2nd Parliament · 3rd Session
The President took the chair at 3 p.m., and read prayers.
page 3397
– I desire to ask the Minister of Defence, without notice, whether he will take care that the state ment with regard to the proposals for a Tariff arrangement with New Zealand is made simultaneously in both Houses?
– I shall try to arrange for that.
page 3397
MINISTERS laid upon the table the following papers : -
Recommendations, &c., and approval of Samuel McHutchison’s promotion to the position of clerk in charge, Crown’ Solicitor’s Office, Sydney.
Ordered to be printed.
Transfers of amounts approved by the GovernorGeneral in Council under the Audit Act, financial year1905-6 (dated 24th August).
Amended Public Service regulations, Nos. 153, 155, 168, 199, allowances and telegraph messengers, Statutory Rules 1906, No. 66.
page 3397
asked the Minister representing the Minister of Trade and Customs, upon notice -
– The answer to thehonorable senator’s questions is as follows : -
The suggestion is to nominate the expert of the company in a case where the factory is large and difficult of access. The expert of the Department will occasionally make a visit of inspection.
– Then the Government will allow certain factories to grade their own butter ?
– Subject to supervision.
– Arising out of the answer I desire to ask the Minister why he has not answeredmy third question ?
– When I received the reply from the Department of Trade and Customs, I noticed that the second and third questions were not answered. I was thinking of sending it back with a requestto furnish me with a definite answer to each of the questions, but afterwards I thought that possibly the honorable senator might be satisfied with the reply which had been furnished, and therefore I took the chance of giving it. I shall call special attention to the fact that the two questions have not been answered, and tell him the result of my inquiries.
– Will not the Minister tell the Senate?
– I shall tell the Senate if the honorable senator wishes.
– I desire to refer to what the Minister of Defence has just said.
– The honorable senator cannot debate the answer to a question.
– I want to ask a question arising out of the reply, and that is whether the Minister of Defenca will make the answer in his place at the table to the question which’ has been properly asked by Senator Macfarlane, so that the whole Senate may know what it is, and so that it shall not be made, as he intended in a private way to that honorable senator. I was astonished that he should have made such a remark.
– Order ! That is comment.
– I ask if the Minister’s answer to Senator Macfarlane’s question will be made public, and at what date?
– Of course, it will be made public. I said that I would give the answer to the honorable senator. I did not mean that I would give it to him privately.
page 3398
asked the Minister representing the Minister of Home of Home Affairs, upon notice -
– The answers to the honorable senator s questions are as follow : -
The Public Service Commissioner reports as follows : -
Recommendations of Heads of Branches are considered by the Departmental Heads, with whom the responsibility rests of submitting recommendations embracing the whole Department, and it is not desirable that any alterations in this respect should be made.
It is not considered desirable to do so.
page 3398
asked the Minister representing the Minister of External Affairs, upon notice -
– The answers to thehonorable senator’s questions are as follow : -
The letter, which is dated at Government House on 4th July, 1906, and addressed to the Prime Minister, reads as follows: -
Sir, - An idea having, by some means, gained ground in Australia that the present Administration of British New Guinea is unsatisfactory, I have the honour to request that a Royal Commission may be appointed at an early date to visit this Territory, with a view to inquiring exhaustively into the matter .
Not only do I regard such a course as eminently necessary in order that ill-founded impressions may be authoritatively dispelled, but also in the future interests of the Possession, for unless existing charges and grievances - whether real, imaginary, or malicious - are ventilated, injustice will inevitably be done to individuals, and the nature of this may be more far-reaching in its injurious effects than is at present evident.
I shall esteem it a favour if you will inform me, by telegram, whether my request is favorably regarded.
I have, etc.,
R. Barton,
Administrator.
No date definitely fixed, but chairman has been requested to present report before 31st December, 1906.
Difficult to estimate until duration of Commission and amount of travelling are known.
It is proposed to pay the chairman £4 4s. per diem ; other members £3 3s. ; actual travelling expenses are also to be paid.
The total cost was£96, made up as follows : - Travelling and incidentals, £70; printing report, £26. Mr. Hunt’s salary for the period of his absence was£164. No additional officer was employed by reason of his absence.
Motion (bySenator Higgs) agreed to -
That the paper quoted by the Minister of Defence be laid upon the table and printed.
– I beg to lay the paper upon the table.
page 3398
– I wish to call the attention of the Senate to standing order 56, which says: -
When the attention of the President, or of the Chairman of Committees, has been called to the fact that there is not a quorum of senators present, no senator shall leave the chamber until the Senate has been counted by the President.
On Friday last I had no opportunity of calling specific attention to this standing order, because the Senate was counted out. Honorable senators know that after attention had been called to the state of the Senate - there was, by-the-bye, a quorum present then - three honorable senators left the chamber. I believe that all three honorable senators were forgetful of the standing order ; in fact, I am quite sure that two were, because they came back when requested, and I hope that the third honorable senator was also, I shall not say ignorant, but forgetful of the standing order. As it happened, the two honorable senators who came back made up the quorum, and, therefore, it was not necessary to take any action. But when attention is called to the state of the Senate, if an honorable senator leaves the chamber in derogation of the standing order, I think it only right that in counting the Senate I should count him, because he ought to be here. He is here in accordance with the standing order. I hope that such an occurrence will not happen again.
– In explanation, sir, I desire to say that I was really forgetful of the standing order at the time; but that on account of the way in which the Senate was treated, particularly the members of the Labour Party, I could not remain in the chamber.
– I only called attention to the standing order, and not to the motive of the honorable senator.
page 3399
Bill received from the House of Representatives, and (on motion by Senator Playford) read a first time.
page 3399
– I desire to amend the motion which has just been declared “formal” by stating the year for which I desire the return to be prepared.
– Do I understand that the honorable senator wants to limit the return to one year?
– Yes. What years does the honorable senator suggest?
– When I assented to the motion going as formal, I thought that the honorable senator was asking for the preparation of a comprehensive return. I am not going; to state what years I want.
– I ask leave to amend my motion by inserting the words “ respectively for the last five years “ after the word “ showing.”
Honorable Senators. - Hear, hear.
Motion (by Senator Findley) agreed to-
That there be laid on the table of the Senate a return showing respectively for the last five years -
page 3399
In Committee (Consideration resumed from 23rd August, vide page 3302) :
Clause 6 -
– I move -
That paragraph a of sub-clause1 be left out.
The term “commercial trust” is very wide and far-reaching, and drags within its net all possible combinations. Senator Playford has told us that all trusts are not necessarily evil, and in Mr. Tregear’s paper the statement is distinctly made on the authority of American Departments that many trusts are beneficent in their action.
– Do not take American authorities in regard to trusts.
– We need not go outside our own knowledge. Everybody is aware that a trust may be beneficent in its action. For instance, in the coal trade we have a trust for the express purpose of enabling coal owners and coal miners to work together with a view to keep up the rate of wages. That, I presume, would be considered a beneficent trust.
– It would all depend upon what price persons have to pay for the coal.
– Of course it would all depend upon circumstances. But as long as it is possible for a trust which is beneficent, and not evil in its working to be constituted, we have no business to pass any provision which would at once constitute a trust prima facie a fraud. The paragraph provides that if the defendant is a commercial trust, the competition shall be deemed unfair.
– Unless the contrary is proved !
– Obviously that is not in accordance with the statement made by the Minister of Defence, and offends against every principle of justice. The clausewould not be weakened for the purpose for which it was designed by the omission of the paragraph, and certainly it would be made a little more satisfactory. The word “shall “ is used in the clause. That is to say, if the defendant is a commercial trust his competition is to be deemed to be unfair, unless the contrary is proved. That is mandatory. However fair, honest, or beneficent the trust may be, the Courts, or whoever deals with the matter, is bound to look upon it as unfair in its competition. Therefore, with every confidence, I ask the Committee to strike out the words.
– I have already admitted - and I think I was accurate in doing so - that there are trusts that are absolutely fair, and may be beneficent; whilst, at the same time, there are trusts which are unfair. This clause simply provides that trusts shall prove that they are not unfair, whereupon there will be no further trouble.It is only where a trust is unfair that the clause will operate. The great majority of trusts are unfair, unmistakably.
– I must express my disappointment at the meagreness of the reply of the Minister. It is, I think, incumbent on any Minister who is in charge of a Bill, when a question is raised as to the wisdom of retaining any of its provisions, to justify them. Surely Senator Playford cannot contend that his brief remarks have justified the words to which Senator Pulsford takes exception. I point out two strong objections to them. In the first place this clause makes a different law for different individuals or institutions. It places a trust - it may be before a criminal Court - in an entirely different light from an individual. Is it desirable to have one law lor one set of persons and another law for another set?
– We have that already in the Bill.
– There is no reason for multifying instances of the kind.
– It is impossible to put companies in gaol, but it is possible to put individuals in gaol; that is what this Bill does.
– Because it is impossible to deal with companies in the same way as with persons, surely it does not justify dealing with them differently, as this clause proposes to do. I can see no justification for saying that where an individual is brought before a Court, he shall be dealt with under a certain law, but that where a combination of persons is proceeded against they shall be dealt with under another law. The Minister said that there is no hardship upon them. It is quite clear that those who drafted this clause thought that there would be a hardship, or words would not have been inserted which place upon trusts restraints that are not applied to ordinary individuals. I should like to quote an authority to show that trusts are not necessarily injurious.
– I object to authorities brought from America.
– This Bill is supposed to have been drafted upon the basis of American legislation.
– That is the reason why it is not “ up to much.”
– Does that account for the honorable senator’s enthusiastic support of it.
– I am not an enthusiastic supporter of the Bill.
– The authority whom I desire to quote says -
One of the best known monopolies is that of the Standard Oil Company of America. That company has an unmistakable monopoly, but it has lowered the price of oil to the consumer, and its operations have not resulted in any disadvantage to the community.
– Who said that?
– Senator Playford said it.
– I understood that he contended that trusts merely cut down prices until they crushed out competition, and then raised them.
– He made the statement which I have quoted quite recently. It is a fact, of which we are all aware, that there are trusts which are not necessarily injurious. If that be the case, it seems to be quite sufficient if power is taken, where it is considered that a trust is doing wrong, to bring it before the Court, and treat it as an ordinary individual would be treated, according to processes with which we are familiar. Merely because a trust is the defendant it ought not to be assumed that it has done certain things. Instead of following the principle which underlies all our legislation - or did until lately - that a man is to be assumed to be innocent until proved to be guilty, this clause is basedupon the assumption with regard to certain individuals, that they are to be held to be guilty, and it throws upon them the onus of proving their innocence. This marks a departure from the legislative road which this and all other English-speaking communities have hitherto followed - of assuming, the innocence of a person charged with an offence until guilt is proved.
– That principle was departed from long ago even in Australia.
– It is because this provision marks a new departure, and because that departure is becoming more frequent and pronounced, that I ask the Committee to see Whether there is any necessity for perusing that departure in the clause which we are now discussing. To my mind, it appears to be desirable that we should not revert to a system well known in continental Europe, but unknown in Great Britain, and unknown in Australia until latterly, for the sake of such a slight advantage as might probably be gained if we retained the words, the omission of which Senator Pulsford has moved.
.- I do not agree with my honorable friend who has just resumed his seat, that this clause puts any unfairness upon commercial trusts. The honorable senator’s first objection is that there is no reason why a trust, which, according to him, may or may not be beneficial or non-injurious, should be treated differently from an individual. I reply that there is a most obvious and decisive reason. We are aware that commercial trustshave been formed for the purpose of defeating legitimate trading, and securing monopolies, and that, having secured monopolies, they have used their power in their own interest. This Bill defines what a commercial trust is, and in so doing it has regard to the growthof commercial trusts through their various stages. In the United States the first stage was an agreement by means of which persons endeavoured to secure and control trade. The Courts, however, interfered, and said that these agreements were in restraint of trade, and consequently could not be permitted to be made. After that, persons desiring to monopolize trade transferred their stock, which was tobe held under a declaration of trust for certain purposes. To meet such arrangements, the words “as understood in equity” are inserted in this Bill. According to law, those persons who held stock in their own name were the legal owners, but as they executed a deed of declaration of trust, the beneficiaries under the declaration are included when we refer to a trust “ as understood in Equity.” This second scheme was also defeated bv the Courts. The third scheme was the creation of what was called holding companies; the effect of which was that they did not come within the terms of the judgments in the previous cases referring to agreements and declaration of trusts, but formed a separate company for the purpose of buying interests or taking over interests in various other companies. By this means a company or commercial trust was created, and illegitimate trading. was thereby secured. The Bill has been drawn for the express purpose of defeating illegitimate efforts on the part of commercial trusts. If a great monopolistic concern of this kind enters into a deliberate scheme to crush an Australian industry by unfair competition and unfair dealing, it is essential to the efficacy of a measure which seeks to prevent anything of the kind that the words objected to should be retained.
– While listening to Senator Best, I have been wondering whether he intended that this Bill should affect trade unions ; because there is no argument applicable to trusts used by him which could not be applied to unions of labouring men. I see no particular reason why paragraph a should be retained in clause 6. What is really aimed at is secured by paragraphs b and c. The one object which we have in passing this clause is to see that there shall be no unfair competition, no inadequate remuneration for labour, no substantial disorganization in Australian industry, and no throwing of workers out of employment. What is the necessity, or what is the desirability, of inserting paragraph a for that purpose? If it be taken out altogether, we do not, to the smallest extent imaginable, impair the efficacy of the Bill, or the clause under consideration.
– But we make it more difficult.
– The elimination of the paragraph will not make it more difficult to work under the clause.
– It would be incumbent to prove two different things, whereas it would not be necessary if the words were retained.
– Surely we do not want such short-cuts to legislation. We might as well say at once that a commercial trust consists of common scoundrels. A commercial trust, however, is not necessarily injurious ; and to the fullest extent to which it may be injurious, it can be dealt with under paragraphs b and c. If there is a little honesty and fair play on the part of a commercial trust, it should not be treated unfairly. But this clause would shut it out even though it were carrying on operations in a way to which we could not have the slightest objection. I cannot see the smallest imaginable reason that the most devoted admirer of this Bill can allege in favour of the words. If they are left out, I cannot see that anything harmful would follow, because everything that is necessary is amply provided for. Senator Playford has admitted that it does not follow that a commercial trust is necessarily an improper thing. We all admit that if a trust has a proper regard for the remuneration and conditions of labour, and for fair competition it is not unfair. I return to the point that every word of this clause would apply to an ordinary trade union. A trade union might be conducted exactly as a commercial trust is supposed to be conducted under the definition which appears in this Bill. Even Senator Best will admit that.
– I will not. It is totally different.
– It mustbe admitted that a trade union might be conducted under the definition of “ commercial trust.” But nobody wants to shut out a trade union because it is a trade union and to say that it shall be treated as a commercial trust is to be treated. That is a serious reason why we should hesitate to include words which in themselves do not add anvthing to the strength of the Bill.
Senator PULSFORD (New South
Best, a little while ago, that this Bill referred to “great trusts.” He used the word “ great.” I refer honorable senators to the fact that the word is not used in the Bill. The clause under discussion refers to all sorts of trusts, small as well as great ; and a misapprehension is created by keeping before the minds of honorable senators the statement that we are dealing with great evils. I urge honorable senators to disabuse themselves of that false impression.. Senator Playford has made a remark which, instead of weakening the ground that I take, strengthens it materially. He said that if a charge is brought against any one, all that he has to do is to prove his innocence. If that argument be looked at quietly, what does it resolve itself into? That an entirely false charge may be brought against anybody. If we eliminate the words to which I object, we shall to a certain extent prevent that evil being done. At the same time, we shall not weaken the power of attacking great trusts and serious evils when they arise. To give an idea as to what is possible, I wish to quote some details of an agreement that I hold in my hand. It is similar, I suppose, to hundreds, if not thousands, of agreements existing in Australia. And remember that an agreement amongst merchants and traders to do a certain thing is, according to clause 3, to be considered to constitute those traders a trust. The agreement which I have in my hand is one by which certain distributing merchants of New South Wales bound themselves to sell a certain brand of cocoa at a given price, and bv which the agent for the manufacturer at Home bound himself to sell only to firms which observed the condition. The sole object of the agreement was to prevent what might be called sweating in selling, because the only profit on this cocoa is equal to1d. per lb. I know all about this matter, because my name appears in the agreement.
– Is the honorable senator a “ commercial trust “ ?
SenatorPULSFORD. - Yes ; I am agent for the firm in London, and, according to this Bill, for one of the most simple and innocent agreements the world ever saw, I am liable to be described as a commercial trust, or a party to a trust, and have a criminal charge levelled at me. Such agreements are made almost by the hundred. Honorable senators will see that if ten or twenty importing firms are dealing in a proprietary article, there is a tendency for one house to quote some minute fraction under the price of another house ; but with an agreement of this kind, which, as I say, may be regarded as a simple and requisite anti-sweating agreement, a minimum price is fixed to cover all trade risks. This is a form of agreement which exists in all the States, and is necessary for the carrying on of business. So far from being of that grasping character which is attributed to trusts, it really has an opposite tendency. The sole object is to make it possible for business to be conducted. It has happened again and again that, with various competing firms, the price has become such as to return no profit, and the sale of the article has been given up. The object of such agreements is to obtain a minimum profit - sometimes a beggarly profit scarcely worth the trouble of entering in the books.
– If an agreement is not detrimental to the public, there will be no liability to a prosecution.
– But why should I be brought into Court to prove that I am not a criminal? Whv should the Senate allow any persons to be charged as criminals, when that can be avoided?
– There are reasons why paragraph a should be retained in connexion with trusts. It is fallacious to reason with reference to commercial trusts, whichhave become a world’s menace, on the same lines as we should with reference to individuals. However, if we require a reason for the retention of paragraph a, Senator Pulsford has supplied one. The honorable senator has shown the existence of an undoubted trust in c’onnexion with the cocoa trade. He has also shown that that is not a baneful trust ; and it would, therefore, not be affected, except to the extent of being called upon to prove its innocence, as could easily be done.
– But, being a trust, it would be held to be guilty of unfair competition.
– Being a trust it is assumed for the purpose of the Bill that its competition is unfair until proved to be otherwise. The reason for so dealing with trusts is that, unlike individuals, thev are generally extremely powerful, and created for the purpose of exploiting the public. While it is admitted that occasionally, and, generally, only tentatively trusts may be non-injurious or may even be beneficent, their general tendency is to be baneful, and, therefore, they are treated differently from individuals whose characteristic is not to be prejudicial to the public well-being.
– This clause applies only to a trust whose deliberate intention it is to injure an industry.
– I think the honorable senator is wrong. This clause applies to any commercial trust.
– It applies only to a trust whose intent it is to destroy or injure, by means of unfair competition, an Australian industry.
– I am putting the worst case ; and it seems to me that, if there be a trust, the authorities may, if they choose, call upon it to prove that its operations are not baneful to the public, or likely to create disorganization in an industry. But, assuming Senator Best to be right, I contend that there is justification for dealing with trusts differently from individuals. According to Senator Pulsford’s own showing, the trust to which he has referred is designed to maintain just and reasonable profit. But, assuming for argument sake that it could be shown - or that the trust was unable to show that it was not so - that the minimum pride was fixed in order to permit the manufacturer, even though the distributors only made a profit of1d. per lb., to charge twice, or any amount, over, what ought to be a proper charge for manufacturing. Under such circumstances, the trust would be onebaneful in its character. As showing from current history the necessity for treating trusts differently from individuals, honorable senators have only to remember the recent proceedings against the fountain head of American trusts, J. B. Rockefeller, who was summoned before a Court to give evidence. I assume that the object of summoning Mr. Rockefeller as a witness was to prove by his evidence that the trust with which he was connected was baneful ; but, as he simply kept out of the way, and would not fulfil his duties as a citizen, he was not called upon to prove his innocence, with the result that the intention of the Court to prove him guiltv was frustrated. If Mr. Rockefeller had been called upon by law to prove his innocence, it would have been no use his running away, and he would have come forward. That seems to be a strong reason why we should deal differently with these institutions as compared with the ordinary institutions of civilization.
– I feel very much concerned about Senator Pulsford being a member of a trust of any kind; but Senator Pulsford will have to take the consequences of this legislation, because I believe it will be passed. If a trade union were organized for the purpose of injuring an Australian industry, or doing any injustice to Australian workmen, producers, or consumers, I should be prepared to let that union also take the consequences of such legislation. To carry on the argument advanced by Senator Trenwith, I may say that a commercial trust is very often described as an octopus. I do not believe in using terms of that description as applied to commercial trusts, or any other institution.
– A number of trusts are “ fishy,” so the term is applicable.
– There is a “fishiness” about trusts that might justify such a term. The Rockefeller trust is an octopus, and if we catch hold of one of its tentacles the responsibility is at once removed to another, and another, and yet another, until it is impossible to say where is the centre. In other words, if we get hold of a trust of this kind by one leg, as the saying is, it hops away on the other.
– The public do not know where to lay their hands on a commercial trust, but a commercial trust always knows how “to get at the public.”
– That is so ; and that is a very strong reason why trusts should be treated differently from individuals. We can always take an individual by the scruff of the neck and give him a shake up by law, or some other means ; but such a step is impossible in the case of a commercial trust. The only way is to say to a commercial trust-“ Until you prove yourself innocent, we shall assume that you are guilty.” Then the trust will come out of its shell, and, if it can, prove itself innocent. There would be no difficulty in an innocent trust proving its innocence, and, if it were guilty, it would not come out of its shell at all; and, therefore, it should be treated as guilty. Otherwise, a trust would be able to carry on its operations, and the law would be ineffective. According to the Bill as presented, a trust, wherever it might be, of whomsoever it might be composed, will be treated as guilty until it proves that there is no in tention to injure the public trust of Australia. It can be called upon to come out of cover, and prove that its business is legitimate; and, for the reasons already advanced, a commercial trust ought to be treated differently from an ordinary individual.
– A very peculiar reading has been given to this clause, and it is, therefore, desirable to have an interpretation from the Government of what is intended. It has been suggested that each one of these paragraphs must, if I may use the expression, conspire together before any person can be charged.
– Oh, no ; there are paragraphs a and b of clauses 4 and 5 ?
– What on earth have the paragraphs of clauses 4 and 5 to do with the question? Several honorable senators have told us that clause 6 will not apply to a commercial trust unless that trust is going to do something improper under the Bill. That, however, is not so.
– The mere fact that it is a trust will be enough.
– I turn to the interpretation clause to ascertain what is the meaning of “commercial trust.” I find that- “Commercial trust” includes a combination, whether wholly or partly within or beyond Australia, of separate and independent persons (corporate or unincorporate) -
There is nothing wrong up to that point, I suppose - whose voting power or determinations are controlled or controllable by -
There is nothing particularly wicked in that, I suppose.
There is absolutely nothing wrong or of a wicked nature in anything contained in that definition. The Minister himself told us that there are some commercial trusts of a beneficent character, and I wish to bring the Senate to the point that the change in the onus of proof is to be substituted for the ordinary rule of law when the defendant is a commercial trust - that is to say, in every case where a number of 1 persons act together, whose voting power is controlled or controllable by a board of management. What is there to make a business which is carried on by a board of management worse than the business of an incorporated company ? What is there to show that an incorporated company is not entitled to the same protection in law as a private firm?
– The clause does not deprive an incorporated company of any protection of law, but merely calls upon it, under certain conditions, to prove its innocence.
– It deprives an incorporated company of the protection which is enjoyed by an ordinary individual, who is held to be innocent until he is proved to be guilty - that is the normal protection that every man enjoys under the law.
– - Men are called upon to prove their innocence in certain cases.
-When it is desired to deprive an individual of that protection there has to be a positive enactment in some form or other. In a few cases, such as that of the Customs Act, men are called upon to prove their innocence.
– There is a special law for special cases.
– It is only done in a few cases, and generallly for what are considered to be good and sufficient reasons. The question the Senate has to decide is whether persons who trade together under a board of management are to be held to be of such a suspicious character that it is necessary the onus of proof should be placed upon them. I rose particularly to ask the Senate not to be confused by honorable senators who talk a great deal about the destruction of Australian industries, and of the question of intent. We have been told on the best authority that some trusts are not only harmless, but beneficent, and yet this clause proposes that all trusts shall be held to be guilty until thev are proved innocent.
Senator KEATING (Tasmania.- Honorary Minister^ [3.58].- With all respect, I suggest that Senator Drake has either misread the clause, or has failed to read it in conjunction with other clauses with which it is necessarily related. _ All this cla.use purports to do is to provide a definition, of “ unfair competition.” as appearing ia the two preceding clauses. The clause begins, “ For the purposes of the last two preceding sections,” &c. ; and in order to discuss the effect of clause 6 we have necessarily to refer to the two previous clauses to see where the words “ unfair competition “ are used, and in what connexion.
– That is only in order to see what the charge is going to be, and it does not alter my argument in the slightest.
– I am coming to that point. Senator Drake disputes the correctness of honorable senators who have preceded him in referring to paragraph b of clause 4 and paragraph b of clause 5. But this clause can have no effect, I submit, unless it is read in connexion with paragraph b of the two preceding clauses.
– They only state what the man will be charged with. I wanted to know why he should be placed in a different category from an ordinary individual, and it is no answer to me to say that he may be charged with those matters.
– If my honorable friend will permit me, I shall read the portion of clause 4 to which clause 6 has relation. Clause 4 says -
An)’ person who, either as principal or as agent, makes or enters into any contract, or is or continues to be a member of or engages in any combination, in relation to trade or commerce with ‘ other countries or among the States -
– That cannot have been proved at the time when clause 6 will be put into operation.
– I think it can. Suppose, for instance, that under paragraph b of clause 4, a certain person - who may be a commercial trust - were charged with having contracted or combined with intent to destroy or injure by means of unfair competition any Australian industry, the preservation of which was advantageous to’ the Commonwealth. Before paragraph a of clause 6 could operate, it would be necessary to prove, first, the existence of a combination ; secondly, that it was a combination of a particular character coming within the definition of a commercial trust; and, thirdly, competition.
– Why?
– Because the whole question would be unfair competition.
– The first thing which it would be necessary to prove would be the intent.
– Under paragraph b of clause 4 it would be necessary to prove that the combination or contractor intended to destroy or injure an industry, the industry which it was intended to be destroyed or injured, and the worth of preserving the industry, having regard to all the circumstances.
– Yes; but the onus of proof is changed. “
– Yes ; and if my honorable friend had confined himself to that, I would not have said that he had misread the clause. Necessarily, it has to be read in conjunction with paragraph b of clause 4 or clause 5, because its opening words are “ for the purposes of the last two preceding sections.” When the authorities were proceeding against some person for the offence created in clause 4 or clause 5, it would not be sufficient to simply bring them before the Court, and say “this is a commercial trust.”
– I did not say that.
– One honorable senator said that all that the prosecution would have to say would be “ This is a commercial trust,” and the matter would be done with.
– Only figuratively, because every one is aware that the case will have to be proved in Court.
– Senator Drake said that we had not to regard the preceding clause at all. The burden of his argument was that it would be necessary to prove the existence of the commercial trust, and that immediately the whole onus of disproving the offence would fall on that body. That is not so, I submit. The Bill makes it necessary that other things should be proved, namely, the intent to injure or destroy an Australian industry, and the fact that it is one which was worth preserving. The question arises whether they are going to do it by unfair competition or bv legitimate competition? If it were a case of a private individual, it would be necessary to prove affirmatively that the competition was unfair. And if it were a trust, as Senator Clemons says, the onus would be thrown upon the trust of disprov ing that it was unfair. I submit that there is that difference, and I agree with what Senator Clemons and others have said, that it is quite possible that there may be in existence trusts which are beneficent, but the balance of public advantage requires that in such cases the onus of proof of innocence shall be put upon the defendant. We have to adopt that course in many instances. The reference which has been made to trade unions reminds me that some of the most learned Judges in the United Kingdom have ruled that a single individual may do a certain act, but that if a number of individuals do that act at the same time, and under circumstances that suggested concert, in every instance all those individuals would be liable. Suppose, for example, that a single individual refrains from attending his ordinary employment. His employer might have no cause of .complaint against him, and might be able to get even with him by stopping his wages. But suppose that ten or 100 men stopped away. Do not honorable senators know that if those persons were proceeded against in a Court, the onus of proof would not remain under those circumstances in exactly the same position as it would if one individual were proceeded against - and that without any statute law? Here we have to deal with a combination which is formed for either a legitimate or an illegitimate purpose, using the words, “ illegitimate purpose “ to cover unfair competition calculated to destroy an Australian industry. If the combination was formed for a perfectly legitimate and bona fide purpose, it would have the means of proving that. If, on the other hand, it was formed not primarily for the purpose of destroying an industry, but, having been formed, and recognising its powers in that direction, it decided to do that, the onus of proof would not be left to the prosecution. If the intent be present, it will be assumed that it was going to effect that destruction by means of unfair competition. I do not think it is a very great burden of proof to put upon a combination of that character. ‘ As Senator Drake said, such a definition of “ commercial trust “ is quite consistent with a combination which is formed for a perfectly innocent purpose, but the balance of public advantage, I repeat, requires that in those cases the combinations, which would have the means of proving their innocence, should be called upon to disprove the unfair competition. When the prosecution has submitted all the other essentials of the charge, I think it is not calling upon, defendant to do very much. For those very reasons we differentiate thecase of the trust from that of the individual.
– For what reasons?
– For the reasons I gave just now.
– The Minister does not say that the onus of proof is changed in the case of trade unionists.
– No; I said that the onus of proof did not lie where it would in the case of a single individual. It is quite sufficient to raise a presumption in the mind of the Court that it was concerted action in the way of a conspiracy. I submit that we are not imposing any hardship upon a combination which is formed for a “ legitimate and honest purpose,” using that phrase in relation to what we deem an offence under the Bill.
– Without going back to the argument as to what “commercial trust” relates to, or how far it stands isolated in paragraph a, we are agreed that in its treatment the case of a commercial trust is separated from that of an individual. For many weary months I have been engaged on. a Royal Commission, and I desire to state one of the conclusions I have arrived at with regard to the state of Australian industries, and that is that many industries would to-day be in a much more flourishing position, and that other industries might have been created, if there had been an opportunity to get larger capital. I am perfectly satisfied that industries have stopped because thev have been started with insufficient capital. However else we may differentiate a corporation, such as a commercial .trust, from an individual, I think it will be agreed that one of the frequent differentiations is that a body of individuals, if formed into a trust or corporation, can command a larger amount of capital under one control than can a single individual. I think it would be a great advantage if capital were to be focussed, or, I might say, if a larger amount of capital- could be got together for more than one industry in the Commonwealth. If we put upon a commercial trust a stigma or hardship ; if it is treated differently from an individual - and, of course, I assume that it is an honest and fair trust - we shall do harm to Australian industry. I believe that the retention of paragraph a will to a certain extent do harm to Australian industry.
.- While agreeing with all that Senator Keating hassaid as to the proper interpretation of the clause, I want to carry the matter even further. In the case of a prosecution under paragraph a of clause 5,’ the onus would be thrown upon the prosecution of proving everything against the commercial trust in the same way as it would have to be proved against a single individual. If, however, it were a prosecution under paragraph ‘b , then, notwithstanding what Senator Drake said, the onus would be thrown upon the prosecution of proving that the commercial trust had entered into the contract, or continued a member of the combination, with intent to destroy or injure an Australian industry. It would be necessary, not only to prove the existence of the industry, but also that it was one worth preserving, having regard to the interests of producers, workers, and consumers. In regard to all those things the onus of proof would be cast upon . the prosecution.
– No.
– It would only be in a case of unfair competition that the onus would be thrown upon the commercial trust to prove that it had not done any of those things. A further study of the provision will convince Senator Drake that, before the stage of unfair competition was arrived at, the prosecution would have to prove the intent to destroy an Australian industry.
– - I hope that we are getting a little nearer to the light. I did not intend to assert that the onus of proof was changed with regard to the fact of the persons being a commercial trust. It is perfectly clear that that would have to be proved first by the ordinary method. But as soon as it was. proved that the defendant was a commercial trust, the onus of proof would be shifted on to the defendant with regard tothe charge that there was unfair competition. The unfair competition is .the whole gist of the offence; and it is in respect of that that the onus of proof is shifted. How isintention proved? By acts. The law presumes that a- man- intends the necessary*consequences of his own acts. That is theway in which intent is proved in regard toall the offences of which I have anr knowledge. It is shown by the man having committed acts which necessarily lead to certain results. Otherwise, intention never could be proved. How is intention to murder or to steal established? Simply by proving that the person committed certain acts which led to those results.
– Is it not the kind of act which shows the intent?
– Under this Bill the thing that indicates the intention is the unfair competition. If there is a prosecution against a firm under this Bill, and it is proved to be a commercial trust, then the onus of proof is changed. The firm is charged with bringing goods into Australia and selling them at a price lower than that at which any firm manufacturing similar goods could compete. The thing is to prove that the act is unfair. There are, it is true, some cases in which the onus of proof rests upon the defendant. We have that in the Customs laws and in licensing laws. In nearly all cases that is done where the facts are particularly within the knowledge of the person, and where, therefore, it would be impossible or difficult to obtain a conviction unless the burden of proof of innocence were thrown upon the defendant. But where is the particular reason for that in this Bill? It may be said to lie in the fact that the defendant, in bringing the goods into the country, would know what would be the result upon other people. But it is a most difficult thing to call upon a commercial trust to disprove innocence. Is it a fair thing, in the case of a person who has done nothing else than import goods into Australia, presumably according to law, and has put them upon the market by l-he ordinary recognised methods, to call upon him to disprove that the competition arising from the sale of his goods will injure other persons, or will injure an Australian industry? What reason is there why the onus of proof should be shifted in this case? If an individual brings in the goods, the ordinary rule of British la.w is to apply - that he is to be held to be innocent unless proved to toe guilty. But if a combination’ of several firms or persons, working together under a board of management, does the same thing, they are to be held to be guilty, until proved to be innocent; and the Bill puts upon them the onus of proving that the introduction of the goods has not been prejudicial to the interests of workers, producers, and consumers.
– There is nothing in the Bill to prevent a commercial trust from carrying on a fair trade.
– The question all turns upon the word “ intent.”
– No. If a commercial trust is found introducing goods into Australia and selling them in such a way that injury results to producers, workers, and consumers, the trust will be held to have imported those goods with intent. It will be proved that injury has been done,, and that there has been unfair competition. Then the law will assume Che in-, tent. When the case comes before the Court the question will be: Was the competition fair or unfair ? I see no reason why the ordinary course of British law should not be followed, and the persons affected held to be innocent until proved to be guilty. That is to say, the competition should be held to be fair unless the prosecution shows that it is unfair.
– If the utterances to which we have recently listened mean anything, they mean that the retention of the words under discussion is going to have a great deal to do with the proof of intent. We have heard something about the proper reading of clause 5. I ask honorable senators to allow me to alter the wording of that clause slightly, and to see whether we shall be warranted in allowing clause 6 to pass as it stands. In clause 6 it is proposed that the mere, fact of the defendant being a commercial trust is to be proof of unfair competition!. That being so, we can read paragraph b of clause 5 in this way : -
With intent to destroy or injure by being a commercial trust.
In clause 6 we say that “ unfair competition “ and “commercial trust” are interchangeable terms; that if the defendant is a commercial trust he is necessarily guilty of unfair competition. How is intent going to be proved ? If it is to be decided in any other way than by judging of the whole of the acts surrounding the conduct complained of, it can only be done by an assumption that no Court would justify. It would have to be decided upon the acts. What would be the act of the defendant in this case ? The very fact that he is a commercial trust, an importer entering into an agreement with a firm in England or America for the importation of goods, would bring him within the four corners of this Bill. There is no commercial man in
Australia who does business outside Australia who could not be brought within the measure. How would the Minister like to be brought under a law of this kind? Suppose he were charged with the worst crime that we know - that of murder. How would he like to be held to be guilty unless he proved his own innocence ?
– I think I could easily prove my innocence.
-What right have we to say that we will throw upon merchants the onus of proving their innocence in this manner ?
– Many civilized nations do it - theFrench, for instance.
– I have already pointed out that this is a principle adopted by certain continental countries, and that it is only of recent years that it has crept into our legislation. As I have said before, as an agreement in itself constitutes a trust under this Bill, it means that there is no one in Australia doing business with firms outside of Australia under agreement who would not be brought within the four corners of the measure. I go further, and say that, as clause 6 stands, we are going to make the act of being a commercial trust prima facie evidence of intent to destroy or injure an Australian industry. It is not a question of unfair competition at all. The mere fact of being a commercial trust in itself is sufficient to bring the defendant within the scope of the measure, and that is one of the things which the prosecution would rely upon for the purpose of showing intent.
– Does the honorable senator say that if a commercial trust entered into an agreement that would be an offence ? I say that it would not.
– My honorable friend asks me whether the mere fact of having entered into an agreement would be an offence. I do not think that it would ; but I venture to say that if my honorable friend were prosecuting for the Crown he would point out that the fact that the defendant was a commercial trust was one of the things proving intent.
– Oh, no. The intent would have to beproved.
– In every case that comes before a Criminal Court it has to be proved, and how is it proved, except by circumstantial evidence? It is true that in a few cases documents are obtained which partly establish the guilt of the accused.
– It would be outrageous to say that a commercial trust could not enter into an agreement innocently. It would be held to be innocent until the intent was proved.
– The Bill says, in clause 6, that one of two things has to be proved. The prosecution can take its choice. It can prove that the defendant is a commercial trust, in which case the prosecution need not bother itself as to whether the competition is detrimental to Australian industry or not. Or it can prove that the competition is detrimental to Australian industry. In all probability the prosecution would take the line of least resistance. It might find considerable difficulty in demonstrating that the defendants knew that their competition was detrimental to Australian industry. The prosecution would, therefore, in all probability, rely upon proof that the defendant was a commercial trust. I venture to say that if Senator Best were engaged in a prosecution of this kind he would urge upon the Court that the mere fact that the defendant was a commercial trust, and that the history of trusts showed that they were injurious and were formed for the purpose of extortion from the people, was sufficient to justify the Court in upholding his contention that intent existed.
– The Court would not listen to me. It would say, “ You have to prove the intent.”
– How would the honorable senator prove intent?
– That is not involved at the present time.
– But it is. My honorable friend continually falls back upon that point.
– Intent would be proved sometimes by correspondence, sometimes by previous misconduct, and in some cases circumstantial evidence would be relied upon.
– It would be all circumstantial evidence. If the trusts are as wicked as Senator Best makes them out to be, I decline to believe that they will be parties to elaborate documents, which, on the face of them, will prove that they are trusts which are likely to be detrimental to the public. They would not work in that way ; it would only be by their acts that the prosecution would be able to prove intent. I am afraid, however, that there is not much chance of amending this clause. I draw attention to the fact that whilst a great deal has been said against the argument for striking out the words in question. I have not heard a single argument in favour of retaining them.
– Senator Drake has urged that we should adopt a different course in this connexion than is adopted in reference to regulating the proceedings of individuals. He said that the principle that the Court should hold a person to be innocent unless proved to be guilty has been departed from in some instances. That is, where the persons charged are the only persons possessed of the facts, and clearly that is a case in point. Persons would be engaged in competition. We have to prove undoubtedly that the competition entered into is prejudicial to an Australian industry. Suppose we go no further than a trust which is likely to disorganize and injure a trade. This being a commercial trust, it is assumed that the competition is unfair unless the contrary is proved. That is very much further than the clause goes. But, suppose we go that far ; in such a case, who is in a better position to prove the contrary as to the unfairness of the competition than the persons who have the control and the knowledge of all the factors in connexion with the business? Let us turn for an illustration: to the harvester industry. It is declared that the competition in that industry is unfair, and is, in fact, destroying the Australian harvester trade. Let us assume we have proof to that effect.
– But that is what has not to be proved under the clause.
– There must be proof to the effect that the competition is disorganizing an Australian industry, and then the commercial trust has to prove that the competition is not unfair.
– Does the honorable senator not think that the Crown will have all the facts necessary to prove the unfairness of the competition?
– No. The honorable senator is aware that there are many things about which we feel perfectly confident, but inregard to which it is difficult, if not impossible, to produce what is called legal evidence. Only the parties concerned, who know all the details of cost and so forth, are in a position to supply the necessary proof.
– Could a private individual not do so as well ?
– We are now dealing with commercial trusts - with institutions which we have a right to assume are baneful until they are proved to be beneficent, or not harmful. The general history of trusts is that they are baneful ; and that supplies a reason for this clause. A trust would be in possession of legal evidence to prove the cost of construction and so forth, and would, therefore, be able to show, if the fact were so, that the price at which it was selling, although much lower than that at which Australian manufacturers could produce, was a fair price, having in view the circumstances of the production. If that proof were forthcoming, then no evil consequences could accrue under the Bill.
– An individual proprietor would surely know his business just as well?
– Quite so, but we are not dealing with individuals. We are dealing with institutions, which, I may almost say, are invariably calculated to be baneful in their operations.
– The honorable senator says the same thing about individuals when they are importers.
– I donot; I would take steps to prevent individuals importing, but importers are decent fellows all the same, whereas commercial trusts are combinations for the purpose of securing the control of trade to the detriment of the public generally. There are instances that can be cited where tentatively - and, I venture to say, only tentatively - trusts axe beneficent or unobjectionable for a time ; but the invariable tendency is for trusts, as they acquire strength, to use their power to the prejudice of the general public. It is because we are dealing with a special kind of danger that we have to adopt a special method of procedure.
– That is a very unsound reason for changing the onus of proof.
– At any rate, I think we have discussed the matter sufficiently.
– Will the honorable senator give us instances in which trusts have been detrimental?
– I have already given one instance.
– Give us two or three others?
– One instance is sufficient for my purpose. If Senator
Guthrie is not convinced by the arguments adduced, he will vote according to his convictions, and if he is aware of more instances, he will doubtless cite them.
– Senator Trenwith’s reason for shifting the onus of proof is that trusts are generally baneful to the general public ?
– Exactly. We have innumerable instances, and particularly the one I have quoted, of the baneful effects of commercial trusts. The American Harvester Trust is said, with very great justification, to be only a branch of the Standard Oil Trust, the Beef Trust, the Steel Trust - the trust which, under a hundred and one aliases, monopolizes and controls, as far as it can, the trade of the world. In connexion with oil, the trade of the world is absolutely controlled by one of the combines, which, in its early stages, was undoubtedly beneficent. That trust merged all the separate and costly managements under one head, and thereby reduced the cost of production, and was enabled to sell cheaply. But it is notorious that that trust can raise the price whenever it chooses ; and the probability is that, when one of the branches of the trust is working to destroy an industry, it secures the funds to do so by slightly raising the price of some commodity controlled by another branch - public money is used for the destruction of the industry. I have no doubt that in the harvester industry-
– Surely it is a little too soon to go into the harvester question.
– That is a very important consideration which has led to the introduction of this question now.
– Is it not the prime moving factor?
– I think it is one very important factor - possiblythe prime moving factor. If Senator Millen desires, there can be no objection to his holding the opinion that, if it had not been for that specially violent, vigorous attack by the foreign trusts, we should not, perhaps, have had this measure at this juncture.
– The attack does not exist.
– That must only be a matter of opinion.
– The victim of the attack is making £20,000 a year !
– It is said to be £30,000 a year.
– I do not know that it is an offence to make £20,000 a year, if at the same time an advantage is conferred on the community. To some honorable senators it would appear to be an offence for an Australian to make a decent living, while it is meritorious for an exploiter abroad to realize large sums of money.
– Why not confine the Bill to the anti-dumping clauses?
– Because it is just as possible for a baneful combination to be formed inside Australia as outside Australia. While we are dealing with one phase of the question, it seems to me only wise and proper to deal with, the whole question.
– Does the honorable senator know of any baneful combination in Australia?
– Honorable senators are drawing me into what is really a second-reading speech, and my desire is to deal with the clause before us. I have pointed out what I consider to be very strong reasons for throwing the onus of proof on the suspected parties. Under the Bill, the Crown has to prove several important facts ; but in regard to the question on which the defendant must have the fullest possible knowledge, the onus is thrown upon him, as the representative of institutions, which, in the main, have been found to be baneful and dangerous.
.- I desire to say a few words in regard to the challenge thrown out by Senator Millen. Why is it that we are engaged in passing anti-trust legislation? Although this Bill has a long, and, in my opinion, very erroneous title, it is really an antitrust Bill - a Bill to regulate and control trusts. While we all admit that there are beneficent trusts, most of us also admit that the great bulk of trusts are formed on selfish grounds in restraint of trade, with the object of doing away with competition, and raising prices to the detriment of the public, and the enrichment of the few. A case has been made out in America, and in England, and, in a degree, in Australia, for, to some slight extent, placing the trusts on a different footing from individuals. I do not think that Senator Drake is quite right when he asks, “Why change the onus of proof?” We do not change the onus of proof except in one particular.
– Why in one particular ?
– I take it that Senator Keating laid down correctly what will have to be proved if a case is brought into Court. I think I spoke practically to the same effect in my second-reading speech. It will have to be proved that a defendant has entered into a contract or combination, and, secondly, that he has entered into that contract with the intention to destroy or injure an Australian industry by means of unfair competition. In proof of the intention, some evidence will have to be given, and, I presume, it will be to show that workers have been dismissed, or that a factory has been closed.
– Not if it is a commercial trust.
-It is only when proof is required as to whether the competition is unfair that the onus is changed, and the defendant is called upon to show that it is not unfair. Senator Drake admits that the plaintiff, whoever he may be, will have to prove the intent to destroy an industry. How could that be proved without evidence?
– By means of the unfair competition.
– The plaintiff has to prove the intent, but the defendant has to prove, if he can, that the competition is not unfair. Let me give a concrete example. The plaintiff may prove that, in consequence of the competition, a factory has been closed, or that some workmen in another factory have had their wages reduced. It might be said that that was not the result of unfair competition, but was due, perhaps, to better machinery and methods in America or England. At this point, the clause would come into operation, and the defendant would be told that, because he was a trust, which the Bill is intended to control and regulate, no time would be wasted, and that the onus was on him to prove that the competition was not unfair. That is my reading of the clause, and, therefore, I must vote for the retention of paragraph a.
– I am sorry to deprive Senator McGregor of the pleasure he seemed to anticipate a little while ago, when he evidently thought that there was some prospect of myself being proceeded against under this clause.
– I should regret the circumstances very much.
– I ought to have explained before that the agreement to which I referred lapsed about a year ago, and that at the present moment I am interested in no agreement of the description, and, therefore, shall be under no liability under the measure before us. But my knowledge of many similar agreements enables me to afford some information which, if the Committee were inclined to deliberate and judge the question, as it should, from the right standard, might be accepted. Senator Dobson, like one or two other honorable senators, assumes that nearly all trusts are great and evil trusts.
– What is the reason for the Bill if most of them are not?
– The honorable senator overlooks the sweeping interpretation of “commercial trust” in clause 3. That definition is not taken from any other Act in operation elsewhere, but has been manufactured here, and is drawn in such a way as to include every possible form of what are merely commercial agreements. Any agreement of the kind, however innocent, will at once constitute a “ commercial trust.” For every trust of a great and iniquitous character, there are, I suppose, 100 or 200 trusts which are entirely innocent and beneficent in their operations.
– If those trusts do not destroy or injure industries they will not come under the Bill.
– Why should hundreds, or even scores, of people be deemed guilty of unfair practices when, admittedly, they are not guilty of anything of the sort? That is the point which supporters of the clause are carefully and . persistently ignoring. There is no doubt that the clause would be equally as strong without these words, and that innocent and necessary agreements amongst traders would be excluded.
Question - That paragraph a be left out - put. The Committee divided.
AYES: 7
NOES: 15
Majority … … 8
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
– We all know that the word “the” in the expression “ the Australian industry,” in paragraph b, is pointing to a particular industry. I .take it that the object is to make the provision apply to any Australian industry which is threatened, and, therefore, I move -
That the following words be added to paragraph I) of sub-clause 1: - “intended to be destroyed or injured.”
I do not -think it necessary to discuss the amendment which I move, because, in my opinion, to refer to “the Australian industry “ is the crudest possible way of expressing what we want to do. The words I propose to add to paragraph b are taken from other portions of the Bill, and indicate that the industry referred to therein is one which it is alleged is being injured.
– I would remind the Committee that paragraph b of clause 6 is still governed by the opening words, “ For the purposes of the last two preceding sections.”
– It would be much better to use the words “ any such Australian industry.” It is bad drafting to say “ the Australian industry.”
– I think not.
– It would be a mistake to add the words, because it would cut down the provision.
– I think it is better to retain the words “the Australian industry.”
– Why not add the words “affected by the competition”?
– I think it is better not to alter the paragraph at all.
– Those words are used in sub-clause 2 of clause 6. It is bad drafting to use the words in one subclause and not in the other.
– “ The Australian industry “ is sufficiently clearly referred to in paragraph b of the two preceding clauses, and there is nothing to be gained by making the amendment.
Amendment negatived.
.- I move -
That the following new paragraph be added to sub-clause 1 : - “(d) If the defendant, with respect to any goods or services which are the subject of the competition, gives, offers, or promises to any person any rebate, refund, discount, or reward _ upon condition that that person deals, or in consideration of that person having dealt, with the defendant to the exclusion of other persons dealing in similar goods or services.”
The object of the amendment is to deal with an illegitimate practice on the part of some trusts and combinations iri paying conditional or preferential rebates, with a view to crush competition, and thus secure as far as possible a complete monopoly ; in other words, to put the public wholly at their mercy. It is one of the most potent weapons which are used by trusts throughout America. In various Acts very strong efforts have been made for the purpose of putting an end to this system of preferential rebates. I am free to admit that it is chiefly injurious in connexion with matters of transport, which, fortunately in Australia are under the control of the States. According to the first memorandum on Anti-Trust Legislation, there is a special effort made in the Elkin Act to deal with the subject of rebates. It says -
This Act is supplemental to the Commerce Act with respect to the publicity of tariff rates and charges, and also declares” rebates, drawbacks, and unjust discrimination unlawful; increases the powers of the Inter-State Commerce Com- 1 mission in regard to the institution of proceeding or obtaining evidence as well against carriers for the practice of unjust discrimination as against all persons receiving rebates, and extends the jurisdiction of the Federal Courts in cases brought to inforce criminal proceedings by declaring that violations of the Commerce Act or the Elkin Act may be prosecuted “within the district in which such violation was committed, or through which the transportation may have been conducted.”
Summarizing briefly the provisions of the sections of the Act separately, section x provides that default on part of corporation common carrier, which, if made by officer thereof, would constitute a misdemeanour, shall be deemed a misdemeanour committed by the corporation, and punishable accordingly by pecuniary penalties, making in express terms the carrier corporation liable, as well as its officials and agents; that the wilful failure of any carrier to publish tariff rates or to observe legally fixed tariff rates until changed by law is a misdemeanour, punishable by heavy pecuniary penalties, it being declared unlawful for any person or corporation to offer, grant, give, or to solicit, accept, or receive any rebate, concession, or discrimination in respect to the transportation of any property in Inter-State or foreign commerce.
Although it is made chiefly the subject of legislation, so far as transportation is concerned, yet the very same principle is involved in trading operations within Australia. It is all very well for some persons to say that the effect is that the consumer is now getting, I will say, his oil very cheaply. But the fact remains that, if by this system of rebates which we know is largely practised, a monopoly could be secured, the public would be placed at the mercy of the Standard Oil Trust. Obviously it is a mere sprat to catch a mackarel. The Standard Oil Trust is, perhaps, more a culprit than are others. It seems to trade in various countries under different names. In Victoria, for instance, it trades under the name of the Colonial Oil Company, which, I may add, controls the White Rose brand of kerosene. There is another company formed for the purpose of dealing in lubricating oils, and by means of these devious methods, carried on in this octopus-like fashion, a very large proportion of the Australian trade in oil is secured to the Standard Oil Trust. The system which is practised can be best illustrated, perhaps, by quoting one or two papers which have been issued by the Colonial Oil Company. It supplies the oil to the wholesale merchant, to whom a rebate of1d. per gallon is allowed, and an additional rebate of½d. per gallon is allowed to the retailer, conditionally upon the Colonial Oil Company getting the whole of his trade.
– Does not that condition apply to the first rebate of1d. per gallon ?
– That is allowed to the wholesale distributor.
– Is that allowed conditionally, too.
– The agreement reads as follows : -
We hereby solemnly certify and declare that during the three months ending….. we have not bought, sold, or taken orders for any kerosene other than that purchased from the Colonial Oil Co. (with the exception of oil of the Standard Oil Co.’s manufacture, which may have been in stock or bought to arrive before we commenced dealing with you), and that our sales of oil bought from you have all been at the prices paid to you from time to time, neither more norless, except that we have allowed discount for cash, viz., 3 per cent. in seven days, or 2½ per cent. usual terms, and delivered free of cartage to buyers. . On all sales made for delivery at points outside of Melbourne and for suburbs, the railage or carriage has to be added to Melbourne price.
We also further certify and declare that we have not, during the period named, sold for export any of the oil purchased from you, except to Riverina districts.
As witness our hands this day of190 .
Having secured the wholesale merchant, the latter has, in some instances, the shopkeeper under his thumb. At any rate, in. order to gain the rebate, a shopkeeper has to trade exclusively in the oil of the Colonial Oil Company ; in fact, it would be quite a crime on his part to attempt to deal in any other brand.
– Suppose that the British Imperial Oil Company were able to supply oil at a lower price?
– Then the oil of that company alone would have to be sold by the shopkeeper, because he could not secure a supply of White Rose kerosene. If a shopkeeper were asked for that brand, and were unable to supply it, naturally the customer would be driven to the shopkeeper who did deal in that brand alone. On the 1st March the Colonial Oil Company issued the following circular letter to shopkeepers : -
Colonial Oil Co.,
Equitable Building,
Melbourne,1st March, 1906.
Mr. A. B., Fitzroy,
Dear Sir, - We enclose declaration form covering your purchases of “ White Rose “ during the six months ending 28th February,1906. If you have neither bought nor sold any other than American “ WhiteRose “ kerosene during this period, will you please sign accordingly, and return the form to us at your earliest convenience.
Yours very truly,
Colonial Oil Company.
The declaration which has to be made reads as follows : -
We hereby declare that we have neither bought nor sold any other than American “ White Rose “ kerosene during the six months ending 31st August, 1905 ….
. . our purchases of “ White Rose “ being . . . cases, made on the following dates. (Signed)
Address.
Please pay the sum due under this declaration to…… for our account.
Date….. from whom purchased ….. cases.
Colonial Oil Company.
The Standard Oil Company does not supply directly to the shopkeeper, but only to the merchant, who, of course, is the distributing agent. But that shopkeeper must get his oil from the wholesale distributing man. For some reason or other, the Jd. rebate has to be secured by the retailer from the wholesale merchant.
– The honorable senator was hardly correct in construing that footnote as being obligatory. It may be there as a suggestion only.
– I am told that what I have stated is the practice.
– There is no intimation that the rebate will not be paid in any other way.
– So far as my information goes, the company will not pay directly to the storekeeper. The rebate has to be paid through the wholesale distributing houses. That is the information conveyed to me. I have a particular case where an unfortunate shopkeeper committed the crime of dealing with another oil company. The following letter is signed by A. K. Oak-Rhind. assistant manager, and is sent to A.B., Fitzroy: -
We have your declaration form, with memorandum thereon, but regret that we cannot allow you the £d. rebate in justice to other traders who only sell “ White Rose “ kerosene.
We are quite unable to prevent retailers cutting our price of “White Rose” kerosene, although it is always a mystery to us why retailers do not sell “White Rose” kerosene, so as to give them a reasonable profit. People must have “White Rose” kerosene, and it requires no selling; it is well-known everywhere. We quite appreciate that you have to do the same in self-defence, and only wish we could get all the retailers to sell “White Rose” kerosene at a reasonable figure.
The fact is shown there that if the shopkeeper attempts to sell- any but White Rose kerosene he is not allowed the privilege of the Jd. rebate. I have reason to think, from investigation which I have made, and from information supplied to me, that this practice is injuring to a serious, if not an alarming, extent, a very excellent industry that has been established in our own. midst by the British Imperial Oil Company. This company imports in bulk, and has done so for some little time past. In extending its factories, and laying down bulky installations, it has spent something like £100,000. It pays in. wages in Australia about £25,000 per annum. But the company finds that it is quite impossible to compete against the Standard Oil Company with, any degree of satisfac tion to itself or its workmen if these illegitimate methods of trade to which I have referred are practised.
– I doubt whether the British Imperial Oil Company would be able to compete in any circumstances.
– Its chance of doing so is decreased if the trading to which I have referred is permitted. The British Imperial Company does not seek for any preference, or any assistance. All that it asks is that fair trading should be insisted upon. If that is done it is prepared to take its chance.
– Where does its oil come from?
– From Borneo. I have briefly stated the facts which prompt me to move the clause under discussion. Having regard to the American experience, and to the fact that the only aim and object of this illegitimate trading is to capture the market, crush out opposition, and so hold the public at the mercy of this octopus trust, we are justified in passing the amendment which I have proposed, with the view of giving a permanent industry of our own a fair show.
– It will be within the memory of the Committee that, in .the course of the second-reading debate, I drew attention to the rebate system which obtains in regard to our Inter-State shipping. I have an amendment in print dealing with the matter, but Senator Best’s is much’ more comprehensive than mine, and if his is carried I shall not proceed with that of which I have given notice. During the debate Senator Guthrie quoted at great length the freight rates that prevailed amongst the Inter-State shipping on the Australian coast. When I spoke I complained more against the rebate system than against the freights. As a matter of fact, the freights are high. They are higher for carrying cargo from Melbourne to Fremantle than for carrying cargo from Melbourne to London. But no doubt the freights from Melbourne to Fremantle are high because the vessels do not get very much back-loading from the West.
– I said that I did not intend to quote ocean freights as against coastal freights.
– I quite agree that there is a great deal in Senator Guthrie’s contention that sea freights aire less for similar distances than coastal freights, because the vessels doing ocean trade can get cargoes at both ends. But, notwithstanding that fault can be found with the freights that obtain on the Australian coast. A good case could be made out against them; but my contention is especially against the system that obtains. That system is unfair both to shippers and purchasers, and it is also unfair to other ship-owners who have hitherto enjoyed a share of the trade.
– Do those other shipowners employ white labour?
– I think that Senator Guthrie will admit that the companies doing coastal trade outside the shipping ring do employ white labour.
– No, they do not.
– It is news to me to learn that the companies outside the shipping ring - Scott, Fell, and Co., for instance - employ black labour. Whilst I am not going to say anything about the freights that are charged-
– Because the honorable senator cannot, I defy him and challenge him to disprove my figures.
– The amendment of which I have given notice has regard to rebates. The rebate system, as has been pointed out by some of the witnesses before the Navigation Commission, has in some cases increased freight rates by 30 per cent. One of the witnesses actually said that the rebate system was just like a pistol held at the heads of the merchants. In my speech on the second reading, I quoted from the evidence of merchants and ship-owners to show that they were crushed out of the trade of Australia, more particularly on the Western Australian coast, by the rebate system. I should like to read to the Committee the finding of the Navigation Commission on the question of rebates. I think that even Senator Guthrie ought to be convinced when he remembers that he put his name to the report.
– Let the honorable senator read the minutes.
– If Senator Guthrie, even after making, a protest, signed the report, it is hard to understand which side he is oh. Certainly his name appears at the foot of the report, which is the finding of a body that gave a considerable amount of attention to this matter. What I shall quote is not the mere assertion of a person who gets up to support an amendment, but the finding of a Royal Commission, which certainly deserves attention -
Upon the point that the limitation of the coastal trade io vessels complying with Australian conditions would result in a monopoly, a considerable amount of evidence was received. It was freely stated that a combine does already exist, by which the rates for passengers and cargo carried by the companies in the Steam-ship Owners’ Federation are regulated. Its extent may be gauged from the fact that out of about 188,000 tons engaged in Inter-State traffic, less than 10,000 are outside the ring. It would appear that the combine has been in operation for some time, and complaints of a very strong and emphatic character were received as to its methods. lt seems to bc the practice to make rebates to shippers who deal exclusively with the members of the Federation. The extent and the manner in which this practice operates is set forth by the witnesses, Messrs. Alexander, Mcpherson, McLennan, and others. The witness, Mr. McLennan, occupies an exceptional position. He is the present representative of the chief shipowners outside the Federation, yet whilst director of one of the companies within the Federation, he assisted to draft the rebate scheme. It may be taken for .”ranted, therefore, that his information is reliable, and, in the main, it was not contradicted by’ Mr. Grayson, secretary of the Federation.
Mr. Mcpherson, a member of the Council of the Chamber of Commerce of Melbourne, and Mr. Alexander, Chamber of Commerce, Fremantle, gave evidence in accord with that given by Mr. McLennan. The method pursued in connexion with the granting of rebates would appear to be open to some criticism. An undertaking has to be given that the shipper, neither by himself nor through his agent, will send or receive any goods other than by the vessels of the Federation. According to the evidence of Messrs. McLennan,. Alexander, Mcpherson, and others, this is rigidly enforced, any departure from the agreement involving the forfeiture of the whole of the rebates on the year’s transactions. Mr. Mcpherson gave an instance of how this worked out in his own case : - £,’In 1903. when I had 300 tons of iron to ship to Fremantle, I went to the shipping people to learn the rate of freight. They held a meeting, and then they gave me a quotation. They said - ‘ You will have to pay 18s. a ton now, but in twelve months’ time, if you confine all your shipments to the ports of the north and the west to the companies within the ring, we will grant you a rebate of 20 per cent.’ In other words, I had to leave with them a hostage of 3s. 6d. a ton on the 300 tons, and let it stay in their hands for twelve months. Had I not agreed to confine all mv shipments to the association, I should have had to charge 18s. a ton for the freight of the iron, and probably I should have lost the business.”
The report goes on to say -
This statement was full)’ corroborated by other witnesses. It would seem that to commit a breach of this undertaking, it is not even necessary for the person to whom the goods are consigned to authorize shipment on any vessel outside the
Federation ; the fact that they were so shipped, with or without his knowledge, is sufficient to involve the forfeiture of the rebates in hand, both on account of the shipper and the consignee. The following articles of the combine were put in by Mr. McLennan : -
Acts which constitute breaches of bonus regulations : -
Accrued bonuses become forfeited under the following conditions : - Through a company, firm, or individual shipping or otherwise receiving cargo, directly or indirectly, by any other vessels than those owned or chartered by the associated companies. It is distinctly understood that any company, or firm, or individual, who may ship or receive cargo by any outside vessel, although it does not pay the freight to that outside vessel, becomes disqualified under the above clauses.
That is pretty comprehensive. Then the report goes on -
In the case of a company, firm, or individual carrying on business as general carriers, and acting under instructions merely as general cargo carriers, with no control over the purchase, sale, or shipment of the goods, then that carrier is exempt.
Further the report says -
There is a note with regard to that. It says : -
If a firm of carriers ship or receive cargo by outside vessels, that fact at once disqualifies them, but should they prove to the Bonus Committee that they had no control over the purchase, sale, or shipping of goods, then the above clauses will enable local committees to add their name to the bonus list without having first to cancel their name and get the authority of the central committee to re-instate them on the bonus list.
That the transactions of the combine in this connexion are very large, may be judged from the statement of Mr. McLennan that “ There must be in the hands of the Associated Steamship Companies at the present time about£60,000 of these accrued bonuses which they pay out to the shippers; it cannot be less.” He added that of this from 20 to 25 per cent. is either forfeited through breaches of rules or unclaimed.
This part of the report concludes -
As your Commissioners consider that the rebate system is open to grave abuses, and calculated to seriously prejudice the commercial and industrial interests of the Commonwealth, they recommend the introduction of legislation at an early date, making it illegal for the owners, master, or agent of any vessel to give rebates or other advantages to any shipper or consignee of goods, if the condition of such rebates are advantageous, is that there shall be exclusive shipment by a certain vessel or vessels.
It would seem as if the Government had introduced this measure in accordance with the findings of the Navigation Commission. As the Bill stands at present, however, I do not think the clauses are sufficient to deal with the rebate system; and, therefore, the amendment submitted by Senator Best is necessary in order to bring that very injurious system within its scope.
– I can hardly allow the occasion to pass without expressing my sense of pleasure that Senator Best is at last convinced that the Bill is open to improvement. With the amendment, and with the author of the amendment, so far as he intends it to go, I am entirely in agreement. But I ask whether the proposed new paragraph may not injuriously affect a class of cases with which, I am sure, Senator Best does not desire to interfere. During the debate on the second reading I referred to a contract which had just been entered into in one of the dairying districts of New South Wales, by which an individual had undertaken to establish a dairying factory conditionally on the dairyfarmers insuring him the whole of their trade for a given term. That could in no sense be regarded as an injurious undertaking; because it was the only possible way the dairy-farmers there had of getting a capitalist to establish a factory.
– Would the Bill apply to an industry localized in that way?
– The industry was not localized, because the agreement covered the export of the butter manufactured at the projected factory. I mention this case because I am quite certain no honorable senator would desire to bring an arrangement of so innocent and beneficial a character within the compass of this legislation. It appears to me, however, that there is a possibility of this class of cases being brought within the suggested new paragraph.
– The proposed new paragraph is governed by clauses 4 and 5.
– Clauses 4 and 5 deal, of course, more particularly with restraint of trade.
– And with intent.
– The first paragraph of clause 4 speaks of restraint of trade, and it has been held, where legislation of this kind has been attempted, that to tie a man so that he can only trade with one individual or firm is a restraint of trade. In paragraph a of clause 4 there is no reference to the possible injury of any other
Australian industry ; the only reference is to restraint of trade. I do not think there can be the slightest doubt that the class of cases I have cited could be shown, technically at least, to come within clause 4. Under the proposed new paragraph we are asked to go a little, further ; and I am entirely in favour of the spirit of the amendment so far as it applies to the injurious contracts or arrangements referred to. I do not propose at this stage to call for a division on the amendment, because, as I say, I am in favour of its general spirit, but I ask the Government, if they have not already done so, to obtain the advice of the Attorney-General as to whether,±he class of cases I have mentioned - which, I am sure, the Government do not desire to interfere with - would be brought within the penal provisions of the clause. If that be so, I ask the Government, after consultation with the Attorney-General, to consider whether some addition cannot be made so as to exempt innocent and beneficial agreements of the kind.
-451- - Senator de Largie, in his remarks, deliberately - and I say this without hesitation - hid, to a considerable extent, the findings of the Navigation Commission. The honorable senator knows perfectly well that I signed that report only on the condition that rebates should be abolished if the coastal shipping companies of Australia got control of the trade. I ask the honorable senator whether that is not a fact. The. honorable senator is silent, and silence gives consent ; and yet the honorable senator has misrepresented me in this- connexion. I signed that report, as the minutes will show, on the condition that only those shipping companies which complied with Australian labour conditions should ha.ve the right to trade on the coast.
– What has all this to do with the rebate question ?
– It has everything to do with the rebate question.
– Nonsense ! The honorable senator does not know what he is talking about when he talks such trash !
– The honorable senator talks nothing but trash.
– Order.
– Are you calling me to order. Mr. Chairman.
– I think that the language used between the honorable senators is not quite in order, and I hope that
Senator Guthrie will confine his remarks as nearly as possible to the clause.
– The position is this : that Australian registered companies pay rates of wages which are consistent with Australian living.
– I am obliged to appeal to you, Mr. Chairman, on a point of order. Does the present amendment deal with rates of wages on the coast ? Has the amendment anything to do with the conditions of employment on our ships?
– This amendment proposes to deal with rebates, and I understand that it is alleged that shipping proprietors, who trade on the coast, are in the habit of allowing rebates. Some quotations have been made from a document, with which I am not familiar, in support of that allegation, and with a view to proving the advantage of adopting the proposed amendment. I understand that now Senator Guthrie wishes to refer to that document with a view to showing that the facts on which Senator de Largie relied in support of the amendment, and the argument drawn therefrom, are not substantiated. So far as I can understand Senator Guthrie, I think that up to the present he has been quite relevant.
- Senator Guthrie may argue that a system of .rebates would enable a shipping company to pay a high rate of wages, and I do not feel disposed to rule the honorable senator out of order.
– When the point of order was raised I was dealing with the question of whether rebates were for the benefit of Australian labour - let me emphasize the words “ Australian labour.” If we abolish rebates we shall have coolies, lascars, Germans, Frenchmen, and others competing for the trade of Australia. Senator de Largie, who is opposing this Bill, is, I believe, one- of the strongest advocates amongst us for a white Australia. The Peninsular and Oriental Steam Navigation Company, whose vessels call at Fremantle, employs lascars, Chinamen, and Eastern natives generally, and pays about one-eighth of the wages which obtain on the Australian coast amongst Australian shipping.
– Do the vessels of the Peninsular and Oriental Steam Navigation Company carry merchandise from port to port in Australia?
– At present I desire to deal with the passenger trade; and I declare that the accommodation on board those mail steamers is not one bit better than that supplied on the Australian coastal steamers. Further, the attendance oil passengers on the Australian coastal steamersis quite equal to that on the mail steamers.
– It is better.
– I accept the honorable senator’s correction. The other day I proved that freights on the Australian coast were lower than anywhere else in the world ; and the figures I then laid before honorable senators have remained unchallenged up to the present moment. Those figures show how much higher the freights are on the English coast, where the cost of labour is only one-third what it is on the Australian coast!
– I do not think the honorable senator is quite in order now.
– I desire to show that on the British coast, where those conditions prevail, there are no rebates. There are rebates on the coast of Australia; but,” without taking these into account, the freights here are one-third less than on the English coast. Yet we hear, not only in the Senate, but in another place, that freights on the Australian coast are extortionate. The first saloon fare from Sydney to Fremantle on the Kanowna, the Kyarra, the Yongala, the Grantala, the Bombala, and the Riverina is £10, and by other boats £9. From Melbourne to Brisbane the fare on the newer boats is £4 ios., and on the older boats £3 12s. F,rom Melbourne to Sydney the fare by the newer boats is £2 ios., and by the older boats £2. Let us see how these fares compare with the passenger fares in other parts of the world. It has been stated that the Peninsular and Oriental Steam Navigation Company gives no rebates, and the fare from’ Sydney to London, a distance of 12,485 miles, by one of their vessels-
– I thought the honorable senator did not approve of comparing coastal with oversea trade ?
– I was then dealing with the question of freight, whereas now I am referring to passenger traffic. After giving a close study to Rhodes’ Steam-ship Guide, which deals with passenger fares over the whole world, I can say that there are no cheaper passenger fares than in Australia.
– Will the honorable senator connect those remarks with the question before us?
– - I say that the rebate system is detrimental to the people of Australia, who are nomadic in their habits, travelling from one State to another. I am prepared to give evidence that they are affected by the system of rebates.
– Do passengers get a rebate ?
– No; but I am prepared to show that passengers travel at less per mile on the Australian coast than in any other part of the globe. Rhodes’ Steam-ship Guide, which deals with the whole world, gives the fares between port and port, and I defy any one to find an error therein. From Sydney3 to London, a distance of 12,485 miles, the fare runs from £65 to £75, but the minimum fare of £65 works out at r.25d. per mile. From Sydney to Colombo, a distance of 5,300 miles, the fare is £32, or at the rate of i-45d. per mile. From Sydney to Vancouver, a distance of 7.067 miles, the fare is £40, or at the rate of i-36d. per mile. From Sydney to San Francisco, a distance of 7,211 miles, the fare is £40;, or at the rate of. 1.33d. per mile. From Sydney to Hong Kong, where the boats are manned with cheap labour at 15s. 4d. a month, as against £8 ios per month on the Australian coast, the fare is £33, or at the rate of i.7id. per mile. From Sydney to Capetown, a distance of 6.349 miles, where the lowest form of white labour that is procurable in Europe, is employed, the fare is £31 10s., or” at the rate of i.igd. per mile. This is truly free-trade in carrying, where the owners, as in -the case of the Peninsular and Oriental Steam-ship Company, have the right to employ lascars and coolies at 15s. 4d. per month, or 6d. per day. Senator de Largie wants that company to come into competition with Australians, who, if they live in Sydney or Melbourne, ‘have to pay from ios. to 15s. per week for rent. And yet its seamen really do not receive sufficient pay to enable them to pay rent, and if they have wives and families, keep them in India, where they can live on an anna per day. Yet this honorable senator has the courage to stand here and say that he is in favour of encouraging Australian industries !
– Will the honorable senator confine his remarks more closely to the question before the Committee ?
– Y’es. Rebates on freight, I repeat, are granted, but no rebates on passenger fares are allowed.
– Some persons are carried more cheaply than are others.
– No.
– The boats carry clergymen, commercial travellers, and actors, more cheaply than other persons.
– So do the States railways. Suppose that we pass a provision to the effect that no rebates shall be allowed under any circumstances. How would it affect the rights of the States? A football or cricket team which is selected to take part in an Inter-State match is allowed a rebate by the Railways Commissioners. It will, therefore, be seen that a provision against the grant of rebates would interfere with the business of the States railways. Senator Playford knows as well as I do that in South Australia the Commissioner for Railways carries wool from Morgan to Adelaide at a considerably cheaper rate than for a similar distance in any other part of the State.
– I understood that an arrangement had been come to among the States not to charge those rates.
– It is still being done. In Victoria, for instance, the Railways Commissioners are carrying wool from Echuca to Melbourne, or Port Melbourne, or Williamstown, at a cheaper rate than they charge for a similar distance in other parts oft he State.
– That is in violation of the agreement arrived at by the States Premiers.
– It has not been carried outyet.
– Then we shall have to create an Inter-State Commission to carry it out.
– What I wish to ascertain is whether the Government have considered to what extent States rights are involved in this question of rebates?
– The Bill does not deal with the States.
– No; but an amendment has been moved which raises the question of States rights.
– I do not think so.
– If the Government of South Australia, or Victoria, or New South Wales are prepared to give rebates on the carriage of wool from the Murray to the sea coast, is not the question covered by the amendment?
– No ; the States do not come within the purview of the Bill.
– If, as the Minister says, the States do not come within the purview of the Bill, I am prepared to bow to his superior wisdom. Having given the passenger rates per mile outside Australian waters, I propose now to mention the passenger rates which are charged on our coast. From Sydney to Fremantle, a distance of 2,450 miles, the fare is £10, or at the rate of.98d. per mile, which is cheaper than any rate I have quoted, the lowest being that from Sydney to Capetown, namely,1.19d. per mile. From Melbourne to Brisbane, a distance of 1,080 miles, the fare is , £4 10s., or at the rate of 1d. per mile.
– That is as cheap as the rate per mile on an English parliamentary train.
– An English parliamentary train does not supply either sleeping accommodation or food, but when travelling from Melbourne to Brisbane, a passenger is well-housed, and is fed like a fighting cock. From Sydney to Hobart, a distance of 628 miles, the fare is £2 10s., or at the rate of . 95d. per mile. Rhodes’ Steam-ship Guide, which is absolutely independent and unbiased, deals with the principal steamship lines in the world, and is as high an authority as is Cook’s Tourist Guide. I take these guides as being absolutely correct. The fares on the Australian coast in no case amount to over1d. per mile. The fares outside of Australia, where the ship-owners have the advantage of cheaper labour, are over a 1d. per mile. Is there, then, any necessity for passing special legislation to restrict our ship-owners? I have now proved that both fares land freights are lower on the Australian coast than on the English coast. I am prepared to go further, and to prove that they are lower than on any coast in the world. There is no necessity for either Senator Best or Senator de Largie’s amendment, so far as the Australian coastal trade is concerned. It has been said that there is no competition. I say that there is competition; but God help the Australian seaman who has to sign on a ship running in competition with a Federation ship ! He gets nothing like the wages that are paid by the federated companies, and he is absolutely starved. Senator de Largie instanced a Western Australian ship-owner - Bateman - who never paid the standard rate of wages in his life. Yet the honorable senator stands up in his place in the Senate, and advocates the cause of Bateman !
– Do Scott, Fell, and Company pay Australian rates of wages ?
– I take it that that firm does so under compulsion.
– Do J. and A. Brown pav Australian rates?
– J. and A. Brown have from the beginning of their opposition said, “ We are prepared to pay union rates.”
– That company is outside the ring.
– The whole coast of Australia is open to it. There is nothing to prevent any ship-owner from entering the Australian trade. If any of them can invent another syste)m to cut against the rebate system, what, is to stop them from doing it? Now I wish to come to a personal matter. Senator de Largie has referred to the fact that I signed the report of the Navigation Commission.
– I think the honorable senator has already made a personal explanation regarding that matter.
– No, I have not. The honorable senator failed to tell the Committee that there is another provision in the Commission’s report which I signed.
– It has nothing to do with rebates.
– It has everything to do with the question.
– Then let the honorable senator bring it forward.
– I am going to do so.
– I stand by every part of the report.
– So do I.
– Did not the honorable senator sign that part of the report dealing with rebates?
– Why mention that part of the report alone?
– Because that is the only ppart with which we are dealing.
– Far from it. I signed the report on this condition - that every sship that was prepared to abide by Australian conditions should have the right bv licence to trade on the Australian coast.
– I think the honorable senator said that before.
– I did not.
– Senator Best’s amendment deals with the question of services which are the subject of competition. We are in this unhappy position on the Australian coast : We have ships trading with our ports which are employing labour at such rates that the men could not live on them in Australia. They would not be sufficient to pay his rent or to cover the cost of the bare necessaries of life. Let me point to the case of a ship which arrived in Queenscliff a little while ago. The crew was absolutely starved on the voyage from Molinda, in Peru, to Queenscliff. They declined to go any further in the vessel. The magistrates decided that they were justified in refusing to go an inch further, first, because they had been starved; secondly because their lives had been endangered from the fact that no lights were exhibited during the voyage, owing to the want of oil; thirdly, because no fog-horns were in use, and fourthly, because the lifeboat which was supposed to be available for the men in case of collision or running aground was in such a condition that paint, when put inside, ran through on to the outside.
– Is the honorable senator opposing my amendment ?
– I am.
– The amendment does not mention shipping.
– But it mentions “ services.” What does the honorable senator mean bv “ services “ ?
– Transport charges.
– Does the honorable senator mean transport charges within a State, or does he mean extra or InterState charges?
– Both.
– Then I hope Air. Bent, the Premier of Victoria, will take notice of the attitude of Senator Best, who is a representative of Victoria. Mr. Bent, to-day, is charging differential rates’ between Echuca and Melbourne.
– The honorable senator spoke of Inter-State and extra-State charges.
– I spoke of InterState and State charges, to which the honorable senator said he intended the words “or sendees “ to apply.
– And so they will apply, so far as corporations are concerned.
– We cannot go beyond corporations.
– I say that Mr. Bent, who is a corporation, and Mr. Tait, who is a corporation in a lesser degree, are charging special rates over the Victorian railways.
– The honorable senator must see that the words cannot apply to any State railways.
– The words apply to every State railway in the Commonwealth.
– If we seek to bind the Crown, the Crown must be specially mentioned; and the clause applies only to corporations formed within the Commonwealth and to Inter-State trade.
– Then we arrive at the question - what is a corporation? Does Senator Best deny that Railways Commissioners are a corporation?
– I answer in the words of the Constitution, that Railways Commissioners are not a foreign corporation nor a trading or financial corporation formed within the Commonwealth.
– The Constitution provides that all the powers regarding the rates on railways shall be settled by an Inter-State Commission.
– Unless special rates are required for the development of some part of the country.
– I shall accept Senator McGregor’s definition. Is it in the interests of the Commonwealth that there should be rebates between Echuca and Melbourne? The amendment lays down the principle that wool carried from Echuca to Melbourne shall be granted a rebate.
– Is it not. a differential rate rather than a rebate?
– Nothing of the kind. Senator Best knows that a rebate has to be granted from Echuca, or the wool would never come to Port Melbourne.
– I hope the honorable senator will not pursue that argument any further, because I do not think the question of States railways has anything to do with the amendment before us.
– I most respectfully decline to agree with your ruling.
– If the honorable senator disagrees with my ruling, will he be good enough to put his disagreement in writing, so that the point may be settled by reference to the President?
In the Senate:
The Chairman of Committees. - Mr. President, I beg to report fhat when the Committee were considering clause 6 of the Australian Industries Preservation Bill, Senator Best submitted an amendment with the object of adding the following paragraph to sub-clauseI : - “(d) If the defendant, with respect to any goods or services, which are the subject of the competition, gives, offers, or promises to any person any rebate, refund, discount, or award upon condition that that person deals, or in consideration of that person having dealt, with the defendant to the exclusion of other persons dealing in similar goods or services.”
Senator Guthrie, in discussing the proposed new paragraph, introduced the question of rebates granted by the States Railways Commissioners, and referred at length to the action of Mr. Bent, the Premier, and Mr. Tait, Railways Commissioner, of Victoria. I ruled the honorable senator out of order, on the ground that the question of rebates granted on any State railway do not come within the scope of the Bill. To that ruling Senator Guthrie has disagreed in the words -
I respectfully decline to agree with the Chairman’s ruling that I cannot debate the question of “or services” in the amendment proposed by Senator Best, clause 6, sub-clauseI, of the Australian Industries Preservation Bill.
You will observe, Mr. President, that the Bill deals with corporations and commercial trusts, and that - “Commercial Trust” includes a combination, whether wholly or partly within or beyond Australia, of separate and independent persons (corporate or unincorporate) whose voting power or determinations are controlled or controllable by -
– I hold that we, as a Commonwealth Parliament, have absolute power under this Bill to control any body whether corporate or unincorporate, unless the contrary intention appears - and no contrary intention does appear in the Bill. “Commercial Trust” includes - a combination, whether wholly or partly within or beyond Australia, of separate and independent persons (corporate or unincorporate) whose voting power or determination are controlled or controllable by -
I do not think that many honorable senators really understand what is meant by “ a trust as understood in equity.”
– The honorable senator evidently does not understand.
– I admit that I do not.
– What has this to do with the question whether we can legislate in reference to States railways?
– I am coming to that presently, if you will only wait. The interpretation clause proceeds -
I wish to emphasize the fact that the Railways Commissioners of South Australia have entered into an agreement with wharfowners - and I particularly instance Port Pirie - to charge a certain rate for wharfage for goods passed over the wharf there. I hold that under this Bill that is an agreement into which the State of South Australia has entered with private individuals. But the Railways Commissioners of South Australia have gone further, and entered into a combination for the purpose of pooling all wharfage, and dividing it at the end of the year. I ask you, Mr. President, in deciding this point of order, to take that fact into consideration. I could point to fifty instances of a similar nature. I shall put the case still more strongly. In Victoria, so far as wharfage is concerned, there is a protective duty. Goods arriving from ports outside Victoria are charged a wharfage fee of 5s. per ton, while goods produced in that State are passed over the wharfs absolutely free. I ask the representatives of Victoria if they will deny that that is a protective duty against other States
– It is a wharfage charge.
-It is a protective duty. Again, salt from Edithburgh, in South Australia, when landed on a wharf in Victoria, is charged a wharfage fee of 5s. per ton.
– The honorable senator must blame the State Parliament for that.
– No ; it is the fault of the Commonwealth Parliament.
– I must ask the honorable senator to address his remarks to the point of order, and not to the merits or demerits of what is done in Victoria.
– The position I wish to put is that wharfage is a service, and that the Constitution provides that services, amongst other things, shall be the same throughout the Commonwealth. Victoria is building up-
– The honorable senator is really discussing the merits or demerits of the system in Victoria; but the question at issue, I understand, concerns a discussion in Committee which he wished to initiate relative to the Bill.
– No. The point I have raised is whether I can discuss the question of services. I leave the question of railways, because I think it must be evident to every honorable senator that there is a more important question to be. considered, and that is the competition between the States.
– The honorable senator must see that the question under consideration is not what powers the Senate bias or has not, but what powers the Committee has in relation to the Bill.
– The amendment of Senator Best begins with the words “ If the defendant with respect to any goods or services.” and the whole question I raise is whether on that amendment I am entitled to move in the matter of services.
– No one ever disputed that for a moment. The whole point at issue was as to States railways.
– No; it is the question of services.
– That is not the point on which the honorable senator was ruledout of order.
– My disagreement from the Chairman’s ruling relates, not to a question of States railways, but to the question of services. I am prepared to prove that the services as between State and State are unfair.
– The honorable senator must not argue that question. The point is whether in this Bill in Committee he can move an amendment-
– No, that is not the question.
– I think that there isa misunderstanding, sir.
– In the first place, I should like to be clear as to what the disagreement was about. I am bound to take the statement of the Chairman of Committees, who, I understand, would not allow Senator Guthrie, on an amendment moved by Senator Best, to discuss the question of States railways and States services. Whether the procedure in Victoria in relation to wharfs or railways is fair or unfair has nothing to do with -that question. The whole point is whether, in Committee on the Bill, the honorable senator can initiate a discussion or introduce an amendment relating to States railways or States services.
– The whole question is whether in Committee I can move fo delete the words “ or services.”
– Nobody can deny that.
– But the honorable senator has not proposed an amendment.
– No; but I was leading up to an amendment when the Chairman of Committees ruled me out of order because of a reference I had made to States railways. The States not only control railways, but also a great many other public services. In New South Wales, for instance, the State controls the tramways. Is this Bill to provide that the Parliament of that State shall not have the right to control the railways by, for instance, fixing the fares, or, if necessary, the freights? I contend that it would be a very bad move indeed on the part of this Parliament to enact such a provision. I could mention other States which control such services as tramways.
– The honorable senator has taken up an hour or so; but I do not understand yet what he is arguing about.
– Does the honorable senator think that the use of the word “ services “ in the amendment of Senator Best would apply to the control of the tramways in1 Hobart?
– This Parliament has no power to deal with the tramways in Hobart.
– Have we not?
-This Parliament has power to deal with trade and commerce among the States, but not with trade in any one State.
– That is a ruling from the Chair which I am very glad to get. In
Victoria, the Railways Commissioners issue railway tickets from Melbourne to Sydney - that is to say, for a journey through two States. Would the amendment of Senator Best apply to them? I think it would. The question to which I was more particularly directing my_ attention when the interruption occurred was whether, when a deep-sea ship arrived at a port in which there was a combination which comprised either the Railways Commissioners or the Harbor Trust, and which arbitrarily fixed the charge for landing goods on the wharf, the Bill would relate to such services. It must be borne in mind that these services are in some cases rendered by private individuals, and in other cases, as in Victoria, by the State. I declare emphatically that it is an absolute breach of the Constitution for a State to levy differential wharfage charges.
– I must ask the honorable senator to confine himself to the question of order. I have already stopped him from discussing the question whether the wharfage rates in Victoria are fair or unfair. What has that to do with the point of order ? Nothing at all. The only question is what amendments can be made in the Bill in Committee.
– I bow to your decision, sir. But I wish to point out that the Constitution provides that the charges for services throughout the Commonwealth shall be uniform.
– Suppose that they are not. What has that to do with this Bill?
– The Committee was engaged in discussing an1 amendment, to the effect that, in regard to services rendered to any person who came within the Commonwealth, no rebate should be granted. That would still leave it open to each State which owned wharfs to fix the rate of wharfage. I take it that in Victoria there is a considerable territory which, under a system of rebates, would send its produce, not to Melbourne or Warrnambool or Portland
– The honorable senator does not seem to see the point of order. He is again discussing the fairness or unfairness of certain conditions.
– He is really ignoring the ruling of the Chair.
– The honorable senator is ignoring the ruling’ of the Chair when he is discussing all manner of things which have nothing to do with the’ question under consideration.
– I have been trying to point out that, if. a system of rebates were initiated under the Bill, it would be possible for ohe State to take advantage of another State.
– But this amendment would prevent the granting of rebates.
– How far would it prevent the granting of rebates ? I want to show honorable senators that it is pos.sible for Victoria-
– What has that to do with the point of order ? The question is what powers the Committee have in dealing with this Bill. Whether if is possible or not for Victoria to discriminate in reference to trade and commerce has nothing to do with the question.
– The point at issue between the Chairman and myself is whether I was in order in discussing the question of services.
– That is not the question put to me by the Chairman.
– I put my dissent in writing.
– I shall take the case as submitted to me by the Chairman of Committees.
The Chairman of ‘ Committees. - May I again explain? When clause 6 of the Bill was under discussion, Senator Best moved an amendment, which was perfectly in order, dealing with corporations and trusts and persons. Senator Guthrie argued at length whether the practices of the States Railways Commissioners came within the scope of the amendment. He proceeded to refer to Mr. Bent as a corporation, and to Mr. Tait, the Chairman of the Victorian Railways Commissioners, as a corporation in a lesser degree. He stated that these persons had granted rebates to persons sending goods between Echuca and Melbourne. As the honorable senator proceeded to discuss that matter at length, I ruled him out of order-
– Senator Guthrie’s objection is that he dees not agree with the ruling of the Chairman as to the words “ or services.”
The Chairman of Committees. - The Standing Orders state that a senator taking objection to a ruling of the Chairman shall put his objection in writing. I trust that honorable senators who were present in Committee will, if there is any difference between Senator Guthrie’s report and mine-
– I shall take the Chairman’s report. Has Senator Guthrie finished at last?
– No. I think that your remark as to whether I have finished “ at last “ was quite uncalled for.
– The honorable senator has been, diverging from the question nearly the whole time he has been speaking.
– The President and I may differ on that point.’ I leave honorable senators to decide which of us is right. I hold strongly that in dealing with services” we are infringing upon the right of the States to control their own business. I say again that the remark of the President as to whether I had finished “at last” was- quite uncalled for.
– I have called the honorable senator to order three or four times.
– I do not care whether you have called me to order twenty times. I am here to represent my State, and this is a matter in which my State is vitally interested. If I am put out of the chamber I do not care.
– This, Bill does not deal with the States at all.
– I do not know whether it does or not. I have asked the Minister a question, and have not obtained a satisfactory reply.
– I have said that the Bill does not deal with the States.
– The whole question, to mv mind, is this - does the word “ services “ relate to the States or does it not? I have given as an illustration a case where ai State enters into a combine, and has agreed to “ pool” the results.
– Such’ a case is not dealt with by this Bill.
– I think it is, and my opinion is worth just as much as the Minister’s. I maintain that I have a right to discuss whether States services are included. I believe that it is possible for a State to enter a combination, and absolutely to bleed the consumer.
– I again ask the honorable senator to confine himself to th’e point of order.
– The question is, have I or have I not a right to address myself to the point whether Senator Best’s amendment would affect a State that entered a combination ?
– The honorable senator does not seem to see the point at issue. The Senate has referred a Bill to the Committee. The Committee have power to consider that Bill, and to discuss amendments relevant to it. The question is whether issues concerning the powers of the States are in order in reference to the Bill. I ask the honorable senator not to continue his remarks, because he has reiterated his arguments a great many times.
– If the services referred to in Senator Best’s amendment are rendered by a State, I wish) to know whether we have power to deal with such a State under the Bill?
– The question at issue presents itself to my mind as being one of some moment. The Bill, as you are aware, Mr. President, deals with combinations in restraint of trade. We were discussing in Committee an amendment, the object of which was to make the payment of rebates illegal. Certain States railways - those in my own State, for instance - grant rebates. I submit that it is competent, in view of the purpose of the amendment under discussion, to debate the question whether the clause and the amendment do refer to States railways or not ; if they do, whether it is constitutional or proper that they should do so ; and if they do not, whether it is desirable that they should. In view of the fact that we have before us in Committee an amendment dealing with rebates, and that there are States railways which pay rebates, it seems to me to be competent for honorable senators to argue how far the clause and the amendment cover the practice of States railways that grant rebates, and what legislation ought to arise out of that practice.
– I wish to draw your at:tention, Mr. President, to important facts that seem to be overlooked. Certain offences are created by clauses 4 and 5 of the Bill. The measure goes on to say that if a contract is entered into, or a combination continues to exist, with intent to injure or destroy certain industries, or to compete with them unfairly, an offence is committed. This Bill can only refer either to a person, a foreign corporation, or a trading or financial corporation. The sole question is whether
Senator Guthrie had a right to discuss States railways. I submit that he had no such right. First of all, States railways cannot possibly be comprehended within the limits of the Bill. In order to bind the Crown it is necessary that the Crown should be specifically mentioned. Consequently,, if the States railways are in the names of the States, the Crown must be specially mentioned, in order that they may be affected. It may be said that the railways in some of the States have been handed over to Commissioners. But the Bill cannot apply to Commissioners of Railways. The Constitution gives us power to make laws with reference to foreign corporations, and trading and financial corpora- tions formed within the Commonwealth. That is all that this Bill seeks to do. The Railways Commissioners of the States have their existence by virtue of Statutes constituting them corporations. But that class of corporation does not come under this Bill at all, because it is not a foreign corporation, nor a trading or financial corporation formed within the ‘Commonwealth.
– Not a trading corporation ?
– I take it from Senator Best’s argument that he contends that the States railways are not covered by the Bill ? If so, surely we can discuss the fact that the Bill does not cover them?
– I do not think so, because we have no power under the Constitution to deal with them in such a Bill. It is true that we have power with reference to the acquisition of railways with the consent of a State.
– We also have power with regard to differential rates.
– Only through the appointment of an Inter-State Commission. But that is not the point.
– This Parliament has already dealt with States services.
– And that question isnow before the High Court.
– That is a precedent.
– This Bill simply deals with offences committed by foreign corporations and trading or financial corporations within the Commonwealth. Statesrailways do not come within either of those designations.
– I would respectfully remind you, Mr. President, that when we were discussing the Conciliation! and Arbitration Bill, and a similar question to this was brought before you, you ruled from the Chair that it was not incumbent upon you, or within your province, to decide a constitutional question.
– Except so far as is necessary for the conduct of business.
– Of course. I rose to remind you that in consequence of your ruling, the question then at issue, which was analogous to the present question, was discussed at great length. You know, of course, that I am referring to the inclusion of States servants under the Conciliation and Arbitration Act. I then agreed with you that it would be inadvisable for you to rule on a constitutional point, and that, as long as the debate did not traverse the Standing Orders, it should be allowed to go on. The question now before the Chair is exactly that which then had to be decided.
– I do not think so. I think it is a question of what can be introduced in the Bill before the Committee.
– Perhaps I am wrong, but the position, as it appears to me, is this. Senator Guthrie was discussing the possibility, or otherwise, of including certain States services within the scope of this Bill. Whether he was using that as an illustration or not is not much to the point. He was discussing the advantage or disadvantage of using this Bill to control such services. When we were dealing with the Conciliation and Arbitration Bill, we discussed the applicability of that measure to States services, and whether it was desirable or not to include them. You were asked whether such a point should be discussed, and your ruling was that it was purely a constitutional matter, that it did not, in your opinion, contravene the Standing Orders, and that you were bound to allow the debate to continue. I have quoted from memory, but I think I have correctly stated your ruling on that occasion. If so, I ask you. Mr. President, to reconsider the matter before you rule on this point.
– I do not desire to prolong the discussion, but it will be within the memory of us all that, when the Arbitration and Conciliation Bill came before another place, there was a clause in it which excluded States servants from its operation.
– I think that was so.
– That factupholds Senator Best’s contention, inasmuch as in that particular Bill the Crown was mentioned.
– We dealt with the Bill as it came to us.
– When the Bill came to us States servants were included, and, therefore, the Crown was named. In order to have objected to the discussion which then took place, you, Mr. President, would have been called upon to object to a clause which was in the Bill - an impossible position. As to the constitutional point which has been raised, I direct honorable senators’ attention to section 102 of the Constitution, which provides the only way in which we can deal with States railways, so far as rebates are concerned.
– Not the only way.
– Yes, the only way.
– The question now is not whether we can constitutionally deal with the States railways; the President will not give a ruling on that point.
– The latter part of section 102 says -
But no preference or discrimination shall, within the meaning of this section, be taken to be undue and unreasonable, or unjust to any State, unless so adjudged by the Inter-State Commission.
That clearly shows that in a Bill of the character before us, we could not deal with any such question ; and the section strengthens the position taken up by the Chairman. If we cannot legislate in the direction suggested, then surely every discussion regarding it must be out of order.
– This is a Bill to deal with certain acts by individuals, or by foreign corporations, and trading or financial corporations formed within the Commonwealth. The question of any dealings by any State-
– Mr. President-
– I am giving my ruling.
– Have I not the right to sneak?
– No. This Bill, as I sav. is confined to certain classes of persons, who are mentioned in clauses 4 and Clause 6 is, to a great extent, explanatory of clauses 4 and 5, and on clause 6 Senator Best has submitted an amendment, which commences “ If the
Cite as: Australia, Senate, Debates, 28 August 1906, viewed 22 October 2017, <http://historichansard.net/senate/1906/19060828_senate_2_33/>.