out the difficulty.

In the case of Senator H. E. Elliott I am afraid that there is no hope. That honorable senator has conceived the idea that this Government does not want any defence system, and has said so to-night. In these circumstances, there is nothing I can do as between the Minister for Defence and Senator H. E. Elliott, but I can perhaps repeat that this Government stands by the word it gave to Parliament. We have said that we want a defence system, and have made up our mind to make the voluntary system of training more efficient that the compulsory system. The honorable senator does not believe that is our desire, and to use a colloquialism, “makes no bones” about that belief, either inside or outside this chamber. I am not concerned with the questionnaire which the honorable senator sent to the Melbourne Herald, and which he suggested should be answered by certain prominent military officers, whom he named. But no one knows better than he does that under the military regulations, no military officer is permitted to answer questions such as he submitted. The average reader of that newspaper did not know that. The letter was written, not in the interests of Australia’s defence; but in an endeavour to blacken the Government in the eyes of the Australian public. If the honorable senator is pained by what the Minister for Defence has said, I can only say that he has tonight repeated the statement of which the Minister complained. In effect, he said that this Government is dishonest in its military system, which he contends is hypocritical anda farce. There is only one honorable course for a person holding a position under the Government, for which he receives £250 a year, and who makes such statements, and that is to return his commission. If the honorablesenator believes that, as an officer, he is assisting us to carry out a sham on the Australian public, he stands condemned as being as dishonest as he contends is the Government which he is serving. Until the honorable senator is prepared to give a practical demonstration of his real feelings, I hope he will keep his quarrels with the Minister for Defence outside the Senate. I respect an honorable senator who acts as Senator Sampson has, and who asks why the Minister did not ascertain whether the report, to which he took exception was correct; but I have no time for one who will make an incorrect statement and deliberately repeat it, as Senator H. E. Elliott did, while serving the Government at a salary of £250 a year.

Question resolved in the affirmative.

Senate adjourned at 11.26 p.m.

Cite as: Australia, Senate, Debates, 25 June 1930, viewed 22 October 2017, <>.