8th Parliament · 2nd Session
Mr. Speaker (Hon. Sir Elliot Johnson) took thechair at . 11 a.m., and read prayers.
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– I wish to know from the Prime Minister whether, as chairman of the Wireless Board, he is to receive any emolument?
– I shall make inquiries, buoyed up with the inspiration of hope ; but so far I have heard of nothing likely to come to me from the source the honorable member indicates. When I have definite information on the subject, I shall let him know, and, as an old friend, he shall share with me.
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– Has the Prime Minister received from the secretary or from the president of the Housewives’ Association a letter conveying a protest against the continuation of the sugar agreement? As a meeting was hold and the protest drawn up with the desire to influence the members of this Parliament, will the Prime Minister make available any letter that he may have received?
– I have not had the honour to receive any communication from any lady recently.
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– I hand to the Prime Minister a letter signed by the Governor-General of the Philippine Islands, whose signature, as the right honorable gentleman will see, is plain to read, and another letter from the Bureau of Commerce to which is attached a signature which I defy any member to read. I ask the right honorable gentleman if, in view of the difficulty often experienced in making out signatures at the bottom of departmental letters, he will cause the instruction to be issued that beneath every signature there shall be typed the full name of the person signing, so that the recipient of a letter may have no difficulty in ascertaining the person responsible for it?
– I am afraid that the question is a hit at me. Probably the body as well as the signature of any letter I write is read with difficulty. What the honorable member suggests, however, commends itself to me, and if my colleagues agree that effect shall be given to the suggestion, the instruction that he asks for will be issued.
– Will the Prime Minister bring the matter under the attention of the Medical Association, so that people may be able to understand the communications they receive from medical men?
– To do that would be to go beyond my province.
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– Some time ago the
Minister for Trade and Customs promised to supply information regarding the number of employees in the Customs Department. Is it ret available?
– That information has been laid on the table.
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– Yesterday the honorable member for Maribyrnong (Mr. fenton) asked me a question about the administration of Nauru. I have looked through the files, and with the permission of the House I shall read the following answer which I have had prepared: -
An agreement was .made on 2nd July, 1919, between the British Government, the Commonwealth Government, and the New Zealand Government to provide for the administration of Nauru and for the working of the phosphate deposits there
And on Ocean Island. .
This agreement provided; that, to give effect to the Mandate to bo conferred upon the -British Empire for the administration, of Nauru, which Mandata was subsequently, on 17th December, 1920, issued by the League of Nations, the administration of the island shall be vested in an Administrator,’ and that the first Administrator should be appointed for a term of five years by -the Common1 wealth Government. An Administrator, Brigadier-General T. Griffiths, was accordingly appointed by the Commonwealth Government, and assumed office in June, 1921.
The Administrator has full powers of legislation and government, . -but he acts under instructions from the Commonwealth Government, and in all important matters the Commonwealth Government consults the other two Governments interested in the island, which receives copies of all Ordinances made by him and of the orders issued by’ him, which contain full information of all his administrative measures.
It cannot, be said, then, that the administration of the island is exercised ‘by the Australian Government to the’ exclusion of the other two Governments.
The’ working of the phosphate deposits which the three Governments purchased from the Pacific Phosphate Company is placed in’ the hands of the British Phosphate Commission, consisting of three Commissioners, one appointed by- each Government, who are declared by the agreement to be free from interference by any of the Governments with the direction, control, or management of their business. The Commissioners do, however, consult their Governments in such matters as the recruiting of labour for work on the island.
Chinese labourers, to whom the report of the permanent Mandates Commission has been stated to make reference, have been employed on the island since 1907. In 1913 there were about 550, and the number is now about the same. The men, in addition to being well fed, housed, and treated, receive, free of charge, first class medical attention. Two doctors, a chemist, surgery, dispensary, operating theatre, and hospitals are provided. Their barracks are electrically lit, and their compound furnished with the most up-to-date water-borne sewerage system. A number of the Chinese, who are mostly single men, have been on Nauru since 1907, voluntarily re- engaging from time to time as their contracts, expired. The employment of Chinese on Nauru has been found necessary owing to the increasing shortage of native ‘ labour throughout the Pacific. lt has been found that Chinese labourers on Nauru have, as a general rule, been contented and law-abiding.
The working of the phosphate deposits is in no way prejudicial to the interests of the natives, who, on the contrary, have never been so well off as they are under the present Administration. Formerly’ a royalty of Jd. per ton was paid to individual land-owners for all phosphate removed. This has been increased since the Commissioners took control to 2d. per ton, and, in addition a fund has been established by a contribution) of Id. per ton made by the Commissioners, which is to be used exclusively for the benefit of the natives as a whole. Besides the royalty, £20 per acre is paid in advance to the native land-owner upon his phosphate land being taken over.
The phosphate deposits are found only in the elevated interior part of the island, which is not used by the natives either for residence or for the growing of fruit or food-producing trees. The natives live on a’ narrow coastal fringe, where there is no phosphate, and in which food-producing’ trees grow in great profusion.
Since the establishment of Australian administration the Nauruans have expressed their thanks and appreciation, through the Administrator to the Commonwealth Government, for the manner in which they are being treated.
As this matter is of considerable importance to the Commonwealth, I move -
That the paperbe printed.
Ordered to be printed.
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– Last week the Prime Minister promisedto get an answer to a question which I asked about wheat charges. I wished to know whether the 3s. covers handling and all other expenses?
– I was unable to see Sir Denison Miller when in Sydney at the last week-end, but I shall obtain the information desired by the honorable member by Wednesday next.
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Repairs
– Towards the end of July I asked for information from the Prime Minister about the repairs done to Commonwealth steamers, and I wish to know when it will be made available?
– I was under the impression that I laid it on the table.
– No. The information to which the right honorable gentleman alludes related to another matter.
-Then I shall see that what the honorable member desires is supplied.
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New States Referendum
asked the Prime Minister, upon notice -
When does the Government propose to give Parliament an opportunity of considering the question to he submitted to the electors on referendum for an alterationof theConstitution enabling a stated number of electors to determine whether they willformnewStates, attach themselves to existing States, or give greater local powers to shire councils.?
– This matter is now engaging the attention of the Government and it is hoped that a measure relating to it will be brought before the House before theclose of this month.
page 2077
asked the Prime Minister, upon notice -
Whether he will favorably consider the question of amending the Commonwealth Workmen’s Compensation Act 1912 with a view to increasing the rates of compensation?
– The matter will receive the most careful consideration at the hands of the Government.
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The followingpapers were presented: -
Lands Acquisition Act - Land acquired under, at -
Cape Pallarenda, near Townsville, Queensland - For Quarantine purposes.
Spalding, South Australia - For Postal purposes.
New Guinea Act - Ordinances of 1922-
No. 26 - Administrative Districts.
No. 27- Supply (No. 2) 1922-23.
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Disposal Wooden Ships - Defence
Retirements - Purchases of Foreign Sugar.
In Committee:
.- I move-
That there be granted to His Majesty foror towards defraying the services of the year 1922-23 a sum not exceeding £2,097,210.
This is the third Supply Bill that has been introduced during the present financial year, and the Supply asked for on each occasion has been for one month. The amount asked for in this instance is for a month’s Supply, but it includes three pays instead of two. The reason why the Government is making provision forthree pays instead of two in this instance is that the Committee has now commenced to consider the Budget and the Estimates, and that if we provided for only two pays it would again be necessary to ask for Supply before the 13th October in order to meet the pay falling due on that date. The Government feel that it would be more convenient to the House if,before we again asked for Supply, an opportunity had beam -given to make substantial progress with the consideration of the Budget and the Estimates. That is why in this Bill we make provision for three pays. The amount asked for is made up of ordinary services of the Departments, £1,947,210, and refunds to revenue£150,000, making a total of £2,097,210. No vote is being asked for in respect of the Treasurer’s Advance, as the amounts granted for that purpose in the first two Supply Bills are sufficient to finance public works until the works programme receives full legislative authority. That authority has now actually been granted, since the Loan Bill was passed last night by another place. The total of the Supply Bills for the present financial year, including that now before the Committee, is £4,872,085. The provision is based upon the Estimates of the last financial year. The Estimates for the year 1921-22, in respect of the ordinary votes, included an amount of £5,548,815 required in connexion with the funding arrangement with Great Britain. That, however, is now dealt with under a special appropriation. In introducing the last Supply Bill, I explained exactly to honorable members what that meant, so that I do not think I need discuss it again. Deducting that amount, the total ordinary departmental expenditure estimated for 1921-22 was £19,166,467. The proportion of that amount to cover expenditure to the middle of October would be £5,590,219, but the amount for which we are now asking to cover us up to that period is £4,872,085. It will, therefore, be seen that the Supply for which we are asking to carry us to the middle of October next is £718,134 less than the total of the estimated expenditure for the same period of last- financial year. There are no extraordinary items in. the Bill. It is an ordinary Supply Bill for the current services of the Government, and, . such being the case, I do not think I need give any further explanation of it.
– I take this opportunity to direct the attention of honorable members and the country generally to something which I con- sider is clearly indicative of, to put it very mildly, the muddling business methods of the Government, and, in order to give the Committee an opportunity to express its disapproval of such methods, as I believe it will do when I have set out the whole of the facts, I move -
That the amount he reduced by £1 as an intimation that the action of the Government in secretly disposing of five wooden ships for an amount considerably less than that offered at public tender is detrimental to the best interests of the Commonwealth.
The whole history of the woodenship transactions is a serious reflection upon the business methods of the Government. A contract was entered into by the Government for the building of fourteen wooden ships in America, and it is to what has happened in connexion with those vessels that I desire to direct the attention of the Committee. These fourteen wooden ships were built at a cost to the Government, and the people of this country, of £2,273,039. After their construction had been completed, however, certain defects in them, were discovered, and the Government, finding they had made a bad deal, and being anxious to smother up the whole thing, quickly entered into an arrangement with a Seattle firm to dispose of them. This firm had already entered into an arrangement for the carrying of certain freight, and the Government handed these ships over to it without the payment of one penny.
– Without even a deposit?
– That is so. I have all the facts, and shall prove them up to the hilt. This Seattle firm took over the fourteen wooden ships, and ran freights with them for between two and three months. At the end of that time, having carried its freights, having completed its contract with certain persons, and so earned its money, it handed the ships back to the Common wealth. It said in effect to the Government, “ We cannot carry out our contract to purchase these ships from you. They are useless to us. They are no good.” As a matter of fact, they had served the firm’s purpose. The muddling business methods of the Government had enabled this American firm to rake off thousands of pounds by using these wooden vessels to carry freight and then to hand them back.
– But did they hand them back to the Government?
– They said to the Government, “ We cannot pay you for them,” and the Government had, therefore, to take action to get them back.
That is one episode in this great drama of the wooden ship muddle. Let us now turn to the next. The scene shifts to Australia. The ships are here, where the people who decide who shall govern the country can see them, and the Government, therefore, decide to at once get rid of them, and so rid themselves of a monument to their ineptitude and bad business methods. And so, in July of last year they invited public tenders for their purchase. In response they received an offer from a business man of standing in Sydney. I refer to Mr. William Waugh, of Weston-street, Balmain, who. is in a. large way of business as a ship’s chandler. He buys ships and breaks them up.
– It was hardly necessary to break up these ships.
– I shall come to that point in a moment. This is but one short chapter in the sordid story of business muddling on the part of the Government. Mr. Waugh, in a letter to me, says that he cannot understand why the Commonwealth Government refused his offer of £15,000 for the purchase of five of these wooden ships in November last, and then in August of this year, without calling for public tenders, sold them for £10,000 to some one else. He asked why he was not given an opportunity to submit his tender for the purchase of those vessels. In order to show the standing of this man I draw the attention of honorable members to a long list of ships that he has bought from the British Admiralty, various State Governments, and public companies. I need not weary honorable members by reading the list, but it is here for their perusal .
– To whom were the five vessels sold?
– In good time I shall give the Committee that information. The story I have to tell shows so glaringly the ineptitude, if not something worse, of the Government that I want to put the facts on record in their proper sequence, so that the Committee may take some action on them.. Here is the tender that was submitted last year by Mr. Waugh -
I, William Waugh, of 20 Weston-street, Balmain, in the State of New South Wales, hereby offer to purchase from the Commonwealth of Australia any two of the wooden steam-ships Bundarra, Bethanga, Bellatta, Berringa, and Birriwa (together with all equipments) stores, machinery now on board), as they lie afloat in Sydney Harbor, for the sum of£6,000 for the two vessels, and Iam enclosing my cheque, value £120, being a deposit of 2 per cent. of the total purchase money. The balance of the purchase money I am prepared to pay on receipt of your acceptance, as per condition No. 5. I am also prepared to purchase the remaining three vessels at the same figure (£3,000) each.
He thus offered £15,000 cash for the five vessels, which the Government this year disposed of privately for £10,000.
– When was his offer made ?
- The negotiations between Mr. Waugh and the Government started in August, 1921, when public ten ders were invited for the disposal of the vessels. In response to that invitation Mr. Waugh submitted the tender I have read.
Here is a telegram, dated “ Melbourne, 2nd August, 1921,” addressed to Mr. Waugh, and signed “ Cogoline,”. which is the code name for the Commonwealth Government Line of Steamers -
Your tender received. Are we to understand you tender purchase two vessels and either one, two, or three remaining vessels, our option ? Reply.
Here is Mr. Waugh’s reply -
I tendered to purchase two vessels, and I am prepared to purchase one, two, or three of the remaining vessels, but would prefer to have the whole five vessels allotted to me.
Here is another wire from Waugh to the Commonwealth Government Line of Steamers -
Wooden Steamers. - After further consideration my company want the whole parcel, based on tender rate. Do you want me to come across ?
This was the reply he received -
Your telegram to-day. Tenders will be considered next few days. Do not wish you to come across.
This is the next step in the negotiations -
Wooden Ships. - Your telegram, 3rd August, states tenders will be considered next few days. What is the result? - (Signed) Waugh.
Waugh received the following reply: -
Yours to-day, decision re tenders not yet known. Hope advise you before end of the week.
The next communication is dated September. In the interim the Commonwealth Government Line of Steamers became suddenly dumb. In September, Mr. Waugh wired the Commonwealth Government Line of Steamers as follows: -
Wooden Ships- When will decision be given?
The next thing he heard was the return of his deposit money on the 13th September, 1921. From that date until the, beginning of August of this year not one public announcement was made by any person representing the Commonwealth Government that these ships were to be disposed of until we heard that they had been sold for £10,000.
– I suppose they were sold to a good Nationalist friend of the Government.
– I shall tell the House who bought them.
– Werenot second tenders submitted ?
– Tenders were called in the first place, which were not accepted. The highest was an offer of £15,000. No further tenders were called, and no further public announcement was made until it was. stated last month that the vessels had been disposed of for £10,000.
– Had anything been taken out of. the ships in the meanwhile?
– I shall show all that if honorable members will permit me. When I have concluded I will not have left many loop-holes. I was curious about this transaction, and, accordingly, submitted the following questions to the Prime Minister: -
I ask honorable members to note the very stubtle wording of the following reply given by the Prime Minister for the purpose of throwing dust in the eyes of the public and honorable members: -
In July, 1921, the steamers were. put. up for public tender; when an offer of £15,000 was received for the five steamers.. This offer was not accepted, as the Department of Works and Railways authorities intimated that they could probably dispose of the vessels to better advantage by dismantling them and soiling them piecemeal. Subsequently the - Commonwealth Government Line transferred a great deal of material from these ships for the use of the Line.
The question of dismantling the vessels and disposing of them, piecemeal was fully considered by the Commonwealth Department of Works and Railways, but in view of the great delay involved and the uncertain state of the market, was finally rejected as. unprofitable.
The Commonwealth Government Line of Steamers management was asked to dispose of the vessels to the best advantage-. The highest offer received was £10,000-
It was a secret offer. The public were not invited to submit offers, and presently I shall tell the House who bought them. The Prime Minister’s answer continues - for the vessels as they stood. One other offer of £11,000 was received after the steamers had been disposed of.
Of course, no one had a chance to submit offers before they were disposed of. After that any one could come in -
This offer, however,was not a cash. one.
That is not true, because I got in touch with the person who made the offer. It was a distinct offer from that of Waugh - and further stipulated that certain gear which had been taken out of the vessels should be replaced. This, of course, was impossible. The Commonwealth Government Line authorities do not consider it desirable to disclose the names of the parties concerned.
Of course they do not, but I will disclose their names. Now I propose to tell the House something of the “ large quantity “ of goods taken out of the ships. They took out the wireless gear, the crockery, the cutlery, certain floor coverings from the captain’s and chief engineer’s cabins, the linen, the compasses, and only one. anchor from the whole five vessels. That is to say, one vessel was deprived of its anchor; the others retained their anchors. In order to prove that these boats were not dismantled, as the Prime Minister in his answer insinuated that they had been to show that they were not worth more than £10,000, I propose to read from a communication sent out by the purchaser; Mr.F. J. Sandoz. He spells his name “ Sandoz,” but pronounces it “ Sandow.” As a matter of fact, this gentleman is a private agent for the purchaser. He is a man who is paid a retaining; fee to get around and show others where they can make profitable investments. In submitting these ships for sale to various persons, this is how he describes them -
Re wooden steamers,, American, built for the Commonwealth Government. - I beg to announce that the disposal of the above steamers has been placed in my hands by the owners.
I hope that honorable members will note the words “by the owners.” The Government say, “ Here is. the man to whom we sold them “ ; but he says that they have been placed in his hands “ by the owners “ for the purpose of selling them. As a matter of fact, a member of the. little syndicate who. got together for the purpose of purchasing these vessels admitted to me that he was merely their agent. His description proceeds -
The fleet consists of five steamers of 207 feet in length, 48 feet breadth, 24 feet depth, twin screws, each approximately 4,300 tons.
In twin-screw steamers there are of course, two engines and! two boilers.
Engines- Makers - Patterson McDonald, reciprocating triple expansion,15½ inches x 23½ inches x 42 inches, each engine 775i.h.p., at 120 revolutions, 30 inch.
– A very good type of marine engine.
– One of the finest to be obtained, and there are two of these on each ship. This is how they are described by Mr. Sandoz -
Boilers. - Heinie water tubular tubes, 448 x 3 inches x 9 feet, No. 9 B.W.G. seamless drawn steel, heating surface 3,300 square feet.
These engine sets are admirably suited for a small coastal vessel of about 150 feet or for a powerful tug.
There are also available masts, derricks (5 ton), winches (5 ton), gin blocks, engine-room equipment, dynamo, tanks (4,000 gallons), anchors, life-boats, and a host of sundries far too numerous to mention.
It will be seen that even the dynamos were left on the vessels, and as I have already reminded honorable members, only one of the anchors was taken off, the remainder being left.
– It depends on what people tender for; what people have tendered for cannot be removed.
– What is the use of saying that? These ships have been sold privately and secretly for £10,000. Mr. Waugh, a big business man in Sydney, publicly tendered £15,000, and he is prepared to give that price to-day for the vessels as they stood in Sydney. That is the statement of Mr. Waugh, and it is a statement by which I stand.
Now let me tell honorable members the prices that are now being quoted for the two engines and two boilers on each ship by the people who purchased them. They are quoting £6,000 for one engine and one boiler, which means £12,000 for the two sets in each ship, or £60,000 for the engines and boilers alone on the five vessels that were sold for £10,000. The people who purchased the vessels boast in Sydney of the bargain they have made owing to the blundering business methods of the Government. I do not impute any improper motives to those people. They are business men, and they seized an opportunity that presented itself of making money; for that I do not blame them, but I do blame the muddling business methods of the Government. As a matter of fact, the purchasers of these vessels openly boast in Sydney that they will have a “rake off” of £100,000. The Prime Minister (Mr. Hughes) need not think that his chuckling will answer this case. Unfortunately, the taxpayers are called upon to pay this money, and that is one of the reasons why there is such huge income taxation.
– How much did the Government pay for these vessels originally?
– The Government paid £2,273,039 for the fourteen ships, or £162,360 for each. This makes the cost of the five ships £811,800, and they were sold for £10,000, showing a dead loss to the taxpayers of this country, on these five vessels alone, of £801,800. A representative of a very large business firm, who was in the lobbies of this House yesterday afternoon, . quite accidentally mentioned that he had, on behalf of his firm, inspected the boilers on these ships with a view to a purchase, and that the price he was asked for one boiler was £2,500.
– Was that before the ships had been sold ?
– It was quite recently, after they had been sold to Mr. Sandoz. Who were the people who made these purchases ? The Government deem it inadvisable to give their names, but I propose to do so. When looking through the commercial newspapers in Sydney one often picks up stray information that proves handy, and I noticed an announcement of the registration of a company known as the Mercantile Marine Salvage Company Limited. I hopped along to the Registrar-General to see who the people concerned were, and what was the object of the company. I found that the company was formed to carry on business as metallurgists, builders, contractors, engineers, ship-owners, sellers of ships, and dealers in ships and shipping machinery. “ Dealers in ships and shipping machinery “ !
– There is nothing sinister in those words.
– Wait until you hear who these people are. This is no laughing matter for the taxpayers of the country; it is a matter that cannot be swept aside, and the Prime Minister will have to take notice of it. I have quoted from documents, and given solid facts; I am not relying on my own word, but on the word of the people concerned. The Prime Minister need not think he can dodge this matter by merely laughing; if he adopts such tactics he will laugh on the other side of his face before long. The following is a list of the shareholders: -
Sandoz, company manager, 88 Pitt-street, one A share; H. V. Chedgey, solicitor, 88 Pittstreet, Sydney, one A share; J. B. Lane, clerk, 88 Pitt-street, one A share.
I think we have heard of Mr. A. E. Barton very often before, and Mr. Sandoz is one of those fellows who get on to something good, and then proceed to promote a company, and induce an unsuspecting public to take up shares. The company was registered on 10th August of this year. [Extension, of time granted.] The shares are issued in A shares and B shares at ?1 .each. The capital is ?16,500, made up of 12,500 A shares and 4,000 B shares. On further inquiry I discovered that the man behind all this, the’ man who knows something of the value of machinery in ships, and has put his money into the venture, is Mr. R. Mallock, managing director, Dangar, Gedye, and Company, Iff Young-street, Sydney. This is a big machinery firm, and its head is the man who retains Mr. Sandoz as his agent to run about and pick up little unconsidered trifles, which are made the means of gathering in “ boodle “ for himself. This is the gentleman who obtained these ships for ?10,000 privately and secretly from the Government.
As to the reply of the Prime Minister, that an offer of ?11,000 has been received for these ships, I desire to quote from a letter written by the person who made that offer. It appeared in the Sydney Morning Herald of 22nd August this year, and wa3 as follows : -
Wooden Ships.
Mr. H. F. Roberts, of ArbitrationStreet, Circular Quay, in a letter to the editor, states that he entered into negotiations on 17th July with the officials of the Commonwealth Government Line of Steamers for the wooden ships, and was informed that the matter was entirely in the hands of the Prime Minister, and that an offer must be made. An offer of ?11,000 was made for the vessels, and officials were informed that business was intended, and that the buyers were prepared to increase their figure if necessary. On 14th August Mr, Roberts was informed officially that his offer was not accepted and that the vessels were sold.
That offer was made on 8th August, and in reply to my question, I was informed, on behalf of the Government, that the ships were sold on the 4th. It is the right of every person in the community to have an opportunity to tender in an open way when such goods are disposed of by the Government. There is no right on the part of the Government to sell valuable pieces of Commonwealth property, or any goods, in a private and secret way. In the first place, tenders were called, and an offer was received for ?15,000. That offer, however, was turned down because it was considered that it would be better to break up the vessels than sell them at the price. Then it was discovered that such a method of business would not pay ; but, instead of calling for further tenders publicly, the vessels were sold in the way I have described. Mr. Sandoz, the secret agent for those other people, could apparently get in touch with some one in the Department, and make an arrangement to purchase the vessels for ?10,000. In this way he was able, on behalf of his principals, to realize ?60,000 from the engines and boilers alone, and have all the rest of the property to boot.
– Have those people sold any of the machinery at the prices you say they are quoting?
– I cannot say whether they have or not, but of course they have only had the ships for a few weeks. The circular sent round by Mr. Sandoz is public, and the honorable member is as well able as myself to get the information. In that circular Mr. Sandoz says -
If you are considering the building of a vessel, we can fit you right out at very low prices.
Of course, Mr. Sandoz can do that, having purchased the vessels for ?10,000 -
We are getting out a catalogue in the next week or so, and if you are interested kindly advise us, and we shall be pleased to forward you one. In the meantime, we shall be glad to quote for any lines you may be in urgent need of. We will hold any lines required firm for a few days to enable you to inspect.
Honorable members know that it is part of my business to know engineering and shipbuilding experts, and I have interviewed ai person recognised as a leader in that line of business. I do not propose to give his name publicly, but will supply it in another way if necessary This person, after giving a similar description of the vessels to that given by Mr. Sandoz, says that the engines - not the boilers - are worth ?3,500 each. That is the opinion of a man who, if his name were given, would at once be recognised as an expert.
– If this machinery is worth ?60,000 it is very extraordinary that only ?15,000 was tendered.
– It is very extraordinary that the Government did not again call for tenders for the vessels. The reply to the Treasurer’s interjection is that the shrewd business men in the cities realized what a lot of muddlers the Government were in business matters, and knew that they could get the ships cheaply and make a good “rake-off.” The man who made the first offer of £15,000 did so in all sincerity, because he realized that if he could get the vessels at that price he would make a profit of many thousands of pounds. The expert whom I have already mentioned estimates the value of each ship at £20,000.
– But how often after one has sold something is he told the next day that somebody else would have given him twice as much?
– Whether or not the Government received the value, or less than the value, of the ships, the fact remains that the sale was effected secretly, and without giving other people an opportunity to tender. A tender of £15,000 was made months ago, and was accompanied by a deposit, but the offer was refused, and the deposit returned; then, without re-opening tenders, the Government sold the ships secretly. I need not labour the case ; the facts speak for themselves. The least that can be said of the transaction is that the Government have bungled, and I allow the public to draw their own conclusions as to whether or not there has been, in this affair, something worse than mere bungling and unbusinesslike methods. In order to give the Committee an opportunity of expressing its opinion on the transaction, I move the amendmentI have indicated.
.- As far as I can see the practice adapted by the party opposite is for each member in turn to move a motion of censure Itis to-day the turn of the honorable member for Dalley. I did not hear all that the honorable member said, but he seems to have done his work in a thoroughly satisfactory manner, and I think he should be given another turn. Let us look at the facts of this transaction. The honorable member said that it speaks for itself; I think it does. He said that, at least, there had been bungling, and he left the people to draw their own conclusions as to whether or not there had been something worse.
That can only mean one thing - that there has been corruption of some sort. I feel pretty sure that if the honorable member had any ground for making such a charge, he would have sheeted it home. I am sorry that he spoilt his case by an insinuation of that character, which I do not think was worthy of him.
– I certainly do not insinuate anything of the sort against the Prime Minister, or any member of the Government. I make that quite clear.
– Very well; I shall pass by the honorable member’s remark. He has had an opportunity to submit to the Committee a prepared case to which I am called upon to reply on the spur of the moment, and I know surprisingly little about it. I shall do the best I can.
– Did not the honorable member for Dalley intimate to the Government that he intended to submit this amendment ?
– No. If he had done so I would have had the facts looked up. I shall be as brief as possible, because the case really does speak for itself. First of all, I direct’ the attention of honorable members to the following question and answer reported on the 30th August (Hansard, page1716) -
– On 24th instant the honorable member for Dalley (Mr. Mahony) asked me the following questions: -
I now lay on the table of the House the following statement, which sets out the position of the matter:-
In July, 1921, the steamers were putup for public tender, when an offer of £15,000 was received for the five steamers. This offer was not accepted, as the Department of Works and Railways authorities intimated that they could probably dispose of the vessels to better advantage by dis mantling them and selling them piecemeal. Subsequently the Commonwealth Government Line transferred a great deal of material from these ships for the use of the Line.
The question of dismantling the vessels and disposing of them piecemeal was fully considered by the Commonwealth Department of Works and Railways, but in view of the great delay involved and the uncertain state of the market, was finally rejected as unprofitable.
The Commonwealth Government Line of ‘ Steamers management was asked to dispose of the vessels to the best advantage. The highest offer received was £10,000 for the vessels as they stood. One other offer of £11,000 was received after the steamers had been disposed of. This offer, however, was not a cash one, and furthermore stipulated that certain gear which had been taken out of the vessels should be replaced. This, of course, was impossible.
The Commonwealth Government Line authorities do not consider it advisable to disclose the names of the parties concerned.
That answer really covers the whole ground. I ask honorable members to endeavour to visualize the position, which may be best set out by a comparison with what happened with regard to the American wooden ships. On 25th May, 1922, there were tied up in America 244 wooden vessels of a total of 89S,251 tons. A very much larger number had been condemned. These 244 vessels were offered for sale by tender and in every other way, and I think I am right in saying that the best offer made for them, was in the neighbourhood of 2s. per ton; it may have been a few pence more. I invite the attention of honorable members to the fact that wooden vessels are a drug on the market, that they, are unprofitable to operate, the cost of maintenance being such that it does not pay to run them at the present time. We made several efforts to sell those we had, and the best offer we received was £15,000. The honorable member for Dalley contends that, even had that offer been accepted, the tenderer would have made a great fortune. -I cannot believe, and I am sure nobody else will believe, that five vessels which had been lying in Sydney Harbor month in and month out were worth a fortune, when nobody was prepared to pay more than £15,000 for them. I candidly confess that I was in despair over those ships, and one day I hired a boat and rowed round them myself to see what they were like. When we received the offer of £15,000 for the five in response to our request for tenders, the offer was rejected, the Works and Railways Department being of opinion that better results could be obtained by . dismantling the ships, and selling the engines, boilers, machinery, &c, separately. Mr. Farquhar, the manager of Cockatoo, was asked to submit a price, for dismantling them, and he said that the cost of dismantling would be so great as to make the work unprofitable; in other words, if we removed the engines and boilers and sold them and the hulls separately, we would lose money. The Commonwealth has another opportunity to gain a similar fortune. H.M.A.S. Australia will have to be dismantled, and honorable members may be surprised to learn that it probably will pay better to put a hole in her and let her drop into the ocean than to break her up for sale. It costs a lot of money to dismantle a vessel. As I have said, however, the Department of Works and Railways, whose advice we sought, recommended that we should not sell the wooden ships for £15,000, but should dismantle them. I consulted Mr. Farquhar, who advised that dismantling would not pay. I do not profess, as the honorable member for Dalley does, to be an expert in this matter. I did not know the value of those vessels ; I could only be guided by my experts. The ships had been running at a loss of £45 per vessel per day. We could not afford to continue that loss, and the ships were anchored in Iron Cove on the 22nd March, 1920. The best tenders came from Mr. Waugh and Mr. Miller. Mr. Waugh offered to buy any two vessels at £3,000 each, or £15,000 for the five steamers, and Mr. Miller offered £1,500 for the Berringa and £2,000 for the Berrima. There was evidently great difference of opinion as to the value . of the vessels. On the advice of the Department of Works and Railways, we considered the dismantling of them. It was thought by the Department at one time that the net proceeds from the sale of the machinery might be £33,000, but it was subsequently stated that conditions had materially changed, and it was unlikely that that sum could be realized in two years, thus introducing an element of risk making the proposal a speculation. Mr. Bingie says in a memorandum that it was pointed out to Senator Russell that the only sale for the hulls would, as far as could then be seen., be as dunnage. The DirectorGeneral of Works ‘advised verbally that he considered that the most satisfactory method of dealing with the vessels would be to take them to Cockatoo Island, dismantle them, store the engines in the shipyard, and moor the hulks. He said that both engines and hulks could then be disposed of piecemeal as opportunities offered. He suggested, however, that if any reasonable offer were received for one or more of the vessels it should be accepted. The correspondence from which I take this information followed on the offers by Mr. Waugh and Mr. Miller to which I have just referred. Mr. Farquhar, however, stated a price for the dismantling of the steamers and the storing of the machinery which would have left us no margin of profit. On the 31st March Messrs. Cameron and Sutherland offered £6,500 for the machinery and equipment of the whole five ships, the Commonwealth to pay tha cost of dismantling, which the Ship Construction Branch estimated at £5,750, so that we should have received only £750 for the five vessels had we accepted that offer; we consequently declined it. The secretary to the Ship Construction Branch wrote to the secretary to my Department informing him that the Board of Control was of opinion that the amount which would be necessary to carry out the work of dismantling the vessels was £1,150 each He said that the Board found it most difficult to place a value on the hulls, engines, and boilers separately at present day market values, owing to the fact, as far as it could be ascertained, that there was no one in the market at the present time for those particular items. It was considered, however, that the hulls should realize £700, the main engines and the auxiliaries £3,000, the boilers £3,300.. and the winches, windlasses, sundry fittings, £1,041 for each vessel.
But the cost of dismantling would have left us only £750. That was the position until early in June, when in a letter dated the 14th of that month, written to the secretary to my Department, Mr. Kneen, the acting manager for Australia of the Commonwealth Government lane of Steamers, enclosed a copy of a letter addressed to the Sydney omeo of the line by Mr. F. J. Sandoz, embodying an offer for the five vessels at £2,000 each. Mr. Kneen says -
This letter states that the offer is to remain open until 12 o’clock on 8th June, but I am advised by Sydney office that Mr. Sandoz has agreed to let the offer remain open till noon on 15th inst, (to-morrow).
I shall be glad to learn whether any definite reply can be given to Mr. Sandoz, or whether I must assume that his offer for the purchase of these vessels is declined.
As our inquiries about the cost of dismantling the vessels showed us that we should be worse off by dealing with them in that way than by selling them, we decided to sell, and I instructed my Department to try to get the first offer repeated. I asked the manager of the Commonwealth Line if he could use the ships ; and, as he said he could not, I gave him authority to sell them, which he did. This is what he wrote on the 20th July to the secretary ito my Department as to the prospect of getting another offer from the original tenderers: -
As a result of inquiries conducted through our Sydney office, I learn that there is no prospect of the original tenderers, as set out in my letter of 6th August, 1021, repeating their offer for the purchase of the five- wooden steamers.
Exhaustive inquiries in other directions have failed to disclose any prospect of obtaining any offer better than, or even equal to, that recently put forward by Mr. Sandoz on behalf of a syndicate to purchase these steamers for a sum of £10,000.
This offer was open for acceptance up to 15th June. It is not certain that the offer will still hold good, but as far as it is possible to ascertain, it is thought that the syndicate represented .by Mr. Sandoz could be induced to re-open the matter.
The prospects at present point to the improbability of disposing of these steamers at any better price than that offered by Mr. Sandoz, and I think this offer should be accepted, providing the tenderer is prepared to take the vessels at that figure as they lie at present in Sydney Harbor.
Writing to me on the 4th August, Mr. Kneen says -
As authorized by you through Mr. Deane, I took up the -matter with the only party now offering for these vessels, and endeavoured to obtain a figure in excess of £10,000. I much regret, however, this has been found quite impossible; and I have, therefore, closed the business to Mr. Sandoz for £10,000, 10 per cent, of which will be payable to-morrow in Sydney, and the remaining £9,000 by Thursday next. … I declined to give any guarantee whatever that the vessels or their gear would be duty free, but saw the Comptroller of Customs and his chief clerk, and eventually, late this afternoon, got a decision, in writing, from them to the effect that the vessels would be free of duty.
The agreement has’ just been signed, and I can only hope that the cash will be paid and the transaction carried through.
I repeat, again, that the party who offered £15,000 some time ago would not interest himself in the vessels at all, and another party in Melbourne, and one in New Zealand, evidently did not care for the business, and dropped same, so that we were left with only one man.
We had no option but to do what we did. Although the vessels were sold for much less than they cost, we got for them prices five or six times as great, per ton, as the Americans obtained for their wooden ships. It was the best price we could get. The ships were white elephants. Their day had passed. They were built to meet conditions created by the war. When peace came they were found to be a drug on the market. In their picturesque beauty they have lain in front of the honorable member’s door for many months, and he resents their being taken away. He has made it a personal matter. His neglectorate - I mean electorate; “ neglectorate “ was a slip of the tongue - will feel itself deprived of one of its chief charms now that they have gone. He has endeavoured to make out that they were of great value as well as of great beauty. But the honorable member has altogether failed to show that we could have done any better. I have said many times that these wooden ships were built as a war measure. They were amply justified by the war conditions; but it was a happy thing for us that the war ended soon enough to prevent the vessels paying. They have been sold at the best price offered. The honorable member said that they have been sold in a secret, private way. I do not know what “ a secret, private way” means. It is just like talking of “ a black dark place.” There was nothing secret about the matter. The transaction was carried through by the manager of the Commonwealth Government Shipping Line. My friend has said that he could see such life and beauty shining from the faces of my colleagues, that “ Corruption, cannot enter there.” But he inferred that it had entered somewhere else. Mr. Kneen, of the Commonwealth Shipping Line, has carried out the transaction, and has done so in a perfectly honorable as well as business-like way, endeavouring to do the best he could for the Commonwealth. I ask the honorable member for Dalley not to accept in future statements made by interested men who write letters to him at times ‘like this, when, in normal circumstances, they would not dream of addressing any communication to him. They say that they are disappointed, and it is alleged that they were going to make money. I do not know whether they were or not, but I think we are fortunate in having sold the vessels. I was horrified when I first got the offer of £15,000 for five vessels, and I declared that I would sooner see them sunk in the harbor than sell them for that price; but time has blunted the keen edge of my grief, and I have come to see that this is a hard world. Therefore, I have been glad to accept the offer of £10,000 with more satisfaction than I evinced when I spurned the offer of £15,000 only a year ago. Times have changed, and the market has altered for the worse. I hope that the honorable member is satisfied with having done his duty. We have done ours.
– The only gleam of satisfaction in this whole rotten matter isthe fact that at last we have got rid of these wooden ships. But the Prime Minister has not putthe position clearly in saying that these ships have failed because they are wooden. In Port Phillip or Sydney Harbor at any time one can see magnificent wooden vessels visiting Australia from other countries. The real fault of the ships just disposed of was that they were so rottenly constructed that no one would buy them. It was their inherent rottenness that was at fault. One of them went to Hobart to load cargo, but after it had taken in a few tons it was found to be unsafe to put any more cargo into her. The water was pouring in. The construction of these vessels was the biggest blunder the Prime Minister has made. He alone was responsible for ordering them. I believe that he ordered them when he and his SolicitorGeneral were on their way through America to England.
– That is not so.
– Then when did the right honorable gentleman order them? We have never been able to ascertain who ordered them.
– The Government ordered them.
– But they were ordered after the right honorable gentleman had left Australia.
– That is not so,
– Then when were they ordered ?
– They were ordered while the honorable member for Balaclava (Mr. Watt) was a member of the Government, and they were ordered by the Government.
– I am not interested in the honorable member for Balaclava in connexion with this matter. What I want to know is, who drew up the contract, and who was responsible for taking delivery of rotten ships ? When the first boat left Seattle to come to Sydney the pumps had to be kept going full time to keep the vessel afloat, and when she was put in dock in Sydney for repairs the caulking iron went right through the timber. Flanks had to be nailed behind so that the caulking could be undertaken properly. I have never succeeded in ascertaining who was responsible for taking delivery of boats which were floating sieves, and which should never have left port, because they were not safe to go to sea in.
– The five vessels referred to by the honorable member for Dalley (Mr. Mahony) are in a seaworthy condition to-day. They are good vessels.
– I am speaking from memory, but I believe that one of them is the ship that went to Hobart, and had to be taken away practically unloaded because the water was pouring into her so fast. What was the subsequent procedure in regard to not only these particular ships, but others? A certain number of them were leased to God knows whom. As the honorable member for Dalley has pointed out, they were taken away to run a certain amount of cargo, and, if I am correctly informed, when the people who had them had used them they not only refused to pay the Commonwealth Government for the charter of them, but also absolutely declined to pay the wages of their officers and crew. In fact, the Commonwealth had to pay these men their wages before they could assume control of their own vessels. That was the sort of firm to which the Commonwealth, or whoever were responsible for the control of the vessels, had leased them. No deposit was secured: There was no lien upon these people. The lessees simply walked out, and left the wages of their seamen and officers unpaid.
– Were the vessels under a regular charter?
– The charter was so “ regular “ that the Government got nothing from them, and had to pay away money before they could regain possession of their own vessels, some of them at the time being in foreign ports.
Although these vessels were unseaworthy and practically useless for the purpose for which the American contractors had contracted to build them, it cost the Commonwealth Government £250,000 to meet an action brought against them by the contractors before we could get out of the contractors’ jaws. We have not had a proper explanation of these matters, and we certainly ought to know who is responsible for taking delivery of faulty ships. One of them came to Melbourne, and had practically to be replanked.
– If they were good ships, why should we not have got a decent price for them?
– It was not because they are wooden vessels that we did not get a good price for them. In any Australian harbor any day magnificent wooden vessels can be seen trading here from Canadian, French, and Swedish ports. Therefore, it is not putting the case correctly to say that these boats have failed because they are wooden. They have failed because those who took them over were responsible for taking over totally rotten ships that were not seaworthy and are unworkable. No one in his senses would give anything like a fair price for them for use as sailing vessels.
– After all, they are better ships than the wooden vessels built in Australia. According to all accounts, those built by Kidman and Mayoh are pretty rotten.
– They are the worst work I have ever seen in or out of the bush.
– Those are some more of the Prime Minister’s beautiful chickens. Who was responsible for the Kidman-Mayoh contract?
– I can tell the honorable member. I can refer him to his own speech, which he has probably forgotten.
– I know what the right honorable gentleman is referring to. I can tell him what happened. In the early days of the war I came to Melbourne, and saw Sir Joseph Cook, and subsequently the Prime Minister, suggesting that they should build three or four vessels, with compound Diesel engines, of about 1,000 tons or 1,500 tons each, for the Inter-State trade to replace the vessels which had been taken away from that trade. If my. advice had been followed, the vessels so built would have paid for themselves very speedily, and, more than that, they would have lifted produce that was rotting in. the ports of Australia at a time when we were down on our knees asking for ships.
– And they were all to be built in the electorate of. the honorable member.
– I tell the Deputy Leader of the House (Mr. Greene) that the statement he has made is just as correct as the ordinary statements he makes in this House. The yards of the suggested contractor are in Devon - port. In Tasmania there is timber eminently fitted for the construction of the most durable of vessels. One vessel built in that State is known to be eighty years old, and the timber in her is as sound to-day as when it was put in; and my complaint against the Prime Minister (Mr. Hughes) is that when he refused to build suitable Commonwealth vessels of Australian timber, which would have endured from forty to fifty years, he gave an order for vessels constructed of Douglas pine timber ororegon, the life of which in a ship is no more than eight years at the very outside. There is not an insurance company in Great Britain which would insure Douglas pine ships for more than that period. The Government paid £108,000 for these Commonwealth wooden vessels, and they were taken over in arotten and unseaworthy condition. We have never been able to find out, up to the present time, how it happened that the boats were accepted in the state they were. They were damned before they reached Australia, because the pump had to be kept going all the way to keep the new ships afloat. The Prime Minister may laugh, but what I say is correct, as he may ascertain if he is interested enough to consult the records of the Department. He will find out how much it cost to re-caulk a boat in Sydney, and to re-plank another in the Yarra. The right honorable gentleman has admitted to a cost of £45 a day being incurred here; and why? Because the boats could not be loaded up to. their carrying capacity. These boats were floating sieves, and never were seaworthy. Some honorable members may regard it as a joke that, owing to the blundering of the Government, we gave £108,000 for ships which were subsequently sold privately for £2,000 each. I do not know Mr. Waugh, but he appears to be a reputable commercial man of Sydney, and he declares that he offered the Government £3,000 each, or £15,000 for the. five ships, and that they were sold to others for £10,000 without his knowing anything about the sale. The statement is made that certain fittings were removed from the ships. If the list, as read by the honorable member for Dalley (Mr. Mahony), is right, that would not materially affect the selling price of the ship.
– It did not affect it at all.
– I take that statement as correct, and I say that Mr. Kneen, the officer of the Commonwealth Line, ought to be asked a very distinct question. He ought to be asked why he did not call for tenders on the second occasion, when there was only one offer. Mr. Kneen states that this other man, Mr. Waugh, was not interested, but Mr. Waugh says that he was, and was prepared to buy.
– Mr. Kneen says distinctly that the other man would not entertain the idea again.
– The other man says that he did not know anything about the sale; and I regard this as very important. 1 am not imputing any im-. proper motives, but here we have a transaction involving the considerable sum of £15,000.
– It is very hard to follow the honorable gentleman’s argument, in view of the fact that he says the ships are rotten.
– I believe that the hulls are rotten, but I am informed by experts that the engines are first class. The question that this House should have answered is whether Mr. Kneen endeavoured to sell those ships to the best advantage, and, if so, why he did not call fresh tenders, seeing that he had a tender of £15,000 and he was prepared to sell for the £10,000. This Government and Parliament, rightly or wrongly, are carrying on certain business concerns. If there is anything that will injure the trading activities of the Government it is a belief that the men who are responsible will not take the trouble to go thoroughly into the business and see that public tenders are called when material sales are being effected. If we are to keep the public life and the Public Service absolutely clean, it is necessary that all big Government sales and purchases shall be absolutely by open public tender without any private arrangements. This sale is a matter that has not yet been cleared up. Mr. Kneen has said that the man who made the offer of £15,000 was interested no longer when the sale was made for £10,000. How did Mr. Kneen know?
– He ascertained from the man himself.
– The ordinary business method would have been, at least, to communicate with the highest tenderer, and ask him if he was still prepared to buy at the price of his tender. Was that done?
– Yes; Mr. Kneen says so in the document I read.
– It did not appear so to me. Does Mr. Kneen state as a fact, or as his own opinion, that the highest tenderer was not then interested? The honorable member for Dalley has produced a file which he says is a complete record of the communications between Mr. Waugh and the Department in regard to this transaction ; and there is no such document as that referred to on it. The House and the Government ought to know whether such an offer was made to Mr. Waugh - whether Mr. Kneen communicated with Mr. Waugh and asked him if he was still prepared to give £15,000.
– He says he did.
– I did not so understand.
– The file has gone now; but that is what I read.
– I was listening as closely as I could to the Prime Minister, and what I understood to be read was a report by Mr. Kneen, in which he stated that the gentleman who had previously made the highest tender was no longer interested in the proceedings. Mr. Waugh declares that he was not communicated with; and the point ought to be cleared up. If there is a letter from Mr. Kneen to that effect it ought to be produced in order to clear Mr. Kneen.
– If it were in existence it would be produced. .
– The report read by the Prime Minister certainly did not say that Mr. Kneen or anybody else had so communicated with Mr. Waugh. Mr. Kneen, for all we know, may have got his information from Mr. Sandoz. If Mr. Kneen did not communicate with Mr.
Waugh, then the whole procedure is most unsatisfactory.
.- Although the Prime Minister was absent during the first portion of the speech of the honorable member for Dalley (Mr. Mahony), the right honorable gentleman has corroborated all that the honorable member said - in regard to the details both are agreed. The question, therefore, narrows itself down to the particular point whether the method adopted for the disposal of these vessels was abusinesslike one - was it business-like in accepting the advice of Mr. Kneen in regard to the disposal of the ships ? For a considerable time past it has been found necessary for the public Departments to invite tenders for the purpose of obtaining supplies, and it is deemed proper in all such transactions - whether for the buying or for the disposal of goods - to invite tenders, so that it may be ascertained exactly what terms the public are prepared to offer. In the present case it is admitted that no tenders were invited on the second occasion. There is evidence that some months previously to the sale of the ships, tenders were invited, and that at that particular time Mr. Waugh offered £15,000. The point raised now is whether Mr. Kneen, in advising the Department, again approached Mr. Waugh.
– I say that Mr. Kneen says he did, and that is all I know. I shall make inquiries during the lunch hour.
Sitting suspended from 1 to 2.15 p.m.
– The debate has narrowed itself down to a question as to whether or not the Government acted in accordance with strict business principles when they accepted an offer of £10,000 for these boats without submitting them to public tender. The honorable member for Dalley (Mr. Mahony) charges the Government with maladministration in that regard. Each one of these vessels cost the Commonwealth originally £162,000, or a total of £811,000, and one wonders why they should be disposed of for £10,000. The Prime Minister has stated that, according to reports received by him from responsible officers, it would not pay to dismantle the ships, and on that account the Government sold them complete. He also said that, according to a report which he had received, all that the Commonwealth could hope to get for the five boats, if they were dismantled, was about £3,921. Such a report should have caused the Department to be very wary, because if the Government could only get £3,921 by dismantling the boats, how could another person expect to make a profit if he paid £10,000 for them, and had to bear the cost of dismantling and selling the machinery and other parts? It is very evident that the Government received some advice which was not very satisfactory, and that there has been a lack of business capacity on the part of somebody. The Prime Minister admitted that, when the vessels were put up for public tender some months earlier, an offer of £15,000 was received ; but, after a certain time, the offer was refused, and the deposit returned. Then, after a report to the Prime Minister in regard to the necessity for selling the ships whole, instead of dismantling them, the Government suddenly decided that the vessels should be sold through Mr. Kneen. The point at issue is - Why did not the Government insist upon fresh tenders being invited ? The Government cannot afford to play in a loose and ready manner with public property that cost over £800,000. The Prime Minister said that he was guided by the report of Mr. Kneen, of the Commonwealth Shipping Line, but that gentleman did not say that he had inquired from other people what they would be prepared to pay for the vessels.
– He did make inquiries.
– Even if he did, that does not absolve the Government of responsibility for having disposed of Commonwealth property without inviting public tenders. If that had been done, the Government would have known where they stood in regard to these vessels, and the transaction would have been carried out in a proper way. When they allowed a couple of individuals to place a value upon the property, and dispose of them for that amount, they landed themselves in difficulties, and did an injustice to the people of the Commonwealth. Would any honorable member conduct his own business affairs in that way ? If he had no use for an article, would he accept any offer that was made for it? It appears, from the statement made by the honorable member for Dalley to-day, that the purchasers of the ships are now hawking the boilers and engines throughout Australia, and are asking for £3,000 each for them.
– They may be asking that price, but they have not sold one.
– That is more than the honorable member can say.
– The honorable member cannot say that they have sold any engine for £3,000.
– No; but an expert of high standing, whose name the honorable member for Dalley is prepared to give in confidence to Ministers, has valued the engines at £3,500 each.
– And still the engines are being hawked.
– Did the honorable member ever know of a person not having to advertise the wares he has to sell ? Every man has to advertise to the public an article which he wishes to sell.
– If it is good property, the vendor has not to hawk it.
– Before an article can be sold, it must be offered to the public, and we have heard a complaint that certain boilers in Newcastle are for sale at less than they cost. Now the purchaser of the five wooden ships is offering the boilers from them for £3,000 each. If, as an expert says, they are worth £3,500 each, and there are two engines in each vessel, the total price the vendor will receive will be £35,000 for the machinery alone. Will anybody say there is no value in the ships apart from the engines and boilers?
– The vendors have first to dismantle the ships, and, according to the statement we received., after receiving £33,000 for the boilers and engines, there would be a profit of only £750.
– Does the right honorable gentleman really believe that anybody would pay £10,000 for those vessels if there was to be a profit of only £750 in them ? Business men are too shrewd to do anything like that. There is money in this transaction.
– And risk, too.
– I do not know that there is very much risk. It is a significant fact that a company for the purchase of the vessels could be formed and registered immediately. Surely the shareholders must have believed that they wouldmake some money out of the deal. Those men are keen speculators, and they know a good thing when they see it. They are how offering the engines and boilers to the public at prices cheaper than those quoted elsewhere. I can well believe that. Honorable members who have spoken have said that first-class double Diesel engines are worth a good price at any time. The price which the vendors are asking is very much below the original cost. Therefore, any person requiring an engine or boiler will purchase from these people. But the fact that they are for sale must first be made known by circular and otherwise. It is idle to sneer, as some honorable members opposite have done, about the engines being hawked. They must first be offered to possible purchasers before they can be sold. We, in this House, can only ventilate the matter by bringing it forward in debate. After all, it is a mattei that concerns the general public, and I do not. think anybody would defend the conduct of business in the manner of which we have complained. In connexion with all supplies for Government purposes, we have established a Tender Board, in order to insure that goods will be purchased on business-like lines, and so prevent wrong-doing. Yet, in connexion with the sale of Government property that cost over £800,000, the Government agreed to a private sale for £10,000, without inviting public tenders, but acting merely on the advice of one officer of the Shipping Line, against whom I say nothing. Business men and the public generally will come to the conclusion that that is not the proper way of disposing of valuable public property. Irrespective of whether or not the ships were seaworthy, the fact remains that they cost over £800,000, and were sold for £10,000 without tenders being called for. We have been told what the engines and boilers are worth; there must be some additional value in the hulls. Nobody will say that the timber is rotten. Although the ships may have been leaking, there must be a lot of good timber in each ship. Therefore, the breaking up of these vessels should return a large amount of money, apart from the amount obtained for the machinery. The Government have not shown business capacity in connexion with this deal. They should have called for public tenders, and then they would have known what the different parties interested were prepared to pay for the vessels. The Government acted wrongly in disposing of the ships without calling for tenders, and I think the honorable member for Dalley has made out a very good case.
– This matter has been threshed out at considerable length, and I rise only to deal with the point raised by the Leader of the Opposition. He said that the Government should have called for tenders; that ships which cost £800,000 were sold for £10,000, and that the purchasers would make a great deal of money out of them. I ask honorable members to look at the facts. Months ago we called for tenders for those vessels, which cost £800,000, and we received two tenders - one tender of £3,000 per ship, or £15,000’ in all, and another tender of £1,500 for, one ship, and £2,000 for another. Those were the only offers we received from all the shrewd, business men throughout the Commonwealth who were looking out for a good bargain. Therefore, we may take it for granted that the value of the ships to a business man is somewhere between £1,500 and £3,000 each. We have exhausted the possibilities of the market, and have ascertained the views of the business men of Australia. . The honorable member for Hunter (Mr. Charlton) now says that the firm which has bought the vessels is offering the boilers and engines at £3,000 each. Officials of the Works and Railways Department valued the engines and machinery, and advised that by dismantling them the Government could get £33,000. It was ascertained, subsequently, however, that the cost of dismantling would leave a net profit of only £750. With respect to that lastmentioned figure, I have sent for the papers again in order to assure myself that I am not in error; but I can say that if my estimate of the net loss is not exact it is, at any rate, not far out. The honorable member for Dalley and the honorable member for Hunter have said, in effect, “You could have got £15,000 from these people. They were ready to buy.” I shall now give the particulars as supplied to me by Mr. Kneen, Acting Manager for the Line in Australia. From the correspondence which I shall read, honorable members will see that Mr. Waugh was again approached, and asked if he was inclined once more to offer £15,000, but that he intimated that he was not. The following is a communication from the Acting
Branch. Manager in Sydney to the Acting Manager for Australia. It is dated July 18th: -
In response to your telephone advices we telegraphed you as follows : - “Jones (one of the officials of the Sydney branch) interviewed Waugh personally first paragraph composed on Waugh’s statement. New Zealand inquiry received to-day for inspection five vessels, which takes place tomorrow, when we will telegraph. Inquirer’s name not disclosed unless first inspection satisfactory.”
From which you will gather that our Mr. Jones interviewed Mr. Waugh personally, and, in addition, he has been making diplomatic and exhaustive inquiries on the waterfront with regard to the possibility of getting rid of the five wooden vessels at a satisfactory figure.
In the course of his investigation he learned indirectly from another director of William Waugh’s company that it was not the intention of the company to again go into the market for the vessels. This gentleman (Mr. Baker) gave the reason for his opinion as the fact that most of the gear had been removed from the vessels in question, and they were, therefore, of much less value than when the original tender was placed.
We have gathered that it was Waugh’s intention to dismantle the vessels and trade the gear and fittings to ship-owners trading into this port, second-hand. This position is rather difficult to handle inasmuch as we have not yet definitely found out who comprised the syndicate which Mr. Sandoz represents, and, therefore, all inquiries, even in the case of Mr. Waugh himself, had to be done in a very indirect way.
It is very evident from the particulars contained in this letter, that we did not know whether Sandoz was not Waugh under another name. The letter continues -
With regard to the last paragraph of our telegram, Mr.H. F. Roberts, a reputable broker of this city, approached us on behalf of a New Zealand client who, we understand, is in Sydney, and we have given him permission to inspect the vessels to-day, and on completion of this first inspection, if same proves satisfactory, he will give us fuller information of his principal, and if there is any room for negotiation we will carry same on with the principals direct.
We are hopful of being in a. position to telegraph yon this afternoon the decision arrived at after the first inspection is made by Mr. Roberts’ client.
There are the three transactions, placed in juxtaposition. There was the original £15,000 offer, which definitely determined that the value of the vessels, in the opinion of competent business men, was, at the highest, £15,000. The value, according to another firm tendering at the same time, was £1,500 for one vessel. Time elapsed, and we did not sell at £15,000 because of the advice received from the Department of Works and Railways that more would be obtained if the vessels were dismantled; in such circumstances the value of the boilers and machinery was indicated as being in the neighbourhood of £36,000. We ascertained later, from Mr. Parquhar, however, that if the ships were dismantled the net return would be merely £750, or thereabouts.
Now I come to these later offers, of which there are two. The one is for, £10,000 on the part of Mr. Sandoz. The other is an offer, or, rather, a request to inspect by Mr. Roberts on behalf of an unknown principal. And, lastly, I shall deal with the report of our agent to the effect that he had interviewed Mr. Waugh and a codirector, and had been assured that that firm did not intend to go into the market again for the vessels. Those statements are quite definite, and dispose of the suggestion which has been made that we could have done better, that is, that we could have got £5,000 each. No one has suggested that we could have got more than that per steamer.
– Was it Mr. Baker, of Waugh and Company, who was interviewed by the Sydney agent of the Line ?
– Yes.
– And was he the man who gave your agent the information regarding Waugh and Company?
– Yes. He reported that he learned indirectly from another director of William Waugh’s Company that it was not the intention of the company to again go into the market for the vessels. But Mr. Jones, of the Sydney branch of the Line, also interviewed Mr. Waugh personally. Had the Government elected to sell the vessels some months ago we could have got £15,000, but no more. We were advised that we could make more by dismantling them. I, personally, was. against selling them for £15,000, and I readily accepted the advice of departmental officials that they should be dismantled. Mr.Farquhar was called upon to give an estimate of the cost of dismantling, and he reported that it would be so great as to leave only a negligible return.
A further period of time elapsed. I then gave Mr. Kneen instructions to try to dispose of the ships at the best figure he could command, and to again approach the party which had offered £15,000.
This he did. I emphasize that it was ascertained directly from Mr. Waugh, and from a co-director, that the firm was not in the market. Mr. Roberts, the reputable Sydney broker, who has been referred to, then approached our Sydney branch on behalf of an undisclosed New Zealand principal; but, after making his inspection, he did not put in his offer - which, by the way, was for £11,000 - until after the sale had been negotiated. Now, here is the position: There was first an offer at £15,000 ; then there was an offer, which came too late, of £11,000 ; and there was a definite acceptance of £10,000. Thus, we have run the whole gamut of possibilities. In the circumstances, we have done all we could have done, and have performed it in a businesslike way.
I repudiate the suggestion that all business is carried on by tender. Of every £100 worth of business done in the commercial world, £95 worth of it is carried on other than by tender. Perhaps £98 worth of it is done in the ordinary way, that is to say, by bargaining between principals or their agents.
No doubt, £10,000 is a very small return for those ships; but we have done very much better than the American authorities. Wooden vessels are a drug on the market. I shall say nothing of the comments of the honorable member for Franklin (Mr. McWilliams), because his ideas are perfectly absurd. His conception of the position is ludicrous. During the war millions of tonnage was sunk; yet the honorable member for Franklin actually came forward with the advice that the Government should build four £1,000 ketches in order to save the Empire from the effects of the submarine blockade. If we had done that, said he, all would have been well. As I say, the honorable member’s idea is too ludicrous for words.
As for the comment that these Government vessels were rotten, they have certainly been lying in the Bay for months. They were not leaking when they were first moored. If they were taking in any water the authorities of the Commonwealth Line would have known. It is not my business either to laud or to defend the transaction. It was a business deal, and it is a good thing for us thatthe vessels have been sold. They were good vessels, but they would not pay. That, however, is not unusual; for, to-day, more than 10,000,000 tons of steel shipping is lying idle. The Americans alone have close upon 6,000,000 tons of steel vessels in idleness. They could not get an offer of any kind whatever. On the whole, therefore, we have done very well. Although I regret that we could not have got more, we have cut our losses, because these vessels were a loss to us and were becoming a heavier loss every day. Despite the assurance of honorable members opposite that the purchasers will make a great deal of money over the deal, I shall be surprised to learn of their making very much at all. If they get out of their transaction on the basis of a reasonable profit, after having taken all the risks, I am of opinion that they will be rather well satisfied. At any rate, the Government have acted under the best advice obtainable, and have adopted the best course which they could have fol- lowed.
.- The Prime Minister has told us that the Government have done the best they could to dispose of their wooden ships, but to my mind his explanation of the negotiations was not convincing. Indeed, he exposed the weakness of the position when he said that the possibilities of the market had been exhausted when the first three tenders were received. A private individual having something of value to sell does not consider the possibilities of the market exhausted when he has received only one or two offers; and, if the sale of these ships had been conducted in a proper, business-like fashion, we might have got more for them. I have risen, however, chiefly to refute a statement madeby the right honorable gentleman just before the dinner adjournment, to the effect that wooden ships were not satisfactory in themselves; that it was in their nature to be faulty, and that when their immediate purpose was fulfilled, they had to be sold as so much rubbish. The shipbuilding experience of New South Wales disproves that, and the slight which has been put on the industry throughout Australia and upon the reputation of our timbers should be removed. At Terrigal Haven, near Gosford, wooden ships were being built sixty years ago, and they long withstood the buffeting of the waves while engaged in the coastal trade of New South Wales; indeed, some of which may still be in service. I know that one of them was being used a short time ago. Blackwall, near Woy Woy, is within my electorate, and since I have been in this Parliament, small vessels have been built there for coastal work. I am not expert in shipbuilding, but I know that these vessels will last for many years. The wooden vessels built for the Government by Messrs. Kidman and Mayoh were a disgrace to those who built them and to those who supervised the building of them. Timber can be procured in Australia which is eminently suited for shipbuilding, and we have good shipbuilders. I am informed by representatives of Western Australia that some of the timber in that State has been used in ships which have done service for more than eighty years. Tasmania, New South Wales, and the other States have also good hardwoods. It is a pity that the Prime Minister, in trying to clear himself of blame in regard to the disposal of the Government’s wooden ships, depreciated the value of our timbers and the workmanship of our shipbuilders. I rose to vindicate the reputation of both, and to express the hope that it will become more widely recognised that we have not only suitable timbers for shipbuilding, but also capable shipbuilders.
Question - That the amount be reduced by £1 - put. The Committee divided.
AYES: 15
NOES: 29
Majority … … 14
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
.- As I shall be absent from the sittings of the House for some time on a parliamentary inquiry, I take this opportunity to state my views on certain matters connected with the financial situation of the country, and the general conduct of Ministers, not only during recent months, but for the whole period that they have been in office. No Government has ever appealed to the country, or is ever likely to do so, with a more unenviable record than the present Commonwealth Government possesses. Unless the electors still remain as credulous as they have been in the past, accepting without verification the statements made by Ministers in the attempt to justify maladministration and unbusinesslike methods, disaster must overtake the Ministry. I wish also to draw attention to the apparent inconsistencies in the behaviour of many of the supporters of the Government; Even the right honorable member for Balaclava (Mr. Watt), the alleged “ strong man,” is not immune in this respect. Last night I enjoyed the privilege of listening to his very able discussion of the financial proposals of the Government. He was quite right in his severe criticism of them, and of the action of Ministers in endeavouring to make it appear that the financial position of the country is much better than it is. But while the right honorable member censured Ministers for the uneconomical administration of their Departments, he himself, as late as yesterday afternoon, declined to vote for a judicious and wise economy which many members desired to enforce.
– What was that?
– I refer to an amendment which was proposed when the Government’s scheme of compensation to the officer class of the Defence Department was under consideration. That honorable member’s conduct in this matter shows what a servile following the Go vernment have, absolutely without exception.
– Fancy a member of the official Labour party talking about servile followers !
– There is no party with a following so servile or amenable to discipline as that which supports the present Government. In recent months we have had it revealed to us that, although the Ministry have been criticised for misgovernment and’ maladministration, a few effective reprimands received in an upper room of this building where the Nationalist party Caucus meets have brought everyone to heel, and honorable members have been told very clearly that, unless they are prepared to support the Prime Minister in the policy he has enunciated on behalf of the Government, their candidature will not receive the indorsement of the National party and their electioneering funds will dry up.
– There is not a scintilla of truth in that statement.
– The honorable member must withdraw that statement.
– I withdraw it, and say there is not a scintilla of foundation for the honorable member’s remark.
– I could give some very interesting information about the honorable member for Kooyong, and have only to remind him of his own experience at the beginning of this session.
– Has he also a past?
– Yes, but not a promising future. I am afraid that he is no different from some other honorable members who have had a long experience here. He has a record. I think that I have been a sufficient time in the House to review the records possessed by some honorable members.
– The honorable member must not continue speaking in that strain.
– What I am saying materially affects the issue, because I desire to have the custodianship of the Commonwealth finances placed in the hands of men who will take care to see that the public welfare is conserved, and is not subordinated to private enterprise, as has been the case while the present Government have been in charge of the affairs of the country. On most occasions they have endeavoured to cloak their actions under the cover of war emergency or patriotism, and in this way have sought immunity from the responsibilities that were rightfully theirs. When we recapitulate the various scandals which have been revealed in this Chamber, such, for instance, as those connected with the Wireless Agreement involving £500,000, the purchase of wooden ships involving another £801,000, the Kidman-Mayoh contract bestowing approximately £50,000 upon favoured friends of the Government, and the compensation to South Africa necessitated by the shipment of inferior flour which was responsible for another £32,000, and realize that in the last-mentioned case we have not been able to ascertain who have been directly responsible for incurring the liabilities that have fallen upon the Commonwealth, because the Government have been prepared to hide their friends who provide the electioneering funds from exposure, we can readily see that it is time the public did their duty and removed from the Treasury bench a Government who are so indifferent to the public welfare, and so willing to subordinate it to private interests. I want the public to know the extent to which they have been committed to heavy expenditure in these matters.
The Treasurer has an idea of relieving the people of Australia from certain taxation, but it is well to make it clear that the relief in question is not to be given to the people who are most deserving of it, and is to go to those who do not require it.
– Evidently the honorable member objects to the raising of the income tax exemption.
– I do not. I contend that the proposal is not sufficiently generous to those on the lower scale, and is exceptionally generous to the more wealthy section of the community. Last evening the honorable member for Balaclava intimated that one-fourth of the taxpayers in Australia paid four-fifths of the taxation of the country.
– It is only fair to say that the Government’s proposal will exempt the basic wage.
– But the basic wage does not providefor even a reasonable form of comfort. It is merely the wage of existence. However, the figures given last night by the honorable member for
Balaclava prove the inequitable way in which the wealth of this continent is distributed. Although only one-fourth of the taxpayers may be contributing fourfifths of the taxation of the country, it is the great bulk of the people of the continent, persons receiving the basic wage or slightly more, who are enriching that fourth of the taxpayers, and affording them the opportutnity of accumulating that wealth which obliges them to pay four-fifthsof the taxation of the Commonwealth. The proposed treatment of those who are lower down in the economic and social scale of life is not nearly as generous as that afforded the wealthier sections of the community. The honorable member for Kooyong (Sir Robert Best), speaking at a meeting of the Women’s National League on 21st August of this year, emphasized the urgency of the Treasurer’s taxation proposals to relieve the commercial interests. I understand that the Treasurer intends to take £3,200,000 from the accumulated surplus, from which we provide for old-age and invalid pensions. If this fund is to be used, it should be to provide increased pensions to the aged and those unfortunately circumstanced as invalids. However, dealing with the question as is proposed, the raising of the income tax exemption from £156 to £200 will give an advantage of something like £600,000 to those who will benefit by it, while there will also be a further relief of £100,000 from the proposed amendment of the Entertainments Tax Act, but that is about the full extent of the relief proposed to be given to those on the lower scale of life .
– The Treasurer could not have given them much more relief than hehas proposed to give.
– I shall tell the honorable member how the Labour party would relieve those who are required today to live on what is known as the basic wage, or on something very little better than that. I was saying that, out of the £3,200,000 which the Treasurer intends to take from the accumulated surplus the working classesare to get relief to the extent of about £700,000. It is evident that the difference between that £700,000 and £3,200,000 is to be devoted to the relief of the big landed, commercial, and financial interests.
– That is not so. In any case all will share in the 10 per cent. re duction of the income tax, and in the advantage to be gained by the removal of the duty on wire netting.
– I fail to see how those who are to receive consideration from the raising of the exemption to £200 will share to any appreciable degree in the advantages to be derived from the 10 per cent. reduction or the removal of the duty upon wire-netting.
– They will be relieved from the payment of income tax altogether. I fail to see now they can be entitled to any more.
– The Treasurer does not correctly state the position, and the worker taking comfort from his assurances will have a very rude awakening. The Labour party propose an exemption of £200 from income taxation upon the earnings of the husband, an additional £100 for the wife, and anadditional £60 for each child under sixteen years of age. That proposal would be far more generous than that put forward by the Treasurer, and would make a great difference to the distribution of the advantages of the exemption from income taxation. Although the workers are, as I have stated, to be relieved in some small measure, they represent the great majority of the population, and what they may receive in one way is taken away in another. Indeed, at the present time they are called upon to pay unjustly in a certain direction, though, perhaps, it would not be proper for me on the present occasion to discuss a question which is now the subject of inquiry by a Committee. To be quite candid, however, it does seem to me that the people of Australia are now being called upon to pay an amount approaching half-a-million. of money in respect of a commodity that is in universal demand, and the most of that is contributed by the working community. It would be well for the workers, and the people generally, if they determined to no longer be deluded by this Government - if they realized that they are being offered exemptions on the one hand, and, at the same time, are called upon to pay a very substantial proportion back into the coffers of the Treasury by an extra charge on a necessary commodity. It will be seen that the advantage offered by the Treasurer is quite a fictitious one.
It should also be realized by the people of Australia that our financial welfare is being seriously menaced by our com- 1mitments in respect of interest. Instead of our obligations in this regard being lightened in any way, we find a steady growth of those commitments, and, unfortunately, the greater part of the burden has to be borne by the labouring classes. Last year our interest bill for war services, payable out of revenue by special appropriations, amounted to £18,075,693, while this year we have it estimated at £18.423,137, an increase of 6347,444. I wish, also to make it clear’ that there is a reduction in the case of the sinking fund, and this I regard as a very serious circumstance. To exempt the wealthy classes from taxation, and to continue to incur obligations which posterity will have to meet, is a policy that we cannot countenance or sanction. Honorable members, whether in the party room or in the House, should endeavour in every way possible to put the financial position of this country on a more sound basis than it is at the present ime.
– Can you suggest anything ?
– Yes, a more effective and complete control of banking operations, affording complete power and management of national credits. I think the honorable member should also pay a fair proportion of taxation. Those who, like himself, have been favoured by fortune could help to lighten the burden which we are passing on to our children, and it is their duty to do so. No Government that has held the reins of administration has shown a higher standard in their conduct of the affairs of the country, especially from the point of view of high finance, than have the various Labour Governments that have held office. No Government that preceded or succeeded the Fisher Government of 1910-13 can show such, a record as stands to the credit of the latter Administration.
To the honour of the Labour movement, which it is my privilege to represent, it has never been associated with any form, of scandal, maladministration, or unbusnesslike methods. Whether in power or in Opposition the Labour party has always shown a clean record, and it will certainly, receive that consideration it deserves at the hands of the people when an appeal is made to the country. On the other hand, the present Govern- ment have seriously prejudiced the influence of the Commonwealth in the councils of the nations, and it has allowed the public finances to drift in such a way that we are heading for trouble. Further, the Government is associated with dealings, such as I have mentioned, in which the public interest is subordinated to private interests; and I feel sure that the party it represents deserves the censure they will receive when they face their masters. [Extension- of time granted.] As a comparatively new member of the House, I have not been favorably impressed with the way in which the finances of the Commonwealth are conducted. There is certainly room for great improvement when the Government are prepared to allow themselves to be the instruments of private vested interests. This is proved by the declared intention of the Government to dispose of certain activities which were undertaken and have proved of great advantage to the Commonwealth. I refer to the proposal to dispose of the Clothing Mill at South Melbourne, the Woollen Mill at Geelong, and, I suppose, eventually, of the Cordite Factory. We may take it that Lord Inchcape will renew his overtures to the Government for the purchase of the Commonwealth Line of Steamers; and if the Government have a further lease of life - though I do not think that is likely - we may find it prepared to dispose of that great public utility which was proved df such advantage to the primary producers during the war period, though certainly those producers do not seem to appreciate the value of what has been done for them. The Commonwealth Bank was instituted by the party to which I have the honour, to belong, and it has proved of direct value in having saved the Commonwealth £5,586,941 in the conduct of our great public finance transactions. But it is possible and reasonable to ‘assume that even the Commonwealth Bank may be disposed of, because it in some degree deprives the private banking institutions of certain percentages and profits that would be theirs if the national Bank were out of the way. The Commonwealth Bank alone is a monument to the financial competency of a Labour Government. It proves that the members of the Labour party have the necessary foresight and acumen to so legislate as to relieve the country of certain obligations which would have to be met if this part of our financial business had been left under the control of private banking interests. The present Government lends itself to the promotion of private and vested interests to such a degree that the people of the country must realize that the “ hidden hand “ of big business behind is more insidious and menacing than any form of influence that could possibly be created or « exerted in the councils of the great Labour movement. It is to the credit of the Labour movement that it will not permit any form of influence that is foreign to the direct representations of the working community. Although honorable members opposite may endeavour to associate the movement with certain factions and bodies in the Commonwealth, the financial policy of the movement and its legislative proposals come directly from the workers, free from any influence that ia detrimental to the general interests of the community. It is to be hoped that, at the next election, the people will not allow themselves to be deluded by the catch phrases that are likely to be part of the electioneering tactics of the Government; that they will not allow themselves to be divided upon political issues because they differ in religious beliefs, and that they will realize that the country’s great need of wise legislation, capable administration, and sound finance can be satisfied only by placing in positions of responsibility those whose previous record proves them to be worthy of the highest commendation and trust.
– Like Mr. Theodore.
– Even the honorable member’s Leader commended Mr. Theodore for the manner in which he had assisted the primary producers of his State, and said that he was prepared to give credit where credit was due; but the honorable member for Bass is one of those who would give credit to nobody unless by so doing he could advantage himself or the party to which he belongs. The record of the present Government does not justify an extension of their term of office. They have proved that they are unworthy of consideration; they have established a record of pronounced incompetence and ineptitude, and if the people desire the restoration of responsible government, free of the dictatorial methods of such a one as the present Prime Minister, which have involved the Commonwealth in heavy obligations-
– And his bellicose Treasurer.
– The Treasurer ia only a pawn in the game, and I have no doubt is prepared to be just as docile a follower of the Prime Minister as is any other member of the party. The best interests of the Commonwealth can be served ‘only by returning to power a Labour Government, and giving the country the advantage of their wise administration. Previous Labour Governments left behind, them an excellent record as administrators; they entered office’ by the front door, and they left by the front door, with their hands absolutely clean. They were free of any suspicion or taint of those unbusiness-like dealings which have been proved against the present Government. The past enviable record of the Labour party will justify the people at the forthcoming appeal in reposing in them the full measure of their confidence.
.- I rise to direct the attention of honorable members to something which I consider very serious, andi that is the deliberate attempt of the Minister for Defence (Mr. Greene) on two occasions to mislead honorable members in regard to questions of fact affecting the working of his Department. Not only did he make deliberate misstatements, but ‘ he quoted officers of his Department in support of what he said. Yesterday, I quoted a list of officers who were due for retirement iri’ from two to nine months, and who wouk receive more in compensation for compulsory retirement than they would hav« received, in pay had they continued ia the service. In order to discount my statement, the Minister argued that some of them would have been promoted ta higher rank, which would have automatically extended their period of service. I said that that answer did not apply to fourteen of the fifteen officers I had quoted, because, they were quartermastercaptains and quartermaster-majors. - The Minister, after consulting one of his officers in the precincts, made this definite and serious statement -
Departmental officers .told me only two minutes ago that it was the invariable rule to give the quartermasters two years.
By saying that that was the invariable rule, the Minister meant that without exception quartermaster-majors and ‘ quartermaster-captains, upon attaining the retiring age of sixty years, were granted an extension of two years. As a matter of fact, the rule is the reverse of what the Minister stated, and extensions of service are the exception. In order to prove that the Minister’s statement was deliberately untrue, I have referred to the Commonwealth Gazette for this year and picked out three names of retired officers - one a captain, who waa retired on 11th January of this year, the second a captain, who was retired on 19th February of this year, and the third a captain, who was retired on the 25th of May of this year. Referring to the officers’ list, I find that the first captain was born on 11th January, 1862, the second captain on 19th February, 1862, and the third on 25th May, 1862. Thus those three officers retired on the exact date when they attained sixty years of age.
– But the Rill makes provision that those men who went out this year shall receive the same amount of compensation as has been given to the others who have been compulsorily retired.
– My point is that for years the rule of the Department has been to retire these men at sixty years of «ge.
– The invariable rule was that these officers received a two-years’ extension, but when we decided upon retrenchment this year we did nob grant those extensions. However, if the honorable member will look at the Bill he will find provision made that men who retired after 1st January, 1922, shall participate in the compensation scheme. As that has been arranged, of course, those men who reached their retiring age after 1st January of this year did not receive an extension.
– The rule has been to retire the quartermasters when they reached sixty years of age.
– All I can say is that the officers told me that the rule was to grant those men a two-years’ extension. But there may have been exceptions to the rule. We did not give an extension to those men who reached the age of sixty years after 1st January last, because we knew that retrenchment was pending, and we made a provision in this Bill for them to get the same amount of compensation as is to be given to others.
– Quartermaster officers cannot be retired until they reach the age of sixty, and the rule has been to retire them at that age.
– No.
– I have quoted from the Gazette the most recent retirements, to prove my contention.
– The honorable member’s proof is wrong.
– Had I referred back to earlier years I could have cited older instances, but I believe in answering the Minister with the most recent cases.
– But the honorable member forgets that the Bill makes special provision that all men who reached the retiring age after 1st January last shall, participate in this compensation.
– But what of the men who retired last year, the year before, and in earlier years at the age of sixty years? If necessary I can produce thefacts in regard to them, too. This is the second misstatement that the Minister has made for the purpose of misleading: the Committee. When I quoted the case of a certain colonel he said that he was. the only one so situated, but perhaps there might be .another. ‘ Then when I quoted the facts concerning fifteen officers,, he said that the invariable rule was to give quartermasters a two-years’ extension after they reached the age of sixty years. The fact is that the men whose cases I have looked up were retired on their sixtieth birthday. ‘I think it is only fair that ‘the Committee should receive truthful information from a Minister.
– I take the strongest exception to the remark made by the honorable member for Yarra, and I cannot understand why his statement that I had made two misstatements for thepurpose of deliberately misleading the Committee was allowed to pass unrebuked by the Chair. I stated last night that the rule, with few exceptions, was that quartermaster officers when they reached the retiring age were granted art extension of two years.
– The Minister said that it was the invariable rule.
– Generally speaking, that is quite correct. But, no doubt, there have been occasions when an officer’s services were of such a nature as not to entitle him to an extended term. In regard to the other alleged misstatement, I made it clear that I spoke of the officers of the Permanent Military Forces. There were only two of these. The quartermasters had the right to the two years’ extension, and the rule was to give it. The honorable member for Yarra (Mr. Scullin) stated that that course was not adopted this year. Quite right; but it was a matter of deliberate policy. It was based on the knowledge that we were going to reduce the staffs to the lowest possible point; and, consequently, as each case came along, when the person concerned reached his retiring age, he went out. But, so that he should not suffer in comparison with his peers, this Bill provides that every man, upon going out after the 1st January - whether he be a soldier in the ranks or a warrant-officer, or a quartermaster, or possessed of any other rank - shall be entitled to the same compensation as those who are to be compulsorily retired now. Thus the honorable member’s proof is no proof whatever. He has simply assisted to demonstrate that the Government have been acting in a spirit of absolute consistency throughout. I therefore take the strongest exception to the honorable member accusing me of having misled honorable members. I have endeavoured to give such information as I possessed, and to tender it as faithfully as I knew how. Naturally, a Minister has to rely upon information supplied to him by his officers ; but I have never wittingly made a statement in this Chamber for which I was not prepared to vouch, and I challenge any honorable member to point to a single exception. The honorable member is guilty of reprehensible conduct in launching the charge that I have deliberately misled the Committee, and of having produced as proof the particulars of three circumstances which, he says, prove his case, but which, I have shown conclusively, prove the direct opposite.
.- By way of personal explanation, I may say that I have no occasion to withdraw anything that I have said. The Minister has qualified his previous statement. Honorable members have, at any rate, gained that much.
– No, I have not done so. On a point of order, I want to say that I will not allow the honorable member to get away with statements of that char acter. He asserts that I have qualified my original statement. The honorable member has no right to make a statement which is not correct, and I ask that it be withdrawn.
– The Minister has interrupted my explanation. He has been reported in Hansard as having stated, only yesterday, that the invariable rule has been to do a specific thing. To-day, the Minister says that it is generally so. Is that not a qualification?
– If the honorable member will refer to my speech he will find that I said, “ The invariable rule, with few exceptions.”
– The Minister’s words are perfectly clear, as recorded in Hansard. He used the expression, “ The invariable rule.” I understand that the Postmaster-General (Mr. Poynton) has just interjected that I am “twisting” on the word “invariable.” The word means “always” - “without variation.” The Minister for Defence intimated yesterday that, without exception, the rule was to do a certain thing.
– I did not say that.
– It stands in the records as the statement of the Minister in reply to the honorable member for Ballarat (Mr. McGrath). I have submitted the proofs, and I stand by every word of what I have said. I repeat that the Minister is misleading this Committee.
– Order! The honorable member must withdraw that statement.
– Very well.
.- I desire briefly to refer to a matter which came before the House some weeks ago, but, in regard to which, I have not, meanwhile, had a more fitting opportunity than the present to deal with it. On the 30th August the Prime Minister laid on the table copies of the correspondence regarding proposed purchases of foreign sugar. My request that the documents should be made available to me in that manner arose from statements made by the Minister for Trade and Customs (Mr. Rodgers), supported by the Prime Minister himself, to the effect that when, in my position as Acting Prime Minister I was responsible for the sugar administration I, by my delay in accepting the advice to purchase sugar abroad, had cost the Commonwealth large sums of money. I have studied the papers which the Prime Minister has placed on the table, and I want to say two things in regard to them.. First, Uley are not complete. I do not suggest that any attempt has been made to hide information. Probably the Prime Minister’s file was the only one placed upon the table.
– What is missing?
– The papers do not con- tain some of the letters which are referred to in these telegrams included in the file, and they do not contain the related papers which I asked for, and which the Prime Minister undertook to furnish.
– What was the honorable member’s request?
– It was given by .way of a formal question on the notice-paper, and it referred to correspondence and related papers. I do not desire to quarrel with the Prime Minister; but if there are any other papers which may throw additional light upon the circumstances - papers other than those in the Department of the Prime Minister or of the Minister for Trade and Customs- I ask that they be produced.
– If the honorable member will specify what documents are missing I shall see that they are produced.
– I asked for the whole cf the cabled correspondence and the related papers. They may be many, but all will throw light upon the exact causes for the whole of the correspondence in relation to the proposed foreign purchases referred to.
– As far as I know, all the correspondence which passed between the right honorable gentleman and myself - that is to say, between Melbourne and London, at the time under review - is now in his possesion.
– I think that is so, but it does not reveal the origin of the advice to which reference is made; and it does not embrace the papers of the Controller or of the Customs Department, which are as vital as is this correspondence.
– I will endeavour to get them,.
– I shall speak now only of the papers which have been laid on the table. The matter begins, so far as the cabled correspondence is concerned, with a telegram dated 22nd October, 1918, from myself to_ the Prime Minister. Among other things it suggests that, because of the shortage of sugar in Australia^ - and the cause is described in the cablegram - the Prime Minister should confer with the Hoya! Commission which was purchasing sugar in England with the object of ascertaining certain information which would enable the Commonwealth Government to decide whether to buy or not. Further, the cablegram asked the Prime Minister to obtain, if possible, a c.i.f. quotation for certain classes of sugar. That message, I repeat, was despatched on 22nd October, 1918. Six days later a formal acknowledgment was sent by the Prime Minister from London, as follows: -
Your telegram 22nd October. Sugar. Note estimated shortage and apparent necessity for imports. Will see Royal Sugar Commission re purchase 20,000 tons, and cable.
The Prime Minister did cable, as promised, on the 9th November. That was eighteen days after I had originally cabled to him. There was no delay at this end. There, clearly, was delay at the other end ; but, as I said in the course of former remarks in this Chamber, I did not blame the Prime Minister. He and his colleague in London were exceedingly busy in other directions.
– The honorable member says that there was delay at the other end. This was the end that was purchasing sugar.
– We asked the Prime Minister to get the information which we wanted to enable us to judge of the situation. The Sugar Controller suggested that we should adopt that course; and, I repeat, it took eighteen days for the Prime Minister to furnish the information.
– The right honorable gentleman was asked by the Colonial Sugar Refining Company to buy sugar, and he did not do so.
– I am going to deal with that, but at this moment I shall devote myself to so much of the correspondence as has been laid on . the table. These documents show at which end was the delay; and I stress that, even in the cablegram of the 9th November from the Prime Minister in London, the right honorable gentleman himself suggested that we should proceed cautiously, which was advice to the effect that we should not proceed hastily. I replied on the 11th November. There was no delay here. My reply probably went out on the same day as the Prime
Minister’s cable came to hand; that is to say, the message despatched from London on the 9 th November would probably reach the Government in Melbourne on the 10th, and the date of the answer was 11th November. The Government accepted the Prime Minister’s proposal that he should get a firm offer, and our cablegram asked him to proceed through the Colonial Sugar Refining Company. That is all we did under cover of our message. There came no answer, however; and, on the 20th November - nine days later1 - I cabled again. Once more the fact is revealed ‘that there was no delay at this end; and that is the vital point of the accusation of the Prime Minister. The particulars of my cablegram of 20th November were as follow: -
Sugar. My telegram 22nd October. Position not improving. We will require 35,000 tons imported before May, and first arrivals must be not later than January. Is any Mauritius available? Kindly cable fully and advise what you have done. Matter urgent.
The Prime Minister replied six days later. The message was despatched from London on the 26th November, and it reached Melbourne on the 28th. That was fifteen days from the original proposition despatched on 11th November. The delay of fifteen days, I emphasize, was at that end, and not at this. On 5 th December . I wired the Prime Minister saying we could do better than the quotation he had sent; and, on 7th December, the right honorable gentleman cabled : -
Re Mauritius sugar. Impossible now obtain at lower price than 19s. f.o.b., and this likely to advance. Advise closing at once.
That message was received on 9th December. I replied on the 10th, accepting. Again, there was no delay at this end. There was no delay here in respect of any of these cables. On 19th December - nine days st’ill later - the Prime Minister wired to the effect that he had bought. These records show emphatically that there was no delay here. There was delay at the other end, possibly inevitable delay, but there was none here, which was the vital point of the accusation against myself.
These documents reveal something else, which is equally vital from my point of view. The statements of the Prime Minister and of the Minister for Trade and Customs (Mr. Rodgers) imply that, either by my personal intervention or due to my neglect, I lost the Sugar Control large sums. These records show that the whole business was dealt with by the then Minister for Trade and Customs, the present Minister for Defence. The Minister was aware of all that was happening. He was directing the sugar business as Minister for Trade and Customs. I was the conduit between the Sugar Control _ and the absent Prime Minister. That, the Prime Minister knows to be a fact. That, the Minister for Defence knows to be correct. The Minister for Defence will see, if he reads again the urgent cablegram of 22nd October, that his mind was in the business more than was mine.
– My recollection of the cable was that it was drafted in the office of the Acting Prime Minister (Mr. Watt), in consultation.
– A consultation between the Minister and myself, and at his suggestion.
– With Colonel Oldershaw.
– Precisely ! But I had no immediate responsibility other than that it was my duty to perform the act of sending the message. If there are further and fuller papers, either, in the Department for Trade and Customs or in the possession of the Sugar Board, they will show all that. I never once gave an independent judgment on questions of sugar, for the reason that I was not informed thereon. I never refused to take action upon questions of sugar when advised by the Minister concerned, or by the Sugar Controller, who was under the authority of the Minister. These are vital and important statements which answer the accusation of the Prime Minister. In every case, if, and when, anything was done by the Prime Minister’s office while I was locum tenens for the Prime Minister, it was done on the advice of the Sugar Controller, or/and. the the Minister for Trade and Customs, the present..Minister for Defence. Members may be interested further in this matter, but, personally, I am not, though I owed it to myself to clear it up after the statements of two responsible Ministers. If the whole House is interested, the matter can be examined by the Committee that is inquiring into other phases of the sugar question.
– There are two points with which I wish to deal - that raised hy the right honorable member for Balaclava (Mr. Watt), and the other relating to the amendment moved this morning by the honorable member for Dalley (Mr. Mahony). As I said earlier, I was not in a position to deal with some of the statements of the honorable member for Dalley, because I had not been advised that the question would be brought forward. I have since seen Mr. Kneen and he says that four or five weeks before the actual purchase by Sandoz wo refunded to Sandoz the £1,000 deposit that he had made in contemplation of this purchase, in order that Mr. Waugh might offer again. Mr. Waugh was approached directly. He was interviewed personally, and he said that he could, and would, make no offer. Having also been assured by diligent inquiries in other quarters that no other offers were possible, we re-opened the negotiations with Mr. Sandoz, which had been closed ‘by the refunding of his £1,000 deposit. Mr. Waugh, I am informed, can buy these ships from their present holders, who are trying to sell them at a figure much below £15,000. Mr. Sandoz realizes that he has not made a bargain, and he is trying to sell. I am advised that if the honorable member for Dalley interviews Mr. Waugh, and tells him that if he will make a firm offer to Mr. Sandoz of £10,000 he can get the ships.
The right honorable member for Balaclava (Mr. Watt) has misunderstood my reference to him. It was not made by way of censure, but in reply to the honorable member for Franklin (Mr. Mcwilliams), who said that if we had done this, or had foreseen that, we could have taken advantage of a cheap sugar market. I replied that we followed the best advice in what we did, that we were advised by the Colonial Sugar Refining Company. On one occasion, we did not follow that company’s advice, and thereby saved a very considerable sum of money. The right honorable member for Balaclava says that ho did not see a letter dated 9th October, sent by the Colonial Sugar Refining Company to the Attorney-General. I was, at the time, Attorney-General, and all communications relating to sugar were addressed to my Department, because I was in charge of the sugar business. Colonel Oldershaw, in the ordinary way, received those communications from the Solicitor-General, or some one else in the office, and took them either to the right honorable member, I being then in London, or to the colleague to whom he had intrusted the handling of this business. On the 9th October, the Colonial Sugar Refining Company recommended us to buy sugar at £13 10s. a ton, and we did not do so. At that time the right honorable member was acting for me during my absence in London. Had we followed the company’s advice on that occasion, we should have saved money, just as we should have lost money by following it on a later occasion. The right honorable member says that there was delay in dealing with the matter in London, but it is useless to try to put the blame upon my shoulders. I have never bought sugar, and know nothing about it. I know as little of the business side of this domestic commodity as does the honorable member. The facts, however, are quite clear. On the 9th October he. was advised by the Colonial Sugar Refining Company to buy 25,000 tons of sugar at £13 10s. He did not do so. He, while Acting Prime Minister of Australia, advised me, on the 22nd October, that we should have to buy sugar, and asked me to see the British Royal Commission. I did so; but the Royal Commission had no sugar to sell. Java had a great deal to sell, and at a low price. It was on the 9th October that the Colonial Sugar Refining Company recommended us to buy Java sugar, and it was not until the 22nd October that the right honorable member asked me, I being then in London, to look into the matter. London was then, perhaps, the worst place in the world in which to inquire about Java sugar, that sugar being cheap to us then because it could not be carried to England, but could be got to Australia. I did not suggest that he was to blame in the matter. But the facts speak for themselves. A Minister is obliged to rely on his expert advisers. The right honorable member, thinking, perhaps, that the market might bo better overseas, sent word to me to look into the matter. The fact remains that on the 9th October the Colonial Sugar Refining Company recommended us to buy sugar at £13 10s. a ton, and we did not buy it until its price had risen to £19 per ton. If, asI have said, we had accepted the company’s advice on a subsequent occasion, we should have been, I would not like to say how much, but a good deal of money, out of pocket. If the right honorable member desires to do so, I will lay the other papers on the table, but I do not think there is any need to do that. I have no wish to pursue this matter further. My reference to the right honorable gentleman, as he will see if he reads the report of the debate, was not by way of censure, but to illustrate the manner in which the market fluctuated. If I want to censure the right honorable member, I shall do so in a way that will leave no doubt as to my intention. The right honorable member will be under no illusion as to whether I am censuring him or not. On that occasion I did not, and I beg him to accept my assurance in that regard. His explanation has not cleared up the point I made.
– I wish to explain that as lateas last Tuesday afternoon I had an interview with Mr. Waugh, the gentleman who was concerned in making an offer of £15,000 for the wooden ships recently sold by the Government. Mr. Waugh is a man of standing and integrity; he is a big business man. He was accompanied on this occasion by Mr. Baker, the gentleman referred to by the Prime Minister, but Mr. Baker is a clerk in the employ of the firm, and would have no more say in deciding the firm’s policy than I would have. On Tuesday afternoon I said to Mr. Waugh, “Are you not prepared to pay £15,000 for these boats?” He replied, “Not only that; I would be prepared to pay considerably more if I could get them.” It is all very well for the Prime Minister to come forward with the statement he has just made. It is his third attempt to get out of his difficulty. Yet not one answer has been made to my definite charge.
– What is the honorable member’s definite charge?
-That these vessels were disposed of privately ; that public tenders were not called, and that another gentleman was prepared to give £5,000 more than was obtained by the secret sale of them.
– Get your Mr. Waugh to make an offer for them now.
– Yesterday afternoon a representative of a very large firm, who was in the precincts of the House, informed me that he had inspected the boilers on behalf of his firm with the object of purchasing one, and that the price he was asked to pay by those who had purchased, the whole fleet for £10,000 was £2,500. The document read by the Prime Minister this afternoonis not worth the paper it is written on. Mr. Waugh’s statement stands, and I stand by it.
– Do I understand that the Supply asked for will carry us on until the end of next. month?
– It will carry us on for three pays.
– Another Supply Bill will be required before the 27th October?
– Yes.
– I would like to know what is intended. We are expecting an early election.
– Not as early as that.
– I would like to know what it means.
– It does not mean an early election. I give you my word on that.
Question resolved in the affirmative.
Resolution reported.
Standing Orders suspended; resolution adopted.
Resolution of Committee of Ways and Means, covering resolution of Supply, reported and adopted.
Ordered -
That Mr. Bruce and Mr. Greene do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Mr. Bruce, and passed through all its stages without amendment or debate.
page 2104
The following Bills were returned from the Senate, without amendment: -
Loan Bill (£12,000,000).
Appropriation (Works and Buildings) Bill 1922-23.
Defence Retirement Bill.
page 2104
The following paper was presented : -
Rule of Court- Rule re sitting - Dated 24th August, 1922.
House adjourned at 4.21 p.m.
Cite as: Australia, House of Representatives, Debates, 8 September 1922, viewed 22 October 2017, <http://historichansard.net/hofreps/1922/19220908_reps_8_100/>.