Senate
7 August 1924

9^th Parliament · 2^nd Session

PAPERS
THE LATE SENATOR BARKER
QUESTION
- DUTY ON REAPERS AND BINDERS
WAR PENSIONS APPROPRIATION BILL
POST AND TELEGRAPH RATES BILL
PRINTING COMMITTEE
STATES LOAN BILL
COMMONWEALTH PUBLIC SERVICE BILL
COMMONWEALTH BANK BILL
- Third Reading
APPROPRIATION (WORKS AND . BUILDINGS) BILL 1924-25
- Second Reading
DEFENCE EQUIPMENT BILL
DEFENCE OFFICERS’ RETIRING ALLOWANCES
CASE OF LIEUTENANT W. W. PAINE
EMPIRE PREFERENTIAL TRADE
NAVIGATION ACT
DEFENCE EQUIPMENT BILL
- Second Reading

The Deputy President (Senator Newland) took the chair at 3 p.m., and read prayers.

page 2889

PAPERS

The following papers were pre sented : -

Public Service Act - Regulations amended - Statutory Rules 1924, No. 113.

Defence- Report (dated6th July, 1923) in connexion with the Royal Australian Naval College, Jervis Bay, and the Royal Military College, Duntroon, by Professor Sir T. W. Edgeworth David, K.B.E., C.M.G., D.S.O., Professor, Sydney University, Major-General Sir C. B. B.. White, K.C.M.G., K.C.V.O., C.B., D.S.O., Chief of the General Staff, and Captain G. F. Hyde, Royal Australian Navy, Second Naval Member of Naval’ Board.

page 2889

THE LATE SENATOR BARKER

The DEPUTY PRESIDENT.- I have to announce that a communication has been received from Miss Barker expressing, on behalf of the members of the family of the late Senator Barker, their appreciation of the resolution of sympathy passed by the Senate on the occasion of the death of the late senator.

page 2889

QUESTION

DUTY ON REAPERS AND BINDERS

Senator J B HAYES:
TASMANIA

asked the Minister representing the Minister for Trade and Customs, upon notice -

What is the approximate average amount of duty paid on reapers and binders imported into Australia?

Senator WILSON:
Honorary Minister · SOUTH AUSTRALIA · NAT

– The information is being obtained.

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WAR PENSIONS APPROPRIATION BILL

Bill (on motion by Senator Pearce.) read a third time.

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POST AND TELEGRAPH RATES BILL

Bill (on motion by Senator Crawford) read a third time.

page 2889

PRINTING COMMITTEE

Motion (by SenatorFindley) agreed to-

That the report from the Printing Committee, presented to the Senate on 6th August, 1924, be adopted.

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STATES LOAN BILL

Bill received from House of Representatives, and (on motion by Senator Pearce), read a first time.

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COMMONWEALTH PUBLIC SERVICE BILL

Report adopted.

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COMMONWEALTH BANK BILL

Third Reading

Motion (by Senator Pearce) pro posed -

That the bill be now read a third time.

Senator GARDINER:

– “Well, I have heard some honorable senators opposite say that it is proposed to pay for the coming wool clip with the notes, and to do that I suggest we shall require £60,000,000 worth of new paper. I have also heard it said that the notes are to be issued to relieve the balances held in London, and I have read that those balances go as high as £70,000,000. I have here a. number of remarks by recognized authorities on finance. It might be as well if I gave honorable senators the benefit of their opinion. Mr. George J. Cohen, president of the Commercial Banking Company of Sydney, referring to the exchange position recently, said -

The balance of exchange with London at the present time is largely in favour of Australia, though I do not think that the accumulations in London are as large as they are, by many, supposed to be. This condition has been brought about largely by transfer of Government and municipal funds borrowed abroad, and by invisible exports, i.e., money remitted here for investment and other purposes, pf which there is no record. The amount of these invisible exports must, I imagine, be very considerable. The only way in which money can be brought from London now is by import of goods.

That is wisdom which I feel justified in emphasizing.

Senator GARDINER:

– If my remark is out or order, let me withdraw it and say that the honorable senator’s interjection is’ not on a level with his usual stupidity.

The DEPUTY PRESIDENT.- I may have been somewhat lax in permitting interjections, but I now ask honorable senators to hear Senator Gardiner in silence.

Senator GARDINER:

– I do not know what to do in addressing myself to this question.

Senator Drake-Brockman:

– Cease being rude.

Senator GARDINER:

Senator Gardiner:

– Thenwhy didthe honorable senator ask for a royal commission, and then vote against his proposal ?

Senator GREENE:
NEW SOUTH WALES · NAT

– I still hold the opinion that the Government would have been well advised if, before it introduced the bill at all, it had sent the whole question to a royal commission for investigation, or if it had taken some other steps to throw into the arena of public discussion, for the widest possible consideration, the proposal it was bringing forward. The Government then would have had the advantage of valuable advice from a great number of men with sound experience of financial matters. May I add that when I said of the Treasurer and the Secretary to the Treasury that they had had no banking experience, I meant nothing that was personally derogatory to them. No man can fairly claim to possess all the knowledge and experience which, in my opinion, are essential for the proper public discussion of this subject. We want the expression of many views, because there are many angles from which this question may be viewed. I do not profess, for a single moment, to have acquired a knowledge of more than the barest outline of some of them; but I felt, and I still feel, that it would have been wise if the

Government had taken the step I suggested. However, I recognize that, under existing conditions, the primary producers of this country are suffering a very serious handicap. I feel that finance in Australia, as Senator Gardiner himself pointed out this afternoon, has been for some considerable time extremely difficult. Money has been very tight. This financial stringency has held up many important business ventures, lt has prevented many perfectly justifiable additional enterprises from being undertaken; but I believe that by means of this amending measure we shall probably find a way out and a solution of our difficulties. I believe that this way out will be very much along the lines against which Senator Gardiner directed most of his criticism this afternoon. For this reason, and in view of the very definite statement that the Government proposed to take action along the lines indicated, I felt justified in taking the risks and saying that I was prepared to do what I could in committee to shape the bill in a way which I thought best in the interests of the bank and Australia. I want my friend, Senator Gardiner, to disabuse his mind entirely of the thought that I, or any one else so far as I know, was actuated by any ulterior motive in connexion with this measure. One could go on almost indefinitely talking about this subject. X have tried in the few words which I have addressed to the Senate this afternoon to clear up the misconception under which I felt confident Senator Gardiner was labouring, and to assure him that if he himself was satisfied that it would have been safe to issue notes along the lines that he proposed, and to which he referred in his opening remarks this afternoon, it is infinitely safer to do what the Government is now proposing to do.

Senator MCDOUGALL:
New South Wales

– I have no desire to delay the passage of the bill, but I cannot allow the present occasion to pass without having a last kick at it, for we shall have no other opportunity.- A perusal of the measure as originally introduced and the bill in its amended form convinces me that the efforts made by Senator Greene and other ministerial supporters have not been effective in perfecting it. It might just as well have been passed in its original form. The underlying prin ciples of the bill as introduced, namely, an alteration in the control of the bank and an increase of its capital, are still in the measure. This increase of capital is to be secured by borrowing money upon which the country will have to pay an excessive rate of interest. All the arguments employed by Senator Greene and other honorable senators have not convinced me that the measure is going to be of any great advantage to the community, or that it will ease the present financial situation due to a dislocation of the exchange position which, in its turn, has been brought about by financial troubles in other countries. So far as I can see, this bill will not smooth out our difficulties. I do not profess to have a very great knowledge of banking or finance, but I know that the present capitalistic system, if it is to continue, must be dominant in the solution of currency and other financial problems. I have no desire to say anything . against the capitalistic system in this country, as at present constituted. In my opinion the social system under which we are living cannot continue under the existing system of finance. I object that this question of finance should always be surrounded with such an air of mystery. Men alleged to be wise in finance think that the man in the street is incapable of understanding these problems, which, we are told, should be left to experts. We all know that our capitalistic system is controlled by the banking institutions of the Commonwealth. The bill as amended has not been improved. Suggestions from this side of the chamber were never entertained, and the amendments that were incorporated in the measure have not interfered with its main principles. When the first Commonwealth Bank Bill was introduced capitalists and financial institutions became alarmed. The Labour party, we were told, should never have contemplated entering the arena of finance. The banking authorities did all in their power to prevent the Commonwealth Bank from becoming the great institution it is today. We were told that we would be unable to get a manager for it. Financial authorities, one or two of whom - including a director of the greatest banking company in New South Wales- - were then in this chamber, declared that by establishing the Commonwealth Bank the Labour party would sink millions of the people’s money. Experience has proved those apostles of finance to be entirely wrong. The Labour party intended the bank to be a national bank, in which the people’s money would be secure. I was one of the unfortunate individuals who suffered as a result of erratic investments by private banking institutions many years ago. Because of the widespread failure of private banks there arose the need for the Commonwealth Bank, with the credit of the country behind it. I am afraid, however, that the career of the bank will not be continued along its present lines. I believe that before long the savings bank business will be dispensed with. Authority to do this is given, in this bill, to the board. The Labour party intended that the bank should become an important institution, for the encouragement of- industrial and rural -enterprises. Unfortunately, in this bill the Government refused to accept an amendment which would have enabled the bank to develop in that direction. Up to the present, it has not materially helped industrial or rural development, but such a bank, with the credit of the nation behind it, must ultimately overshadow all the private banking corporations of the Commonwealth, and reap some of their gains. In the earlier stages of its career the bank made satisfactory progress, but latterly something went wrong. The bill, as it leaves the Senate, will do what it was aimed to do - prevent’ the Commonwealth Bank from getting some of the gains which private banks wish to monopolize. I believe that there is a combine among the banks. Of course, they deny its existence. Mr. J. G. Cohen, the veteran banker of Australia, denies that the banks had anything to do with this bill. He declares that it was not submitted to them for their’ advice. The Government claim that they have had the advice of bankers, and yet these people say they were not asked to give it. If the Government did get advice from some quarter, I want to know where they got it”. So far they have not answered that question. All we know is that an alteration has been made, and we are not aware who instigated it. So far as I can see, the purpose of this bill is nothing but an attempt to interfere with the policy of the Labour party. It is a direct move against the principles of a national bank.

At the very outset the Commonwealth Bank did not become as formidable a competitor with the private banks as was originally intended. Its functions were curtailed,* and its powers were limited, because it was likely to interfere with the monopoly held by private institutions. What that monopoly was may easily be gathered from the fact that half a dozen men would meet in some office and determine what the rate of exchange should be, and how bills should be discounted; and every private banking institution had to fall into line. But when the Commonwealth Bank was established they were faced with the competition of an institution which was outside the ring, and from that time onwards they have used all their endeavours to have its functions curtailed and its powers limited. At last they have succeeded. The Government have fallen down in front of the foes of the Commonwealth Bank. They are now willing to permit of its slaughter in the interests of private profit-gaining institutions. As the members of the -present- Government are not wonderful financial experts - the Treasurer has made such heinous blunders that his financial record does not give one the impression that he ought to be regarded as a great financial expert - there must be something, of which we have not been told, behind this attempt to curtail the powers of a great national institution, and save the private banks by eliminating all competition with them. Prior to the establishment of the Commonwealth Bank, this little combine to which I have referred, could gamble as they liked with the people’s money. They were doing this to such an extent before the bank smash of the early nineties that unfortunate people lost their life savings which they had placed on fixed deposit in the banks, having. been induced to do so by the offer of a rate of interest that any one in his sane judgment would know the banks could not pay. When the institutions closed their doors for reconstruction, the workers were left lamenting for all time. Many people went to their graves without being repaid. I understand that the Commonwealth Bank, which was to be a people’s bank, is now to become, a bankers’ bank. . Senator Greene has tried to explain what this means, but, in my opinion, a central bank is an institution that discounts for other banks and does work for those institutions. It is a

Bort of combine that exercises a certain amount of control over the financial operations of the Commonwealth. If that is the case, this reactionary piece of legislation must have been introduced by the Government at the dictates of its masters. There is a certain amount of outside influence behind every party, but- the outside influence behind the present Government is stronger than that which has been behind any of its predecessors in office. At any rate, it is sufficiently sinister to force Ministers to take steps to destroy a great piece of Labour legislation’. Fortunately, everything points to the early advent of Labour to power. When that comes about the bank will escape from the bond3 forged for it by this bill and will then fulfil its historic destiny. I have not the slightest doubt it will again be placed on the pinnacle of fame it has earned throughout the world. In Canada, the United States of America, and other parts of the world, its success has been held up as an object lesson to the people of other countries to induce them to undertake their own banking. This bill has been brought forward at the dictates of the financial institutions to drag the bank down from that great pinnacle to which it was raised by the brains and foresight of one who is now departed from this life. However, I have done my duty in regard to it. With a few others on this side of the Senate, I have attempted to defeat the objects of those who are behind the Government in this move. We have failed. Although the bill has been altered in certain details the main principles have not been touched, but like an old boxer leaving the ring after defeat, I do not give this departing measure my blessing but give it, rather, one last kick.

Senator LYNCH:
Western Australia

– Before this bill leaves the Senate, I wish to say that I thought of using the present opportunity to insert in it a safeguard in the public interest, namely, to oblige the bank to keep a certain amount of its assets in cash or liquid form. That intention was dictated, as I have already mentioned, by my observance of the experience of Australia in the early nineties. I believe that the law in regard to the control of banking has not been altered from what it was at that “period in Australia’s history, and that the banking legislation of to-day does not compel the banks to keep within easy reach a negotiable part of their assets which would enable them to withstand any sudden demand upon them. I have already quoted the opinion of a leading banker given before a royal commission in New South Walts at the time to which I have referred, that too much attention was paid to the necessity for keeping a gold reserve in respect of notes in circulation, and not sufficient attention to the more vital necessity of compelling the -various banking institutions to keep a substantial cash ‘reserve, and securities in a fairly liquid and negotiable form, so that these might be made available to meet any sudden demand made upon the institutions. I intended to ask the Senate to agree to some such safeguard in the case of the Commonwealth Bank, so that a recurrence of the unfortunate -experience of the early nineties might be avoided, but I now realize that to do so would be to place the bank in a very disadvantageous position as compared with other banks. To call upon the Commonwealth Bank to keep within easy reach a valuable portion of its assets in order to meet a sudden demand, such as was manifested in the early nineties, and not to call upon the other banks to do likewise, would impose on it a handicap that would seriously interfere with the carrying on of its business on a profitable scale. Therefore, it would not be fair to apply this safeguard to the bank owned by the Commonwealth while not applying it to private institutions. Nevertheless, my conviction is not undermined that some such safeguard is absolutely necessary in order to compel the banking institutions of this country to conduct their businesses on safe, sound, and rational lines, so that they shall never again furnish us with the spectacle of the early nineties, when thousands of people were ruined as a result of the careless, rash, and almost criminal action on the part of some people conducting banking in this country. The law to-day is the same as it was at that time, and it is open for the same thing to recur; yet no action is taken to prevent such a possibility. I realize, as the Minister has pointed out, that the Commonwealth Bank has behind it the credit of the nation. The good faith of the people is a most important/ asset, and is something that does not stand behind any private bank. With the security behind the- Commonwealth Bank there is not the necessity to apply to it. the safeguard that would be warranted in the case of private banks. However, I take this opportunity to record my conviction that a general banking bill ?s required to deal with that class of bank which extends its operations beyond the limits of a state. Since such a bill is not before us, if my suggestion were applied to the Commonwealth Bank only, it would impose a handicap on an institution which stands least in need of a safeguard which should be, in my opinion, applied to all banks operating in Australia. The other point to which I wish to direct attention is that raised by Senator Gardiner, who referred lengthily and very interestingly to what he called a novel departure in arming the board of directors of the Commonwealth Bank with power to issue notes in Australia to banks which may have their balances in London.. Senator Gardiner mentioned the danger of departing from the established practice, and paid that- it was not wise to issue notes against other than a gold security. Up to a certain point 1 am in agreement with the honorable senator. At the same time I have to ask myself if the time will ever come when there may be a necessity to depart from this principle, and when the departure may be made without any danger arising. Whilst I am supporting this bill embodying the amendment which Senator Gardiner considers so objectionable, I am doing so in the firm belief that the powers which are to be given to the board will not be abused. I believe that the old and established principle of acknowledging and, accepting gold as the only safe basis must in the main be observed. Gold, as every one who has studied the subject knows, is a convenient substance and one which will always be accepted by the nations of the world at its face value in liquidating debts. It possesses a rare measure of exchangability, and having that unique quality it is superior to any other substance in existence to-day. Generally speaking, paper currency is not accepted beyond the boundaries of the countries in which it is issued, although Bank of England notes were accepted by the German Govern ment in 1870, in payment of the huge indemnity which that country demanded of France. We have, however, not many Banks of England in the world. The ordinary paper in circulation is not of great value beyond the borders of the country of its origin. Although Senator Gardiner very laudably objects to currency being placed upon other than a secure foundation, instances can be quoted in which departures have been made, and where no evil results have followed. A case I have in mind is in connexion with the issue of notes under the Canadian Banking Act. The Canadian Bank is conducting business on sound and safe lines, and it has the power to issue notes on a different basis from that proposed in this bill. It issues notes upon gold deposited in the treasury, notes issued by the Canadian Government, and upon the unimpaired sharpe capital of the company. In addition the Government do not call upon the .bank to put up any security for an excess issue, but allows it to do it under statutory authority. Assistance is given in this direction only in particular instances, such as in connexion with the shipping of the wheat crop, which is a loading feature in the industrial life of that dominion. The bank is allowed to issue ten per cent, above the stipulated amount, and an additional deposit of gold or an increase in the unimpaired share capital is not required. The Bank of British North America is also allowed to issue notes on dominion securities in excess of the stipulated amount up to 25 per cent, of its unimpaired capital. It will therefore be seen that there has been a departure from the established principle to enable the Canadian Bank to facilitate the commercial transactions of the country without injury to the public credit or the possibility of a financial catastrophe such as Senator Gardiner contemplates. The securities held in London represent the accumulated balance which has been built up in various ways. These balances are locked up, so to speak, owing to the exchange rates being against Australia, which makes it difficult to transfer the funds to Australia. The securities which the amending provision of the bill is to cover are of such an unquestionable character that I am justified in saying that they are quite as good as gold.

Short-dated bills are first-grade securities, and are just as good as gold deposited either in London or in Aus-, tralia. As this surplus cannot be used to facilitate business in this country, it must be regarded as a dead asset. Every one knows that it is most difficult to obtain credit from the banks even on tho most reliable security, and I therefore trust that the board will utilize the power which this Parliament has given it in a plenary fashion, and see that the currency of this country is not unduly inflated. I am satisfied that as the Government will charge the board with the responsibility of seeing that the currency is not inflated it matters very little after all whether the currency is on the basis of gold held here or whether it is on its equivalent held in London. I trust that the bill will be the means of placing the Commonwealth Bank in a better position than it has hitherto occupied, and that it will be of greater service to the Commonwealth than with its lesser powers it has been in the past.

Senator GRANT:
NEW SOUTH WALES · ALP

– The three* principal amendments which have been made in the Commonwealth Bank Act will not, in my opinion, tend to improve the position of the bank. Originally the bank was conducted by a Governor, but it has now been decided that its operations shall be controlled by a Governor, Deputy Governor, and six directors, with a number of subsidiary state directors. Although some are of the opinion that considerable improvements could be effected in the control of the bank, I am not at all hopeful that the alterations made will prove beneficial. The Government have also decided to place the note issue department under the control of the Commonwealth Bank, and to issue notes against securities held in London. The time is long overdue for the enactment of some of the powers conferred upon the Commonwealth by the Constitution, included in which is the power to pass a general banking bill. The Government, no doubt, have been too busy attending to. their own domestic affairs to give attention to this matter. I have no particular objection to placing the note issue department under the control of the Commonwealth

Bank, but I strongly object to the maimer in which it has been decided to dispose of the profits derived by the bank’ from its ordinary business, and also from its control of the note issue. The Commonwealth Bank ought to be able to stand upon its own resources, and should be empowered to use the whole of its profits in extending its operations. The Government is silent on that point. Apparently, it does not care whether the bank extends its business or not. Clauses appear to have been inserted in the bill with the definite object of preventing the extension of the bank’s operations. Take, for instance, the decision not to interfere with the disposition of the profits from the Notes Issue Department. Surely that department is part and parcel of the business of the bank, and, as such, its profits should be used by the bank for the purpose of extending its operations. Since the establishment of the notes issue branch, profits totalling £9,600,000 have been made. The whole of those profits should be used to extend the operations of the bank, chiefly in the. direction of establishing branches throughout the Commonwealth, and, as far as possible, elsewhere;’ but that, apparently, is not the Government’s intention. On the contrary, its desire appears to be to cripple the bank by utilizing the profits in other directions. The Government has also decided that the profits made by the bank itself shall be disposed of in such a manner as to rob the bank of its legitimate property. “Dp to the end of December, 1923, the total profits made by the bank were £4,570,000. This bill proposes that a little less than half of those profits, namely, £2,000,000, shall be transferred from the redemption fund to the bank reserve fund, making the latter fund about £4,000,000, which is to be used for any purpose in connexion with its banking business. That is a step in the right direction. In addition, the bill provides that in future onehalf of the neb profits from the banking business shall be applied to the liquidation of the national debt. A more ridiculous proposal it would be almost impossible to imagine. Why should the profits of the Commonwealth Bank be used to reduce the national debt? Surely there are many other ways by which the national debt :may be liquidated. I do not agree that the tightness of the money market is due to the causes mentioned by Senator Greene. That tightness and the existing unemployment in the Commonwealth are due to other causes, which Senator Greene, together with a limited number of other senators, do not care to discuss in. this chamber. Both are due to the fact that the best of our land is monopolized by people who do not put it to its best use. I tried, unsuccessfully, to secure an amendment that the bank should not be permitted to hold land indefinitely, but I realized that it would be unfair to handicap the Commonwealth Bank in that manner, and that a proposal of that nature must wait until such time as a general banking bill is introduced. That, I hope, the Government will do at an early date. I am unable to understand why the Government should in this bill seek power to issue notes against credits held in London by privately-conducted Australian banks. According to the latest figures furnished to us in the budget, there is at the present time, £56,890,225 represented by the notes in circulation. Of that amount £34,518,426 is held by the banks, and £22,371,799 by the public. I should like the Minister to say why he desires to secure the power to issue more notes, when the banks now hold notes representing over £34,000,000. The Minister has given no reasonable answer to that question, which I raised at an earlier stage. The proposal to issue notes against credits held in London is an entirely new departure, and no one has yet given us any indication of the way in which the proposal will work out. In my opinion, its effect will be to increase the credits held by the private banks in London, and to make the position considerably worse than it is now. I hope that in this I am mistaken, and that the result of the’ Government’s action will be to make money cheaper. I point out that if the currency is increased by machinery being put into operation to print millions of new notes - from some statements made in this ‘ chamber I presume that that will be so - the excess credits in London totalling £35,000,000 will be increased. If the Government issues a large number of new notes, it will, in my opinion, increase the cost of living considerably, and at the same time it will give no compensating advantage to that great army of men and women who are on fixed salaries. The bill is not one which should receive the endorsement of this Parliament, and I shall vote against the third reading.

Question - That the bill be now read a third time - put. The Senate divided.

AYES: 16

NOES: 9

Majority . . . . 7

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 2903

APPROPRIATION (WORKS AND . BUILDINGS) BILL 1924-25

Second Reading

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move -

That the bill be now read a second time.

When, a few days ago, I moved that the papers in connexion with the budget be printed, I gave particulars of the expenditure, which included that on works and buildings. It is, therefore, unnecessary for me to repeat them. This bill is to appropriate the money for the purpose of carrying out the works and buildings programme for the year. Any delay in the passing of the bill will mean that we shall not be able, during the course of the year, to expend the whole of the money which is voted. As the passing of this measure will enable these works to be proceeded with at once, I urge the Senate, subject, of course, to any legitimate criticism, to agree to it without delay. I draw attention to the main items, so that honorable senators may devote themselves to them, and thus be prepared to deal with the bill when it reaches the committee stage. The main items are -

Senator GREENE:
NEW SOUTH WALES · NAT

– Why is no expenditure from revenue debited to the PostmasterGeneral’s Department this year?

Senator PEARCE:

– It was announced last year that the Government proposed to debit Post Office expenditure from loan, and establish in connexion therewith a sinking fund of, speaking from memory, 2^ per cent, and downwards, based on the life of the work, so that during the life of the work we should be making an annual payment that would extinguish the debt.

Senator Kingsmill:

– Are there no replacements ?

Senator PEARCE:

– This bill deals only with new works. It may save discussion if I give particulars regarding the expenditure for oil and fuel storage. The Oil Agreement Act 1920 provided for the establishment by the AngloPersian Oil Company of the industry of refining mineral oil, and for the erection of an oil refinery in Australia. The Commonwealth Oil Refineries Limited was to be formed with a capital of £500,001, of which the Commonwealth was to contribute £250,001. The Commonwealth subscription was fully paid before 30th June, 1924, the Commonwealth thus acquiring a controlling interest in the refinery company. The object of the company is to import crude oil until local supplies are available, refine it in Australia, and put the products - such as motor spirit, kerosene, and fuel oil- on the Australian market. When local supplies of crude oil become available) they are to be utilized, instead of supplies being imported. The erection of the refinery at Newport, and the provision of the necessary tanks and wharfage,, have been practically completed, and the refining of oil has been commenced. It was found, however, that further capital was required to enable the company to attain the full objects for which it was formed. The Oil Agreement Act of 1924 provided for the capital of the company being increased by £250,000, representing 250,000 shares at £1. each. The Commonwealth’s share of this increase is £125,000, of which £31,250 was advanced during last financial year; the balance of £93,750 is being provided on this year’s Estimates. I suggest that, as the items in the schedule to the bill are mainly a matter for consideration in committee, the Senate pass the second reading without delay. Any information desired by honorable senators will be furnished in committee, as far as Ministers are able to do so.

Senator Gardiner:

– I should like the Minister to consent to the adjournment of the debate. I do not think the adoption of that course would seriously delay the passage of the measure.

Debate (on motion by Senator Gardiner) adjourned.

page 2904

DEFENCE EQUIPMENT BILL

Debate resumed from 6th August (vide page 2836), on motion by Senator Wilson -

That the bill be now read a second time.

Senator GARDINER:
New South Wales

– The problem of defence has for a long time been calling for something like reasonable consideration. The trouble is that Australia has no fixed defence policy. Some Minister in charge of the Defence Department occasionally develops a spasmodic desire to spend a million of money and the sum is forthwith voted, but effective defence is brought no nearer than before. Only six years have elapsed since the armistice was signed, and we have spent since the war,, in round figures, £4,000,000 per annum on the so-called defence of Australia. But with what result? If we are to believe those men who by reason of their positions and qualifications are entitled to advise us, no result of any value has been achieved. I intend to approach the consideration of the bill, not in a party spirit, but ‘with a desire to advance the interests of the country. Before Parliament commits itself to any expenditure upon a navy it ought to consider whether we have any effective defence at the present time. In conversation with the Honorary Minister (Senator Wilson) the other day I somewhat jokingly remarked that I would support the defence proposals of the Government if it intended to spend £100,000,000 for the protection of Australia. To my mind, any comparatively small naval expenditure would be equivalent to throwing money into the ocean. The expenditure should be sufficient to give Australia real defence ; it is no use wasting a million here, and scrapping a battleship there. Before any expenditure is decided upon there should be a conference of men whose service and capacity would enable them to arrive at a sound conclusion on some of the most important aspects of the defence problem. In the first place, we should decide how much money Australia is prepared to expend in this direction. It is useless to propound a scheme and then be met with the question: “But from where is the money to come?” I do not bind my colleagues to the views I am about to express, for I venture to say that the Labour party’s defence proposals are very much the same as those of the Country party, or the National party - they are in the minds of the individuals, and are not outlined in the party platform. I think I can safely say that expenditure upon anything like an adequate defence of Australia will never be shirked by the Labour party. What we do object to, and what is most repugnant to me, is the expenditure- of money on defence without, any practical result. It would be- better to have no navy and no Defence Department than to carry on, at a cost of £4,000,000 per annum, a department which is supposed to prepare this country for defence, but which in reality makes no provision whatever for it. I am inclined to look upon General Monash as a soldier whom Australia takes seriously. Here are some of the observations he is reported in the press to have made in regard to Australia’s lack of defence -

The air force was a sham.

There were no tanks.

They had no Mills bombs.

There was not enough munitions in the country to last 24 hours.

Conditions in regard to the defence of Australia were most unsatisfactory. Things were going to pieces.

It is a deplorable thing to realize that the men we are training to-day could not be adequately equipped.

In my opinion, the position of Australia, in 1924, is not as favorable as it was in 1914.

The present compulsory system of training Australian youths is farcical.

The Minister for Defence should not speak on. this subject without having given it careful consideration. The following are extracts from press reports of remarks by the Minister (Mr. Bowden) : -

Mr. Bowden emphasized the fact that Australia was not prepared to meet ari emergency.

The position regarding munitions was serious.

At present the position of our fixed defences and our artillery units is serious, so far as munitions is concerned.

The coast defences of Australia, are in a deplorable condition. The loss of efficiency in the Australian Navy is staggering. So says the Minister for Defence, Mr.. Bowden.

Mr. Bowden used the word “ appalling “ to describe the present conditions of the local defences.

When I came to realize the appalling conditions of the defence of Australia. . . ,

The greatest problems were those of the supply of arms and munitions. The supply on hand was very inadequate.

It was no good saying we had seven or eight submarines, when those in charge of naval defence knew these were obsolete and - could not be used.

Mr. Bowden admitted that the question of air defence was not as satisfactory as it might be. . . .

Senator Drake-Brockman has a record of active service, and a general knowledge of military- affairs, which entitle his views to respect. I find,’ from Hansard, that the honorable senator stated, in the course of a speech, on the 28th March last -

I can say that, at the moment, Australia could not equip one division, let alone five. As a matter of fact, if we desired to put a division in the field in Australia to-day, we could not find sufficient equipment for it.

The truth is that even if we could call upon them, we have not the arms or equipment for them.

We, at the present moment, could not find more than 50,000 men available and fit to take the field. In any case, we could not equip them.

We are not able to-day to provide the munitions of war.

If we were suddenly called upon to defend ourselves we would not have enough munitions, war equipment and the things necessary to maintain an army for 24 hours.

At the present time we are not getting full value for the money we are spending.

– Of course, there are many trade routes, and we learned during the war that this immense armament, even with the support of the navies of Japan, Italy, and France, and eventually the American Navy could not protect Britain’s shores from bombardment. The trade routes were never safe, because a new force in naval warfare had almost reached perfection. Had the use of submarines been understood in the first months of the wax as well as it was understood in the concluding months, it is very hard to say what would have been the outcome of the struggle. It waa not until 1917 that the Germans began to make effective use of submarines in the destruction of vessels carrying food to Great Britain. Had they done so in 1914, the result of the war might have been different. One can imagine almost anything happening in a conflict, conducted as it will be tomorrow if hostilities are declared between two first-class powers. The effective battleships and armoured cruisers of Great Britain are as follow: -

These vessels are all of greater tonnage than the Australia. The best British naval authorities do not anticipate that vessels of this type will be required for the defence of Australia. I am unable, to follow their reasoning, but when the Washington conference decided that certain vessels were to be scrapped, the best naval authorities of Britain evidently decided that Australia required no battleship, because our only battleship had to be scrapped. I declared at the time that the Australian sentiment for an Australian navy would sink with the Australia. I venture to prophesy that this will be borne out by facts, and that in future Australia will concentrate on defending itself by means of the strong arms and stout hearts of Australians armed and equipped by Australian factories. Australia will never again venture upon the building of a navy.

Senator Elliott:

– Is it not the policy of the Labour party to do away with military training f

Senator GARDINER:

– Tes, with the absurd military training that produces the results to which I have alluded. The policy of the Labour party can be well summed up in one sentence: “ We are prepared to scrap the whole of the existing system of defence, which is only a pretence.” It is something that - we pay for but which gives us nothing, and it must go. What we want in Australia is a defence system that each year will leave us in a better position to defend ourselves than we were in the previous year. I would scrap the whole system of compulsory training, because I can quote the opinions of military officers who realize that compulsory training has -broken down of its own weight. That is to say, we have spread our efforts over the whole continent in an attempt to train every one, with the result that more men do not attend drills than those who do attend them. We want to scrap compulsory training, because the men in charge of it have made it the miserable failure that it is to-day.

Senator Elliott:

– And what would the honorable senator substitute for it?

Senator GARDINER:

– The millions we are now spending on a defence system that, on the authority of the best men we can quote, give us nothing, should be spent on establishing factories to give us arms and equipment, engines for flying machines, submarines, quick-firing guns, and vehicles necessary for the rapid transport of troops, and on the provision of roads to enable that transport to be carried out rapidly. Such a policy would carry us a long way further than the spending of £4,000,000 a year on a system of defence, only to be told by the people who are spending the money that we have nothing to show for it. Before I was led away to the discussion of land defence questions, which are quite in keeping with the bill, I was giving the Senate some idea of the magnitude of the British Navy and its importance to the Empire - or, to use a term which I prefer, the Commonwealth of Nations. Britain has to maintain this navy because of her peculiar position. She is dependent upon outside sources for the employment, the clothing and feeding of her own people. We sometimes meet persons with a shallow view, who ask, “ Do you think that we in this Commonwealthof Nations should ask Britain to maintain this navy while we escape any portion of its cost? “ If Britain is spending £58,000,000 on a navy, and we are spending nothing, it does not mean that we are not doing our share of the work of Empire development. We have very few people in Australia. We and our fathers before us have made this outpost of the Empire habitable for 6,000,000 people. Some of those who are listening to me’ to-day will live to see 16,000,000 people in Australia, and in turn their children will live here in a British community of perhaps 60,000,000 people. But the whole cost of the development of this outpost of the Empire has fallen upon the pioneers of Australia. Whatever assistance Britain has rendered in the shape of loans has. been, not more than she has always been ready to render to any other country. Will any one affirm that the building of thousands of miles of railway is not playing just as effective a part in the defence of the Empire as the building of a battleship to cruise in the North Sea? Those who say that the making of roads and the clearing of land to make this continent habitable, or that making two blades of grass grow where only one grew before is not taking a part in the task of holding together the British Commonwealth of Nations, are not viewing the matter, as I do, through Australian eyes. Our expenditure on defence per head of the male population considerably exceeds that of any other portion of the Empire, so that we are not under a compliment to any one. I quote again from the Daily MailYear Book the following in regard to the British Navy : -

The fleet in commission was thus organized -

Atlantic Fleet. - 9 battleships, 2 battlecruisers, 11 light cruisers, 46 destroyers, 14 submarines, 1 aircraft carrier, several drifters, 3sea-going oilers, 1 minelayer, and 2 repair ships.

MediterraneanFleet. - 6 battleships, 6 light cruisers, 18 destroyers, and many small craft.

China Station. - 5 light cruisers, 18 sloops and gunboats, 6 submarines.

Africa Station. - 2 light cruisers, 4 small craft.

Bast Indies. - 3 light cruisers, 3 small craft.

North America. - 4 light cruisers, 2 sloops.

New Zealand. - 1 light cruiser, 2 sloops.

Australia. - 2 destroyers.

Canada. - 2 destroyers.

That is the Empire’s navy. We are asked to extend it by building two cruisers for replacement. Senator Wilson has told us that when Mr. Bruce was in London he had an offer to build a cruiser for £1,900,000. The price has already crept up to £2,100,000, and I suppose that by the time Parliament has passed this bill and a contract has been let, and the people who build these vessels in the Old Country know that we actually intend to have one built, the price will be at least £2,500,000. Senator Wilson knows as well as I do that the naval authorities are continually making changes in the construction of these vessels. I have heard ill-informed men talk about the cost of building the cruiser Adelaide. As a matter of fact the plans of the ‘Adelaide were altered time after time to suit the changes necessitated by the war. Things which were deemed unnecessary when the vessel was begun were found to be absolutely necessary later on, and alterations had to be made. Yet people who look only at the actual cost of construction and at the time occupied in building the Adelaide declare that the time occupied is an indication of how long it would take to build other cruisers.

– I shall now give the Senate some idea of the magnitude of the American navy, which has to protect a coast-line 4,000 miles less than our own. Are more vessels required to protect America than .to protect Australia? With a more extensive coast-line, more vessels are needed for our protection. According to the publication from which I am quoting, the cost of each of the firstclass battle-ships required by America is about £8,000,000. America has the following battle-ships : -

The figures which I have quoted give one an idea of the enormous size of the vessels, their number, aud the men required to man them. I do not think I need quote further from the -figures relating to the American navy, except to say that their submarines and cruisers are in proportion to the number -of battle-ships. The American fleet is large in number, effective, and up to date, and my view of naval defence is that, unless our naval strength is equal to a first-class naval power, we should not waste a few million pounds in the direction proposed. If we had millions to spare, I could quite understand some one suggesting the construction of two cruisers to protect our trade routes.

Senator Wilson:

– We are only suggesting a unit to act in conjunction with the British fleet.

Senator GARDINER:

– I can visualize Australia as being the most populous portion of the British Empire, if the Empire stands together long enough. I can also understand that there are more important things to be done than to assist Britain in the matter of naval construction. In 1909 we considered the question of whether we should increase our naval subsidy to Great Britain.

Senator Payne:

– Great Britain’s navy is our navy up to a certain point.

Senator GARDINER:

– I realize that it is. I realize, too, that this country is one of Britain’s best customers, and that it is to her interest that her navy should protect us. Britain is one of our best customers, but we have never asked her to construct railways, to undertake the conservation of water, or to assist in other ways in the development of this great outpost of the British Empire.

Senator Payne:

– She has recently offered to do that by offering to loan us money practically without interest.

Senator GARDINER:

– I have not heard of that; but, at any rate, we can best assist in this “holding together” business by proceeding to do our share in the most sensible way. I have shown that it costs £71,000,000 for the upkeep of the American Navy, and £58,000,000 in maintaining the British Navy.

Senator Kingsmill:

– What number of men are required?

– Nor did they prevent the American, army from reaching France.

Senator GARDINER:

– The distance between England and France is not great, and that stretch of water was well protected. We all know that narrow passages only were provided for vessels to travel from one country to the other. Lord Fisher said that the North Sea was sown with mines; but when a vessel went down he said that it was due to a German mine. Britain protected her own Grand fleet from submarines by stationing them in a secure place, waiting for the day when the German fleet would come out. But it is ridiculous for us in Australia, with no fleet to protect anything - the big vessels of the British fleet being thousands of miles away - to think that by spending £4,500,000 on the construction of two cruisers we shall be doing something for naval defence. I shall vote for no. expenditure on defence until the Government places before us a programme extending over a period of years. If a workable scheme is presented, all parties are patriotic enough to assist in carrying it out. What is the use of introducing a scheme which is only a waste of the people’s money ? While our defence farces are handicapped for want of equipment, millions of pounds are to be wasted. I have here the report of the Inspector-General of the Australian Military Forces. (Extension of time granted.) Lieutenant-General Sir H. G. Chauvel, G.C.M.G., K.C.B., Chief of the General Staff, in his report on the Australian Military Forces, said -

With regard to the question of the provision of arms, equipment and ammunition, I wish to state very clearly that these essentials do not exist in this country in sufficient quantities to enable our formations to be given their war outfit when raised, on mobilization, to war establishment; and there are no reserves to replace wastage.

Will Senator Elliott vote to waste money in the building of two cruisers when the Inspector-General of the Forces says that those forces are not equipped ?

Senator Elliott:

– The equipment is being provided at the same time as the cruisers.

Senator GARDINER:

– Genera] Chauvel’s report continues -

The allocation by the Government of the sum of £250,000 during the present financial year for the purchase of munitions will effect a slight, improvement in this matter, but very much more is required before any substantial qualification can he made in the statement above.

That is the report of the man responsible for the inspection of our forces. Dealing with mobilization stores, he said -

No improvement has been effected in the matter of mobilization stores since the submission of my last report. The stores in the 1st, 2nd, and 3rd Military Districts we still overcrowded. It is most desirable that t)he necessary mobilization stores in the 4th and 6th Military Districts be erected at an early date, and also at the additional place of mobilization selected in New South Wales. Extra storage accommodation is also required in the 1st, 2nd, and 3rd Military Districts.

So far as land forces are concerned, we are practically helpless.

Senator Elliott:

– Nothing that the honorable senator has read from the report supports that contention.

Senator GARDINER:

– I am aware that the report may not convey much to the honorable senator’s mind. Regarding aerial surveys, General Chauvel said -

Little or no advance has been made in the development of aerial surveys during the last year, and the technical difficulties outlined in the last report have still to be overcome before practical results can be achieved. The test survey of the Geelong sheet proposed last year was not proceeded with, owing to the shortage of personnel and machines of the Royal Australian Air Force.

And, in connexion with, the remount service, his report stated that the position was growing worse, and that the Indian Government, previously our greatest customer, was looking elsewhere for army horses. Australia has ceased to produce army remounts. Dealing with ordnance workshops, the report states -

A question which has been prominent for the past four years, but with which little progress has been made owing to financial stringency, is the establishment of ordnance workshops, which must exist for the efficient upkeep of military equipment. Great difficulty was experienced in all military districts in getting both men and material to carry out the repairs to the post bellum equipment, and the lack of proper workshops was a severe handicap. Contract ‘work in connexion with material of this description is undesirable. It can be done much more efficiently and economically in departmental workshops. At present machinery is lying idle and valuable material is deteriorating.

– That would not matter if we had factories manufacturing interchangeable parts in order to maintain supplies of up-to-date aircraft. With five or six factories centrally situated so that they could be economically operated, it would not matter how soon the equipment became obsolete, for the factories would be constantly producing war-like material of the most modern type. In a country like Australia we could have thousands of men trained in this class of work. They could be fitting themselves for such service, and at the same time could be engaged in turning out commercial articles. I do not contend that such factories should ‘necessarily return interest on the money invested, but they would certainly serve an admirable purpose. Rather than spend money on building cruisers, attention must be devoted to submarines and aircraft, but I place first and foremost the establishment of factories in all parts of Australia to manufacture the material required for defence. The possibilities of my suggestion are unlimited. I appeal to the Minister, even at this, the eleventh hour, to advocate, not the spasmodic expenditure of a few millions, but a system based upon Australia’s capacity to pay. Our expenditure arising out of the late war amounts to about £30,000,000 per annum, including pensions, reparations, maintenance of the injured, &c. That indicates to some extent the financial possibilities of a nation of less than 6,000,000 people. I contend, therefore, that the Government will do well to scrap its pretence at dealing with the defence problem - because what we have is a pretence rather than a defence system - and start anew by adopting an adequate system to which all parties can agree, and which will have continuity, irrespective of changes of government. I have quoted several authorities to show that Australia has no defence system at the present time. The Government would be well advised to withdraw the bill, and. prepare a wellconsidered scheme. Australia will never have adequate defence so long as we continue to spend a million here and a million there in this spasmodic fashion.

Debate (on motion by Senator John D. Millen) adjourned.

Sitting suspended from 6.28 to 8 p.m.

page 2915

DEFENCE OFFICERS’ RETIRING ALLOWANCES

Appointment of Select Committee

Senator GARDINER:
New South Wales

.- I move-

That a select committee, consisting of Senators Kingsmill, Cox, Elliott, Foster, Duncan, Grant, and the mover, be appointed to inquire into the allowances being paid to warrant officers, non-commissioned officers, and other officers retiring from the Defence Department, with full power to send for persons, papers, and records, and to move from place to place.

The inquiry should be a simple one - an inquiry into the subject of superannuation benefits or retiring allowances paid to warrant and non-commissioned officers of the Defence Department, who have been retired. I shall refer very briefly to two officers, and since they have discussed the matter with me I shall take the liberty of mentioning their names. One is Warrant Officer Ingall, a retired officer with a record for splendid service in several states, notably in New South Wales and Tasmania. Probably he is one of the ablest warrant officers that we have ever had in New South Wales. For 36 years he rendered excellent service to that state and later to the Commonwealth. He was retired in 1922 without a pension or superannuation benefits. The other case is that of Warrant Officer Gale. His term of service was not quite so long as that of Warrant Officer Ingall, but the circumstances of his retirement are so peculiar that I feel confident the Senate will agree to the motion for the appointment of a select committee to make the necessary inquiries. The composition of the suggested committee is such that it will be representative of both sides of the Senate. I do not want, and will never ask for, the appointment of a committee so constituted that it will be likely to return a finding in accordance with my own views. I want the committee to be absolutely unbiased so that it may deal with the cases that come before it on their merits.

Senator PEARCE:
NAT

– Has the honorable senator ascertained if the honorable senators whose names appear in the motion are willing to act?

Senator GARDINER:

Sydney, 7th September, 1923

Dear Sir,

With reference to your application for a pension under the- Superannuation Act, I have to inform you that the board advises that the amount necessary to complete 26 fortnightly payments in your case is £30 16s. 9d. I shall be glad if you will forward the amount to this office as early as possible.

I direct attention to that letter. Warrantofficer Gale had been contributing for five units of pension, which would have entitled him, upon retirement at the age of 65 years, to a pension of £130 per year, and yet he was called upon to pay £30 16s. 9d.’ in a lump sum. Then upon his retirement he got a pension of only £14 10s. 9d. a year, which works out at 5s. 8£d, per week. My first action when this case came under my notice was to arrange an interview between Warrantofficer Gale and the Minister for Defence. The warrant-officer stated his case, and was advised by the Minister that, as there were other anomalies of a similar nature, the Government intended to introduce a bill to remedy them. I waited, and when Parliament met I asked certain questions. The Honorary Minister (Senator Wilson) will remember that, last week, I asked whether the bill was to be introduced. His answer was vague and most unsatisfactory. He told me that the Defence Department was pressing to have this matter settled, but could not get it completed. In the circumstances, I think that an inquiry by a select committee, as proposed, will do a great deal of good, and result in the remedying of many grave injustices. If, as has been stated, a certain department is preventing the necessary legislation from being introduced, the proposed inquiry will probably expedite a settlement of the difficulty.

Senator PEARCE:
NAT

– The Superannuation Board has been definitely instructed to draft a scheme, and it is now engaged on that work.

Senator GARDINER:

– The Minister has just told us that the Superannuation Board is drafting a scheme. Speaking from memory, I think that, very shortly after Parliament adjourned last year, I brought this matter under the notice of the Minister, for Defence, and, as I have already stated, I waited until Parliament met before taking any other action, as I was given to understand that amending legislation would be introduced. Admitting that the Superannuation Board is drafting the necessary amending legislation, these men cannot wait indefinitely for consideration. Therefore, I ask the Senate to agree - to the motion for the appointment of the select committee, because, whilst I have mentioned only two cases in which it is apparent grave injustice has been done, I know there are others. Warrant-officer Gale’s record is an excellent one. Upon his retirement he was given the honorary rank of lieutenant in recognition of his meritorious services, and as evidence that the department was highly satisfied with his work. Although he was over the age limit, he volunteered times out of number for active service, but, as he was a very useful man for the training of men who had enlisted in the Australian Imperial Force, he was kept in Austrafia. It is extraordinary that, after 23 years of service, and after he had paid over £5 for superannuation benefits, he should have been called upon to pay £30 16s. 9d. in a lump sum, and then receive a pension of only 5s. 8Jd. per week. If the Minister will give me a definite promise that the necessary legislation will be introduced this session - I am sure that, if introduced, it will be passed - I shall not press for the appointment of the select committee. But when we get nothing but vague answers it is time that the Senate took up the matter and had a full inquiry into it.

Debate (on motion by Senator Wilsonadjourned.

page 2917

CASE OF LIEUTENANT W. W. PAINE

Appointment of Select Committee

Senator GRANT:
NEW SOUTH WALES · ALP

.- I move-

That a Select Committee be appointed to inquire into and report upon the case of First Lieutenant W. W. Paine, such Committee to consist of Senators Gardiner, McDougall, Foll, Greene, Cox, Elliott, and the mover, and to have power to send for persons, papers, and records, and to move from place to place.

Realizing the limited time at the disposal of honorable senators, and the great amount of business to be transacted, I bring this matter before the Senate with some degree of reluctance, but so far as I can see, there is no other means of securing redress for this returned officer, who has been unsuccessful in obtaining from the Repatriation Department that to which he believes he is entitled. He was wounded at Gallipoli and returned to Australia. When in Australia on home service he was repeatedly operated on in various hospitals, and the real point at issue is whether or not the septic condition if his body is the result of wounds he received in the war. There is a conflict of evidence upon the point. I have here a certificate from the medical superintendent of St. Vincent’s Hospital, Darlinghurst. It is as follows : - 28th November, 1923.

This is to certify that W. W. Paine was admitted to St. Vincent’s Hospital on 26th September, 1923, and discharged on 31st October, 1923.

During that time he was operated on for ischio-rectal abscess, but the relief afforded was only temporary and a further operation of a more radical nature will be necessary to ensure a cure. The condition has been present for some years, and it is more than probable that the sinus tracks up into the rectum, i.e., a fistula-in-ano.

There is also a certificate from Dr. Hughes as follows: - 5th December, 1923.

Mr. Warren Wyllie Paine was operated on by me at No. 4 Australian General Hospital, Randwick, on November 2nd, 1917, for an ischio-rectal abscess.

Lieutenant Paine’s efforts to secure redress from the department failed. This is one of the letters he received - 24th March, 1924.

I am desired by the Hon. the Treasurer to advise you that, in reply to representations made on your behalf, he has received a report from the Chairman of the Repatriation Commission to the effect that the commission has gone very carefully into your case. They state that, on the evidence available, they could not trace a sequence regarding the several abscesses from whichyou have suffered and, consequently, could not relate the latest abscess, i.e., the ischio-rectal, to any occurrence happening on service. They, therefore, have no option but to disallow your claim.

I am enclosing the medical certificates of Dr. Chisholm Boss, Dr. F. Curtis Elliott, Dr. O’Gorman Hughes and Dr. J. H. B. Brown which you desired to be returned to you. (Signed.) C. BAGOTT,

Private Secretary

I have also the following certificate from Dr. Curtis Elliott: - 12th December, 1923.

Mr. Wyllie Paine was operated upon early in 1917 for ischio-rectal abscess in No. 4 A.G.H. This condition started shortly after healing of g.s.w. of arm.

The following is a letter he received from the matron of the Randwick Military Hospital : - 24th June, 1924.

Your letter to hand regarding your being inRandwick Military Hospital during the years 1915, 1916, and 1917. I remember perfectly well your being treated for abscesses on your body after your septic arm had healed. Sister Powellwho was theatre sister at No. 4 A.G.H., is here with me, and she says that you will find the records of your operations in the theatre register; she recorded them herself. Hoping you are well.

Following upon some verbal representation I made to the Repatriation Department in connexion with this case, I received the following letter: - 5th July, 1924.

Further to your verbal representations on behalf of Mr. Warren W. Paine, Lieutenant, 1st Battalion who is claiming that the ischiorectal abscess from which he is suffering is the result of his war service, I have now to inform you that the whole case was placed before Sir George Syme, of the Medical Advisory Board for an opinion as to whether the abscess referred to could be connected with the condition caused by war wounds. Sir George Syme in his opinion states, “ I do not regard this as a war service disability.” (Signed.) J. M. SEMMENS,

Chairman Repatriation Commission

Against the opinion of Sir George Syme, I have the following certificate of Dr. Jarvie Hood : - 15th July, 1924.

I have to state that 1st Lieutenant W. W. Paine, 1st Battalion, Australian Imperial Forces, was in No. 4 A.G.H. from 1915 to 1918 at intervals, suffering from septic wounds of right arm and left leg. While there I saw him frequently, and while there he developed an ischio-rectal abscess, which was, in my opinion, the direct or indirect result of the septic condition he was in.

I invite the attention of honorable senators to this certificate. I understand that Sir George Syme is at the head of his profession in Victoria, just as Dr. Jarvie Hood is at the head of his profession in New SouthWales. Had the department secured the services of Dr. Jarvie Hood, no doubt the Minister for Repatriation would have accepted his opinion instead of that of Sir George Syme, and the returned officer would have been given at least the benefit of the doubt.

Senator GRANT:
NEW SOUTH WALES · ALP

- Dr. Jarvie Hood says that he saw Lieutenant Paine frequently in the No. 4 Australian General Hospital, and that he had developed an ischio-rectal abscess which was the direct or indirect result of his septic condition.

Senator Crawford:

– But the septic condition developed long after Lieutenant Paine recovered from the wounds he had received.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is not quite correct.

Senator CRAWFORD:
NAT

– It is correct. At least seven doctors have expressed a view contrary to that of Dr. Jarvie Hood.

Senator GRANT:
NEW SOUTH WALES · ALP

– I do not know who the seven doctors are, but if a man who occupies the position in his profession that Dr. Hood does, has expressed an opinion of this sort, Lieutenant Paine should undoubtedly get the benefit of whatever doubt there may be. If Dr. Hood’s language conveys any meaning at all, it is that the abscess from which Lieutenant Paine suffered was due to the septic condition he was in as a result of his war service. I was of opinion that the production of this certificate would have some weight with the Repatriation Department, and I- presented it to the Minister, Dr. Earle Page. On the 17th July last, Dr. Earle Page sent me the following reply: -

I have examined the files of Lieutenant W. W. Paine and I concur in the opinion expressed by Sir George Syme and the Medical Board that it is impossible to relate his disabilities to war service.

I do not question Dr. Earle Page’s ability to diagnose a case such as this from the files dealing with it, but a medical man who has had personal experience of the claimant should be in a better position to come to a correct decision than one who is as busy as tha Treasurer must be. I do not suggest that the Minister did not give very careful attention to the matter, but, with all due respect to him, Dr. Hood, who saw Lieutenant Paine frequently from 1915 to 1918, was in a better position to express a reliable opinion upon the case than one who had merely undertaken the task of examining the departmental files.

Senator Wilson:

– When ‘ I suggested , that I should bring the matter under the personal notice of the Treasurer, did not the honorable senator indicate that if that Honorable gentleman looked into the matter he would be perfectly satisfied with his decision?

Senator GRANT:
NEW SOUTH WALES · ALP

– I have no recollection of saying that. Nothing short of what I wanted would satisfy me. I want this man to undergo a further operation and to get an increased pension. Following upon representations I made to the Repatriation Department and to the Minister on his behalf, I received a letter from Paine.

Senator Wilson:

– Are we to understand -that if the report of the select committee were not in the form the honorable senator desired, he would still be dissatisfied-?

Senator GRANT:
NEW SOUTH WALES · ALP

– I mean to exhaust every possible form which Parliament will permit me to exercise- - I am not particular as to the time taken - to obtain for this case the consideration to which it is entitled. Some years ago, when men were being urged to enlist, innumerable promises of an indefinite character were made, and it was never anticipated that advantage would be taken of technicalities to prevent ai soldier from receiving additional . surgical treatment or a higher pension. Paine is now receiving only 12s. 6d. per week. The letter which I have received from Paine reads - 10 Lytton-street,

North Sydney, 6th August, 1924

Dear Sir. - I am in receipt of your letters of the 31st July and 4th August instant, and wish to thank you for the efforts you are making on my behalf.

In the letter from the Minister for Repatriation to yourself (copy numbered 14605) it is stated inter alia tha£- “ The ischio rectal abscess did not appear until 11th September, 1917, long after his discharge. This complaint was considered by the surgeon who performed the operation on 2nd November, 1917, not to be the result of service, and by another examining doctor to be due to ‘ infection of recent origin ‘. The departmental medical officer reported it had been established that there was no sequence of abscesses from the date of his discharge to October, 1917.”

The above statements are, to say the very least of it, very misleading - in fact, they are Untrue.

The facts are, briefly, as follow: -

I returned from active service in July, 1915, and was discharged , on the 4th August, 1916, as medically unfit on account of gunshot wounds in right arm and left leg., For the period, July, 1915, to August, 1916 (thirteen months), I was an. out-patient, receiving treatment, at the Randwick Military Hospital. The treatment I received was for the wound in my arm, which was septic. After a long series of vaccine treatments the wound in my arm closed (about December, 1916), or some seventeen months after my return to Australia, and four months after my discharge. I was discharged on 4th August, 1916, with a suppurating septic arm.

The sepsis evidently remained in my system, as a series of abscesses formed on various parts of my anatomy, principally on the right side of -my neck. These abscesses were treated at the Randwick Military Hospital.

After another series of vaccine treatments,an ischio rectal abscess occurred, and early in 1917 (during the month of February, I believe), I reported this trouble to the medical officer at Liverpool camp (where I was then engaged on home service), and was sent to

Randwick Military Hospital, where I was operated on by Dr. Curtis Elliott (about February, 1917). See Dr. Curtis Elliott’s letter in Repatriation Department’s files.

Therefore, you will see that the Minister for Repatriation’s statement that, “ the ischio rectal abscess did not appear until 11th September, 1917,” is untrue, and also that there is, to my mind, ample .proof that there was a “ sequence of abscesses from the date of my discharge to October, 1917.

There is every reason- to believe from the foregoing that my medical records are very incomplete, and therefore it is extremely desirable, and, may I say, essential that a select committee be appointed to inquire into the whole of the circumstances and to peruse the whole of the evidence relative to my case, and should such committee be appointed, I shall welcome the opportunity of appearing before them in person to substantiate, by documentary evidence and otherwise, all statements made by me.

You already have certificates from Dr. Jarvie Hood, and other eminent medical authorities, supporting the contention that the ischio rectal abscess is a direct or indirect result of my war service.

I have been compelled to attend other than military hospitals for treatment of my complaint, owing to the Department of Repatriation refusing to treat me under their medical scheme.

The final suggestion in the Minister for Repatriation’s letter, that I should now go to civil hospitals for treatment is, in all the circumstances, resented.

Should there be any further particulars that you require, I shall be pleased to give you same immediately.

Senator GRANT:
NEW SOUTH WALES · ALP

– The statement I have made is in accordance with the official records.

Senator Crawford:

– Dr. Jarvie Hood’s certificate does not say that his condition is due to war service.

Senator GRANT:
NEW SOUTH WALES · ALP

– He says that, in his opinion, the abscess is the direct or indirect result of Paine’ s septic condition.

Senator Crawford:

– He does not say that the septic condition is due to war service.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is understood. It appears to me that this is the only means by which I can obtain justice for this man. I believe the people of Australia are strongly in favour of giving every consideration to the claims of incapacitated ex-soldiers, who should in all instances be given the benefit of any doubt which may exist. The committee I propose would consist of seven members, four of whom are returned soldiers ; and I am sure that if the case were fully investigated a recommendation would be made to the effect that Lieutenant Paine is entitled to further treatment, and also an increased pension. I trust the Government will at the earliest possible moment bring in a bill to enable the Repatriation Department to deal with cases of this character. It was an easy matter for those who returned from thefront in good health to re-establish themselves in civil life, but men who cameback incapacitated, or who are now feeling the effects of illness, consequent upon war wounds, find it extremely difficult toundertake work which will return them a living wage. As the Government are in possession of all the facts, I trust that an adjournment of the debate will not be sought, but that the motion will be agreed to without a division.

Senator GRAHAM:
Western Australia

– I second the motion. I support all Senator Grant has said concerning the disabilities experienced by men who are indisposed owing to illness consequent upon war service. A number of cases in Western Australia have been brought under my notice,, in which men who returned from the front have been unable to follow their ordinary avocations owing . to disabilities such as those -mentioned by Senator Grant. One case in particular is that of a young man named Tucker, who served abroad for three years and ten months, received a good discharge, and on his return endeavoured to follow his ordinary work, but after a week found it impossible to do so. He was under the doctor’s care for fifteen months, and during that time his wife and children were dependent upon charity. Twelve monthsafter the termination of the war Tucker contracted an abscess on the liver, and after being operated upon he was in hospital for seven months with a tube in his side. Since that time he has not been able to do anything. The doctors whohave watched the case are of the opinion that the abscess on the liver may have been contracted as the result of dysentery, from which he suffered while at the front. He has endeavoured to prove that his present condition is due to war service. The two doctors who had him under observation had also suffered from the same complaint when they were on active service. Their condition, however, was not sufficiently grave to be reported to the authorities. Scores of similar caseswhich I could enumerate all require investigation. Something should be done to enable these men to get that to which they are justly entitled. After doing their bit “in the great war, they are thrown on the wings of the world, and their wives and families have to be kept by public subscription. Such a state of affairs is a disgrace to this country. I hope that the Senate will take notice of Senator Grant’s remarks, and act upon them.

Motion (by Senator Crawford) -

That the debate be now adjourned. - put. The Senate divided.

AYES: 16

NOES: 9

Majority … … 7

AYES

NOES

Question so resolved in the affirmative.

Debate adjourned.

page 2921

EMPIRE PREFERENTIAL TRADE

Order of the day for the resumption of the debate (vide page 1840) on motion by Senator Duncan, called on, and debate (on motion by Senator Wilson) adjourned.

page 2921

NAVIGATION ACT

Exemption of British Ships prom Coastal Provisions.

Order of the day for the resumption of the debate (vide page 2652), on motion by Senator Ogden, called on, and debate (on motion by Senator H. Hays) adjourned.

page 2921

DEFENCE EQUIPMENT BILL

An examination of the principal materials required for manufacture disclosed that Australia possessed or could manufacture the majority of those most essential, and could, therefore, look forward to reaching a relatively high degree of self-containment when it had facilities for turning those materials into articles of specific use in war.

No one will doubt Mr. Leighton’s qualifications to speak on such an important subject. The Public Accounts Committee has. proved that there are, within the bounds of this island continent, nearly all the raw materials necessary for making Australia self-contained in the matter of munitions if we ever put our hands to the work of manufacturing them. Our cruisers may be sunk, our trade routes may be closed, but we have here all materials ready to manufacture that which would enable .us to repel any attack. The report of the committee proceeds -

The actual scheme of operations could, however, only be determined by an expression of Government policy regarding the strength and nature of the Defence Forces, and what these forces were designed to accomplish. . . .

On the 13th August, 1921, the Munitions Supply Board was constituted, a statutory body under the Defence Act with the same personnel as that of the Board of Factory Administration, whose powers and functions were transferred to the new board. The personnel of the Munitions Supply Board comprised -

Chairman - Mr. A. E. Leighton, F.LC, Comptroller-General of Munitions Supply.

Members - Colonel T. J. Thomas, O.B.E., Finance Secretary, Department of Defence; Mr. M. M. Maguire, O.B.E., Assistant Secretary for Defence.

In addition to any other powers or functions conferred upon it by the Minister, the board has power to deal with the following matters: - (o.) Provision of such armament, arms, ammunition, equipment, supplies, and stores of all kinds as may be demanded by the responsible authorities and duly approved.

Research.
1. Inspection and examination of supplies obtained in Australia other than food, forage, and fuel supplies, up to the point of issue to the service.
2. Administration of establishments established or to be established under section 63 of the act and placed under the control of the board.

As the inquiry of the committee developed, it found that the board was exercising all its powers, and had done splendid work. In dealing with the amended proposals the report states -

The scheme of 1919 was based on the assumption that military requirements demanded that the factories should be maintained on a prewar output, but the arrival of large quantities of military stores from abroad brought about a lessening of demand upon existing factories.

Further, the drastic reduction of Defence Estimates made towards the end of 1921, and the curtailment of the universal training system, necessitated a change in policy. Up to June, 1922, it had been the practice to run existing factories largely as trading concerns.

This was costing about £700,000 per annum, In order to establish new factories and obtain the necessary plant, tools, equipment, &c, an additional £400,000 would have been required, making an annual total of £1,100,000.

I am submitting these extracts from the report because the inquiry conducted by the. committee was a lengthy one, and at its sittings valuable evidence was tendered. The committee came to the conclusion that we should concentrate more on making Australia self-contained in the matter of defence, which is more desirable than to undertake the construction of two cruisers which would be of little use in the event of an attack. The report goes on to say -

The 1922 programme of the Munitions Supply Board, which has received the endorsement of the Government,, is. based on the following assumptions: -

that under peace conditions the sum available for munitions supply purposes is limited to £492,000 per annum; (2i) that the total cost of new construction and establishments as at present proposed is spread over six years

that existing factories are maintained on a nucleus basis.

That is the kernel of the proposals. The committee endeavoured to bring about a change in factories working under this scheme, whereby iri certain establishments a portion of the premises would be set aside for the manufacture of munition supplies so that operations could be effectively carried out at given centres when the occasion demanded it. Provision has now been made not only to conduct these factories in time of peace, when employment will be available to our artisans, but to have a reserve of material and of skilled men capable of carrying on the necessary manufacture in the event of war. The money allotted has not been spent during any one of the six years mentioned, because the department has not been ready to proceed, but I believe from now onwards this scheme will work more effectively and rapidly. I wish to again emphasize the point that I am opposed to the construction of cruisers, but if Parliament determines that two are to be built, I shall strongly advocate that the work of construction be undertaken in Australia by Australian workmen.

Senator Pearce:

– The honorable senator has used the same arguments that were employed a good many years ago when the Labour party proposed to construct three cruisers. The proposal was contemptuously described as one for a “ tin-pot “ navy.

Senator NEEDHAM:

– I am a much older mak than I was then, and I am now much wiser in the matter of naval and military defence.

Senator Wilson:

– If the honorable senator is ever on this side of the chamber he will tell another story.

Senator NEEDHAM:

– No matter on which side I am seated, I shall never change my principles. I sacrificed my seat in this chamber rather than sacrifice my principles, and I am here again holding the same principles. I was once an enthusiastic advocate of compulsory military training, but I am not to-day. I move -

That after the word “ That.” the- following words be inserted : - “ as efforts are being made by the President of the United States and the Prime Minister of. Great Britain to convene another conference to deal with the question of further disarmament, and in view of the early sitting of the League of Nations, it is the opinion of this Senate that expenditure upon naval construction should be deferred for the .present.”

Debate (on motion by Senator Duncan) adjourned.

Senate adjourned at 9.57 p.m.

Cite as: Australia, Senate, Debates, 7 August 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240807_senate_9_108/>.

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Senate 7 August 1924

PAPERS

THE LATE SENATOR BARKER

QUESTION

DUTY ON REAPERS AND BINDERS

Senator J B HAYES:TASMANIA

Senator WILSON:Honorary Minister · SOUTH AUSTRALIA · NAT

WAR PENSIONS APPROPRIATION BILL

POST AND TELEGRAPH RATES BILL

PRINTING COMMITTEE

STATES LOAN BILL

COMMONWEALTH PUBLIC SERVICE BILL

COMMONWEALTH BANK BILL

Third Reading

Senator GARDINER:New South Wales.

Senator GREENE:NEW SOUTH WALES · NAT

Senator GARDINER:

Senator Sir Thomas Glasgow:

Senator GARDINER:

Senator Pearce:

Senator GARDINER:

Senator Pearce:

Senator GARDINER:

Senator GARDINER:

Senator Drake-Brockman:

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator Drake-Brockman:

Senator GARDINER:

Senator Lynch:

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator GARDINER:

Senator Drake-Brockman:

Senator GARDINER:

Senator Drake-Brockman:

Senator GARDINER:

Senator GARDINER:

Senator Drake-Brockman:

Senator GARDINER:

Senator GRANT:NEW SOUTH WALES · ALP

Senator GARDINER:

Senator Findley:

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator Gardiner:

Senator GREENE:NEW SOUTH WALES · NAT

Senator Gardiner:

Senator GREENE:NEW SOUTH WALES · NAT

Senator Gardiner:

Senator GREENE:NEW SOUTH WALES · NAT

Senator MCDOUGALL:New South Wales

Senator LYNCH:Western Australia

Senator GRANT:NEW SOUTH WALES · ALP

APPROPRIATION (WORKS AND . BUILDINGS) BILL 1924-25

Second Reading

Senator PEARCE:Minister for Home and Territories · Western Australia · NAT

Senator GREENE:NEW SOUTH WALES · NAT

Senator PEARCE:

Senator Kingsmill:

Senator PEARCE:

Senator Gardiner:

DEFENCE EQUIPMENT BILL

Senator GARDINER:New South Wales

Senator Payne:

Senator GARDINER:

Senator GRANT:NEW SOUTH WALES · ALP

Senator GARDINER:

Senator Wilson:

Senator GARDINER:

Senator Wilson:

Senator GARDINER:

Senator GREENE:NEW SOUTH WALES · NAT

Senator Kingsmill:

Senate
7 August 1924

Senator J B HAYES:
TASMANIA

Senator WILSON:
Honorary Minister · SOUTH AUSTRALIA · NAT

Senator GARDINER:
New South Wales.

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GRANT:
NEW SOUTH WALES · ALP

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator MCDOUGALL:
New South Wales

Senator LYNCH:
Western Australia

Senator GRANT:
NEW SOUTH WALES · ALP

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GARDINER:
New South Wales

Senator GRANT:
NEW SOUTH WALES · ALP

Senator GREENE:
NEW SOUTH WALES · NAT

Senator JOHN D MILLEN:
TASMANIA · NAT; UAP from 1931

Senator GARDINER:
New South Wales

Senator PEARCE:
NAT