7th Parliament · 2nd Session
The President (Senator the Hon T. Givens) took the chair at 11 a.m., and read prayers.
page 13509
Senator Lt.-Colonel O’LOGHLIN.I ask the Acting Minister for Defence whether he has noticed that the report of Admiral Lord Jellicoe on naval defence has been laid before the Parliament of New Zealand. I ask why, after the report has been published in a sister Dominion, the people and Parliament of Australia are kept in the dark in regard to it? I ask the Minister, further, if it is a fact that in Lord Jellicoe’s report it is proposed that a subsidy of 20 per cent. of the cost, amounting to nearly £4,000,000, should be paid by Australia? I ask, also, when will Lord Jellicoe’s report be placed before this Parliament?
– I shall have inquiries made in the course of the day, and will make a statement in regard to the matter on the motion for the adjournment of the Senate.
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– I ask the Acting Minister for Defence whether, in view of the statements which we continually see in the press to the effect that in Australia we are not treating our soldiers as well as returned soldiers are being treated in other parts of the Empire, he will have a statement prepared snowing how Australia is treating her returned soldiers and how soldiers are being treated in other parts of the Empire. The latest information on the subject would be of great advantage to honorable senators?
– I shall see whether it is possible to have such a statement prepared early next week. There is some little difficulty in interpreting the exact application of regulations adopted in other places, but I think it will be possible to furnish a statement which will be approximately accurate.
-Am I right in assuming that the Acting Minister for
Defence will see that there is included in the statement to be prepared the repatriation proposals of the various parts of the Empire, so far as the facts are available?
– I understand that what is desired is a fair comparison of the treatment of returned Australian soldiers with that of soldiers in other parts of the Empire. I shall endeavour to supply that with as full detail as possible. If the question is repeated on Tuesday next, I shallprobably be in a position to say what will be includedin the statement.
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– Will the Acting Minister for Defence give the Senate some idea of the Bills we shall be asked to deal with before the anticipated closing of the session?
– I think the following is a fairly complete list of the Bills which will be submitted : -
Loan Bill, Matrimonial Causes (Expeditionary Forces) Bill; Deceased Soldiers’ Estates Bill; Treaty of Peace (Germany)’ Bill; Sugar Industry Commission Bill; Electoral (temporary) (SoldiersVoting, &c.) Bill; War Service Homes Bill, to bring munition workers within the operation of the Act; Indemnity Bill; Legal Proceedings Control; Land, Mining, Shares, and Shipping; Northern Territory (railway rates) ; Invalid and Old-age Pensions Bill; Navigation Act Amendment . Bill; Tasmanian Debentures Bill; Customs Tariff Validation Bill; Excise Tariff Validation Bill.
Most of these Bills are merely technical and formal.
– With a view to enabling the Senate to cope with the very large programme which the Minister has announced, will he move to suspend the new standing order limiting speeches ? Honorable senators may laugh, but I am asking a serious question. I wish to know whether with a view to our getting through the programme announced between now and the end of the session, the Minister will suspend the standing order limiting speeches? Evidently, I am not to be allowed to proceed.
– Order! The honorable senator in asking a question is entitled to be heard without interruption.
– I am not prepared to consider the honorable senator’s suggestion; but I shall see that as many as possible of the Bills are circulated amongst honorable senators, in order that they may peruse them in advance of their consideration.
– Very well; we shall run to the time-table which the Standing Orders prescribe.
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– Is it the intention of the Government to make a statement to the Senate before the close of the session showing the exact position of the various Wheat Pools? .
– I am hopeful that I shall be able to make a statement on the subject very early. We are having an independent survey made of all stocks in hand in Australia. I expect to receive this return immediately, and as soon as it is received I shall make as complete a statement on the subject as possible.
page 13510
Permanent Officers’ Pay
asked the Acting Minister for Defence, upon notice -
– A return containing the ‘desired information was laid on the table of the Senate on the 2nd instant.
page 13510
asked the Leader of the Government in the Senate-
In connexion with the proposed war gratuity, will the Government, in ‘ order to make the financial burden easier, consider the advisability of allowing soldiers to choose between taking their amounts in cash or war bonds; if necessary, offering an inducement to them to take war bonds?
– This matter is still under consideration, but the Prime Minister will make an early statement in regard thereto.
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The following paper was presented : -
page 13510
Bill received from the House of Repr.esentatives.
Motion (by Senator Russell) proposed -
That so much of the Standing and Sessional Orders be suspended as would prevent the Bill being passed through all its stages without delay.
– I rise, at this stage, to protest against the suspension of the Standing Orders or the suspension of so much of the Standing Orders as would prevent the hurried passage of any measure through the Senate at the close of the session. When there is real urgency and the condition of things issuch that it is essential for the Government to put their business through with extreme haste, then alone is there justification for the suspension of the Standing Orders. In this particular case I can see no need for extreme haste, unless it is the haste and hurry of the Government, who evidently have in their minds something which they will not intimate to Parliament in connexion with the holding of an early election. I say, advisedly, that they have not yet intimated it to Parliament. I have asked time after time in the Senate for a definite statement as to the date fixed for the general election, but so far I have no official answer from the Minister stating what date has been fixed.
– O - On the contrary, the Minister said only yesterday that the date had not been fixed.
– Senator O’Keefe very properly reminds me that only yesterday the answer given by the Minister leaves a doubt in one’s mind as to when the elections will take place. If Parliament is to go to the country, that would constitute a valid reason for “the suspension of the Standing Orders, to pass without delay, any measure which might be regarded as one of urgency, but that would not justify us in making every measure a matter of urgency. That there is merely a limited’ time at the disposal of the Government is no reason why we should rush measures through the Senate. The Minister has said that the Bills to be dealt with are machinery Bills, and we are very near the end of the session. The particular. Bill now under consideration, dealing with the ratification of the Peace Treaty, is not a matter of urgency.
– I did not say that this was a machinery Bill.. I said that most of the Bills in the list I gave are merely technical.
– I have no desire to do the honorable senator any injustice. I had in my mind the enormous list of Bills which he read out, and I know . he referred to them as machinery Bills. I presume that the matters dealt with in the Bill now before us have already been discussed in the debate which took place on the Peace Treaty. That discussion need not be gone over again. I do not know the contents of this particular Bill or what bearing it has on the peace proposals. But I do know that the Standing Orders ought to be rigidly adhered to, and I see no reason why, because the Government , get into a hurry, we should join in their hurry. These Standing Orders, in most cases, have stood the test of many years’ conduct of the business in the Senate, and now suddenly it is found necessary to suspend them day after day, and in respect of measure after measure. During the last week honorable senators on this side have shown a reasonable amount of forbearance in regard to the discussion of the different measures that have come before us, in order that the Government may get on with business and terminate the session on the . date on which, from press reports and rumours, we understand it is likely to expire. I might reasonably complain that we have not been taken sufficiently into the confidence of the Government, because we do not know definitely when a certain event will happen. Because of this state of uncertainty regarding the conduct of the business, I do not feel called upon to go out of my way to expedite measures by agreeing to the suspension of the Standing Orders upon every Bill that comes before us, without, at all events, demanding from the Minister some reason for this expedition. We are not aware officially why it is desirable to rush’ business through, but I take it that the Government intend to push on with business as much as pos sible, or the Minister would not have taken this extreme course of suspending the Standing Orders. The Bill dealing with the Nauru Island agreement occupies a prominent place on the noticepaper. I am not sure whether the Standing Orders were suspended in respect to that measure. The Government would be well advised if they allowed us to resume the debate on that Bill this morning. I came here prepared to deal with it.
– So we will.
– Does not the Minister intend to take this measure before the Nauru Island Agreement Bill?
– No.
– That alters somewhat my view of the motion, because I think we can very profitably occupy our time to-day with the Nauru Island Agreement Bill.
– I have no complaint to make concerning the attitude taken up by the honorable senator, but I maypoint out that since I have been in charge of the Senate I have not used any power I may possess to unduly restrict debate upon the measures that have come before us. I have moved the suspension of the Standing Orders so that the passage of this Bill may be expedited, but it is not the intention of the Government to go on with it to-day. I regret I cannot give the honorable senator any definite information as to the date of the election, but it is quite obvious that an election is at hand. Certain legislation dealing with the Constitution had to be finalized. Every honorable senator knows that as well as I do. I can say that it is the hope and intention of the Government to finish up the business of Parliament next week, if possible.
– Why all this mystery about the date of the elections?
– There has been no mystery about the date at all. Certain legislation had to be passed before the date could be definitely fixed ; . but the honorable senator may take it from me that there will be no delay.
– C - Can the Minister say if the election has been fixed for the 13th December, as stated in the press?
– So far as I am aware, no. The majority of measures to which I have referred are machinery Bills, and should not occupy an undue amount of time. In view of the early approach of a certain event, I ask honorable senators to be reasonable in debate during the remainder of this session.
Question resolved in the affirmative.
Bill read a first time.
page 13512
Bill received from the House of Representatives.
Motion (by Senator Russell) proposed -
That so much of the Standing and Sessional Orders be suspended as would prevent the Bill being passed through all its stages without delay.
.- This is a Supply Bill, and it should be debated. If we agree to the suspension of the Standing Orders, I am afraid that the Minister will move that it be read a first time.
– This Bill, not being an ordinary Supply or taxation Bill, and therefore a measure which the Senate may amend, cannot be debated on the first reading.
Question resolved in the affirmative.
Bill read a first time.
page 13512
In Committee (Consideration resumed from 3rd October, vide page 13017) :
Schedule -
Article 3. There shall be a Board of Commissioners, comprising three members, one to be appointed by each of the Governments who are parties to this agreement. . . .
– I offer a suggestion which I think will expedite the passage of this measure. The purpose of the Bill is to give effect to an agreement arrived at between Great Britain, Australia, and New Zealand in respect of the island of Nauru, and I suggest that we resume consideration of postponed clause 3, in which I desire to move an amendment which I think the Minister will agree to, dealing with the claims of the natives. Another amendment to be moved will give Parliament an opportunity of agreeing or disagreeing to any expenditure before being finally committed to it. I do not want my manner to be taken as an instruction to the Government. I make the suggestion because I am earnestly desirous of seeing the Government business expedited. The amendments fairly open up the scope of the Bill, but I shall not occupy much time in dealing with the clause. It is not my desire to attempt to amend the agreement, but I would like a test vote on it in Committee.
– I have given this agreement a considerable amount of reflection since the Bill was. last before the Committee, and I also offer a suggestion, in effect much the same as Senator Gardiner’s, but for somewhat different reasons. I see the difficulty that might arise if the Senate amended any of the articles that have been subscribed to by the Prime Ministers of Great Britain, Australia, and New Zealand ; but there is, I think, a general feeling that, the agreement should be adopted subject to some further control by the Commonwealth Parliament with regard to the money that Australia may be called upon to pay. I ask the Minister to resume consideration of clause 3, which, if passed, will practically approve of the agreement as it stands. My suggestion is to add the following words to the clause - “ subject to the amount of compensation to be paid under Article 8 being ratified by Parliament.” If these words are added, it seems to me that all the objections to- the agreement will, be removed.
– Am I to understand that honorable senators want to consider clause 3 in order to get a test vote on it ?
– That is my idea.
– The idea underlying my request is to have those words inserted, thereby getting honorable senators out of a difficulty in connexion with the probable payment of a lump sum by Australia as compensation for the rights of any company in the island. The insertion of the words will not affect the agreement in any shape or form. If the Minister accepts my suggestion, I do not think there need be much further discussion on the Bill itself.
SenatorRussell. - I have no objection to the resumption of the discussion of clause 3.
Schedule postponed.
Postponed clause 3 -
The agreement made between His Majesty’s Government inLondon, His Majesty’s Government of the Commonwealth of Australia, and His Majesty’s Government of the Dominion of New Zealand, in relation to the island of Nauru (a copy of which agreement is set forth in the schedule to this Act) is approved.
– I move-
That the following words be added: - “ provided that the amount of compensation to be paid under Article 8 be ratified by Parliament.”
Many honorable senators now find themselves in a difficult position, inasmuch as the passage of the Bill as it stands, will commit the Parliament, in effect, to paying whatever compensation may be decided upon for the purpose of buying out the phosphate company’s interests. Whatever sum the taxpayers may be called upon to pay should be specially agreed to by Parliament; and, if the proposed amount is, after all the evidence has been placed before Parliament, considered to be too high, we should have the right to say that it shall not be paid. If the words proposed to be added are accepted the agreement will be in no wise affected.
-The amendment will affect the agreement. The agreement may have tobe completed within a certain time, and the next Parliament may not meet for another six months.
– There is no reference in the Bill to a time limit within which the agreement must be ratified. Mr. Lloyd George will require to get the authority of the British Parliament before he can pay the United Kingdom’s share; and, similarly, Mr. Massey must secure the approval of theNew Zealand Parliament. So far as we know, a similar measure has not yet been passed by the Imperial Parliament, and may not be introduced, indeed, until the time has arrived for us to vote the money.
– The effect of the amendment will be to strengthen the hands of the Governments concerned in their negotiations with the company.
– That is so. The addition of these words will have a con siderable moral effect, if such effect is required, not only upon the company, but upon the British Government as well.
– However friendly may be the intentions of Senator Pratten, his proposed amendment is about as unfriendly as any Government could well be asked to accept. The suggestion is that the Government are not to be trusted to undertake financial negotiations. Parliament must be supreme in financial matters. The Government have no power to appropriate money, and will not make any payment until Parliament has voted it. Here, however, the Government are in a difficulty. An agreement has been arrived at between the Governments concerned to ascertain what is a fair price to pay by way of compensation. When that fair price has been decided, the proposal will be submitted to Parliament. I draw attention to the following remarks of the Prime Minister (Mr. Hughes) : -
I do not intend to indicate to the House what we consider a fair price. If I gave too low a figure, I should mislead the House, and if I gave a figure higher than that which it is worth it would he used by the company in the proceedings before the arbitrator, or in their negotiations with the Secretary of State. I did, however, mention a figure to the Secretary of State, beyond which we are not prepared to go without consultation. If the matter comes down to a direct affair, and is not referred to arbitration, that figure, of course, will be presented to this Parliament, which can express its own opinion on it.
– Does not the Minister consider that this Parliament has a say in what may be regarded as a fair price?
– I do; but I remind the honorable senator that this is not by any means an ordinary affair. The company with which we are to negotiate is not the company which held the original lease. We do not know the nature of the original lease. It was granted to a German company;the present company must be prepared to produce its documents. We do not know what its interests may be. Possibly it may. have none. Since the original title was vested in a company by the German Government, and seeing that all enemy property hasbeen transferred, it may be discovered that the original lease is practically worthless.
– How will that affect my amendment?
– In that the present company may not possess the title which it thinks it has.
– Then its title may not be worth anything ?
– Possibly that” may be so.
– Is it not provided under the terms of the Peace Treaty that enemy properties which have been acquired must be paid for by the respective Governments ‘!
– No; property which has been acquired from the enemy is to be held as security against debts owing by enemy subjects to British subjects. Nauru was taken from the enemy by force ns an act of war. I am not competent to say exactly what may be the conditions arising from the forcible seizure of the island, nor am I prepared to say what offer has been made to the present company.
– Why all this secrecy ?
– It. is a private company, and its interests are privateinterests. If the Prime Minister (Mr. Hughes) had said finally and definitely that the property of the company is wortha certain sum-
– How does he know ?
– He does not know the exact value. He knows, however, that it is not above a certain amount. He does not want to make public what information he may possess with respect to the negotiations.
– Has not Mr. Massey given an estimate? Did he not say that the amount of compensation would be about £3,000,000 ?
– Mr. Massey stated in the New Zealand Parliament that the company had asked for £3,000,000.
– -What, it has asked for and what it is likely to get are two different matters. The Ocean Island people have recognised that, with Government competition in the future, if they do not altogether go to the wall, the value of their shares will drop; and they are anxious to negotiate in order to get rid of their property. The Prime, Minister has given the definite pledge that the offer agreed upon between, the Governments in partnership would be placed before the Federal Parliament. If the negotiations are not referred to an arbitrator, the sum decided upon will be announced to Parliament; and Parliament will be entitled to express its views thereon. The .Government are in the same position as any other Government with respect to financial responsibility. They cannot regard the amendment in any other light than as practically equivalent to a motion of want of confidence.
– Nothing of the kind ! It was not intended to be so.
– The Government cannot spend one penny until it has been voted by Parliament.
– But they have done so time after time. What about the purchase of the ships?
– That deal was ratified by Parliament; the money was voted from time to time for the purpose. The pledge of the Prime Minister is quite clear.
– That is, that before ratification the price to be paid shall be submitted to this Parliament?
– No. If the op- .portunity permits, however, that will be the course adopted. A definite sum has been agreed upon as a basis for negotiations between the Governments of New Zealand, Great Britain, and Australia. I take it that, in the ordinary business’ way, those who are charged with these negotiations will endeavour to pay as little as possible for the proposition. ‘ But if we announce what the sum agreed upon is, the information cannot fail to get into the possession of the- private company concerned, a condition of affairs that is most undesirable. Of course, it may happen that definite action may require to be taken whilst Parliament is in recess. The Prime. Minister, in speaking upon this question, said -
If the matter comes down to a direct affair, and is not referred to arbitration, that figure, of course, will be presented to this Parliament, which can express its own opinion on it. I
– But the deal may have been completed then.
– If the conditions which have been laid down by the three contracting parties to the agreement are accepted, the deal will be completed. But, in the event of the matter being . referred to arbitration, I tate it that we shall not have the right to secure a decision and afterwards to reject it.
-Then, in any case, we are “ clewed “ up.
– Yes. The great majority of the supporters of the Government, with their eyes wide open, sent the Prime Minister to the Old Country, and it was well known, to them, prior to his departure, that one of the matters which would be the subject of negotiations at a later stage was the island of. Nauru.
– We did not know anything about it when the Prime Minister left Australia. The war was not over then.
– I am sorry if the House did not then know that one of the big subjects for subsequent negotiation was the island of Nauru.
– We had no knowledge when the Prime Minister went to England that we should possess the German colonies.
– That is so. But we knew that our soldiers were in possession of it, and resolutions had been passed by this Parliament demanding the retention of the islands of the Pacific which our troops had conquered. . The question is, therefore, whether the contract which has been entered into is to be honoured or not. If we could be sure that Parliamont would be sitting when the negotiations are completed, I would have no hesitation in giving the pledge which Senator Pratten seeks. But let us suppose that the private company concerned turns down the offer of the Governments of New Zealand, Great Britain, and Australia, and thai the acquisition of its rights in Nauru becomes the subject of ‘arbitration. Will the other contracting parties be prepared to negotiate on the basis of “heads you win, tails we lose “ ? In my judgment, if would be much better for us to concentrate upon the nature of the arbitration proceedings. There is no doubt, however, that the money involved in the purchase of the company’s rights in the island - or, at least, our share of it - will eventually have to be voted by this Parliament. If special conditions arise which compel the Government to take prompt action, they will not hesitate to do so, and they will, of course, have to accept responsibility for their action. In conclusion, I repeat the pledge that has been given by the Prime Minister.
.- I do wish that the VicePresident of the Executive Council (Senator Russell) would approach this matter in a reasonable spirit. I do not impugn the honesty of the Government.
– I know that that is not the honorable senator’s intention, but it is, nevertheless, the effect of Senator Pratten’s proposal.
– Has proposal is that before any money is paid in connexion with the purchase of the company’s rights in Nauru Island, the agreement entered into between all the contracting parties shall be ratified by this Parliament. The Prime Minister has intimated that if the matter be not dealt, with by an arbitrator it will be submitted to Parliament, but if it is dealt with by an arbitrator it will not be so submitted. If the rights of the company which- owns the phosphatic deposits in Nauru Island become the subject of arbitration, whatever the decision of the arbitrator may be, Australia will be bound to respect it, because the honour of her people will be at stake. But we -are now invited to send a representative from Australia to negotiate upon a matter, although we do not know within £1,000,000 the amount of money that is involved in it. What is the proposal which has been put forward by Sena - tor Pratten ? It is that before any money is paid for the acquisition of a private company’s rights in Nauru, the agreement entered into between all the parties shall be ratified by this Parliament. Our position, I submit, is analogous to that of a board of directors intrusted with’ the management of the affairs of a company, and we are not justified ‘in accepting the manager’s statement that he is going to enter into a conference with certain other parties at which he will be careful to safeguard ‘our interests. My responsibility is that of a director, and on behalf of the people of Australia I demand that the agreement shall be submitted to this Parliament for ratificationj and that our representative shall not commit Australia to the expenditure of an unknown amount. The adoption of that course would strengthen the hands of the Prime
Minister immensely, and would prevent the private company concerned from making exorbitant demands.’ Mr. Hughes has already entered into an agreement, which I am prepared to allow to paas, even thougn I am very much dissatisfied with it. But I am not going to lay’ myself open to the taunt, perhaps twelve months hence, “Why, you agreed to this proposal. You accepted it without complaint, avid now you are taking up an entirely different attitude.” . I happen’ to occupy a different position in regard to this matter from that occupied by most honorable senators, in that I have had tha good fortune to meet three men who have been to Nauru Island, although only one of them, Mr. John McDonnell, has had any interests there. Mr. McDonnell was a member of the garrison at Nauru. Another nian who has worked there is the secretary of the Actors Union in Melbourne, and a third gentleman who has been in Nauru has informed me of the amount which the present company gave for the whole of their property.
– What proof did he adduce as to the amount they gave for it?
– I cannot produce any proof beyond the word of this gentleman, which I have no reason whatever to doubt. He told me that the company purchased their rights for £500,000.
– That may be true, and it may be less than the.amount which the company will receive.
– One of my complaints against the Government is that we are asked to agree to this Bill because we have confidence in them.
– That is just the difference between my honorable friends oppo-. site and the Ministerial supporters. We have confidence in the Government, whereas they have not.
– In money matters I have confidence in nobody.
– Then the honorable senator must be a very unhappy man.
– I am not; because an agreement which is well made is always a good agreement. The Government have placed themselves in a very peculiar position. Unless my ideas are entirely wrong, they should not ask us to trust them in a matter involving a large expenditure until after the elections.
– The honorable senator cannot get. away from the respon sibility of the country. The Commonwealth is a party to this agreement.
– The VicePresident of the Executive Council his stated that before the Prime Minister left for the Old Country we knew perfectly well that the acquisition of rights in Nauru Island would be one of the big matters which would form the subject of negotiations later on. That statement has absolutely no foundation in fact. I well remember that when the Recruiting Conference was sitting at Government’ House, Melbourne, the Prime Minister was panic-stricken because ‘he thought that our enemies would win the war. When he started for Great Britain he was absolutely panic-stricken with that fear. If necessary I can quote his remarks in proof of my statement. How idle it is, then, for the Vice-President of the Executive Council to affirm that before the Prime Minister’s departure we knew perfectly well that Nauru Island would form the subject of subsequent negotiations. As a matter of fact, we did not know at that time whether we would be called upon to sign a triumphant peace or a dictated one.
– And the honorable senator did not seem to care very much, either.
– The honorable senator is welcome to his opinion. I am satisfied that even the honorable senator himself did not play his part any better than I played mine. But I decline to make this question one of confidence in’ the Prime Minister. I am merely stating a business proposition when I say that before any money is expended by the Government in the acquisition of rights in Nauru Island, Parliament should be called upon to ratify the agreement entered into on its behalf. We know perfectly well that the Peace negotiations that were conducted on the other side of the world were submitted to this Parliament for ratification.
– And the agreement in respect of Nauru will be submitted to Parliament.
– Then there is no lack of confidence implied in the Go vernment if we insert that, condition in the Bill. I have here a map of Nauru Island, drawn from a sketch by Mr. John McDonnell by his. son, who is engaged in that particular business. Honorable senators will see that, according to this map, not more than one-twelfth of the island belongs to the company.
– I thank the honorable senator for that information. It will greatly assist me.
– I repeat that not one-twelfth of the island belongs to a private company at the present time.
– The honorable senator may stress that point as much as he chooses.
– In the proposal submitted by the Government, the impression was conveyed that we were taking over the whole island.
– And we shall have the whole of the island, and not onetwelfth of it.
– The difference between the honorable senator and myself is that he says in effect, “I am not responsible for what money we put into this enterprise. I am prepared to leave that to the Government.”
– I never said any thing of the kind, and the honorable senator is putting words into my mouth.
– If it is good business, what objection can there be for those who represent the people having the proposition put before them? Where is the need for secrecy? The Prime Minister (Mr. Hughes) has stated that an amount has been mentioned. Why should Parliament be denied the right to know what that amount is? We can honorably negotiate with companies by speaking our mind freely, and I cannot see any reason for secrecy. If there has been an agreement - I understand there have been some negotiations - it must be remembered that Parliament is above the Government, and the members of this Senate are responsible to the various States which sent them here. According to the map I have in my possession the company owns about 500 acres.
– Has the honorable senator ever heard of the Mount Morgan mine?
– I have been through it.
– It is a very small pimple on the face- of Queensland, but it is very valuable.
– Yes ; but gold is worth £4 an ounce, and phosphatic rock is excavated in millions of tons and sold at 30s. a ton f.o.b. Rich deposits may be profitably worked in small areas. Some honorable senators consider Nauru Island one of a few places where phosphates can be obtained. For the information of the Senate I wish to submit the following particulars relating to the world’s store of phosphates : -
United States. - Important deposits of mineral phosphates are now worked On a large scale In the United States, the annual yield far surpassing that of any other part of the world. In 1008 Florida produced 1,673,051 tons of phosphate valued at 11,000,000 dollars. Tennessee has an output of 403,180 tons.
Algeria and Tunis. - Algeria contains important deposits of phospherite, especially near Tebessa and at Tocque ville, in the province’ of ConStahtine. Joint production of Tunis and Algeria in 1907 was not less than 1,000,000 tons.
Egypt - Phosphates also occur in Egypt.
Professor Gregory has stated that the output of phosphates from Algeria is approximately 3,000,000 tons, and that the price at which it can be placed on the market is so cheap that the product of the Pacific Islands cannot compete with supplies from that source. The statement continues: -
France. - Franco is rich in mineral phosphates, the chief deposits being in the northeast and south-west. The production in France is still large- -375,000 tons in 1907.
Belgium.- Production of Belgium, 180,000 in 1907 .
Germany.- In the Lahn district of Nassau there are phosphate beds in Devonian rock. The deposits were rich. . . .
Spain and Portugal. - In northern Estremadura, in Spain, and Alemteza, in Portugal, there are vein deposits of phosphate of lime. As much as 200,000 tons of phosphate have been raised in these provinces.
Russia. - Large deposits of phosphate occur in Russia, and those in the neighbourhood of Kertch have attracted some attention.
– The freight from those places to Australia would kill the proposition.
– The argument can be taken the other way. So far as the Pacific is concerned, the freight from Naura to Europe would also kill the proposition. The product from Nauru could not be profitably shipped to any other country than Australia.
– Do you know the quantity exported to America ?
– I understand that 60 per cent, of that produced on’ Ocean Island comes to Australia, apart from the quantity sent to New Zealand. The value is arrived at principally on the cost of labour involved in production, as is the case with, say, blue metal from a quarry.. It costs up to 30s. per ton to place phosphates f.o.b. at Ocean Island.
– Order j The honorable senator’s time has expired.
– In opposition to Senator Pratten’s amendment, the Minister quoted from Hansard a guarantee . given by the Prime Minister. If that guarantee is to be accepted, there should not be any opposition to this safeguarding amendment, which is to add the words “ subject to the amount of compensation to be paid under article 8 being ratified by Parliament.” The amendment does not ask the Government to make public the amount the Government are prepared to pay under the partnership, neither does it seek to lift the veil of secrecy. I agree with Senator’ : Gardiner, that secrecy is unnecessary in dealing with public matters. The amendment merely says that Parliament shall have the Tight to express an opinion in connexion with the expenditure of public money. Parliament will be invited to express an opinion on the merits of the deal when the proposed agreement has been made by the Prime Minister on behalf of the Parliament, Government, and people. The people of Australia will have to step in behind the compact, irrespective of its merits or demerits, and will be asked to honour the arrangement. This is a pernicious system, and one that has been operating for generations. It is a system which has created wars, and enabled privileged people calling themselves diplomats to enter into compacts on behalf of their people and Parliaments, and when war has been declared, Parliaments, Governments, and peoples have had to honour the compacts made without their authority. Pf the Government refuse to accept the amendment, that pernicious system will be followed in the commercial arena. As the Leader of the Opposition (Senator Gardiner) has stated, Nauru is not the only place where phosphates are obtained. .Iri Queensland some experimental work, which promises to be successful, has been undertaken, after a preliminary geological examination.’ On the small island of Holbourne, which comprises about 70 acres, and which is about 20 miles from the Queensland coast, there is a deposit of phosphate S or 9 feet in depth.
– What is the percentage ?
– Nineteen or twenty per cent. I am not putting that up against the phosphatic rock supplies of the world. A full report of the Queensland Government Geologist on the matter appears in the Queensland Government Mining Journal of March last. The opinion is held that With a further geological examination of the islands along the Queensland coast, particularly towards the approach to Thursday Island, it is likely that phosphatic deposits of greater richness may be discovered. It must also be remembered that in Queensland bone . manures are extensively used, and there is not likely to be a great demand for phosphatic manure except, perhaps, on the heavy red soils’.
– It could be used on the Darling Downs.
– It might be used with advantage in the Bundaberg and other districts if increased supplies were available. A wrong impression may be caused by the fact that phosphatic rock produced on Nauru Island costs 30s. per ton, f.o.b., and some who have not gone into the matter may believe that it can be purchased at a price approximating the f.o.b. price. The phosphatic rock placed f.o.b. at 30s. pelton at Ocean Island or . Nauru Island, when crushed, treated, and loaded at Cockle Creek, is sold at £5 or £6 per ton, but there are distributing costs to be added to that. According to the Queensland Journal of Agriculture, the manure used by the Department of Agriculture on its experimental farms costs about £7 10s. pelton. The Article we are discussing is the kernel of the Bill, and an endeavour is being made to bind the people of Australia to the payment of a sum that has not been specified. In making the agreement,’ Parliament is net to be consulted ; but we shall be compelled to ratify what has been done. It has been pointed out during the debate that those who are dissatisfied with the agreement have always favoured State control of industries. Ever since the birth of the Australian Labour movement that has been the policy of the party. It is asked why honorable senators, who believe in . the conduct of enterprises by the State, should be opposing this proposal, under which the Government seeks to make a State industry of the manufacture in Australia of superphosphates from phosphatic rock mined at Nauru Island. One of the principal causes operating against the success of State industries in the various States of the Commonwealth, and I admit that there have been instances in- which the States have carried on unsuccessful operations, has been the over-capitalization in the early stages of the enterprise. There have been instances in which enterprises carried on by the States have been so heavily handicapped by over-capitalization that success has been denied them from their inception.
– No ;the “ government stroke “ is the principal difficulty.
– Iam afraid there may be over-capitalization of the enterprise dealt with in this Bill. Senator de LaTgie should have no ground for complaining of the “government stroke” in connexion with the mining of phosphatic rock at Nauru Island, because it will be carried on by Chinese and Indian indentured labour. If this proposal is doomed to failure as a State enterprise, as I fear it is, it will afford no. opportunity for the libelling of Australian workmen in respect of the amount of work they perform.
– It is. not all libel, as the honorable senator knows.
– In my opinion, the Australian workman does more than does the average worker in any other country in the world. When the Scottish Commissioners werein Australia investigating the conditions of labour and settlement, they said that the outstanding surprise to them was the extraordinary amount of work performed by Australian workmen in comparison with workers in other countries.
– They referred to the Australian farmers.
– They said that they had seen ohe man in Australia driving as many as five horses in a team and milking as many as a dozen cows. An Australian boy or girl will milk twenty cows before ‘breakfast and trot off to school afterwards. It is a libel to say that it is the “ government stroke “ that has been responsible for the non-success of some State enterprises in Australia. The principal cause has been overcapitalization and unsympathetic ‘ administration. I fear that over-capitalization of this concern will be a factor operating against its success, and that another factor will probably be unsympathetic administration. We have had many instances of persons placed in command of State enterprises having no sympathy with their success. They have carried on a system of scien tific sabotage to insure their failure, which has given Senator de Largie and other people the opportunity to speak disparagingly of the “government stroke.” The comparative failure of some of these State enterprises has been brought about by the scientific go-slow policy of those placed in charge of them. If I were appointed to investigate some of these enterprises . I should look for sabotage, not amongst the workers, but amongst the bosses, who work against their successful development at every stage.
Senator Pratten’s amendment does not propose that any announcement shall be made of , the amount of money which Australia will be called upon to pay for her share in this agreement, but that whatever the amount may be it shall be ratified by this Parliament. The responsibility is upon this Parliament to find the money, and no Executive, or Prime Minister should be given control of the national purse-strings.
– The honorable senator’s time has expired.
– I understand that the object of Senator Pratten’s amendment is to preserve to this Parliament what should be its most cherished power, and that is the power over the purse. I entirely agree with the honorable senator in ‘that desire. Some things have been done lately by our very energetic Prime Minister that have been calculated tomake our hair stand on end. Here, however, we are confronted with a definite proposition to purchase 42 per cent, of a company’s interest in the Island of Nauru. I approve of Senator Gardiner’s simile that we are here as a Board of directors, and the Government are in the position of our managers. We are practically in charge of the funds of the shareholders, and we are asked to delegate a certain amount of power to our managers to invest in a specific enterprise. As a private individual and member of a board of directors I have often consented to the manager of a company - when, for instance,we wished to purchase a mob of sheep - being given the power to pay a certain amount per head for them.
– No; to do the best he can.
– Sometimes we tell him to do the best he can, but we certainly never let the owner of the sheep know the price that we are prepared to give. That is why the Government are not in a position to disclose the amount which they are prepared, with the Governments of Great Britain and New Zealand, to pay for the interests of the company in Nauru Island.
– Senator Pratten’s amendment does not ask that the amount should be disclosed.
– No; but it asks that the agreement should not be ratified until it is sanctioned by this Parliament. The Minister has pointed out that Parliament may not be sitting, and it may not be possible to obtain its consent When it is required. We have been assured that there may be a very great profit from this investment. Information has been supplied bv Senator Gardiner which goes to show that what is proposed will not be a good bargain. I understand that Senator Senior is in possession of a great deal of information tending to show that it will be a splendid bargain. If it turns out to be a really good bargain we shall look very foolish if we decline to give our managers, the Government, the power they ask for to complete this contract. We know that the Prime Minister (Mr. Hughes) had to exhaust a great deal of energy, and go to a great deal of trouble to secure for Australia the right to claim a 42 per cent, interest in this investment, and no doubt the Imperial or New Zealand Governments . would be1 prepared to take the bargain off our hands at a moment’s notice.
– From what I know about it T would let the New Zealand Go vernment take it over to-morrow if I had my way. I have no hesitation in making, that statement publicly.
– I question whether any of us has really reliable information about the prospects of this investment. Nauru is a solitary island in the Pacific, and, with very few exceptions,. I suppose that the only people who have visited the island are the employees of the company. Senator Gardiner has said that he obtained some information from a member of the guard there. I do not attach much importance to the statement that the phosphatic deposit is confined to 500 acres of the island. We have no information as to its depth. It may be 100 feet in depth; and, if so, it would be an enormous and very rich deposit. I do not wish to go into the facts of the matter.
– Does the honorable senator not think that the Government should give us the facts?
– The Government have supplied us with some information, and I assume that they will send experts to the island tp make a thorough examination of the proposition, and report to them, so that they may be in a position to say whether they should conclude the bargain ot not.
I object very seriously to handing over to anybody the power of the purse, which Parliament should retain, and I, therefore, commend the motive actuating Senator Pratten in submitting his amendment.. We should take the utmost care to see that abad bargain is not made, and we have cautioned the Government, as our managers, that every possible care must be taken to see that we are not asked topay too much for our share in the enterprise. Some information which has been supplied has shaken my faith in the speculation, but, as Senator Keating has pointed out, we are in this matter on thehorns of a dilemma. If this should turn out to be a splendid investment we will look very foolish if. we have stood out of it; because there is no country in the world that is more dependent for its agricultural . prosperity upon a supply of fertilizers than is Australia.
– The suggestion is,, not (that we should stand out, but that Parliament should control the money paid for it.
– The practical effect of that may be t.o keep us out of it,. because I can conceive that the company may stipulate for an immediate answer, the Imperial and New Zealand Governments may ibe prepared to take the risk, and we may “lose a very good thing. After what has been said, I am prepared to trust our managers, the Government, to carry this deal through. I feel sure that they will take all reasonable precautions to see that the money of the Australian people is not wasted.
– When I spoke on the second reading of the Bill, I was not fortified with facts with which I have since made, myself acquainted. Senator Gardiner produced a map, and told us that the company have’ rights over about 500 acres of Nauru Island. I learn from the Handbook of the Pacific Islands, published by Stewart and- Company, of Sydney, that Nauru Island is circular in form, and about 3 miles in diameter. There are about 1,284 natives on the island, slightly fewer now than there were in 1912. There is about. 4,500 acres of the island highly phosphatized. This gives us the size of the island, and the area from which phosphates may be gathered. In 1915 the exports of phosphates totalled 85,808 tons, and in 1916, 105,012 tons. It will be seen, therefore, that rapid progress was made in the development of the deposits. The imports in 1916 were shown at £34,548, and the revenue in that year was £8,402, made up as follows: - Customs, £1,567; licences an.d internal, £1,288; court fees and fines £171; Pacific Phosphate Company, £3,599; post-office, £1,776.
Let us turn’ now to the position of the Pacific Phosphate Company. I find, from the Mining’ Manual and Mining Year-Book, 1919, an English publication, that the company obtains its rights from the Pacific Island Company, which in turn derives its rights from a company formed in Hamburg. No doubt Senator Pratten, who lives in Sydney, will remember the quarrel that took place between this company and Burns, Philp, and Company with respect to shipping charges made in connexion with trade to this island. I need not state the number of directors of the company, but I may inform honorable senators that the chairman is the Bight Honorable Lord Balfour of Burleigh.
– And a German named Voss is the secretary.
– Well, the German secretary may be all right. This company has offices in Melbourne, Sydney, and Adelaide. The Mining Manual states -
The company was registered on 18th April, 1902, to acquire from the Pacific Islands Company Limited, a licence from the British Government for ninety-eight years from 1st January, 1902, to deal with phosphatic deposits on Ocean Island (Gilbert and Ellice Islands Colony), in the Central Pacific Ocean; also a concession from the German Government for a period of ninety-four years from 1st April, 1906, giving the exclusive rights of exploiting guano, phosphates, &c, on Nauru (or Pleasant Island), GasparRico, Bigar, and all other islands in the Marshall Group. The consideration was £200,000, payable £100,000 in fully paid-up £1 first preference shares, and £100,000 in fully paid-up £1 ordinary shares. In 1901 ‘ the deposits on these two islands were estimated at 54,266,450 tons.
Shipments. - 1902 to 1915 (inclusive) - Ocean Island, 1,875,904 tons; Nauru Island, 781,835 tons.
In addition to the above concession, a large shareholding is held in the Compagnie Francaise des Phosphates deI’Oceanie, of Paris, which was formed in October, 1908, to exploit phosphate deposits on the island of Makatea, Eastern Pacific, estimated at. 8,000,000 tons.
Capital. - £1,200,000, in 125,000 7 per cent, cumulative first preference, 325,000 6 per cent, cumulative second preference, and 750,000 ordinary shares of £1 each; all the first preference, 100,000 ‘ second preference, and all the ordinary shares are issued, and the first and second preference and 375,000 ordinary being fully paid up, and 375,000 ordinary having 10s. paid. The capital was increased from £250,000 to £500,000 in June, 1909, by creation of £250,000 ordinary shares, which were offered to ordinary shareholders at par by way of bonus (being two for every share held), and increased to £875,000 in May, 1910, by creation of a further £375,000 ordinary shares, which were offered to ordinary shareholders at par (credited with 6s. 8d. paid) by ‘way of bonus. In June, 1912, the capital was increased to £975,000 by creation of 100,000 second preference shares, which rank for dividends and return of capita] next to the first preference shares. It was increased to present amount in March, 1914, by the creation of a further 225,000 second preference shares, and 100,000 were offered for public subscription at par.
Now we come to the dividends, and on this subject the authority I have quoted states -
Dividends. - The preference shares are payable 1st January and 1st July. Distribution on ordinary shares - For 1903, 25 per cent.; 1904, 15 per cent.; 1905, 15 per cent.; 1906, 30 per cent.; 1907, 50 per cent.; 1908, 50 per cent., also a bonus of £2 per share, payable in two new ordinary shares or cash; 1909, 35 per cent, and a bonus of 6s. 8d. per share, payable in cash or in £1 ordinary share (6s. 8d. paid) ; 1910, 45 per cent.; 1911, 30 per cent.; 1912, 25 per cent.; 1913, 25 per cent.; 1914 to 1917, 7 J per cent, each year; 1918, 24 per cent, (interim), 24th December.
This information shows that the company has done exceedingly well.
– But that has nothing whatever to do with Nauru Island.
– It concerns Nauru Island just as much as Ocean Island.
– The company has taken very little out of Nauru. When those dividends were declared they had hardly exploited Nauru Island at all.
– The honorable senator is very much mistaken. The issue of Stead’s for 4th October, which Senator Gardiner himself quoted, contains photographs of workers engaged upon that island.
– To those dividends * which you have quoted, Nauru contributed but a very small proportion.
– Nauru Island last year sent away 100,000 tons.
– The big dividends which the honorable senator quoted related to some years ago.
– Had Senator Gardiner carefully read the article contained in Stead’s, he would have discovered that there are railways worked by electricity, and that the island is lit by electricity.
– I referred to that in my general remarks.
– If Senator Gardiner cares to glance through the issue of The World’s Work for June last, he will see an article written by Thomas J. McMahon, F.R.G.S., F.KC.I., &c, which deals with the British phosphate enterprise, particularly in Nauru. Mr. McMahon alludes to the’ important fact that the moorings for vessels are the deepest and most costly in the world. I will quote now from another journal of high technical repute, namely, The American Fertilizer, of 19th December, 1913-
The Island of Nauru, belonging to the German Marshall Islands (longitude 165 degrees East, latitude i degree South) is, as far as can bc judged without any deep borings, a pure coral island built up on a basis of massive rock or volcanic tuffs; this basis, probably a hill, was submerged in the course of time, on which coral polyps have settled and built up the present island. This base is now sunken to a great depth, and is covered with a thick hood or stratum of coral substance. This coral substance was originally carbonate of lime in the form of aragonite, but lias been converted into carbonate of lime-magnesia, in dolomite. By the eroding effect of the water, a dissolving of the carbonate has taken place. This has been’ the cause of the formation of large and small caves, and of the surface phenomenon of dolomitic Karrenfelder or Schrattenfelder, characterized as pinnacles, dolines, funnels, and kalamms. Every piece of the dolomite exposed to the atmospheric influences represents a “ Karrenfeld “ in miniature.
The dolomitic debris, gravel, and sand has been changed into phosphate of lime by infiltration of products of solution of bird excrements in the dolomite. The space between the pinnacles is filled in, to a large extent, with phosphate; also the greater part of the area’ of land is covered with phosphate. The stratum of phosphate, -mostly in the form of sand and gravel, and workable with a shovel, has a thickness of from 10 to 50 feet. Even at the present time, the forming and extension of caves and cavities takes place by dissolving the carbonates by rain water, while the formation of “ Karrenfelder “ practically has come to an end, as a cover of the overlaying phosphate prevents it. Still, the heavy rains extract much carbonate out of the island; proportionally, more lime than magnesia is leached out. The water. of the lagoon Buada contains lime and magnesia in the proportion of live to one.
I stress the point that the deposit has been proved to a depth of from 10 to 50 feet. The- article in The World’s Work mentions that there is a railway cutting 40 feet deep, and that it- has been tested right down to the bottom. Also, a well has been sunk, and its waiter has been found to contain, phosphates. ‘ I have quoted the best authorities available, and I think I have established the undoubted value of the island. Since we must recognise that Ocean Island has proved of immense value, we have every right to be confident that Nauru Island will prove equally rich.
The price quoted, namely, 30e. f.o.b.’, is extraordinary; I cannot understand it. Under similar conditions, work is done in South Australia by means of some such apparatus as a steam shovel, and a cubic yard of material - practically, 1 ton - can be removed for 9d. At Nauru the material has to be conveyed no1 great distance, and the traction is electric. I fail to see, therefore, how the charge of 30s. per ton can be justified. If a practical man such as Mr. Joseph Timms, or his late partner, Mr. Teesdale Smith, were to get on the job, I feel confident that he would undertake to remove the product, and place it on shipboard for less than one- third of the price quoted. If we have the opportunity to secure the phosphate at anything like a reasonable price, and Australia should fail to ratify the agreement, we shall he missing one of the greatest opportunities ever placed before “ us.
– I am pleased that Senator Senior has been able to put the other side of the case so completely. He has provided considerable information, but it only tends to corroborate my own earlier remarks. I stated that the greatest output from Nauru in any one year amounted to 105,000 tons. The profit shown by the company varies from 5s. to 7s. per ton.
– What dividends did the company pay?
– It was in relation to dividends that the honorable senator failed to do his subject justice. He quoted certain very large dividends, and inferred that they had been earned on the Island of Nauru. In the year in which the dividends totalled £42,000, Nauru’s contribution did not amount to £16,000. The greatest output from Naura, as ‘ I have already stated, was 105,000 tons in one year. The company claims that its profits range from 5s. to 7s. .a ton. That is to say, the greatest annual output from the island failed to show a profit on the company’s workings of more than £35,000.
– Those profits, as’ a matter of fact, are more than 50 per cent, under-estimated.
– It is not. an under-estimation, but is what is shown on the balance-sheets. Can we hope to double the output of the company, and to double the company’s profits?
– To quadruple them.
– We will need to increase them tenfold if we are to be compelled to pay £3,000,000. We are not negotiating for Ocean Island. Responsibility rests more heavily than ever on Parliament, and it is no more than fair that Parliament should be acquaintedwith the whole of the facts in the possession of the Government. Mr. Massey announced in the New Zealand Parliament that the company had asked for £3,000,000. That being so, if we enter upon this agreement blindfolded, the company will undoubtedly get what it asks. If the Labour party is returned to power after the next elections, this proposed compact will be submitted to Parliament. The price will.be placed before members of the Federal Legislature. No matter what agreement Mr. Hughes may have entered into, not one penny will be paid to anybody without the consent of Parliament. It will be -useless for our opponents to bring up the matter of the Wheat Pool scandals. This project looks like the biggest swindle ever sought to be foisted on the Australian people. I do not see anything in it to justify the expenditure of more than £200,000.
Sitting suspended from 1 to 2. SO p.m.
– When the -sitting was suspended, I was characterizing the agreement contained in this Bill as a “put-up job.” The more one looks at the infernal thing, the worse it appears to be. I propose, to read what Sir Joseph Ward said in the New Zealand Parliament, when complaining that,, although he attended the Peace Conference as a co-delegate with Mr. Massey, and was present at one meeting at which the Nauru Island agreement was discussed, he was excluded from attending all the other meetings. As will be seen by reference to page 49 of the New Zealand Han-sard for the- current session, he said -
May I be allowed to say that, except at a meeting with Mr. Hughes and Sir Joseph Cook, I was never present at any of the meetings held in regard to this matter, as I was not invited by Mr. Massey to attend (hem. I do not question that Mr. Massey was doing what he regarded as best for New Zealand, and I am not trying to take away any credit to which the honorable gentleman is entitled. The meeting I attended was adjourned. It was the only one I was at, and the only one I was ever asked to attend. I do not know the ‘conditions of the agreement as to Nauru now, and for the reason that I was not consulted - I want to make that quite clear. The agreement may be one that I could readily assent to; I do not know that it is not; but until I have had the opportunity of considering it, I cannot say. I cannot take any responsibility.
The Bight Hon. Mr. Massey. - I do not understand the objection. There was only one meeting. I never saw the agreement until the day I left Paris.
These things, I submit, are worthy of our serious attention.
– But the matter had been discussed previously.
– The quotation continues -
I never saw the agreement till the day I left Paris, and the right honorable gentleman had been away then for some weeks.
The Bight Hon. Sir J. G. Ward.- It was while I was in Paris, long before this.
The Right Hon. Mr. Massey. - The agreement came down to me on the morning I left Paris. There were several suggestions made previously, but no meetings. I really do not understand this. Now I want to come back to the mandate. We got over the first difficulty with regard to Britain holding the mandate. The next difficulty was the company, and Lord Milner sent me one ‘ morning the suggestion I mentioned; and, as a matter of fact, I lent him my copy of the report of the inquiry by the Inter-State Commission of Australia. That Commission had taken a lot of evidence, and had gone into the question exhaustively; and Lord Milner suggested that the only way to prevent the exploitation of the producers of New Zealand and Australia, particularly, was to buy the company out. We had a lot of correspondence on the subject, and I have no objection whatever to laying it on the table, as it may save time; and hie suggestion was that the property should be acquired compulsorily. New Zealand could not do that, nor could Australia - only Great Britain. He suggested that the property be taken compulsorily at a valuation. . . .
Both Mr. Hughes and I agreed to it, and the draft was sent to me on the morning I left Paris ; but it all depends upon the Government so far as the completion of the contract is concerned - that is, upon the Government and the Parliament.
Mr. Wilford. Have we the power of getting out of it?
The Right Hon. Mr. Massey. - Most certainly, we can. I do not know what we may have to pay, but the company- suggested their interest was worth ?3,000,000; but the buyer does not often take the vendor’s valuation. By way of explaining the position, as far as Nauru is concerned, and the deposits of phosphates there, I propose to quote from reports on th’e subject.
The time at my disposal will not permit me to read those reports. It will, however, suffice for me to point out that we are asked to acecpt this agreement as a matter of confidence in the Government, notwithstanding that one- of the New Zealand delegates who discussed this question has affirmed that that Dominion can get out of the agreement if it so desires. Personally, I am not prepared to shut my eyes and enter blindly into an arrangement of this sort. I am very glad that Senator Senior has substantiated my remarks regarding the utmost output of phosphates from Nauru Island. I stated on a previous occasion that, so far, the maximum output had been about 105,000 tons, which represented a value of, approximately, ?160,000. These figures enable me to say that it would be possible to obtain cheap phosphates for our farmers only by increasing the output tenfold.
– And then we should not be able to use them.
– Exactly .
– Why?
– Because there is only a limited demand for them. Unless we can make the price of phosphates cheaper, we cannot increase the ouptut from Nauru Island very much. Under the conditions which formerly prevailed, we were obtaining 60 per cent, of the output of phosphates from Nauru, whereas under the proposed agreement we shall get only 42 per cent. The private company which has hitherto been exploiting the deposits there, controls but a very small portion of the island. If Nauru is so full of phosphates, why should we not work the balance of the island ourselves? Senator Pratten’s proposal merely asks the Government to free themselves from suspicion by inserting in this Bill a clause providing that Parliament shall have a voice in determining whether the agreement shall be ratified or not. Such a provision, T contend, would strengthen the hands of Ministers immensely. Their representatives would then be able to go to the Conference and say to the representatives of the company, “ Any arrangement that we may make here is, of course, subject to ratification by the Commonwealth Parliament.” What could more effectually prevent profiteering than such an announcement ?
– Could the company have paid the dividends which it has paid if it were not a prosperous affair ?
– The dividends have not been paid out of the phosphates from Nauru. The biggest output from that island in one year has been 105;000 tons. The full value of those phosphates - on board ship was only 30s. per ton; or, roughly, ?160,000. The company claim that they have ?750,000 worth of machinery and appliances on the island. It is idle, therefore, for the” honorable senator to talk about the big dividends which tie company have made.
– Then the honorable senator denies their dividends ?
– I do not. But those dividends were obtained from the phosphates produced on other islands. What is the use of claiming that huge profits are to be made out of this enterprise when it is patent that there are not, if we allow for working expenses and interest upon capital. In the case of the Commonwealth, too, those working expenses would have to be increased by the appointment of a Commissioner and his Staff. I am sorry that the time limit imposed upon our speeches prevents me from dealing exhaustively with this matter.
– King Charles’ head.
– Fool and all as was King Charles I., he had some trains in his head. I cannot say that much for Senator de Largie.
– How does the honorable senator know that King Charles I. had brains ?
– I do not know. But I do know that Senator de Largie has none. There is not a single member of this Senate who would be prepared to put his money into this venture.
– I would be willing to put all I possessed into it.
– I repeat that the largest output from Nauru Island has been 105,000 tons a year. Of course, honorable senators opposite claim that that output can be increased considerably. I question that statement very much. We know that ships have to stand off the island some distance, and that the phosphates have to be taken out and loaded on to’ them by means of tenders. In such circumstances, it is impossible to obtain cheap phosphates. I know that the price of native labour is only 8d. per day; but I have had experience of that class of labour, and I say that native labour at 8d. per day is more costly than is Australian labour at 8s., or even 18s., per day. Upon one occasion, I saw a piece of machinery placed on board ship, at Sydney, by eight men, and when it arrived at Fiji thirty men were not sufficient to take it off the vessel. This is a proposition in which it is the duty of Parliament to safeguard the public interests. The taxpayers of this country ought not to be saddled with any monetary responsibility until Parliament has ratified the proposed agreement. Surely we ought to protect their interests by affirming that the National Legislature shall itself be the judge of whetherthe proposed arrangement is a fair one or not.
. -It is with very sincere regret that I lay myself open to the charge of prolonging this discussion. But, in the absence of official information from the Minister - information which has been asked for time and again - my duty to the farmers of Australia impels me to continue the debate in the hope that it may be forthcoming before this Bill finally passes.
– To what information does the honorable senator refer?
– I want official information regarding the amount which it is proposed to offer to the private company for the acquisition of its rights over the island of Nauru.
– The honorable senator is most unfair, because I have already explained, half-a-dozen times at least, why I cannot give that information. .
– The honorable gentleman told us last week that he would come along with some further information, and I was hopeful that he might give us an idea of the approximate amount which the Government are willing to pay for the company’s interests at Nauru. On a previous occasion”, I laid before the Senate certain figures relating to the capitalization of that company - figures, which were based on the profits made by it -and, so far, no reply has been vouchsafed to them. Consequently, I feel myself, as a Government supporter
– What?
– Then, shall I say, with clue deliberation, as sometimes an independent supporter of the Government, I feel myself in an exceedingly difficult position? I do not propose to indulge in the somewhat extravagant language that has been used by Senator Gardiner; but I wish calmly to place before the Committee the business principles which ought to be followed in connexion with the payments that will be made by the Government in respect of Nauru Island. If those payments are excessive, instead of superphosphates being cheapened to the farmers of this country, we shall compel the latter for all time to purchase dearer phosphates than they can purchase now. I am not speaking without my book in this matter. I have taken the trouble to understand it; and I can assure honorable senators that there is a very strong feeling abroad that if this Bill be passed’ in its present form, instead of cheapening superphosphates to our farmers, it may have an entirely opposite effect. I am sure that we do not desire to bring about any such result. That is the reason why I have risen to discuss the Bill as fully as it lies within my power to do. The Minister has refused a very fair suggestion which was offered to him when the debate opened this morning. The suggestion is contained in my amendment, and I am sure that many honorable senators on. this side of the chamber considered it fair. My amendment is to the effect that before money is paid by the Government - and any payment must eventually be a charge upon the farming industry - this or the next Parliament shall have an opportunity of expressing its approval or disapproval. I submit that that is returning to constitutional government. It is in accordance with the best traditions of government that Parliament should have supreme control over the public purse. I wish to continue my observations on Articles 7 and S, which read -
Any right, title, or interest which the Pacific Phosphate Company or any person may have in the said deposits, land, buildings, plant and equipment (so far as such right, title and interest is not dealt with by the Treaty of Peace) shall be converted into a claim for compensation at a fair valuation.
Article 8 goes on to say -
The amount of the said compensation shall be contributed by the Governments of the United Kingdom, the Commonwealth of Australia, and the Dominion of New Zealand in proportions to be mutually agreed upon,, or in the event of their failing to agree, within three months of this agreement coming into force.
The Minister informs us that the Prime Minister has in his mind the sum which he has agreed shall be paid to the company for its rights in this island. The Prime Minister has no right to keep from Parliament the amount in his .mind that shall be paid out of the Consolidated Revenue of the Commonwealth, irrespective of whether Parliament considers it a good bargain or not. He has no right to arrogate to himself, as the sole arbiter, the right to say what this company shall receive. If it is a reasonable sum there will be no hesitation on the part of Par- liament in indorsing the action of the Prime Minister.
– If three parties are to negotiate, it is fair to have a basis of negotiation.
– The Minister has informed us that an agreement has been arrived at as to what sum shall be paid to the company for its rights.
– No.
– Then, perhaps, the Minister will tell us what is the exact position?
– They have agreed to a maximum amount as the basis of negotiations, but nothing further.
– A maximum amount as the basis of negotiations? Then if the company accept that maximum amount, the Minister will not deny that the agreement will be concluded and the money paid.
– Certainly not. The people who have acquired are going to make the first offer.
– After inspection.
– We have heard that the company expects to receive about £3,000,000 for their rights. There is nothing in the Bill about the money being paid after inspection, and Articles 7 and 8 are quite specific. I have my modest share of responsibility and duty as one of the custodians of the public purse. I am sent here to protect the interests of the farmers, and I owe my position in this Senate in part to the farmers of New South Wales. I am not going to see a possible imposition put upon the fertilizer industry of Australia. The whole trend of the debate has been in the direction that if certain things eventuate in connexion with the- company’s right, title, or interest in this island, the phosphate rock will cost more f .o.b. Nauru than at present. It will certainly cost the manufacturers of superphosphates more, and consequently they will have to ask more from the farmer. One “step after another leads up to the farmer, who will eventually have to pay if this Parliament or Government makes a bad bargain.
– Is it a bad bargain ?
– That is what we wish to ascertain. I understand that a maximum price has been agreed upon in connexion with the negotiations with the company.
– As a Basis.
– One of the Articles in the Bill specifically provides that if two parties to the agreement disagree the question must be referred to arbitration. I take it that it will be the usual arbitration, that certain arbitrators will be appointed on both sides who will mutually agree upon an umpire, and that the decision of the umpire will be final. We are committing ourselves to arbitration in the event of the company not accepting the price offered by the Government: . ‘By so doing we are committing ourselves to accepting the arbitrator’s award ‘ unless we specifically provide otherwise. Apparently, some honorable senators think that the only phosphate in the world is to be found at Nauru and’ Ocean Islands. It has been shown by Senator Senior and Senator Gardiner that very large quantities are also obtained in America, Algeria, Tripoli, and in other parts of the world. In addition to those sources of supply, phosphate is obtained on the shores of the Red Sea, and on many islands in the South Seas which are undeveloped, including Makatea, which now supplies New Zealand.
– Makatea is under this option.
– Makatea has nothing whatever to do with the Bill under discussion. So far as I can ascertain, cheap phosphatic supplies are not a question of basic material,, because that is found all over the world in greater quantities than we can utilize. It is entirely a question of cost f.o.b. ports, where it is eventually converted into superphosphate. Let us analyze the figures.
– Order ! The honorable senator’s time has expired.
– In regard to the danger of continuing the policy of allowing any Government, or Leader of a Government, to enter into an agreement or contract without the consent of Parliament, it will be seen that, by Article 3, power is left in the hands of the Prime Minister to come to some arrangement with the other two Governments concerned in the administration of Nauru. There is a responsibility of committing the Commonwealth to the expenditure of a certain sum of money. Let me take honorable senators back to the occasion when the Prime Minister was in England, and took upon himself the responsibility, on behalf of the Commonwealth, of entering into contracts for the extension of the shipbuilding scheme. That was done, without the knowledge or authority of Parliament, and while I, as a member of the Labour party, viewed the result of the Prime Minister’s action in that regard as right, in that it coincided with the policy for the construction of a, Commonwealth line of steamers, I realized the danger attached to such action- Those of us who know Mr. Hughes will feel quite sure that he might have turned round and sold the whole Fleet. The Prime Minister is so constituted that he would do that in a moment. Such a responsibility should not be in the hands of one person, and it should not be in the hands of the Government without the consent or control of Parliament. The course of allowing the Prime Minister or the Government such power as is contained in Article 3 is not in- the best interests of the Commonwealth. To those who have great faith in the Prime Minister - I have not - and who contend that in business arrangements as in political, the right honorable gentleman can do no wrong, is it not reasonable that the community _ should be safeguarded? It will be admitted by the Prime Minister’s most ardent supporters that he is only human, and likely to make a bad bargain. He has admitted that he is not a god. He has made mistakes, and it would be in the best interests of the Government and his party for the Senate to accept the amendment moved by Senator Pratten, and place the responsibility on Parliament.
– Why not submit it to a referendum?
– I do not thinkthat is warranted. We have a Public Works Committee which has to investigate and report on all public works proposals involving an expenditure of £25,000 or more before they can be undertaken. Where is the consistency of giving the Prime Minister such power as we are giving in Article 2, and in committing the Commonwealth to the expenditure of an unlimited sum of money? Surely there is no reason for departing from the policy of the Commonwealth ?
– The Prime Minister purchased the Commonwealth line of steamers, which has proved very suc- cessful.
– Yes, and he entered into those contracts consonant with the policy of the Labour party. But apart from the wisdom of purchasing ships, the policy of doing so without the sanction of Parliament was wrong.
With regard to the output of Nauru, the Prime Minister in another place very grandiloquently stated that the year’s output of 100,000 tons might be doubled without much effort. Senator Reid evidently is under the same impression, because he talks of the erection of a jetty on which the phosphatic rock might be taken out to the larger boats. The Leader of the Opposition and Senator Senior have shown that but a short distance from the shore of the island itself there is a drop of a quarter of a mile in depth before the bottom of the ocean is reached. Those, then, who suggest the building of a jetty ought first to obtain some estimate of what the probable expense of its construction would be.
– I say that it is possible to construct a dock there.
– I understand that Nauru Island is practically surrounded by a coral reef.
– That is so, and immediately outside the reef there is an increase of a quarter of a mile in the depth of the water. It may be possible to construct a dock at Nauru Island, but Senator Senior overlooked the fact that that would add to the capitalization of this enterprise. I fear the overcapitalization of the undertaking. In the course of a few years we may find that there is an increase in the price of phosphates to the farmers, and the control by the Government of the Commonwealth of the phosphate output of Nauru Island may be pointed to as another shocking- example of State control. Honorable senators opposite will be mounting platforms to condemn the system of State control of business enterprises. They will ask people to look at Nauru Island, and will say that Government control of the mining of phosphate rock there has led to an increase in the price of phosphates to the farmer.
– What about the Commonwealth shipping line?
– The Commonwealthshipping line cannot be operated in conjunction with this enterprise without detriment to one or the other.
– Why?
– If the Commonwealth line’ of steamers carry phosphate rock from Nauru Island at a lower rate of freight than will be payable, “the returns from the steam-ship line must suffer, and the taxpayers of Australia will have to make up the difference. If, on the other hand, the Commonwealth, steam-ship line engages in this trade, and earns as much freight as it could earn in other avenues of trade, that must add to the charge for working the enterprise at Nauru Island. .
– Is the honorable senator aware that a large shipping company in Sydney was paid £900 a month by the Nauru Island Company? The avoidance of that payment should lessen the cost of freight.
– If freights come down they will do. so all over the world, and not merely between Nauru Island and Australia, otherwise the Commonwealth line of steamers would be sacrificing freight in taking up this trade. Heavy capitalization of this enterprise will, reduce the margin which we are told there is between its. operations and those of the British Phosphates Company. For those who believe that economical workingcan be secured by the utilization of cheap native or indentured labour, I can quote the experience gained in the sugar industry in Queensland. At tone time kanakas were employed in the sugarfields of Queensland. They were paid £& per year, a. pair of moleskin trousers, a shirt, and some rice and sweet potatoes. To-day even those who advocated the continued employment of the kanaka are prepared to admit that the white labour now employed in the cultivation of the sugar cane is cheaper than the labour of the kanaka at £6 per year. Though labour may be employed at Nauru Island at very low rates, it will not follow that it will be cheap or economic labour.
I shall be no party to taking out’ of the control of this Parliament the right to say what money shall be expended in a national way. The Minister has said that Mr. Hughes and the Government will keep to themselves and their copartners in the enterprise the amount of money they are prepared to pay the company. But I remind honorable senators that Senator Pratten’s amendment asks, not for any disclosure of that amount, but that the right shall be preserved to this Parliament to ratify any agreement entered into by the Government, the Prime Minister, or any one else.
– Before the amendment goes to a vote I should like to say that the question narrows itself down to a decision as to whether or not the Government shall take upon their shoulders the responsibilities of carrying this transaction through without consulting Parliament. Constitutionally this Parliament, of which the Senate is a branch, has absolute and unchallengeable control of the purse. I realize that in connexion with some matters it is necessary that the Government should have a free hand, especially in eases where, if they are not in a position to act at once, we may let a golden opportunity, like sunbeams, pass us by. If. it can be shown that this is a matter of urgency, in connexion with which the Government should be intrusted with the carrying out of the bargain, I would not stand in the way. But I want to have it made clear to me that, unless we give the Government power to «lose with this deal, we may be compelled to make a worse bargain later on.
This is not a small matter which may be regarded as child’s play, because, if the company’s terms are accepted, we shall be involved in an expenditure of something like £1,250,000 for our share in the enterprise. Even that is not the gravest aspect of the case, which is the necessity for preserving and maintaining -the source of phosphatic rock for the cultivation of the soil of this country in the future. That is the all-important consideration, because if we have, not an independent source of supply our previous experience goes to show that the cultivators of our soil will be at the mercy of a company that will have a sole monopoly of the source of supply. If I thought there was any chance that such a position would arise I should be prepared to give the Government a free hand in this matter. If there is -no chance of that, this Parliament should assert the constitutional position, and its right to review any bargain struck by the Government, -who are only the mouth-piece of Parliament. It should not be forgotten that if the amendment be adopted, one effect will be that the company will understand that instead of having to deal with the Government alone in this matter they will have’ to deal also with Parliament. A vendor may more readily deal with one party than with two;, and if the vendors in this case understand that they will have to deal not only with the Government, but with the bosses of the Government, the Parliament of this country, they will be brought to their bearings very much more easily because of that knowledge.
I quite realize that it is owing, in a great measure, to a special effort of Mr. Hughes that we have this .proposition before us, but it is no reflection upon the Prime Minister, or his Government, to say that after all Parliament declines to abrogate its prerogative to review whatever may be done by the Government. Unless the Minister can show that there is special urgency in this case, as there certainly was in the case of the purchase of the Commonwealth steam-ships, and can assure us that the Commonwealth must be in .a position to close upon this proposition at once to make a good bargain, I shall not be disposed to give them a free hand.
– I point out to Senator Lynch that the Government are not asking for any special privileges in this matter. All that they are asking is that honorable senators shall have confidence that they will conduct this business in the way in which they are called upon to conduct businesses every day. Senator Gardiner has quoted Mr. Massey as saying that the value of this proposition is about £3,000,000. The only reference to such a sum which I have seen was in some statement by the company as to the value of their assets. Senator Gardiner is aware that, companies always open their mouths very widely at the first bite, but the Government may be trusted to have a sufficient knowledge of business not to give this company one penny more than they are entitled to receive.
It should not be forgotten that this is not an ordinary negotiation between buyer and seller. The whole island of Nauru has been compulsorily acquired, and it is a question rather of the compensation to be paid to the company for disturbance. No one to-day knows exactly what agreement the company is working upon. It appears to me that they have only a sublease, and the original lessees were the members of a Germany company. One of. the conditions of that lease was a royalty of one half mark on every ton, and for that £25,000 was paid in one year. Senator Pratten asked me to produce the balance-sheet, but it is difficult to do so, because there have been so many estimates and calculations made concerning this matter. I could draw upon my imagination, as Senator Pratten has done, to produce a balance-sheet. The honorable senator assumed a purchasing price of £3,000,000, and he had no right to assume anything of the kind. I have given distinct assurances to the Committee, and I have not previously been accused of making loose’ statements. I am always conservative in any statements I make, because I recognise that it is the duty of a Minister, if he cannot give accurate information, not to make guesses.
– I estimated the purchasing price at £2,000,000. The Minister might correct the statement he made in that regard.
– I accept the honorable senator’s correction. The purchasing price has been estimated at £3,000,000. Interest on that would amount to £150,000 a year, and with an annual output of 100,000 tons there would be a charge of 30s. per ton for interest. It has been estimated also that with 7s. per ton profit the output would ‘ show . a profit of £35,000. I could produce another balance-sheet- from other and widely different estimates. One authority makes the statement that at Nauru Island there are phosphates sufficient to supply, for three generations, all the countries of the world, let alone Australia. . An analysis of the product shows that the Nauru Island phosphate is the richest in the world, and the output could be expanded to 300,000 tons a year. I happen to be in possession ‘of some confidential information which shows that the profits are more than double the estimated figure, but I cannot give the information to the Senate as a fact.
– Even if you could, you would have to show the labour cost of producing it.
– It is a roughandready calculation on the best evidence available. I have read other papers in connexion with this matter, but, unfortu nately, quite a number of them are confidential; but the figures are just as reliable as Senator Pratten’s. lt has been argued’ that no money should be paid without the authority of Parliament. But there have been times when the Government have acted’ without the authority of Parliament. Senator Gardiner, I think, was a member of the Government when the big fleet was bought, and that transaction was one of the greatest triumphs of the war period from the Australian point of view. Everybody associated with it is entitled to credit for that deal, although at the time we did not know the outlines of the proposal.
– Had Parliament been sitting, do you think we would have bought the ships without consulting it?
– I do not “know that that course would have been taken. I do know, however, that if we had gone round London telling people we were about to huy ships, the vessels could not have been obtained. , A certain amount of secrecy had to be observed, as people were wondering who was buying the ships. The principle in this agreement is very much, the same as that under which the Government compulsorily acquire land for public purposes. Section. 14 of the Lands Acquisition Act 1906 states -
– That is in the Commonwealth.
– But we do not own Nauru Island. The British Empire has a mandate over Nauru Island, and if we acquire this property in the manner suggested, where does the League of Nations come in?
– I do not care, at the moment, to debate with Senator Pratten the difference between ownership and the mandate; but if the mandate is not practical ownership, I do not know what practical ownership means. The powers which we now propose to execute at Naura have been freely exercised by the Commonwealth in regard to Papua and other territories under our control. Section 17 of the Lands Acquisition Act provides -
Upon the publication of the notification in the Gazette, the estate and interest of every person entitled to the land specified in the notification, and the title of the State to anyGrown lands specified in the notification, shall be taken to have been converted into a claim for compensation.
I admit that Nauru Island is a bigger deal than any other which we have carried through, but the principle is exactly the same. I assume that negotiations will be entered into on behalf of the Government, though some honorable senators may think that the Government are not capable of conducting negotiations.
– “Why persist in adopting that attitude? If you think that way, we are quite prepared to take that stand outside Parliament.
– We have to indicate the starting point in these negotiations, and it is done in this Bill. There will, no doubt, be some negotiation over the price, and I take it that the Government will appoint an arbitrator for the purpose of safeguarding the interest of the Commonwealth.
– The other side will do the same.
– I admit that; but the British Empire is in possession, and, as the honorable senator knows, possession is nine points of the law. I assure honorable senators that there is no “ Fiji uncle” business about this transaction. Our only desire is to help the producers of Australia, and I think that, as a result of our experience during the war period, we should take every care to secure an effective control over the raw materials of production. Something has been said about the limitation of our requirements in this direction, but it seems to me that the amount has been largely understated. We should remember that 100,000 people are trying to book passages from the Old Country to Australia, and, therefore, a considerable expansion in our agricultural operations must take place if, as is probable, we double our population within the next twenty or twenty-five years. The commercial system is becoming more complicated every day, f.nd I believe we shall be wise to check the present’ tendency -by securing control of this raw material. I can promise that the
Government will conscientiously do their best to secure this company’s rights at the lowest possible price.
– I intend to avail myself of the opportunity to say all I have to say, irrespective of time, about this matter, believing that in doing so I shall be acting in the interests of the Australian farmers. I think there is a good deal of misapprehension in regard to this proposal. Let us examine the position. In 1913 we imported into Australia phosphatic rock to the amount of 200,000 tons, valued in the Customs statistics at about £3 per ton; in 1914-15 we imported 210,000 tons, valued at £2 10s. ; in 1915- 16, 200,000 tons, valued at £2 10s.; in 1916-17, 200,000 tons, valued at £2 15s. ; in 1917-1S, 185,000 tons, valued at £2 10s.
– There was a fair amount of local production also.
– Quite so, and that, I hope, will increase.
-. - If phosphatic rock could have been obtained at half the price, double the amount would have been used.
– My honorable friend’s interjection that if it were half the price, double the amount would have been used, might be true theoretically, but I point out that we cannot expect to get phosphatic rock from Naura, Ocean Island, or anywhere else, c.i.f. Australian ports for much less than £2 10s. per ton, seeing that it has to he mined, trucked, taken out in small boats to be loaded into the ships, and transported some thousands of miles to our shores. I am not going to weary the Senate by quoting much of that which is contained in the report of the Inter-State Commission on British and Australian trade in the South Pacific, but I refer honorable senators to pages IS and 19, where they will find details in connexion with this company. Lord Stanmore was the first Chairman, and when he died in 1912 he was succeeded by Lord Balfour of Burleigh, with whom were associated as directors Lord Grey, Sir William Lever, and other prominent British business men. The report states -
If the Government desires to go for phosphates to Nauru, it could choose some other place further down the coast where it could build its own wharfs and put down a plant without being likely for years to interfere with the other.
The other, in this case, is tie Pacific Phosphate Company. I also draw honorable senators’ attention to further remarks about this company on pages 124, 125, and 126, in evidence given by the representative in Australia of the Pacific Phosphate Company Limited. He states that £3 per ton is considerably more than the company has ever received for phosphates delivered in Australia, and his evidence confirms the Customs statistics which I have quoted:
– Who said that?
– The manager of the company, Mr. Alfred James King. In reply to some information given by Senator Senior this afternoon, I may be permitted to quote the following extracts of evidence: -
No bonus dividend has been paid during that period. The bonus dividend referred to is probably one declared in respect of the year 1900 for the redemption’ of debentures which shareholders applied to the part-payment of new ordinary shares issued for that purpose.
Further on he states -
The discovery of other deposits has increased competition and reduced prices and profits accordingly.
All the evidence I have quoted confirms the supposition that the average annual output, with the present plant and appliances, to be expected from the phosphatic deposits of Nauru approximates to about 100,000 tons. Some honorable senators have asserted that this amount can be largely increased for the reason that there are so many million tons contained in the island. Senator Senior argued that 23s. a ton was a ridiculous cost, seeing that black labour was used, with the assistance of modern appliances, and that the product was conveyed in trucks over electric railways to the jetty and the ship. The principal cost in placing it f.o.b. steamer is the lightering and the loading, basket by basket, into the ship’s hold. On account of the adverse conditions at the anchorage, shipping cannot ‘ lay alongside the jetty.
– The product is run straight out to the end of the jetty, into baskets on boats, and those baskets are landed wholly into the ship.
– The loading is as I have described it, basket by basket. - With reference to the output of 100,000 tons, there is another reason why that estimate is reasonable. It is that the weather conditions are not favorable to loading for quite half the year. Respecting the profits of the company, the evidence which I have quoted confirms the figures presented by Senator Senior, with the exception of the reference to the bonus shares. I will assume, that the 30 per cent., 35, 15, and 7£ per cent, profit can be averaged over the past fifteen years; and I will assume, for the purpose of argument, that the company has made on an average £100,000 per annum during that period. That is the maximum which any honorable senator can claim on behalf of the industry. But all the figures show that not more than one-third of the profit was made from Nauru Island ; the most they can claim on behalf of Nauru, therefore, is £33,000 per annum.
– You cannot deny that the deposit on Nauru is richer than that on Ocean Island.
– It is useless to say that the Nauru phosphates are a few decimal points richer than those on Ocean Island. I am stating a broad business proposition to ascertain how much the Government should pay. The Minister will not accept my amendment. He will hamstring and leg-rope Parliament so fiar as the matter of the eventual payment is concerned. Those men in England who constitute the company are keen business gentlemen, and will take as much as we will give them, while it is our duty to give them as little as we can. Senator Senior mentioned that the German Government took 200,000 shares by way of payment for the whole of the island, and the whole of the concessions which we are now asked to buy. We lose sight of the fact that this is a raw material, and does not become superphosphate until it has passed through a secondary process. We have ten’ big factories in Australia turning out the product, and the capital value involved is at least £1,500,000. Do the Government intend to build factories to treat the phosphatic rock? The companies at present working in Australia state that they will not be able to buy the rock from the Government c.i.f. ports as cheaply as they have been able to do in the past, because there will be a capitalization charge for interest, which will have to be added to the cost of the rock to the Government, and which the Government will have to get back in their charges for it. Phosphatic rock to-day is quoted at 42s. c.i.f. ports, from the Island of Makatea, in the Friendly group. The Japanese have huge deposits in the Carolines. There is practically no market outside Australia and New Zealand for the products of our islands in the Pacific. We cannot send these products to Japan; nor can we send them to England. England has far better, opportunities of securing all her requirements from comparatively near at hand. America has all she wants; and it amounts to this, that wo shall be importing 200,000 tons of phosphatic rock, and must charge the cost to the farmers. I would sooner scrap this agreement altogether than be a party to paying a large capital sum to the present owners. To scrap the agreement would be more in the interests of the farmers, and they would get their phosphates more cheaply than they are likely to get them if the agreement is ratified.
– I remarked in the earlier stages of the debate that the company which bought out the old German company paid £500,000. Those figures are substantiated by the statement of Mr. Massey, Prime Minister of New Zealand. He remarked that the company had been originally part German, and that, following the usual custom, the German shares were put up by auction and sold during the war, and realized £575,000. I desire to place those figures side by side with my earlier statements in order to buttress my remarks regarding the purchase of the shares of the old company.
The amendment of Senator Pratter merely asks that the amount involved in any arrangement which may be entered into for the purchase of Nauru Island shall be agreed to by Parliament beforehand. Senator Pratten has shown unmistakably that there is little prospect of more than 100,000 tons being won from the island deposits in any one year, even with the most up-to-date equipment such as has been already installed. The fact that the industry on Nauru Island has been boomed during the past twelve months in so many tenth-rate magazines more than suggests that those articles have come from inspired sources. I recommend to Senator Russell that he should consider the statements of Mr. Massey. All the information at the disposal of the Prime Minister of New Zea land was placed before’ the Dominion Parliament, together with a promise to lay the whole of the correspondence on the table of Parliament. Had the Federal Government acted similarly, far less opposition would have been shown to this Bill. I hope honorable senators will realize that the amendment is in no sense a matter of trusting the Government or otherwise, but an insistence upon knowing the amount of money to be disbursed before Parliament agrees to the purchase.
Question - Thatthe words proposed to be added be added (Senator Pratten’s amendment) - put. The Committee divided.
AYES: 7
NOES: 12
Majority . . 5
AYES
NOES
Question so resolved in the negative
Amendment negatived.
.- I move-
That the following new sub-clause be inserted : - “ (a) In any agreement entered into, the interests of the natives shall be considered and full justice done to them.”
The natives, I may tell honorable senators, arc now putting up a claim for the protection of their interests in this island. Hitherto the Germans have ruthlessly overridden the natives, and I fear that the company may also desire to set their claims entirely on one side. I have in my possession quite a number of letters from the natives of Nauru, in which their claims for recognition are pressed with considerable ability. I understand, too, that an action is pending in the High Court in respect of some of their claims.
The letters in my possession reached me from Mr. John McDonnell, who was one of our garrison at Nauru. The natives there have appointed him as their attorney, to safeguard their interests. Here is one of the letters in question -
Nauru Island, 7th August, 1919.
To whom it may concern:
We, the people of Nauru, in council assembled, do hereby appoint Mr. John McDonnell our sole agent and representative, and give him entire authority to brief counsel and conduct all negotiations with the British, Australian, and New Zealand Governments regarding the adjustment of our claims and the illegal and wholly unjustifiable holding of any part of out island - by the Pacific Phosphate Company and the authorities who control the wireless station (erected by the Germans), whoever they may be.
That letter was signed by the chiefs of the island, of whom Oweida is the king.. Mr. McDonnell, I repeat, was one of our soldiers who formed portion of the garri son which was on the island for eighteen months, and he naturally possesses a great knowledge of it.
Progress reported.
page 13534
Motion (by Senator Russell) agreed to-
That the Senate, at its rising, adjourn till 3 p.m. on Tuesday next.
page 13534
The following Bills were received from the House of Representatives, and the Standing and Sessional Orders having been suspended, were read a first time: -
Referendum (Constitution Alteration) Bill.
Matrimonial Causes (Expeditionary Forces) Bill.
Deceased Soldiers’ Estates Bill (No. 2).
Sugar Industry Commission Bill.
Navigation Bill.
Customs Tariff Validation Bill.
Excise Tariff Validation Bill.
Tasmanian Loan Redemption Bill.
page 13534
Motion (by Senator Russell) proposed -
That the Senate do now adjourn.
– - I desire to bring under your notice, sir, the fact that the bells in the Library are but of order. I certainly desired to record my vote in the division which was taken a few minutes ago, but, unfortunately, I was in the newspaper Library at the time, and the bells failed to ring
– I shall see that they are put in order.
– I desire to ask the VicePresident of the Executive Council what Bills it is proposed to deal with next week, and the days upon which they will be brought forward. I naturally desire to be afforded an opportunity of preparing a few remarks in respect to each of them.
SenatorRUSSELL (Victoria - VicePresident of the Executive Council and Acting Minister for Defence) [4.1]. - The. Bills are numerous, and I have not yet had an opportunity of perusing them. After the Nauru Island Agreement Bill has been disposed of, the Land Tax Bill, the Income Tax Bill, and the Entertainments Tax Bill will be dealt with.
Question resolved in the affirmative.
Senate adjourned at 4.2 p.m.
Cite as: Australia, Senate, Debates, 17 October 1919, viewed 22 October 2017, <http://historichansard.net/senate/1919/19191017_SENATE_7_90/>.