Senate
31 May 1933

13th Parliament · 1st Session

  1. Senate
  2. 13th Parliament
  3. 1933

The President (Senator the Hon. P. J. Lynch) took the chair at 3 p.m., and read prayers.

page 1969

QUESTION

ASSISTANT TREASURER

Senator DUNN:
NEW SOUTH WALES

-Will the Assistant Treasurer inform the Senate whether there is any truth in the newspaper reports that on account of health and for private financial considerations, he intends to resign from the Ministry after the next Premiers Conference?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Announcements in regard to Ministerial changes are not customarily made in reply to questions. If any change of the kind suggested by the honorable senator’s question should take place, the Senate will be informed in due course.

page 1969

QUESTION

NEW CRUISER

Senator DUNN:

– Has the attention of the Minister for Defence been drawn to the following newspaper cablegram from London : -

The London Daily Telegraph understands that an official announcement is expected soon respecting the building of a new cruiser for the Australian Navy to replace H.M.A.S. Brisbane. Construction would be cheaper here, but the Commonwealth Government may wish it built in Sydney.

Has the Minister received any advice from London on this subject, and will he state whether the Government intends to construct the new cruiser at Cockatoo Island Dockyard?

Senator Sir GEORGE PEARCE.Whilst Commonwealth Ministers are grateful for the help of gentlemen who, at great distances from Australia, frame Government policy for them, I must say that often these announcements are premature. The Government’s intention in regard to this and cognate matters of policy will be announced when the b udget speech is delivered to Parliament.

page 1969

QUESTION

CORDITE FACTORY

Senator BROWN:
QUEENSLAND

– I ask the Minister for Defence if the Government intends to establish a new cordite factory in the vicinity of Melbourne? If so, will the Minister state why the factory is not to be situated in Canberra, thus keeping faith with the residents, business men, and workers of the Federal Capital city?

Senator Sir GEORGE PEARCE.There is already a cordite factory at Maribyrnong, and the proposed expenditure of £40,000 is merely for the extension of that establishment.

page 1969

PAPERS

The following papers were presented : -

Australian Soldiers’ Repatriation Act - Regulations amended - Statutory Rules 1932, No. 137; 1933, No. 10.

Naval Defence Act - Regulations amended - Statutory Rules 1933, No. 65.

page 1969

ASSENT TO BILLS

Assent to the following bills reported : -

Commonwealth Grants Commission Bill.

Petrol Commission Bill.

Royal Commissions Bill.

Seat of Government (Administration) Bill.

Commonwealth Inscribed Stock Bill.

Financial Emergency Bill.

Supply Bill (No. 1) 1933-34.

page 1969

QUESTION

OVERPAYMENTS OF COTTON BOUNTY

Senator COLLINGS:
QUEENSLAND

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

  1. Is it proposed to compromise with Bond’s Industries Limited regarding the overpayment of cotton bounty and outstanding claims?
  2. Is there any reason for delay in this matter, and is any special consideration being shown to this firm?
  3. Is it not a fact that old-age pensioners are being forced to refund their overpayments in pensions?
Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The answers to the honorable senator’s questions are - 1 and 2. The whole situation depends upon the interpretation of the law in its relation to capital and profits. Questions of law have been submitted for the opinion of leading counsel whose views are awaited. Until the Government is fully advised on the matters in doubt it cannot be stated whether or not overpayments of bounty have occurred.

  1. Old-age pensioners whose circumstances are such that they are able to refund overpayments of pension are required to do so.

page 1969

QUESTION

UNEMPLOYMENT

Senator MILLEN:
TASMANIA

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

  1. What was the number of unemployed in theCommonwealth, both male and female, for theyears 1931 and 1932?
  2. During these two periods, what was the percentage of unemployed of both sexes, who were under 21 years of age?
Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The following replies have been furnished by the Commonwealth Statistician : -

  1. Information is not available as to total unemployed.
  2. Separate particulars are not available for males and females or for adults or juniors. With regard to trade unions which make returns, the percentage of unemployed of all ages and both sexes during 1931 was 27.4, and during 1932, 29.0.

page 1970

QUESTION

WESTERN AUSTRALIAN SECESSION REFERENDUM

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Prime Minister, upon notice-

  1. In view of the result of the referendum held in Western Australia on the 8th April last, at which the question of the State of Western Australia seceding from the Commonwealth of Australia was submitted to the electors, who decided by 138,653 votes to 70,706 votes in favour of secession - a majority of 67,947 votes - is it the intention of the Commonwealth Government to assist the Western Australian Government and Parliament in carrying the will of the people of that State, as expressed by the referendum, into effect?
  2. If not, is it the intention of the Federal Government to endeavour to defeat the decision of the electors of Western Australia in favour of secession and home rule?

Senator Sir GEORGE PEARCE.The Commonwealth Government is aware of the result of the referendum to which reference is made, and does not propose to take action in either of the directions suggested.

page 1970

AUSTRALIAN ANTARCTIC TERRITORY ACCEPTANCE BILL

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

page 1970

CUSTOMS TARIFF 1933

First Reading

Motion (by Senator McLachlan) proposed -

That the bill be now read a first time.

Senator BARNES:
Victoria

.- This measure is of great importance to the people of Australia, because everybody will be more or less affectedby the duties for which it provides. Honorable senators on the Opposition side are anxious that the welfare of the people shall be safeguarded, so far as possible, and that, in order to bring about that result, there shall be proper tariff administration. The two main reasons for a measure of this description are that it provides a means of raising revenue, and what is more important, to my mind, that it enables the people of a sparsely-populated country-

Senator Sir George Pearce:

– I rise to a point of order. The measure before us is a money bill, which the Senate may not amend. The Standing Orders provide that the first-reading discussion of a measure of this nature need not be relevant to the subject-matter of the bill. The first President of the Senate, I believe, directed the attention of the Senate, when a money bill was brought up, to the fact that, although an opportunity was provided in another place to speak on grievances every fortnight, such an opportunity rarely occurred in the Senate. He proposed, therefore, with the concurrence of the Senate-

Senator Dunn:

– I rise to a point of of order. Is the Leader of the Government explaining a point of order, or making a speech on one?

The PRESIDENT (Senator the Hon. P. J. Lynch). - He is giving his reasons for submitting a point of order.

Senator Sir George Pearce:

– The first President of the Senate, in the early days of the Commonwealth Parliament, pointed out that the Senate had not the regular opportunities for discussing grievances enjoyed in another place, and that the Senate occupied a different position in that regard from that of most second chambers. He, therefore, proposed, with the consent of the Senate, to initiate the practice of permitting such discussions onthe first reading of money bills. Parliamentary procedure, as honorable senators know, is governed, not merely by the Standing Orders of the Houses, but by the practice established in compliance with the rulings of their’ presiding officers. President Baker stated that when a money bill was received from another place, he would permit only such discussion on the motion for its first reading as was not relevant to the subjectmatter of the bill. He added that this gave an opportunity to honorable senators to discuss grievances and acts of administration, such as was given in the House of Representatives every fortnight. But he reminded the Senate that if honorable senators were allowed to discuss money bills on the first as well as on the second reading of those measures, there might be in effect two second-reading debates, which was not desirable. The practice so proposed was agreed to by the Senate, and the various presidents have given effect to it ever since, with the result that it has become the established custom of this chamber.

I have risen merely to ask that that practice be maintained, because it is of distinct advantage to honorable senators to be permitted to discuss irrelevant matters on the first reading of a money bill. I have not taken this point of order with any intention of being discourteous to the Leader of the Opposition, who, I observed, was proceeding to discuss . the bill itself. I ask for your ruling, Mr. President, as to whether, in debating the subject-matter of the bill, the honorable gentleman would be acting in consonance with the established practice of the Senate?

Senator Barnes:

– I draw attention to Standing Order 190, which states that in considering bills which the Senate may not amend, the question “ that this bill be now read a first time “ may be debated, and the debate need not be relevant to the subject-matter of the bill. My intention was merely to make a few introductory observations regarding the bill itself, and then to deal with other matters.

Senator E B Johnston:

– This is a bill of the class referred to in Standing Orders 189 and 190, which we cannot amend on the second reading. Our only opportunity is to amend it on the first reading. I notify you, Mr. President, that I desire to move an amendment on the first reading of the bill in the following terms: -

That all words after “ be “ be left out, with a view to insert in lieu thereof the words “ returned to the House of Representatives with a request that the House will so amend the bill that the terms and the spirit of the Ottawa agreement shall be given effect to in so far as’ concerns the preferential duties referred to in the bill; that is to say, will so amend the bill that the proposed duties against British goods shall he reduced to tbA level of the 1921-1930 tariff in all cases where they have been raised . above that level without report by the Tariff Board.

If the point of order taken by the Leader of the Government is upheld, I shall be deprived of an opportunity, on the first reading of the bill, to submit my amendment, and the Standing Orders provide that a bill of this kind may not be amended on the second reading.

Senator Sir George Pearce:

– My sole reason for taking the point of order was to confine discussion on the first reading to matters not relevant to the bill.

Senator E B Johnston:

– I have indicated my intention to submit an amendment, before the President gave his decision, so that I may not lose my opportunity to move it.

Senator Barnes:

– The two points differ materially, and I hope that they will not cause confusion. Under Standing Order 190 I claim the right to discuss any subject not specifically referred to in the bill.

The PRESIDENT:

– The practice of the Senate, which has the support of the Standing Orders, has been to allow honorable senators, when speaking to the first reading of a money bill, which the Senate may not amend, to refer to subjects foreign to the bill itself. The Leader of the Senate now claims that that practice takes from honorable senators the right to refer, on the motion for. the first reading, to any subject covered by the bill. This point has not, I think, previously been raised in the Senate, and I therefore desire time to consider it. For that reason I shall not, at this stage, give a considered opinion on the question raised; my ruling will be merely a tentative one. With this qualification, I rule that, on the first reading of a money bill, honorable senators ‘may, in addition to dealing with extraneous subjects, also refer incidentally to the matters dealt with by the bill itself. I have noticed, during my 26 years’ membership of the Senate, that considerable latitude has been extended to honorable senators when making their first reading speeches on money, bills ; they have not been, debarred from referring .to the subject-matter of sucH bills. ‘That practice has lessened considerably the time occupied by the second reading debate. The Leader of the Opposition will be in order, on the present occasion, in referring incidentally to matters within the scope of the bill.

Senator Sir George Pearce:

– I’ am loath to move a motion dissenting from your ruling, Mr. President, for I can assure you that various Presidents have ruled in the direction which I have already indicated. I understand that you have merely given an interim ruling, pending further consideration of the point raised.

The PRESIDENT:

– That is the position.

Senator BARNES:

– Australia is a big country, with a small, scattered population, and for its development a much larger population is necessary. In order to attract people to develop this country, reasonable opportunities for obtaining remunerative employment must exist. The quick and vigorous development of this land depends, to a great extent, on the maintenance of a high standard of living. The troubles which Australia, in common with most other countries throughout the world, have suffered during recent years, are the result of causes for which, so far, no effective remedy has been found. Australia’s position is worse than it has ever been; a great proportion of the men and women of this country are unable to obtain work, and their condition is so deplorable that desperate remedies are needed. The Government has not seriously attempted to cope with the position which has arisen, and for its neglect it is now charged with maladministration. Eighteen months ago its supporters promised the electors that, if a Nationalist government were returned, the tariff would not be interfered with, and that every person out of work would soon again find employment. Those promises were made from every platform in the country, and they were repeated in the columns of the press. They sufficed to obtain a majority of the votes passed at the elections, but what has become of thom since the present Government took the reins of office? The latest figures of the Commonwealth Statistician show that the peak period of unemployment was the second quarter of 1932, when 30 per cent, of the people of Australia were unemployed. The Government cannot claim that it has not the power to give effect to its promises, for it commands a majority in both Houses of this Parliament. Although this Government promised at the last election that, if it were put into office, it would solve the unemployment problem, we find that during the last eighteen months, it has expended on the relief of unemployment less money than was expended by the previous Administration during a similar period. When the Scullin Government took office, it was faced with financial difficulties much greater than those which confronted this Government. At that time, the financial position of this country was much worse than it had ever been before. The Treasury was practically depleted, and there was no prospect of obtaining sufficient revenue from the ordinary sources. The banks were refusing to release credit, and the money market was closed to us. The Scullin Government had, therefore, to introduce new methods of revenue collection. I question the accuracy of the Commonwealth Statistician’s figures relating to unemployment. I am not reflecting upon the ability of that officer, but I know that he is handicapped to the extent that he cannot obtain reliable information as to unemployment in this country. According to his figures, a comparison of the second quarter of 1932 with the first quarter of 1933 shows that unemployment has decreased from 30 per cent, to 26.5 per cent., and that, therefore, during the last eighteen months the unemployment has been reduced by practically 4 per cent’. Information as to unemployment is gathered by the Statistician from returns furnished to him by trade organizations, and I contend that that source of information is not reliable. Take, for instance, my own organization - the Australian Workers Union, which spreads throughout Australia, and covers a class of labour which is more affected by unemployment than any other. It is impossible for our organizers to collect accurate data relating to unemployment among the rank and file of the union, and that applies - perhaps, not to so great an extent - to every other organization. The Commonwealth Government, and some of the State Governments, claim that they are rapidly reducing unemployment. I admit that unemployment has been reduced to some extent, because work of a spasmodic character has been provided, but there has been no great provision of employment. There appeared in yesterday’s Age a letter describing the conditions of relief employment in the country. It reads -

page 1973

QUESTION

RELIEF CAMP CONDITIONS

I desire to point out the position of the unemployed men in the various relief camps. Take this camp. The men, when engaged, were told that they were to be sent to a camp seven miles out of Nowa Nowa. This seven miles eventually stretched to 57 miles. On arrival at the station we were met by two motor trucks at 5.45 p.m., and the gang (approximately 40 men) and their luggage were then loaded like an iimals to face a journey of 57 miles of mountainous country. We arrived at the camp cold and hungry at 10.35 p.m. Fortunately, a good hot meal was waiting for us. The wages are 10s. lid. per day, and we must do our bust to work five days of eight hours each - that is, “ weather permitting.” As at this time of the year Gippsland “enjoys” a good rainfall, we will probably have to work Saturdays to get our full time in. Out of the sum of £2 10s. 7id., 5-8ths, or £1 14s. 3d., is allotted to the wife, and the remainder, after deducting value of mess, to the men. The average man of this camp leaves behind him a wife and four children, for which, were he with them, he would receive sustenance to the value of 10s.; also he would get his weekly allowance of wood, and sometimes clothes, from the local relief committee, also his rent paid for him. After being sent to this district his family, after paying their rent, averaging 15s., have to their credit the large sum of 19s. 9d. on which to exist for the week. From this sum they must pay for the wood with which to supply warmth, and the ability to cook the few vegetables they can purchase with the remainder. Many of the men are without even a change of clothing, which is absolutely necessary after a day’s work in the rain. When they applied to their relief committees before leaving town they were given one shirt and a pair of pants. This, of course, only applies to some of them. Others were lucky if they got a flannel. During the first night in the camp several of the bunks, which are made of saplings and chaff bags, fell through, and when the men provided themselves with fresh bags from vacant tents they were told by the overseer that the bags must be returned. - S. H. Farn (Wulgulmerang).

This Government has practically made no effort to keep its election promise, that it would provide work for the unemployed. There is another phase of unemployment which has not come under the purview of the Statistician, because of the fact that he has no means at his disposal to gather information respecting it. There has been no machinery with which to procure the information that is needed, and that has been sought by at least some organizations in Victoria. I quote the following from the Melbourne Herald of the 13th April last : -

Mr. Keane, Chairman of the Bendigo Boys Employment Committee, said that in the four principal centres of population in Victoria - Melbourne, Ballarat, Bendigo and Geelong - there were approximately 56,000 boys and 56,000 girls between the ages of 14 and 21. Approximately, 8,000 boys and 8,000 girls between these ages left school each year. He pointed out that the vocational officer of the Education Department (Mr. G. R. Giles) stated that, of those who left last year, approximately 2,000 boys and 2,000 girU had found employment. Even if another 1,000 were also in work, it appeared that there were not less than 35,000 unemployed youths between 14 and 20 years of age in the four cities. Returns issued by the Secretary for Labour showed that there were 21,000 -boys under 21 years of age employed in factories, shops, railways, banks and post offices supervised by factory inspectors. This would mean 35,000 boys and perhaps an equal number of girls were unaccounted for. All attempts by the Bendigo committee to determine what the 70,000 boys and girls under 21 were doing had failed. Mr. Keane said the Education Department should be able to supply the information as twice a year it obtained returns from every school. In spite of the committee’s request, which had also been pressed by the Minister of Lands (Mr. Dunstan), however, the committee had failed to obtain the necessary information.

That is a striking commentary on the grievous situation in which Victoria and the other States of Australia are placed; 70,000 boys and girls between school leaving age and full manhood or womanhood, are unable each year to find employment, and they are not taken into account by the Commonwealth Statistician when compiling figures relating to unemployment. It is for that reason that I say that those figures cannot be expected to place the situation in the real light.

The provision of employment for our people is the most important task that any government could, undertake. Notwithstanding all the talk about prosperity being close at hand, and similar piffle that is written from time to time, there is no escaping the concrete fact that there cannot be a return to prosperity until employment is found for the people. Working men and women are the basis upon which the whole structure of society is built, and it is idle to affirm that prosperity can return to either this or* any other country so long as they are unemployed. If they have no spending power, trade in every channel is paralysed. Markets cannot be extended, because the workers in other countries cannot afford to buy what we produce; just as we cannot afford to purchase what is being brought into Australia at the present time. So we find these miserable atoms of humanity wandering around Australia, the elders finding intermittent employment such as I have described, and the youths without a feather to fly with, and with no hope of becoming absorbed in the industrial army, with the result that they must inevitably become in time of jio use to the community, because they have no means of training themselves in a useful occupation, and of making them; selves efficient helpers in industry. The Government has failed in its duty, in that it has not grappled with the problem in a sterner and more vigorous fashion. It has had eighteen months in which to effect improvement, yet the country is in as bad a state to-day as when it assumed office. It unquestionably deserves the unequivocal condemnation of the people for its ineptitude. It may plead unpropitious circumstances ; but such a plea cannot be entertained. The last Government brought forward a proposal that would have kept the majority of the people in remunerative employment,” but was prevented from putting it into operation by the machinations of those who in this chamber now sit behind the present Government. It having failed to fulfil its promise to usher in a period of prosperity, there is not the slightest doubt of what the people’s verdict will be when the next appeal to them is made. » This country is being flooded with importations of goods that, because of the inability of the people to purchase them, must, for the time being, at all events, remain in the warehouses. When the present Government party was previously in power, the same thing happened; the warehouses of this country were filled with the products of the labour of other countries, while our own people were out of employment ; with the result that, -when another government took office and .altered . the tariff, the beneficial effect of its action was not felt, because the cheap imported products had io be disposed of before those turned out by our own factories could be placed on the market. But in spite of the handicaps that hung like a millstone round the neck of that Government, it almost succeeded in balancing it’s budget in one year; and it certainly did not allow unemployment to reach the height to which it attained after the present Administration came into power.

Senator BARNES:

– I direct the attention of the honorable senator to ,the glowing accounts that are published in the press from time to time of the revenues from customs and excise duties that are flowing into the Treasury. That is the principal avenue through which the country is obtaining revenue, and it is being done at the expense of the people.

Senator Payne:

– Is the honorable senator not able to cite a specific item?

Senator BARNES:

– I mention textiles of every description. Commodities are coming from Japan which are produced by child labour at a cost of 3d. a day, or by adult labour at 9d. a day, under labour conditions that should not be tolerated by present day civilization. Those goods are pouring into Australia to be sold to those who have no money with which to buy them, for, as a result of this Government having failed to honour its election pledges, they have no jobs. Prior to the last general election, it was stated that the election of a different government was all that was necessary to restore confidence; that purse strings would then be opened-, and money would be available to provide employment for all. When this Government assumed office, it attempted to float a loan of £8,000,000, of which only one-third was subscribed, the remainder having to be underwritten. The Government refrained from floating another loan until last week, and I congratulate it on the success of that appeal. At the same time, I make it plain that the gratifying result of that -loan is not due . to any confidence in the Government; that it arises from the protests that have been made by all sections in Australia, workers included, regarding the attitude ,’bf the financial institutions in Great ‘Britain towards this country. As a result of last week’s successful flotation, the investors are directing a more kindly eye towards Australia.

This Government could obtain money through the same channels that the Scullin Government proposed to exploit, and it would- have had the support of honorable senators on this side in doing that, with the result that we should not now have such a huge army of unemployed everlastingly and vainly seeking jobs which do not exist. There is no shortage of money in Australia. Only recently, I was talking to a banking friend who told me that the banks are full of money, and that the financial institutions are only waiting an opportunity to invest their funds. Had this Government made the appeal, it could have raised £20,000,000 instead of an inadequate £5,000,000, which will go nowhere.

Senator Collings:

– The Government has no intention that it should go far.

Senator BARNES:

– I agree with the honorable senator. I consider that the Government is making no serious attempt to relieve unemployment. It believes that it has not done its job well enough; that the workers have not been ground down to a low enough level to compel them to accept work under conditions even worse than those which now exist.

A good deal of press propaganda has been indulged in concerning the desirability of reducing duties in order to allow commodities which are used by primary producers to come into the country practically duty free.

Senator E B Johnston:

– If the primary producers are prosperous, everybody else will be prosperous.

Senator BARNES:

– I admit that the welfares of the country is largely dependent upon the prosperity of the primary producers, and Senator J Johnston will find that no other party has so great a sympathy for that section as that represented by my colleagues and myself. The Labour’ party is the only one that has consistently and persistently fought for the primary producers. Often, after having strenuously advocated their cause, and obtained relief for them, my party has sought, in turn, a measure of support for the secondary producers, and it has not been forthcoming. It is alleged that the working classes obtain all the relief they need from the operation of the Conciliation and Arbitration Court. The primary producers receive as much benefit from the community generally as does the working class from any decree of the Arbitration Court. The last census revealed that for every bread-winner who is a primary producer, there are three and ‘ a quarter bread-winners in other categories. While we have failed frequently to obtain advantages for those bread-winners who preponderate, we have provided quite a lot of relief for the primary producers. . In 1931-32 that section received assistance: through the medium of the wine bounty to the extent of £201,268; through the operation of the cotton bounty, £64,206; the bounty on cotton yarn, £94,395; and from relief to wheat-growers, £3,296,464: while those engaged in the butter industry were assisted to the extent of £2,250,000. Those measures of relief had the wholehearted support of representatives of the Labour party. Incidentally, had the parliamentary representatives of the wheat farmers supported the Labour Government, those engaged in that industry would have been granted considerably greater relief than was given. My colleagues and I will support the cause of the primary producers on every occasion, for we know that it is a deserving one. At the same time, we should like occasionally to receive a measure of reciprocal assistance for those whom we represent. When those who represent the primary producers remember the needs of other sections, and grant their support, we shall all get along very much better. Without resorting to additional taxation, or applying to the loan market, this Government could have afforded considerably more relief to the country than it ha* done. This Government should have borne in mind the extraordinarily heavy interest burden on our people in connexion with the overseas debt, which was accumulated largely as a result of the war. I do not wish to imply that Australia could have kept out of the war, because, the Mother Country being involved, the Commonwealth, as one of the dominions, no doubt felt in honour’ bound to play its part in that terrible conflict. But my complaint is that interest rates on our huge overseas debt are too high, the total interest bill being approximately £25,000,000 a year. Of the total debt, £43,000,000 carries interest at 6 per cent, and over, and on £355,000,000 the rate is 5 per cent. It is the duty of this Government to take immediate action to reduce this crushing burden. Towards the end of last year the right honorable member for Flinders (Mr. Bruce) proceeded to London, after the Ottawa conference, to take up his duties as Resident Minister, for the purpose of endeavouring to convert to a lower rate of interest the total debt owing to British bondholders. Within the last few days, he has been able to convert only £11,500,000 from 6£ per cent, to 3£ per cent. I do not wish to reflect upon the right honorable gentleman, because I admit that he is eminently fitted for the task set him; but I am afraid he has not had sufficient backing from this Government to ensure the complete success of his mission. British bondholders have not been told, in plain terms, that the interest rate of Australia’s overseas war debt is altogether too high. I am confident that, had the position been put to them, there would have been no difficulty about converting the whole of our debt on favorable terms. That there is ample money in Great Britain is evident from the fact that last year the British Government converted £2,000,000,000, and reduced the interest charge by lj per cent., thus saving British taxpayers £52,000,000 a year, and within the last two or three weeks, when it floated a loan of £50,000,000 at 2i per cent., the offerings amounted to £87,000,000.

Why should Australia continue to pay from 5 per cent, to 6^ per cent, on a considerable portion of its overseas debt? Hitherto there has been no serious suggestion of repudiation of our overseas debt, because our people honestly desire to meet their obligations. No other country has a better record than that of Australia in this regard, and for this and other reasons, we are entitled to expect every consideration from Great Britain, which cancelled £1,000,000,000 of war debts owing by France and Italy.

Speaking on this subject in the House of Commons a few weeks ago, Mr.

Lansbury, Leader of the Opposition, is reported as follows in the Melbourne Age of the 11th May:-

Mr. Lansbury complained that the Prime Minister had submitted no concrete proposal which the Government intended to advocate at the World Conference, and that the House had been told nothing definite about the war debts question. We should not be mealymouthed on the subject, seeing that we had cancelled £1,000,000,000 of the debts which Italy and France owed to us.

Great Britain has given relief to France and Italy, but apparently expects Australia, one of her own dominions, having a relatively small population, to continue to carry its crushing burden of £600,000,000 of war debts.

Senator Payne:

– What is the honorable senator’s authority for the statement that our war debt to Great Britain is £600,000,000?

Senator BARNES:

– I accept the statement made by the Leader of the Opposition in the British House of Commons, which, to my knowledge, has not been contradicted.

Senator Elliott:

– The total of the war debt owing to Great Britain by Australia is now about £80,000,000.

Senator BARNES:

– Prior to the war, Australia’s public debt was negligible. Now it is about £1,200,000,000, the great bulk of which was due to our participation in the war. Because of the part played by Australia in the war, we should now have more consideration from the British bondholders. They should treat the Commonwealth at least as well as they have treated their own people. They should, figuratively, allow us to come in on- the ground floor, and convert our war debt and other obligations on terms as favorable as were given recently to the British Government. If we could reduce by about £20,000,000 a year the interest on the money which we owe to Great Britain, it would be of tremendous relief to our people, and do much to dispel the cloud of unemployment that has hung over this country for so long.

This problem should be tackled seriously by the Government. British bondholders should be told plainly that we are no longer willing to pay such high interest rates on our overseas debt. It is true that we owe the money; but conditions now are entirely different from those obtaining when we entered into the contract, and we should not have to go begging on our knees for a remission of interest. Australia is an important part of the Empire, a fact which is generally realized ; but it is time that such realization took some concrete form. The overseas bondholders should be told that we are no longer prepared to put up with this imposition. We have no desire to repudiate - we have shown that in an unmistakable manner - but we should insist on a fair deal.

The really important thing is to get our unemployed people back to work. While unemployment existed only among pick and shovel men, nobody bothered much about it; but now, when 30 per cent, of registered trade unionists are out of work, and when, moreover, our boys and girls leaving school have no means of livelihood offering, the position has become infinitely more serious. The Government has done nothing to find work for them, or to provide avenues of employment by which they may become usefully employed, and grow up as citizens of whom the community might be proud. It is useless for the Government to plead that it cannot obtain money. It has got some now, even though it is only a drop in the bucket. It can get more if it likes, and get it legitimately in the manner I have suggested.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I understood the Leader of the Opposition (Senator Barnes) to say that the greater part of the debt we owe in Great Britain was incurred as a result of the war; that it wa3 incurred during the war and for the war, and that, because we have to pay interest on it, we are not able to do as much for the unemployed as otherwise Ave should be able to do. The honorable senator should know, however, that most of the . debt owed by the States and the Commonwealth in Great Britain has prac.tically nothing whatever to do with the war. The money was raised over a great many years, dating practically from the beginning of responsible government, and was spent on railways, public works, and other improvements throughout the length and breadth of the Commonwealth. The money so raised represents a debt of approximately £500,000,000, while the war debt as such is only £83,000,000.

Senator Brown:

– Does the Minister really wish us to believe that Australia owes only £83,000,000 as a result of the war?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That is a fact. The honorable senator has only to turn up the financial records of the various States to learn that it is they who are responsible for the greater part of our overseas debt, and the States had nothing to do with financing the war.

Senator Collings:

– The sum of £S3,000,000 represents money raised to pay the direct cost of the war; it does not represent our debt as the result of the war.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The servicing of our war debt in Britain has not hindered us from assisting the unemployed, because, during the whole period of this economic depression, Australia has not, owing to the generosity of Great Britain, paid one penny either in interest or reduction of principal on that debt. In regard to the debt incurred for purposes other than the war, the Leader of the Opposition does not suggest that we should repudiate our contractual obligations, and I do not think that any honorable senator here would suggest it. The Leader of the Opposition stated truly that on some of that debt we were paying high rates of interest, but I remind him that on a great part of it we are paying a very low rate. If he will look at the figures in the budget-papers he will find that no less than £111,000,000 was raised at rates of interest between 3 and 4 per cent. About £58,000,000 was borrowed at rates varying from 3 to 4 per cent., and there is a large block of loans, raised principally for redemption purposes, between 1922 and 1929, at 5 per cent., the loans maturing at periods between 1945 and 1975. Then there is another block of securities carrying interest at the rate of 5 per cent., and up to 6£ per cent., which is admittedly very high. The honorable senator blames the Government for not having read the riot act to the British bondholders who hold those securities, but I remind him that wc must pay some regard to the situation in London, and to our method of approach when arranging for conversions. Mr. Bruce has had an extremely difficult task. To appreciate the conditions which he had to face it is necessary to visualize the circumstances under which he went to London. It should not be forgotten by honorable senators opposite, and particularly by those honorable gentlemen in this chamber who call themselves the Lang party, that Mr. Lang was primarily responsible for the extraordinary conditions which Australia had to face on the London market. I say deliberately that Mr. Lang has been responsible for preventing many thousands of pounds from being made available to feed the unemployed of this country. He has caused more misery in this country than any other man living. No man made Mr. Bruce’s path in London more difficult than did Mr. Lang. At the time Mr. Bruce went to London, our 5 per cent. stocks were quoted at £65 - I speak from memory.What possible hope was there of converting our loans under such conditions, and while Mr. Lang was still fulminating the repudiation of the whole of our interest and debt in London? At this time, the Lyons Government took steps which the Scullin Government should have taken much earlier tomake it impossible for Mr. Lang to carry on, and ultimately he was dismissed from office. It was due to this fact that a basis was made for such a restoration of our credit in London as made approach to the London money market possible. Mr, Bruce then took this task in hand, and has done his work with remarkable ability. I am sorry that if is not possible to tell the Senate the whole story of the negotiations which have proceeded through many months, but they have necessarily been of a very confidential character. I believe that no man in Australia could have done the work that Mr. Bruce has done in London with greater ability, assiduity, and success than he has done it.

The first difficulty which faced him shortly after his arrival was the approaching maturity of a loan floated by the very State which had been responsible for the shaking of Australia’s credit in London to its very foundation. That conversion was necessary because of the approach of a redemption date which had to be met. It was perfectly useless at that time to attempt a general conversion of our optional loans; but we had necessarily to deal with maturing loans that we were under obligation to redeem on a set date.. That most difficult task was carried through by Mr. Bruce with wonderful success. We converted a £12,000,000 6 per cent. loan at3½ per cent. It was put on the market at £97 10s. The effective rate of interest was £41s. 3d.

Circumstances then arose which we thought would enable us to handle a large portion of our optional conversion loans. The honorable senator drew no distinction whatever between that portion of our indebtedness over which we have optional conversion rights and that portion over which we have no such rights. We can deal at the moment only with that portion of our loan in London over which we have optional conversion rights, totalling about £83,000,000. Just as. the stage was set for this conversion operation unexpected difficulties arose. Honorable senators realize that we are living in a time of alarms and excursions when -

The best-laid schemes o’ mice an’ men,

Gang aft a-gley.

When the work of Mr. Bruce seemed about to come to fruition, difficulties arose over the American debt and interest payments which upset the market conditions, and made action by us impossible for the time. When things had steadied again, and the prospect of a successful conversion operation appeared bright once more, difficulties arose through Herr Hitler and others, which again threw us back to our old position. From these remarks honorable senators will get some idea of the difficulties and disappointments which the Government has experienced, notwithstanding its most strenuous efforts here, and also those by Mr. Bruce in London, to convert a substantial portion of our overseas indebtedness.

Honorable senators should recognize that the whole responsibility in regard to this conversion does not rest upon the Commonwealth Government. The State Governments, as a matter of fact, are very much more concerned in these conversion operations than is the Commonwealth Government. In the event of the whole of our optional conversion rights being exercised in London, the Commonwealth Government, qua-Commonwealth Government, will get very little relief, because it is directly interested in only one small parcel of securities. The State Governments will, however, get great relief, because they are deeply interested in the bulk of the securities. Naturally, in these circumstances, the State Governments are co-operating to the fullest possible extent with the Commonwealth Government in all the negotiations. The Loan Council is, of course, privy to all that has been going on. The fullest disclosures have been made to the council of everything that has been attempted, and of all the conversations that have occurred between the Government and Mr. Bruce. The State Governments are as fully desirous as is the Commonwealth Government of the early success of these conversion negotiations, for they will receive greater relief from them than will the Commonwealth Government.

Senator Barnes:

– The Commonwealth Government could be a great spearhead for the State governments.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

-I am certain that, if the honorable senator were to inquire of the State governments - Labour and other - all would assert that the Commonwealth Government has been a very satisfactory spearhead. I hope that other honorable senators will not fall into the error of confounding the war debt with the normal external debt incurred for expenditure on railways, bridges, and other public works.

Senator O’Halloran:

– And repatriation activities.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Little, if any, of the repatriation expenditure is included in the external debt. During the war Australia borrowed considerable sums internally for activities incidental to the war, including repatriation, and the interest rate on this internal debt has been already substantially reduced. I do not suppose that Senator Barnes is suggesting that the bondholders in Australia should submit to a further cut of interest rates.

Senator Collings:

– They might have to do so yet. We cannot continue creating hunger and starvation.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– A further reduction of the interest rate on the internal public debt might have an effect opposite to what the honorable senator desires. I hope that he will not suggest such a step, for, although the opportunity to carry out his threat may be remote, the money market is a sensitive thing, and should not be unnecessarily disturbed.

Senator Barnes referred to the concessions made by the United Kingdom in connexion with the war debts of Italy andFrance. Those actions have no bearing on Australia’s ordinary debt in London. They were merely adjustments of war indebtedness between countries that had been allied during the war. Between those war debts and the normal debt of Australia there is no analogy. Honorable senators supporting the Government are not less concerned than Senator Barnes regarding the abnormal unemployment. We are just as anxious as he is to terminate this evil.

Senator Barnes:

– President Roosevelt has shown how to do it.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Along the path which the United States of America is now commencing to tread Australia has already advanced a considerable distance. President Roosevelt has not asked his people to take any steps which Australia has not already taken.

Senator Dunn:

– What rot!

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I invite Senator Dunn to point to any action taken by America of a kind which has not already been taken by Australia. Senator Barnes claims that theScullin Government made greater provision for unemployment than has been made by the present Government. I find by a hurried study of the figures that, in the two budgets for which the Scullin Government was responsible, it provided £1,000,000 from trust funds, £250,000 for unemployment, a further £500,000 in December, 1930, £100,000 for the repatriation of surplus coalminers, £40,000 for the Federal Capital Territory, and £300,000 in 1931-32 for federal works, making a total of £2,190,000 for two years.

Senator Barnes:

– Exclusive of the £750,000 granted to South Australia.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– If Senator Barnes insists upon taking that sum into account, I must include in the expenditure by the present Government, £1,000,000 granted to South Australia for exactly the same purpose, namely, to assist the State finances. The present Government has been responsible for only one budget, and it made available £1,972,000 in one year. That compares favorably with the provision made by the Scullin Government, but it is not the whole story. When the Scullin Government was in office, the Commonwealth and State Governments made available, out of loan funds, £10,700,000 from all sources. Last year, the Commonwealth and State Governments made available from all sources £20,700,000. On these figures, the record of the present Ministry is better than that of the Scullin Government.

Senator O’Halloran:

– Yet figures supplied by the Assistant Treasurer this afternoon show that unemployment has increased by 2 per cent.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The honorable senator is wrong, as I shall explain later. The provision of loan funds on a generous scale is not so easy as Senator Barnes has suggested. He seems to be of the opinion that we can continue to raise unlimited sums in the loan market, and to expend them for the relief of unemployment. Money can be borrowed by the Commonwealth Government only through the agency of the Loan Council, which is composed of the Treasurers of all the States, and a representative of the Commonwealth Government. The Loan Council has to decide what is a reasonable sum to be raised in the market in any year. Last year, goverment requirements were financed principally by the issue of treasury-bills, plus small borrowings in the market. The total sum provided from all sources last year was £20,700,000, but I do not know whether we shall be able to find so great an amount this year; no one can estimate what the market will make available to governments. Recently, the Loan Council decided to float a loan of £5,000,000 as a first instalment of its loan programme for 1933-34. Senator Barnes said that the Commonwealth should have raised £15,000,000. An attempt to borrow such a sum would have necessitated a protracted campaign, and possibly, after the beating of drums, the blowing of trumpets, and all the propaganda incidental to a large public loan, would have disturbed the market for a considerable time without producing the full amount, The Loan Council decided that it would be better to apply to the market for a small sum, limit the duration of the appeal, and close the loan as soon as the amount sought was subscribed. The recent loan was floated upon those conditions, and it has been a complete success. I regard that method as infinitely better than that suggested by Senator Barnes. One reason is that a big loan, necessitating a protracted campaign, would arrest or retard the normal tendency, that is clearly evident, towards the reduction of interest rates. While a loan at 3¾ per cent. is open, and people know that the appeal will continue for a considerable time, they arrange their affairs accordingly, and no lower rate can be obtained. There is a tendency, with our stocks at a premium, to a rate of interest less than 3¾ per cent., and I am hopeful that when it is necessary to approach the market again, we shall be able to borrow at 3½ per cent. It would have been a great mistake to try to raise at once, at 3¾ per cent., sufficient money to cover the whole loan programme for the year, keep the loan open a long time until it was fully subscribed, and so prejudice the chance of later borrowing at cheaper rates. The chances are that, when we go to the market again, as will inevitably be necessary before the year ends, we shall be able to obtain a rate slightly lower than 3¾ per cent. At all events, I hope that that will be our experience.

Senator Sampson:

– Why not give up borrowing ?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– How can we finance works programmes for the development of Australia, continue to operate State railways, and provide postal and other services, unless we go on the loan market from time to time?

Senator Sampson:

– Are we living within our means, if we go on borrowing?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– It is impossible to carry out works programmes without borrowed money. The Commonwealth Government has endeavoured to set a good example to the States by not borrowing for purelyCommonwealth purposes. It believes that works programmes can best be. carried out by the State authorities. It is possible to obtain only a certain amount of loanmoney, and, if the Commonwealth Government raised large loans for its own purposes, there would be so much less money available for the States. In the circumstances, I believe that the policy followed, both by this and the previous Government, is a wise one. The Commonwealth Government, however, proposes to extend its works programme to some extent in the coming financial year, and particulars of its proposals were announced in another place. The probability is that the expenditure on Commonwealth works, without encroaching in the slightest degree upon the money available to the States, will, in the coming year, be about twice as large as last year. I can give honorable senators so much information in advance with regard to the new ‘budget.

Every honorable senator knows that, when the present Government came into office, Mr. Lang was still in power in New South Wales. His policy had created unemployment from one end of Australia to the other, and, until we had got rid of that menace, it was utterly impossible for the drift in unemployment to be checked. Consequently, some months elapsed, after this Government obtained power, before the effect of its efforts in this regard, and the efforts of other governments, too, was felt. The improvement in the position is the result of the action taken by all governments in Australia to reduce unemployment. The peak figure was reached in May, 1932, just after the defeat of the Lang Administration, and the figures show that progressive improvement has occurred since that time. In May, 1932, the proportion of unemployment, according to the reports submitted by trade unions to the Commonwealth Statistician, was 30 per cent, of the membership. The report furnished in August, 1932, indicated the slight improvement of about four per 1,000 members, and the November report indicated a further substantial reduction, compared with the August figures, to the extent of fifteen per 1,000 members. This reduction has continued in 1933, the February reports having shown an improvement of sixteen per 1,000 members. Since the unemployment rate reached its maximum in May, 1932, there ha.s been a reduction of 35 per 1,000. The improvement since the second quarter of 1932 has been experi enced in all the States to the following extent: -

The improvement during the first quarter of 1933 over the last quarter of 1932, which was also general throughout the States, was as follows : -

The number of men registered as unemployed is a good index to the actual amount of unemployment. We find that in Victoria, for instance, the number registered on the 25th February, 1933, was 27,473, as against 39,861 in the previous year. On the 28th April, 1933, the number registered as unemployed in Victoria was 26,602, as against 41,332 in the previous year.

Senator Barnes:

– Those are only scrappy figures.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– But they give a clear indication of the improvement that has been made. Surely, when it can he shown that an improvement of this nature has occurred in the. comparatively short period during which this Government has been in office, a fair indication is given of the success of the work that this Government has been doing. A similar result is noted in practically every other State. In New South Wales, the number of unemployed in December, 1931, was 133,865. That was at the time when Mr. Lang was at the zenith of his power. In December of the following year, however, the number was only 101,694. The expenditure in New South Wales on food’ relief for the year was £4,675,650, and the sum appropriated for the unemployment relief tax, fund for works, grants, loans, &c, was £339,854. The number of men employed on government relief works in that State in December, 1931, was 2,254, and a year later the total had increased to 14,121. The figures show a similar improvement in almost every other State. The only State in which the trend is definitely the other way is Queensland. The number of persons registered as unemployed in December, 1931, was 27,786, and in December, 1932, the number had increased to 38,091, while in February, 1933, it was 41,399. So far as every other State is concerned, however, a decided improvement has been noted in the unemployment figures during the last few months. The problem of unemployment is not peculiar to Australia,- but is world-wide, and Australia is suffering much less from this malady than nearly every other country. I do not think that any country can, at the present time, show such satisfactory results in the checking of unemployment as are indicated by the figures that I have quoted this afternoon. This is decidedly a matter for congratulation. I believe that this Government has taken steps of the kind best calculated, in all the circumstances, to relieve unemployment. Although its action may not have had a direct effect, the indirect result has been good. The Government has nothing to be ashamed of regarding the provision that it has made for the relief of unemployment, or the results which have crowned its efforts.

Senator E B JOHNSTON:
Western Australia

– One cannot but recall the attitude of the Senate to the tariff introduced at the end of 1931, when a Labour Government was iri power in the federal sphere. At that time, honorable senators representing large and small States, and connected with both the Country party and the Nationalist party, Worked hand in hand, with the common object of securing tariff reduction. It was so arranged that every duty that was capable of reduction should be attacked, and the votes taken, so far as the consideration of the tariff was proceeded with, showed, not only the unanimity of those parties, but also that they Were desirous of obtaining much lower duties than those introduced by the last Government, particularly in cases where the duties affected ‘the primary producers. I can only hope that similar enthusiasm and co-operation will be noted on the present occasion. I recall the eloquent address made by the Leader of the Government (Senator Pearce), who was then

Leader of the Opposition, in favour of the reduction of duties. The present Vice-President of the Executive Council (Senator McLachlan) also urged the Senate to reduce the tariff in every possible direction. I also recall the appeal to the Senate made by Senator Greene, through the press, to reject all increases of duties made by the Scullin Government without reports having been obtained from the Tariff Board regarding them, on the ground that such action was illegal. He objected to the action of the Labour Government, just as I take exception to the heavy increases that have been made without reference to the Tariff Board, in spite of the fact that the Tariff Board Act provides that before an increase or a reduction in any duty is made, the matter shall be referred to that board. In studying the tariff schedules presented in another place, we find a whole section of items, comprising several pages, published together as group 7, and headed “ Items amended by the Scullin Government which are not supported by Tariff Board reports”. The present Government, despite its previous attitude to the tariff, is now asking the Senate to pass those duties.

I think that it is very unfortunate that immediately prior to the last election, a meeting took place in Sydney between the Prime Minister (Mr. Lyons), the AttorneyGeneral (Mr. Latham), and certain representatives of the big manufacturing interests in that State. On the Wednesday before the election a new agreement entirely ‘ different from . that which had operated previously was entered into between the Nationalist leaders and the manufacturers. Just when substantial tariff reform and reduction were in sight, two leaders of the Nationalist party entered into that agreement without consulting the rank and file of the party. The new agreement was not published until the Thursday before the election. I can imagine the annoyance of some of the members of that party who did not receive the full text of the agreement until after the election. The Country party was sold a pup, and the electors of Australia, particularly those in rural districts who did not hear of the agreement until well after the elections, were misled.

Senator Rae:

– It would appear that the honorable senator’s party got in under false pretences.

Senator E B JOHNSTON:

– My party was returned on the policy of tariff reduction, which it submitted to’ the electors. So anxious was the Country party for tariff reform that when the Prime Minister (Mr. Lyons) offered it some portfolios in the Government, the Country party unanimously decided not to accept the offer unless the important portfolio of Trade and Customs was given to one of its members. The experience of the Country party was such that it felt that only in that way could relief from the burden caused by the tariff be given to our primary industries.

Senator O’Halloran:

– The Country party was not prepared to trust the United Australia Party.

Senator E B JOHNSTON:

– My remarks are capable of that interpretation so far as the tariff is concerned. The Country party felt that the most urgent need was tariff reform, and it was not prepared to join any government unless it was certain that by so doing that reform would come about.

Senator Brennan:

– Surely the Minister for Trade and Customs is bound by the law.

Senator E B JOHNSTON:

– Of course he is ; but he has enormous powers under by-laws. I regret that the Country party and the United Australia Party are not working in unison for tariff reduction, but that is entirely due to the break-away of the United Australia Party.

Senator MacDonald:

– We have not noticed any disagreement.

Senator E B JOHNSTON:

– Any one who has studied the tariff debate which took place in the House of Representatives must realize that the Government used the Country party and the Labour party in turn to suit its own purpose. Whenever it attempted to reduce the duty on an item, it sought and obtained the assistance of the Country party; but when it did not want any reduction of duty, it called to its side the members of both Labour groups and thereby defeated any attempt by the Country party to effect a reduction.

Senator Dooley:

– The honorable senator believes in a policy of freetrade.

Senator E B JOHNSTON:

– I believe in a revenue tariff, with no duties on the requirements- of primary producers. The Government shows its inconsistency by asking the Senate to pass group 7 of the tariff, which comprises “ Items amended by the Scullin Government which are not supported by Tariff Board reports.” I shall also object, at the proper time, against tariff increases in group 2 - “ Items which have been amended in accordance with the Ottawa agreement, but not otherwise amended.” Instead of giving effect to the Ottawa agreement by reducing the duties on goods from Britain, preference is given to Britain by imposing an increased duty against goods from foreign countries. That is entirely opposed to the spirit of the Ottawa agreement, and I hope that the Senate will not agree to it.

Senator Rae:

– Britain has already departed from the Ottawa agreement.

Senator E B JOHNSTON:

– I do not agree with the honorable senator; but even if the position were as he states, it would not justify the raising of duties against foreign goods instead of lowering the duties on goods from Britain as a means of giving effect to the Ottawa agreement.

I am sorry that, owing to the defeat of the Scullin Government, the Senate was unable to complete the task of tariff revision on which it was engaged, and I am afraid that some votes which would then have been cast in favour of tariff reduction will not now be so cast.

Senator O’halloran:

– Does the honorable senator suggest that supporters of the Government are going to twist?

Senator E B JOHNSTON:

– The facts which I have given to the .Senate speak for themselves. Had the Scullin Government not been defeated, the Senate would have gone on with the work of tariff revision until not one item, remained in the group “Items amended by the Scullin Government which are not supported by Tariff Board reports.” Every such item would have been reduced to its old basis by the Senate at that time. Our high tariff has been the main factor in the deplorable drift of population from country centres to the cities during recent years. That drift has so swollen the population in and around the cities as to affect the ratio of members representing metropolitan and country constituencies in another place. Sydney and Parramatta together send fourteen members to the House of Representatives, whereas Western Australia and South Australia together have only twelve representatives. The representation of the electors in another place shows how hopeless is the position of country interests.

Senator Rae:

– Western Australia has six members in the Senate.

Senator E B JOHNSTON:

– It has six out of a total membership of 36 in this chamber, but, as the honorable senator knows, a good deal of city support is necessary before any candidate can obtain election to the Senate. However, it is in another place that governments are made and unmade ; and it is there that the representation is so inequitable.

Although I have been a member of the Senate for nearly four years, I have not yet had an opportunity to complete the consideration of any tariff schedule. From time to time, tariff schedules have been laid on the table of another place, and have at once been operative; but they have not come before this chamber for consideration. Notwithstanding that the people have groaned under the burden of a high tariff, there has been no opportunity to relieve them. It is true that various tariff schedules have been validated, but only to safeguard the revenue prior to an election. Had approval not been given to the duties set out in those schedules, the Government would have been liable to refund millions of pounds. It could not afford to do that ; and, moreover, had the money been repaid to those who actually paid the duties, the real sufferers - the consumers - would have received no recompense. I hope later to have an opportunity to attack the duties on such items as barbed wire, fencing wire, galvanized iron, and agricultural and mining machinery, and many others that increase the cost of production in Australia. For at least ten years, the tariff has been the main factor in increasing the cost of production and the cost of living throughout the Com monwealth. The Wool Committee’s report shows that the tariff has increased the cost of wool production by 2d. per lb.

Senator Collings:

– That report also shows that the big pastoral companies are an incubus on the wool-growing industry.

Senator E. B. JOHNSTON.The tariff has increased the cost of producing wool by 20 per cent., and I am of the opinion that it places an even heavier burden on the wheat industry. That burden has been estimated at from 4d. to 6d. a bushel or more, and with wheat selling at from 2s. 2d. to 2s. 6d. a bushel, the industry is quite unable to bear the corresponding burden of at least 20 per cent, which the tariff places upon the cost of production. In the last general debate on the tariff in 1931, I quoted in detail figures which 1 do not now intend to repeat, which were prepared by the Primary Producers Association of Western Australia, and showed that a farm which cost £1,000 to equip and develop in 1911 cost at that time £2,800. That tremendous increase in the cost of production and equipment is due entirely to the tariff which has been imposed upon the people of the Commonwealth generally without any reference to their State House, the Senate. I have to-day received a letter from Messrs. H. V. Piesse, C. H. Wittenoom and A. Thomson, three members of the Western Australian Parliament, who recently travelled over 500 miles in the agricultural districts of that State. They say -

One thing was impressed particularly upon us at our interviews and conferences, and that was the serious depredations and loss to farmers and graziers and the State of Western Australia caused through . the rabbit scourge.

I believe that a similar position exists throughout the agricultural districts of Australia to-day. These gentlemen continue -

It is estimated by many of the roads boards that the losses in their districts from this pest is 50 per cent, of the grazing value of the land and 20 per cent, of the grown crop. It was considered by the different roads boards and settlers that the providing of netting is the only solution to solve this problem. We were informed that the lowest present price of netting landed in the great southern districts was £40 10s. per mile whilst in pre-federation days it could be landed at £15 per mile. 1 know that British wire netting is admitted free of duty, but these gentlemen recommend that, in view of the rabbit menace, wire netting should be free of :he anti-dumping duty, and, with them, I think that the present duty of £10 pei1 ton under the general tariff should be removed.

Senator Rae:

– - Is not Great Britain capable of supplying all our requirements of wire netting?

Senator E B JOHNSTON:

– Yes, but that country is not permitted to export rabbit-proof netting free of duty as was intended by this Parliament, because if the export price is lower than the domestic price, the Customs Department subjects the wire netting to a heavy dumping duty on its arrival here. In Great Britain, wire netting is not used nearly to the extent that it is used in Australia, the people there buying only a roll or two at a time. Wire netting should, therefore, be relieved from the dumping duty at once. As this commodity is -essential to primary production, it should be available to settlers at the lowest price.

I was interested in Senator Barnes’ remarks about unemployment in relation to the tariff, particularly as the primary producers of Western Australia and others know that ever since federation the one great cause of unemployment in this country has been the increasing tariff.

Senator Collings:

– Nonsense.

Senator E B JOHNSTON:

– As the tariff has increased, so has unemployment increased, and if the Government would start reducing the tariff there would soon be a corresponding decrease of unemployment. I have with me a copy of the Tariff Reformer, a publication which was issued recently. It shows that with every increase of tariff since 1900 unemployment has increased. The Kingston tariff operated from October, 1901, to August, 1907, and the unemployment percentage of the population in the year 1906-7 was 6.1. The Lyne tariff operated from August, 1907, to December, 1914, and during 190S-14, the unemployment percentage remained at 6.1. The Tudor tariff operated from December, 1914, to March, 1920, and during 1915-20 the unemployment percentage increased to 6.8. The Massy Greene tariff operated from March, 1920, to September, 1925, and during 1921-25 the unemployment percentage increased to 9.1. The Pratten tariff operated from September, 1925, to November, 1927, and during 1926-27 the unemployment percentage dropped to 7.1. The Pratten tariff operated from November, 1927, to November, 1929, and during 1928-29 the unemployment percentage increased to 11 per cent. The Scullin tariff operated from November, 1929, to 1932, and in 1930 the unemployment percentage increased to 19.3, and in June, 1932, to 30 per cent. The Pratten tariff of 1925 was the only one followed by a decrease of unemployment, and that was due to our overseas borrowing, and the extremely high prices received from our primary products.

Senator Collings:

– Did not unemployment increase in other countries?

Senator E B JOHNSTON:

– I am showing that, during 32 years of continual increases of tariff, unemployment increased correspondingly. Mr. Scullin, on the 17th October, 1929, said, “I believe that the Ministry can stem the tide of depression, and improve the finances.” Mr. Theodore, on the 10th November, 1929, said-

The unemployment problem will be a conspicuous feature of ministerial ‘ policy in the very near future. Mr. Scullin and I are seeking the best method of approaching the unemployment problem.

Mr. Scullin, on the 16th December, 1929, said that there would be 65,000 new jobs in textile industries alone. At that time the number of unionists unemployed in the Commonwealth was 56,801. Mr. Forde, on the 16th February, 1930, said -

By its tariff amendments the Scullin Ministry has arrested the retrogression in industry, and we are now at the beginning of a great revival, which -will result in the employment of at least 100,000 additional workers.

The number of unionists unemployed was at that time 63,144. Mr. Forde, on the 30th June, 1930, said, “There are better times, ahead.” The number of unionists unemployed had then increased to 80,595. Mr. Forde, on the 9th February, 1931, said, “ The figures ‘ indicate that the tariff policy of the Federal Ministry has been very successful in its results.” At that time there were 113,614 unionists unemployed.

Senator Dooley:

– There were other factors.

Senator E B JOHNSTON:

– There were other factors, but I am showing that the continual increases of the tariff have been responsible for increased unemployment. Senator Daly, on the 29th October, 1931, said, “The Ministry’s fiscal policy has saved Australia.” At that time there were 120,694 unionists unemployed. The Labour election leaflet of October, 1929, contained this statement -

There are more than 120,000 workers in the Commonwealth who are willing to work, but are unable to find employment. . . . Labour will remedy this evil, and will also provide a national scheme of insurance against unemployment.

At that time the number of persons unemployed in the Commonwealth was 120,000. Mr. Scullin, in January, 1930, said, “ It is estimated that, at the end of twelve months, 100,000 more hands will be employed.” Unfortunately, at that time the number of persons unemployed was 130,000, representing an increase of 10,000 on the previous figure. Mr. Scullin, in April, 1930, said -

While a number of people engaged in importing businesses may lose their positions, this will be more than counterbalanced by the absorption of additional workers in the manufacturing industries.

At that time the number of unemployed had increased to 200,000. Mr. Theodore, in January,. 1931, said -

The onus is upon us to form a plan, and we must go on with it. You will find, in a very brief space of time, a definite development, something the people will understand, something that will bring them hope, something calculated to bring the country back to prosperity once more.

At that time the number of unemployed had increased to 285,000. Mr. Scullin, in his policy speech of December, 1931, said, “ We have 300,000 unemployed, many of them suffering severe privations.” It is clear that this disastrous attempt on the part of Commonwealth governments to make this country selfcontained has failed miserably, and that, as the tariff has since federation been increased by successive governmentsI do not place the blame upon any one government or party - so have the people engaged in our great primary industries suffered in corresponding ratio, and so has that great source of employment for our Australian people been reduced, and the total number of unemployed increased.

Senator Dooley:

– Does not the same position exist in freetrade countries? Have not their unemployment figures increased to the same extent as ours?

Senator E B JOHNSTON:

– Where are the freetrade countriesto-day ? Unfortunately, the world went mad, and every country wanted to sell its products to the other, taking nothing in return, That system has failed miserably, and the sooner we return to a proper system of interchange of goods between countries, the better it will be for the world generally, and particularly for a country like Australia, which cannot live without its great export production and markets.

Senator Brown:

– Does the honorable senator really believe that we can return to pre-war conditions?

Senator E B JOHNSTON:

– We can resume international trading. I shall do my best to bring about a return to those conditions, and a proper interpretation of the Ottawa agreement will assist in that direction. Not only have many members of Parliament, on the rare occasions on which they have had an opportunity to discuss the policy of increasing the tariff at the will of the Government, but the Tariff Board also objected to the continuation of that policy. The Tariff Board, in its annual report for the year ended the 30th June, 1931, made a lengthy protest against this practice. I am tempted to read the whole of it, but shall content myself with reading only the conclusions of the board. It said -

The foregoing review of the board’s work for the year emphasizes the necessity for public inquiry before any request for amendment of the Customs Tariff is acceded to, in order to safeguard against the granting of assistance to one industry at the expense of another, or at too high a cost to the community generally.

That was a protest against the policy that had been followed by the Government of the day, of making at its own sweet will, and without consulting this important statutory body, whatever tariff increases it liked. There is no doubt that that action waa contrary to the law of the country. The board went on to say-

Tt also points to the urgent need for a systematic investigation of the existing tariff in order to ascertain what duties, if any, are imposing undue burdens upon industry generally, and ultimately on the consumers. Such investigation should be directed particularly to a survey of the effect of the duties on the costs of essential raw materials.

The board pointed out that in many cases it had recommended against increased duties where increases had been granted by the Scullin Government. A considerable number of those increases have been retained by the present Government. If the exploitation of the people by means of the tariff were ended, we should soon be able to exchange essential primary products with other nations, but particularly with the Motherland, and thus begin the process of national rehabilitation.

I protest also against the hundreds of tariff increases made by the Scullin Government, in the majority of instances without having received a report from the Tariff Board, and in others in the absence of a recommendation by that body. The protests that I am now making were made even more vigorously by present Ministers of the Crown, when they sat in opposition to the Scullin Government. Wherever they or the members of the present Government party spoke in the constituencies, they objected to the illegal imposition of duties without the reference of the matter to the Tariff Board. A letter addressed to the editor of the Sydney Morning Herald, dated the 9th November, 1931, expresses in unmistakable language the views held and expressed both in and out of Parliament at that time by gentlemen who are now Ministers of the Crown. It reads -

The Senate and the Tariff.

Sir,

Apart from any fiscal views that may be held by various members of the Senate, there is a question of outstanding importance in relation to the tariff schedule the Senate is now about to discuss that calls for the most serious consideration, lt is not generally known that the bare submission to Parliament of many of the alterations in the present tariff schedule in each and every case constitutes a separate and deliberate breach of the statute law of the Commonwealth by Mr. Forde, the Minister for Trade and Customs, who says, when he is confronted with .his., flagrant disregard of the law, that,, he .is advised .that though this is so, everything will be all..right; provided Parliament subsequently endorses his action.

Now this is a case where I think that under no circumstances, whatever, should Parliament endorse the illegal act of a Minister of the Crown. The breach of the law has been deliberate in each one of the many instances that it has occurred. The act which created the Tariff Board, and under which it operates, definitely provides that: - “The Minister shall refer to the board for enquiry and report on the following matters: [d) The necessity for new, increased, or reduced duties, and the deferment of existing or proposed deferred duties; and shall not take any action in respect of any of those matters until he has received the report of the board.”

I admit that this is a very awkward provision of the law for an impatient Minister of Customs who wants to alter the tariff much as you would slap whitewash on a wall. But it is the law - the law which Mr. Forde’s oath of office binds him to uphold. That provision of the law was put there with a deliberate intention of preventing a wholesale alteration of the tariff, either up or down, without due investigation. It was put there for the protection of the public, for the protection of Parliament, and last, but not least, for the protection of the Minister. It was put there because of and as a definite check upon the immense power placed in the hands of the Administration of that day under the Customs Act, .whereby the more tabling of a resolution in the House of Representatives can bring into operation in “ a twinkling of an eye “ changes in the tariff which, whilst bringing affluence to some of our citizens, at the same time can destroy the means of livelihood of others. I believe it to be a good law. I think, however impatient a manufacturer may be to get his individual case dealt with, manufacturers of all people can least afford to see this law ignored.

Now Mr. Forde has submitted to Parliament many alterations .of the tariff - some of the most drastic character - without having before him any report of the Tariff Board- In every case where he has done so, he has broken the law, and I have no hesitation in saying, that in every case, without exception, where this has occurred, the Senate should unhesitatingly decline to endorse the illegal act of the Minister, unless the members of the Senate desire to connive at this contemptuous indifference to the law. If the Senate desires that the door should he opened for the alteration of the tariff, without prior investigation by the Tariff Board, let the Senate invite the Minister to bring down a bill repealing the provision of the Tariff Board Act, referred to above. If the Senate is not prepared to do that, let them uphold the law and in no uncertain terms refuse to endorse its deliberate violation. As a matter of principle, I would, were I able to record my vote, vote against every alteration of the tariff where no Tariff Board report is forthcoming, no matter what the industry, and quite independently of the case for or against the particular alteration.

I am &c,

  1. Massy Greene.

I agree in every particular with those views, and consider that Senator Greene is entitled to the thanks of the Senate for his advice, and for having placed the legal position so properly and so clearly before it. But having written that letter, I cannot reconcile the presence of the honorable gentleman in a government that asks the Senate to pass group 7 of the Tariff Schedule, which is headed, “Items amended by the Scullin Government, which are not supported by Tariff Board reports.” I hope that a majority of the members of the Senate will adopt the advice that the honorable gentleman gave them in the letter that I have read, and reject the. whole of that group. I have discussed tariff increases with several Ministers, and am acquainted with the views upon the subject that are held by the right honorable the Leader of the Senate (Senator Pearce), and the Vice-President of the Executive Council (Senator McLachlan). On the hustings, those honorable, gentlemen have invariably advocated a low tariff, and have always stood for the upholding of the law by the reference of proposed increases to the Tariff Board. It is extraordinary that while individually, probably all Ministers are opposed to high tariffs, and stand for tariff reduction, collectively they fail to uphold the policy to which individually they subscribe. I ask the Government to live up to the tone of the letter written by Senator Greene, and to withdraw the proposals for increases. How does it reconcile its request to the Senate to agree to group 7, with the legal position as stated by Senator Greene ?

I should like to know, too, if the Government is blind to the position of the primary industries of Australia to-day. This tariff neither promises nor gives anything in the way of assistance to our primary industries. Does the Government realize the desperate plight of those who are engaged in the wheat, wool, and other great primary industries? It is not too much to say that in Western Australia the majority of the wheatgrowers are on the verge of bankruptcy. Their debts are greater than their assets, and their financial position is nothing short of tragic. The wool-growers, too, are in a bad way in the northern and north-western pastoral areas, as well as in the agricultural districts. That applies not only to Western Australia but also to the rest of the Commonwealth. The operations of the small wool-growers are to-day being carried on at a loss. As a wool-‘ grower, the Leader of the Senate must be well aware of that. The butter industry and the meat trade are in serious difficulties. The mining industry is practically the only export industry that can more than meet’ its costs, although the fruit industry is perhaps just paying its way. Unless our export industries are placed on a sound basis, how can Australia progress or meet her principal and interest commitments overseas ? The only course open to the Federal Government, adequately to assist these export industries, is substantially to reduce the tariff on all basic requirements. What we need is, not only the immediate substantial reduction of duties which the amendment that I intend to move would entail, but also . further progressive reductions to bring down the cost of production in all industries, to enable our export industries to return a profit to the people who are engaged in them, to lower the cost of living, and to increase the employment of our people generally. I move -

That all the words after “be”, -be left out with a view to insert in lieu thereof the following words: - “returned to the House of Representatives with a request that the House will so amend the bill that the terms and the spirit of the Ottawa agreement shall be given effect to in so far as concerns the British preferential duties referred to in the bill, that is to say, will so amend the bill that the proposed duties against British goods shall be reduced to the level of the 1921-1930 tariff in all cases where they have been raised above that level without report by the Tariff Board.”.

That is a simple amendment. It is on the lines of one that was moved in another place by the Acting Leader of the Country party (Mr. Paterson). If it is adopted, a step will be taken in the direction of giving effect to the policy of the Country party, for tariff reduction and increased trade with the Motherland. My amendment seeks to ensure that the real spirit of the economic conference at Ottawa and the trade agreement entered into there between Australia and the United Kingdom shall be carried into effect. Article 10 of the Ottawa agreement reads -

His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principle special consideration may be given to the case of industries not fully established.

Few will claim that, so far, Australia has lived up to the terms of that important article, or to the undertakings given on our behalf at Ottawa by Mr. Bruce and Sir Henry Gullett. The Ottawa agreement has been ratified by the Australian Parliament and people, and it is our duty to see that it is made effective - a real agreement of mutual benefit to Australia and the Motherland.

In the tariff schedule which the Government introduced to implement the Ottawa agreement, there are 440 items on which the duties were increased to give effect to the agreement. In no fewer than 317 of those items the preferential margin of 15 per cent. could have been obtained by reducing the British preferential duties. In 123 cases, it was necessary to increase the tariff to the foreigner to obtain the necessary margin of preference. In only twenty cases did the Government reduce the British duties at that time, compared with 317 items in connexion with which there was room for a variation either way, or where they were increased. The Government has since made some further reductions, but no information has been given to honorable senators to indicate the number of items involved.

In his last budget speech, the Treasurer actually forecast a lower revenue from customs, because of the reduction in customs duties, which, it was anticipated, would result from the Ottawa agreement. Yet, for the first ten months of 1932-33, to the 30th April, 1933, the actual customs revenue was £27,722,205, as against an estimated £23,000,000, a difference of £4,722,205. Those figures prove that the tariff can, and should be, decreased. Even if the Government effected a decrease in duties, there would not be a fall in revenue, for, as a result of the increased imports that would follow that action, the revenue from this source would be actually greater than it now is.

Article 11 provides for a review of the tariff by the Tariff Board, in accordance with the principles laid down in article 10.

Senator McLachlan:

– Is that not a little inconsistent with the honorable senator’s amendment?

Senator E B JOHNSTON:

– No. My amendment is on the lines of the opinion that was held by a majority of senators as expressed in a motion moved in this chamber on the 15th October, 1931, by Senator Pearce and seconded by Senator Elliott, and reading as follows: -

This meeting of the majority of the Senate affirms its intention to endeavour to obtain amendments to the tariff schedule by a reduction of excessive duties and by such a further reduction of the duties against British imports as will foster Empire trade, and lead to the adoption by Great Britain, Australia, and the other dominions of reciprocal trade agreements benefiting every unit of the Empire.

That was the policy that a majority of the senators in this chamber fearlessly and properly adopted. What, I ask, has the Government done to put that policy into operation ? In the main, our tariff is as high or higher than it then was, and it has been supplemented by at least 440 increases that, much to the surprise, of everybody in the Commonwealth, were introduced to implement the Ottawa agreement. My amendment is entirely in accord with the statement that was made by Mr. Baldwin on the eve of his departure from England for Ottawa, when, in a message to the Empire, he said -

The object of the Government is freer trade. At Ottawa the objective will be the expansion of Empire trade to be brought about as far as possible by the lowering of trade barriers as between the several members of the Empire . . . This object can be best attained by assuring traders of markets for goods by the removal or limitation of existing barriers to trade, particularly arbitrary and erratic quota system.

There is a general feeling in Australia that the Commonwealth Government has not acted up to the spirit of the Ottawa agreement. Daily, in our newspapers, we see resolutions to this effect. Only recently, the Sydney Morning Herald printed the following resolution which was carried by the Joint Committee for

Tariff Revision, at the Chamber of Commerce buildings in Sydney: -

This meeting of the Joint Committee foi Tariff Revision, after consideration of tariff reductions made by the present Federal Government is of the opinion that such reductions do not give sufficient effect to the spirit of Ottawa, and will be ineffective in bringing about essential reductions in costs of productions. The meeting is also of opinion that repeated reference to the Tariff Board, as in the case of plain clear sheet glass, shows undue consideration for one section of the community, and creates unnecessary difficulties for both distributors and consumers, as well as indicating a deplorable lack of strength.

That is typical of many similar resolutions which have been carried throughout the Commonwealth. Statements have been printed in the Western Australian press to the effect that the British Government has made representations to the Federal Government, complaining of delay in reducing our duties in order to give British goods an opportunity for fair competition on the Australian market, as provided in article 10.

Senator McLachlan:

– What is the date of those statements?

Senator E B JOHNSTON:

– One was embodied in a letter which appeared in the West Australian a few months ago over the pen-name “ Senator “, and headed “ Federal Affairs “. The writer, who contributed weekly letters to the press, proved himself remarkably well informed.

Senator McLachlan:

– ‘Did the press take responsibility for that letter?

Senator E B JOHNSTON:

– No; but I should like to know from the Government whether the statement is accurate or not. I should be surprised if it were found incorrect, because we have failed to reduce duties under the Ottawa agreement, and our default in this regard is known in Great Britain. An amendment similar to mine was moved by the Acting Leader of the Country party (Mr. Paterson) in another place. It represents a practical step in the policy which is endorsed by the Country party and other sections of the community, and favours a prompt and all-round tariff reduction. I, personally, should like to go much further in the way of tariff reduction than is set out in my amendment, as regards both British and foreign goods. I hope that the Senate will support the amendment, as representing a short step ‘towards a long-desired tariff reform.

Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The amendment that has been moved by Senator Johnston illustrates the difficulties that arise under the administration of the Standing Orders, to which some reference has been made earlier in the debate. I did not intend to speak on the first reading of this measure, as I intended to follow the practice adopted by Ministers in charge of a measure, and wait for the motion for the second reading, when I should have explained certain economic conditions affecting the tariff. I take it that, provided that I confine myself as closely as possible to the text of the amendment, the observations that I shall now make will not be regarded as my speech in reply, and close the debate.

The PRESIDENT:

– So long as the honorable senator confines his remarks to the subject-matter of the amendment, he may speak without closing the debate.

Senator McLACHLAN:

– In moving his amendment, . Senator Johnston has travelled from Dan to Beersheba, and dealt with a variety of matters that must, inevitably, be dealt with by me when I make my second-reading speech on the bill. I mention this with no disrespect to the Chair, sir; but, in order that you may see the repercussions that are likely to ensue unless the practice which you are at present considering is adopted.

The proposal of the honorable member amounts to a wholesale amendment of the tariff on general lines, without regard to its varying effects upon the industries of the country. It has no bearing on any particular item or class of trade. It is simply a request that the tariff should be returned to the other House in order to give effect to certain principles which he claims, have been violated. Before embarking on a closer examination of that claim, may I say that this Government can be bound only by its declared policy on the hustings, on which it was elected. I pass by the agreements to which the honorable senator has referred, because, whatever may have been the tentative arrangements arrived at in conference, they were, I understand, to be submitted to the parties concerned, with a view to their ratification. The agreement made between the representatives of the parties concerned was of a tentative character.

Senator Hardy:

– I can produce the minutes of the meeting.

Senator McLACHLAN:

– When this matter was mentioned in another place, Mr. Paterson, the Acting Leader of the Country .party, accepted the statement that the agreement made was tentative, and that the Government was bound only by the policy statement of its leader. I know of no agreement or understanding of the nature referred to by Senator Johnston, but the following report, which appeared in the Sydney Morning Herald of the 1st May, 1931, makes it appear that the Country party’s tariff policy, as then laid down by its leader, was in conformity with the proposals of this Government : -

The Country party proposed that all embargoes should be subjected in future to parliamentary approval, and that tariff duties must be ratified by Parliament within six months of their imposition. The Country party proposed to make immediate reductions on all commodities which were not being manufactured in Australia, or which were not being manufactured to any serious extent, particularly machinery and tools of trade. All prohibitive duties would be immediately revised in the light of this policy. It was not the intention to smash well-established and properly run Australian secondary industries, but sufficient protection would be afforded those industries to ensure their continuance upon lines of efficiency. Where it was proved that manufacturing industries wore being conducted on inefficient and uneconomical lines, or were profiteering at the expense of the public, the party would not support protection for them. To ascertain which were the efficient and economic industries in relation to Australian consumers, the party would refer a carefully planned basis of investigation to the Tariff Board.

This shows clearly enough that the Country party’s policy is to refer all tariff matters to the board before action is taken, and I suggest to Country party senators that, notwithstanding their desire to bring down costs of production, it would not be wise to attempt to do this in haphazard fashion by an indiscriminate reduction of protection given to industries, some of which have been helped by parliamentary action, because, if support were suddenly withdrawn, they might be destroyed. The proposals of the -Go vernment implement the Ottawa agreement in a way that is perfectly satisfactory to the British Government.

Senator Hardy:

– One would not’ infer that from the speeches of Mr. Baldwin.

Senator McLachlan:

– Whatever may be said by critics in the press of this country - they have not at their disposal the information in the possession of the Government - it was fully recognized at Ottawa that the margin of British preference could best be given, not by a drastic downward revision of the existing tariff, but by increasing duties against imports from foreign countries. Since the return of the then Minister for Trade and Customs (Sir Henry Gullett) from Ottawa, the Government has asked the Tariff Board to review every report submitted during the three years ended December last, for the purpose of ascertaining whether it would be necessary to review any report in the light of the principles embodied in the Ottawa agreement. In all, there were 214 reports, and the board has reported that, in respect of 201 items, the duties were in accordance with the spirit of the Ottawa agreement. Since then, the board has furnished about 50 reports dealing with other items, and effect is being given to its recommendations. Although the board has a long list of subjects for investigation, it is hoped that it will be able to expedite its inquiry concerning certain items which have been remitted to it, and that it will be possible to deal with them in this schedule. To give effect to the provisions of the Ottawa agreement, the only course open to the Government was to increase the duties against foreign imports.

Senator E B Johnston:

– Why could not the Government have reduced the duties on imports from Great Britain?

Senator McLACHLAN:

– That would have been in direct violation of pledges given by the Prime Minister. Indiscriminate interference with existing duties would be dangerous. It was never contemplated that to give effect to the Ottawa agreement, duties against British imports would be reduced to such a level as to destroy Australian industries. The understanding was that they ‘ should be maintained at a level that would permit of reasonable competition, having regard to Australian conditions. It would be simple madness to reduce duties on British goods without an inquiry first being held by the Tariff Board.

Senator Hardy:

– Why?

Senator McLACHLAN:

– Because to do that may mean the destruction of a number of important Australian industries without having first ascertained the facts.

Senator Hardy:

– Even with the additional assistance afforded by the higher rate of exchange and primage?

Senator McLACHLAN:

– It is a good thing for many industries that they have the additional protection givenby exchange and primage ; but exchange, we all hope, in the interests of trade and commerce generally, will not be a permanent feature of the fiscal policy of any country. It is being dealt with separately by the Tariff Board.

Senator Elliott:

– Is this tariff schedule like the one which the Minister had in mind on the 5th November, 1931, when he said, “ The schedule is a thing of shreds and patches, and contains some extraordinary anomalies due to the fact that it was begotten in iniquity?”

Senator McLACHLAN:

– No; it is an improvement on that illegitimate child. I am, however, afraid, that if I were to reply to the honorable senator, I should be transgressing the President’s ruling.

Senator Elliott:

– Does the Minister still hold the opinion, expressed in 1931, when he declared he was “ opposed to internal ruin, which this tariff will mean to many of our manufacturing industries?”

Senator McLACHLAN:

– I am sorry that, at the moment, I am not permitted to discuss the tariff ; after the first reading has been disposed of, I shall be glad to give the honorable senator the benefit of my views on that subject.

I put it to honorable senators that the only way in which the Government could give effect to its declared policy, and at the same time benefit the primary producers of this country, was that taken by the Government, namely, by increasing the rates against foreign imports, and so cultivating trade with the Mother Country. On this point, I direct the attention of honorable senators to the following statement by Sir Henry Gullett in another place -

The British delegation accepted the decision of the Commonwealth Government that amendments and protective duties should be made through the Tariff Board, and that the Australian delegation was not in a position at Ottawa to engage in arbitrary alterations. That cleared the path for the consideration of British requests for extended margin of preference, and for special adjustments upon commodities not produced in Australia, and subject only to revenue duties.

Sitting suspended from 6. 15 to 8 p.m.

Sena tor McLACHLAN. - Reduction of duties without reference to the Tariff Board would be a breach of faith on the part of the Government, having regard to its announced policy. The Government followed the less objectionable course of increasing the duty against foreigners in order to give immediate effect to the Ottawa agreement. Steps are being taken at the present time to give effect to that agreement in a regular way by having each of the items examined by the Tariff Board.

The policy as announced by the Prime Minister is practically identical with that announced by the leader of the Country party, and I ask Senator Johnston what course he would have taken in the light of the promise that there was to be a planned investigation by the Tariff Board. He would either have to follow that course, or indiscriminately reduce the duties on which so many Australian industries have been established, and that would make confusion worse confounded. I am convinced that, if the honorable senator had the responsibility thrust upon him, he would have acted in precisely the same way as the Government has done.

The honorable senator’s policy for a reduction of the tariff may be one that his party holds in common with my own, but the reduction must be brought about in a recognized legal and constitutional way, and in the manner specifically provided, namely, by reference to the Tariff Board, which is capable of conducting a more detailed and accurate examination of the facts than is possible to any legislative body.

The honorable senator complained that on certain items the duties had been increased. On twelve items there have been specific increases; on 28 there have been increases of 2^ per cent. ; on 244 there have been increases of 5 per cent. ; on 54 there have been increases of 7i per cent. ; on 94 there have been increases of 10 per cent. ; on one there has been an increase of 12-J per cent. ; on six there have been increases of 15 per cent.; and on one there has been an increase of >17£ per cent. These items are being examined by the Tariff Board as rapidly as possible, and, before the debate is concluded, , honorable senators will probably have an opportunity of stating their opinions on the Tariff Board’s reports and recommendations upon them.

Senator Dooley:

– Were those increases on the foreign duties?

Senator McLACHLAN:

– Yes. That was the only way in which we could implement the Ottawa agreement, and still keep within the spirit of our election pledges. As I have said, the British delegation were aware of the position in which we were placed. There was no secrecy about what was being done ; every one at Ottawa knew all about it, and accepted the position. They now recognize that we are doing our best to give effect to what has been agreed upon.

The honorable senator referred to the political opinions of those on this side of the House, myself and others, as expressed some time ago. It is quite true that we held certain fiscal opinions; but the burden of our song always was that the tariff was being indiscriminately altered by the then Government in an upward direction without consulting the Tariff Board. To this course we objected, although honorable senators of the Opposition would no doubt justify it on the ground that, in order to strengthen our credit overseas, it was necessary to prohibit the importation of goods from abroad.

The honorable senator who moved this amendment has criticized the duties on items set forth in what was group 7 of the schedule when it was before another place. There are now only 85 items left in that group out of a total of 1,775, and they are the items which have not yet been examined by the Tariff Board. The duties on them were increased by the previous Government without any reference to the board. That is the part of the schedule of duties on which the honorable senator relied to support his case, but even those items are covered by the pledge which the Government gave to the people. The individual opinions of Cabinet Ministers with regard to the downward revision of the tariff will be expressed at the proper time; but they must necessarily be interprete’d in “the light of the Government’s pledges on the hustings as to how tariff revision was to be accomplished. Nor should we overlook the pledges given by the leader of the honorable senator’s own party. The honorable senator has announced himself as’ a revenue tariffist, and on that I must join issue with him. The Government ha3 never pretended to be in favour of only revenue duties, but has pledged itself to support a competitive tariff, as opposed to the prohibitive one. If the honorable senator persists in this attitude, we have nothing in common.

To have reverted to the Bruce-Page tariff, as suggested by the honorable senator, would still have been a violation of the pledge that we would not interfere with duties without consulting the Tariff Board. I do not claim, in regard to group 7, that it is our policy that those duties should stand as they are, but they were in effect at the time that the Government came into office, and there they must stand until the Tariff Board has had an opportunity to examine the position and submit recommendations to the Government, together with the reasons that have actuated it in coming to its conclusions.

I have made it clear that the Government has kept its pledges, that there is no ground for complaint from the other parties to the Ottawa agreement, and that we are implementing the agreement as quickly as possible, in a manner understood by them. The Government cannot accept the amendment, and must ask honorable senators to vote against it. I am somewhat embarrassed in discussing this subject, because I must confine myself to the amendment, and to the points put forward by the honorable senator in supporting his amendment. His arguments have really no force behind them when we examine the position in the light of the Government’s policy, and having regard to the Ottawa agreement, the British Government’s knowledge of the manner in which was proposed to implement it, and the fact that the implementation of it is proceeding as rapidly as possible at the present moment.

Senator COLLINGS:
Queensland

.- Under the Standing Orders I believe that this debate may become what, in another place, is described as a grievance day debate. I intend to air a few grievances before I resume my seat. After listening to the discussion here to-day, the number of my grievances has been increased by two at least. You, Mr. President, gave a tentative ruling this afternoon, in the course of which you said that we in this Senate must be guided, not only by the Standing Orders, but also by practice, and it seems to me that we should adhere properly to both. This debate has certainly disclosed the futility and childishness of carrying on such a discussion on the first reading of a bill which the Senate may not amend. I suggest that the Standing Orders Committee should take steps to ensure that the present system is altered. Obviously, it is most difficult for speakers to avoid discussing matters which, under the ruling given, have been forbidden. If I have any powers of discernment at all, I am justified, I think, in believing that the whole of this debate is not in accordance either with the Standing Orders or with the practice of this chamber. Standing Order 406 seems to me to be relevant at this juncture, and I suggest to you, Mr. President, to Senator Johnston, and to others who may be interested, that it should be adhered to, or wiped out altogether.

We had a most edifying debate this afternoon. The Vice-President of the Executive Council (Senator McLachlan) said in his opening remarks that we had travelled, in the course of our discussion, from Dan to Beersheba. He seems to have done not too badly in that respect himself. He had something to say about the indiscriminate stabbing of Australian industries, and I gathered from his remarks that the Government now contemplates to do some discriminate stabbing of such industries. According to the laws of logic and reason, that would be a fair interpretation to put upon his words. He then went on to condemn an illegitimate tariff schedule, so that, presumably, the schedule with which the Government has now confronted honorable senators is quite legitimate, having been born within holy wedlock. One gathers from his remarks that the status of the offspring is determined by whether or not it was fathered by a Minister of» this Government, or by a member of His Majesty’s Opposition. The Minister in charge of the bill has definitely threatened the several pretenders to the throne of the Country party leadership with linguistic calisthenics. I hope I shall be on deck when my friends over here get the opportunity of reply to the measure, for they have certainly made things a bit unpleasant, at the moment, for the Government.

Senator Hardy:

– They will be more unpleasant yet.

Senator COLLINGS:

– I am glad to hear the honorable senator say so. Anything that he may do in that regard will be heartily reciprocated. Senator Barnes made what I think every honorable senator will admit was, a very eloquent and sincere speech relative to unemployment. I think he was particularly powerful when he alluded to the tragic position of the boys and girls of this country who have reached school-leaving age, and have absolutely no prospect whatever, except one which must be entirely unsatisfactory to honorable senators of all parties in this chamber. The problem of the youth of Australia to-day is a challenge to our whole social fabric, and will, unless it is grappled with, as no country has yet attempted to grapple with it, most assuredly destroy civilization itself.

Senator Payne:

– Can the honorable senator suggest the removal of some of the causes of the problem?

Senator COLLINGS:

– It is impossible for honorable senators, in approaching the consideration of this subject, to close their eyes to what is happening in other parts of the world. The situation in Italy, for example, is not the result of something which no one can understand, but is the definite result of preceding causes which are to-day operating in Australia, and which were referred to this afternoon by the Leader of the Opposition. The dictatorship in Italy was rendered possible by the revolt of the younger generation because of the impossible and chaotic conditions brought about by the policy which has been operating in that country for years. That policy is the policy of the parties opposed to the Labour party in this chamber. In every country of the world where it has been followed it has had the same results.

Senator Hardy:

– Does the honorable senator want a dictatorship here?

Senator COLLINGS:

– I am firmly convinced - and I have voiced this thought in this chamber previously - that unless the policy of the Labour party can be put into effect by the people giving it a majority in both Houses of this Parliament, we shall have cither a bloody revolution of hunger-driven people, or a fascist dictatorship. If honorable senators can, with equanimity, visualiseeither of those alternatives to the Labour party policy, they’ possess a calmness that I do not possess. Hitlerism in Germany is the definite result of the impossible terms which the allied governments, at the declaration of peace after the Great War, forced upon that country. The revolt of the youth of Germany is against the cruel and rotten conditions which have come upon their country as the result of the economic effects of the Peace Treaty.

SenatorFoll. - Is not the movement in Germany a revolt against communism ?

Senator COLLINGS:

– Not at all. Senator Foll must imagine that communism is a great deal more powerful than it is at the moment. But I warn honorable senators opposite who are fearful of the growth of communism, that what is happening in Australia to-day under the policy of this Government will encourage the growth - and the inescapable growth - of communism to a greater extent than anything else of which I can think.

Those who listened to the mournful dirge to which Senator Johnston treated honorable senators for an hour and a half to-day, heard him predict catastrophic happenings in this country unless the primary producers get everything they want. There is no section of the community so keen on State socialism as the primary producers - so long as they get all, and no one else gets any, of it. That is the distinguishing feature of the primary producers, or, to be fair to the primary producers, I should say, the Country party which claims to represent the primary producers in this chamber.

Senator Elliott:

– We always thought the honorable senator claimed to represent the primary producers.

Senator COLLINGS:

– The honorable senator will get ample evidence, as time goes on, of my capacity to represent the primary producers. He was given some evidence of it last year, but I shall treat him to some more of it. No party in Australia is doing so much against the interests of the primary producers to-day as is the Country party.

Senator Greene quoted statistics relating to unemployment, and contrasted what this Government has done to relieve unemployment with what was done in that direction by the previous Government. He also quoted figures relating to unemployment in the various States, including Queensland. Had it not been for my great capacity for restraint, 1 could hardly have contained myself while he was speaking, because I knew how exceedingly inaccurate his figures were. Although I was bursting with suppressed emotion and indignation, I did not, at the moment, have the statistics beside me to refute the honorable gentleman’s statements.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– My figures were official.

Senator COLLINGS:

– I quite believe it, but so are those I am about to quote. The honorable senator omitted to give the authority for his figures this afternoon, but I shall indicate the source from which my figures come. As a matter of fact, I went without my dinner and spent the meal time in the Library, so that I might make quite certain of my facts. I was quite sure that honorable senators opposite would not accept the authority of honorable gentlemen on this side of the chamber, so I took the trouble to obtain information from, the organ of the Nationalist party in Brisbane. I refer to the Brisbane Courier. If honorable senators will examine the issue of that newspaper on the 28th March, which they will find on the files in the Library, they will see reported in it a statement made by Mr. M. S. Herring, its managing director, who, by no stretch of the imagination, could ever be found guilty of having said anything that even savoured of being favorable to the Labour party. That gentleman is, certainly, entirely antagonistic to the present Labour Government of Queensland. But in the issue to which I have referred, he is reported to have made the following statement at a dinner given to certain advertising representatives in Sydney : -

Queensland was better off than any other State. It had made marvellous progress since its foundation. It was the healthiest State, the cheapest to live in, and it had the highest basic wage in Australia, and as the basic wage earners were the best spenders they (his hearers) had the best evidence of the soundness of Queensland.

The issue of the Brisbane Courier of the 19th April also gives some statistics quoted by the Premier of Queensland in a public statement made on the 18th April. These figures, which have never been in any way challenged, show that the basic wage of Queensland is the highest of any State in Australia, being £3 14s. per week. We ought to be very proud of having, at last, brought the highest basic wage of any State in Australia down to that figure! The statement to which I have referred shows that the basic wage of the other States was as follows: -

It is also shown that the unemployment figures for the June quarter of 1932, which was the end of the reign of the Moore anti-Labour Government, were 19.9 per cent., and for the March quarter, 1933, when the Labour Government had been in office for nine months, 16.7 per cent. T also direct the attention of hon.orable senators to an extract from the A.B.C. of Queensland and Australian

Statistics, issued this year by the Registrar-General of Queensland -

Those figures speak for themselves. The statistics quoted by Senator Greene showed that Queensland had the highest percentage of unemployment, whereas my figures show something entirely different.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– My figures showed that the actual registrations of unemployed people were growing in Queensland, which is quite a different thing from what the honorable senator is endeavouring to show.

Senator Reid:

– Hear, hear! The registrations of unemployment are growing there.

Senator COLLINGS:

– I promise the Minister that I shall take that point up as soon as possible, and furnish him with the exact figures. I remember that just prior to 1929, while Labour was in possession of the treasury bench in Queensland, the Minister for Labour, on being asked a question in the House regarding unemployment, furnished figures in his reply which staggered every member of the Parliament who knew anything abou) the situation. His figures showed that unemployment was worse, by three or four fold, than any one of us ever dreamt it was.

Senator Hardy:

– Does not the honorable senator know that the method of collecting unemployment figures in Australia cannot be relied upon?

Senator COLLINGS:

– We had evidence of that in the answer given to a question in the Senate this afternoon. We discovered later that the figures furnished by the State Minister on the occasion to which I have referred, included old-age and invalid pensioners, people in asylums, and also the people in Dunwich, which is our institution for the indigent. Presumably all these were included as unemployed because they were not earning wages. I suspect that something of that sort has also happened in connexion with the figures Senator Greene has used to-day, and which Senator Reid has, by interjection, endorsed.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– My figures are the actual registrations.

Senator COLLINGS:

– I feel sure that I shall be able to confound both Senator Greene and Senator Reid a little later. . Senator Greene also quoted statistics in regard to expenditure and percentages of one kind and another; but I put it to honorable senators’ that this is of no benefit to people who are suffering from unemployment or to the boys and girls who have reached school-leaving age, and have their future before them. It is of no use to quote statistics at, or figures to, them. At the very best, they are an extremely poor substitute for employment, for spending power, for happiness and security, for release from insecurity, for the giving of decency and dignity, and for the taking away of the fear of the future. I remember an occasion when a Labour Minister in Queensland was addressing a meeting regarding what the Government was doing to relieve unemployment; incidentally, he stated that only 10 per cent, of the people in Queensland were out of work. From the back of the hall, a man who was friendly both to the Minister and to the La.bour party, interjected : “ That is all right, but I am one of the 10 per cent. I am out of work, and my wife and children are hungry. Your figures do not satisfy me.” I ask honorable senators to bea:r in mind that their statistics will not allay the pangs of hunger or clothe the naked. It is idle for honorable gentlemen to surround themselves with an air of dignity, and, as apologists for the Government, chatter a lot of financial jargon - not understood by nine-tenths of the people - about conversion loans, reduction of interest, fluctuations of the money market, and the wonderful negotiations of the Resident Minister in London. Obviously, Ministers are endeavouring to create in this chamber an atmosphere favorable to Mr. Bruce in order to distract attention from the inadequacy of his work overseas. Similarly, a few weeks before the Ottawa agreement was presented to Parliament, an attempt was made to impress this Parliament and the Australian people by surrounding the head of the right honorable member with an aureole of admiration and adulation. That attempt succeeded with some honorable senators, but I draw attention to what the Canberra Times of yesterday said of the wonderful work of this wonderful gentleman -

page 1997

QUESTION

AUSTRALIA’S TURN TO TALK TO LONDON

The success of the Commonwealth Loan means much more than all its implications here in the Commonwealth. At home, it is a demonstration of a complete return of public confidence. Not since the end of 1930 has a loan in Australia been oversubscribed. The oversubscription of the 1930 loan was, in fact, not a healthy sign, for the interest was high, and the money invested was taken out of industry. The success of the present loan has none of the disturbing features that attached to the 1930 subscription. It completely assures a period of low interest lending in Australia, and marks definitely a termination of complete dependence of Governments on the banks for the finance of public works. The other effects of the loan in Australia will be seen when the money passes into circulation in expenditure on reproductive public works.

But it is outside Australia rather than within that the most important lesson of the loan remains to be read. The time has arrived for those who have eyes to see overseas to use them. The time has come for the cessation of the three years and more of preaching at Australia, and for the redemption of all the fine promises of support and friendship for Australia. If all the preaching at Australia over the last three or four years by British and other outside observers be reviewed, it will be found that the Commonwealth of Australia has done all that it should have done, and more. In fact, Australia has done more than her economic and financial teachers have asked of her. The Commonwealth has balanced its budget, whereas neither the United Kingdom nor any of the dominions can show the same record.

Now Australia has been able to float an internal loan at lower rates of interest than we have got in London despite the existence of a low money market there for approaching twelve months. The time has come for plain talking to British investors, and for a cessation of hesitancy, nervousness, or apologetics, by Australia’s representative in London. Australia has the right to demand better terms in the London market than hitherto have been indicated in published references to the subject of our debt conversion Only by a show of determination in London can Australia hope to get anywhere. No country has the right at the present time to offer sounder security to investors than Australia has. and in no country is there more ground for impatience at the lengthy proceedings that have been made of negotiations for our debt conversion. The time has come for Australia to talk in straight terms to London. If the Commonwealth Government has no one in London who is independent enough for the job, there should be no delay in getting one there, and in putting before the London market a conversion proposal in which Australia’s claims are stated without reservation or excuse. If the oversea bondholders do not respond, it will be time enough to consider what course should be taken with people who have eyes to see and will not see.

I am glad that those sentiments are expressed, not by a disreputable Labour newspaper, but by a very staid organ of public opinion in the National Capital If I were the Resident Minister in London-

Senator COLLINGS:

– If Senator Carroll has any aspirations in that direction, he has even less chance of realizing them than I have of realizing mine, and my chance is nil; but if he did realize them, he would probably make a more miserable mess of the job than even the gentleman whom the Canberra Times has criticized. That journal says that if we have not a representative in London who is independent enough to do what requires to be done, the Commonwealth. Government should send one who is. I endorse that sentiment; the Commonwealth Government should send another representative without delay. We have been asked to believe that the successful flotation of fin internal loan for £5,000,000 is an indication of the capacity of the gentleman who represents Australia on the other side of the world, and that the condition of the money market ha3 been so delicate that profane hands must not touch it, and profane tongues must not utter a word about it, even in this chamber. This is only the childish gibbering that for centuries has been used to keep the great crowd in awe. People were told that they must not interfere with the wonderful machine called banking least they frighten that sensitive thing called money. The clay when such shibboleths could deceive the people is passing, if it has not already passed. It is futile to talk about the delicacy of the negotiations in London, the state of the market, and international difficulties, and to assert that no senator would stand for the repudiation of Australia’s contractual obligations. I have heard that sort of thing ever since I was a lad. It has kept the people of every country in bondage to the financial institutions upon which we are not to blow the cold breath of suspicion.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I would be interested to hear the honorable senator explain in detail what he would do.

Senator COLLINGS:

– Unless we adopt a policy entirely different from that attempted by any country to date; unless we cease adding to our indebtedness, external or internal, the burden will be too heavy to be borne by us or to be passed on to posterity. I was very glad to hear Senator Sampson ask this afternoon when we. are to cease borrowing. Unless we can stop the manipulation of credit for private profit and bring credit under the control of the nation, the evil conditions which honorable senators opposite say they deplore, will continue. I accept their protestations of concern for the unemployed. I am not so base as to believe that they glory in the misery which exists all about them; but there is little difference between agreeing to these conditions and continuing to regard them with smug complacency. Regret at the existence of these awful conditions can be demonstrated only by concrete action to remove them.

Senator Hardy:

– The honorable senator recognizes that the exporting industries, not the secondary industries, are paying the interest on the overseas indebtedness ?

Senator COLLINGS:

– Had the Scullin Government’s tariff policy been continued, the Commonwealth would have had no difficulty in obtaining all the funds it required overseas, and, incidentally, we would have been building up Australia and conferring the greatest benefit on the primary producers by providing a home market for their products. Senator Greene has asked me what 1 would propose. I need not at this stage elaborate the details of the Labour party’s policy. We say that control of credit by the nation, in the interests of the people, is absolutely essential to commerce and industry. We cannot afford to risk disaster already upon us becoming infinitely worse by allowing credit to remain under the control of private profit-mongering financial institutions any longer.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– What does the honorable senator mean by control of credit by the nation?

Senator COLLINGS:

– It is difficult to explain. I have to assume that my audience does not understand the subject, and, therefore, I must talk down to the intelligence of my listeners.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The nearer the honorable gentleman gets to fundamentals, the more I shall be pleased.

Senator COLLINGS:

– Very well. All wealth is the result of human labour applied to raw materials. At a conservative estimate, we have in Australia 300,000 adult males who are anxious and willing to produce wealth, but are not permitted to do so because this Government, like every other government in Australia, except one, stands for “ private enterprise “. I am tired of hearing that expression. It is like that blessed word “ Mesopotamia “ was in my youth. Ministers tell us that from that source alone must come the rescue of society from the present depression. All that governments can do, we are told, is to encourage private enterprise by relieving it of taxation. Senator Johnston would add that we should remove all tariffs.

Senator Herbert Hays:

– The Queensland Government did not do that successfully.

Senator COLLINGS:

– I am experiencing difficulty in this instance in talking “ down “ to honorable senators. My friend knows that the policy which I am recommending cannot be tried in Queensland, because the Commonwealth Parliament has sole control of currency matters in this country.

Senator Hardy:

– How would the honorable: senator release credits?

Senator COLLINGS:

– I am endeavouring to answer the Minister, and my reply to him will furnish an answer to the honorable senator. We all know what happens when we go to a bank for an overdraft. If I ask a bank for money for a certain purpose, even though the bank may approve of my proposition, I do not receive actual cash. All I get is credit. Figures are entered in a bank book, and, ultimately, the debt that I have incurred is not discharged because the bank holds the deeds of a property, but only because wealth has been produced as a set-off to the credit that has been issued. When the Australian Labour Party obtains control in the Commonwealth Parliament, and proceeds to put its policy into operation, it will not borrow internally, nor go cap in hand to the financial interests on the other side of the world. It will certainly fulfil its contractual obligations, but the trouble is that Australia has been asked to do more than that. One of the reasons why the primary producers, particularly the wheatgrowers, whom Senator Johnston claims to represent, are suffering so acutely to-day, is that they have to provide three bags of wheat to pay back a sum representing the value of one bag of wheat at the time when most of our overseas debt was incurred. Similarly, the sheep farmers now have to furnish three hales of wool to discharge a debt equal to the former value of one bale. Let us get down to bedrock, and see what our contractual obligations really are. I believe that I am right in saying that Australia has repaid its public debt over and over again, by reason of the interest payments that it has made; but the interest goes on accumulating, and the principal is never liquidated. A government composed of men belonging to the party that I represent, would say to our creditors overseas, “ How much do we owe you to-day? How many years has the debt to run ? What is the rate of interest? Fund the whole debt. We shall pay you at the rate of 5 per cent, every year, and twenty years hence the debt will be discharged “. In that way posterity would be saved from being burdened for ever with these allegedly contractual obligations.

Senator Hardy:

– There are 500,000 individual bondholders overseas.

Senator COLLINGS:

– I am aware of that,- but honorable senators cannot induce me to say things, which, though not untrue, would, in cold print, appear impolitic.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Is what the honorable senator has said an answer to my question ?

Senator COLLINGS:

– I have not yet completed my reply. I can imagine a national Government in control of the affairs of Australia, telling the Commonwealth Bank that, because of the disaster that has overtaken the nation in the form of the widespread unemployment, it should write on a page in one of its ledgers, “ The Commonwealth Government,” and should place on the credit side any sum, say, £50,000,000, which is not more than the value of the wealth that the community is able to produce. “We need not get hot and bothered because we have just raised £5,000,000 internally, and have a little over. As a matter of fact, fear, because of the fall in the value of property other than government stock, was largely responsible for the success of the latest loan. The action of governments in tempting the public to subscribe to loans, by promising that these shall be free from a certain amount of taxation, thereby depriving the country of much-needed revenue, is criminal.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Would the honorable senator pay interest to the Commonwealth Bank on that £50,000,000?

Senator COLLINGS:

– I would pay only the interest necessary to cover the administrative costs. No usury whatever would be permitted. I am not an authority on ‘the subject, but I believe that I am not far short of the mark when I say that the administrative costs need not be more than 1 or 1 per cent. There would be no brokerage, no thieving commission agents to get a “ cut “, no premium to be paid. The people would get the benefit of the full £50,000,000. On the other side of the ledger, what is there ? Figures again ! There is plenty of currency available in Australia. We have all we require, but it is locked up in the coffers of the banks in the form of notes of big denominations. The banks say that they cannot let it out; they contend that no profitable investments are available. Yet they liberate that money as soon as they believe that the “menace of a Labour government “ has disappeared. As surely as sunlight follows darkness, a Labour government will.be returned to- power in this Parliament, and it will see that an extension of credit is given.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Is that the honorable senator’s solution?

Senator COLLINGS:

– I have not yet finished my explanation. That credit having been established, a start would have been made; but it would probably take twelve months to put into operation the machinery necessary for safeguarding the expenditure of that amount. Economists admit that the circulating medium goes round half a dozen times before it reaches its final destination. It would only be necessary to see that none of that credit was issued for other than national purposes, so that national work would be done, and national wealth created. That is how our financial obligations are met now. Our debts are paid by the production of wool, wheat, sugar, and other commodities. This country can produce all those things which are essential for the payment of its debts, both internal and external, and it is now in a better position to do that than ever before. We have the paradox of one country burning wheat, and another burning coffee, because it is said that they are unable to obtain markets for their produce. In Australia, as I mentioned on Friday, we have a fruit-grower in the Stanthorpe district, in Queensland, destroying S tons of plums, because he was unable to find a market for them ; yet tens of thousands of women in Australia would have been glad to have that fruit, in order to make jam for their starving children.

I could show the Minister a sheaf of authorities which support the policy of tha Labour party with regard to the utilization of national credit. NonLabour governments in this and every other country have utterly failed to solve the problem of unemployment. Is it not a crime for them to stand in the way of those who contend that they have a solution to offer, and at least should be given an opportunity to test it? The Labour party could not bring worse disaster upon the country than has already overtaken it. A great many of the children born at the present time have no chance of reaching manhood or womanhood with properly developed bodies, because they are suffering from malnutrition. As Senator

Barnes remarked, tens of thousands of the boys and girls leaving school to-day have no hope of finding employment. When they grow up they will realize the cause of their predicament, and they will see that something is done to remedy the evil. A Spaniard has written these words -

Want is the strongest poison for the human body and soul. It is the fountain head of all inhuman and anti-social feeling. Where want spreads out its wings, there the sentiments of love, of affection, of brotherhood, are impossible.

In order to indicate the policy of the Labour party, I propose to quote some remarks by Henry Ford. He is not a Socialist, or a Communist; he is noteven a Labour man. He is one of the most successful business men that the world has produced, and honorable senators opposite are fond of advising the youth of Australia to study his writings. Indicting the banks, Mr. Ford said -

This is not a cycle of hard times from which we shall return to build bigger panics. This is not a period of depression to be tided over until good times ‘‘come back.” This is not a “ clean-up,” by which the rich profit and the poor lose. This is not a break which can be patched up so that we can resume our reckless course again. This is the ending of an era.

Honorable senators opposite, sitting back on their comfortable cushions, remind me of Nero. They fiddle away whilst the whole edifice is crashing. Mr. Ford further stated -

Events have pushed us out of the sheltered backwater and thrust us into the stream of change. But ‘ we must go on ; we cannot stop.

What, has happened is this: The thing that should have served life was compelling life to serve it, and life threw it out. Life always does that. As long as the money system helps life it is permitted to exist; when it begins to cramp and hinder life it is discarded. Of course, our greatest delusion .is money.

My remedy is what Mr. Ford indicates - the removal of the stranglehold which the private banks have on the production, distribution and exchange of wealth. Remove that stranglehold, and give the production, distribution and exchange of wealth an opportunity to flow freely through the channels of commerce and industry, and nothing can keep this great Australian nation from becoming a beacon-light to the civilized world. Mr. Ford’s statement continues -

It exercises a strange magnetism on most minds. In itself a mere conveyor system, a short cut in the barter of goods between man and man, a moving stream on which should float the commerce of the world, it has been made the symbol of power over men, and the strangulation of exchange.

A money system that served mankind thus badly was foredoomed to challenge. It is not man’s wisdom that has challenged it, but the laws of nature - or shall we say God? Money, which by our Constitution should be under the control of the Government, has been farmed out to private interests, like sandwich concessions at a country fair, until scorning to be the handmaid of the people, it has sought to be their mistress.

The debt industry and the money-lending industry have presumed to control all our industries, and inasmuch as money is a dead thing, and production is a living thing, the revolt of the living thing was inevitable. The law of use or lose automatically operates.

For the present life simply refuses to resume under the old order of things. And because of that refusal the old order is dying of anaemia.” We must somehow contrive to burst through the crust and get at the meat of the matter, which is deeper than most of our current discussions indicate.

When we think of money we think of stock markets and banks, but it is of little use to inveigh against the stock market and the banks. Both of these institutions when they perform their proper functions are of undoubted service to society. But when they begin to profit at the expense of the people, life marks them for challenge. Too often a prosperous bank means a mortgaged community. When the debt business is good, life is being cramped somewhere.

I hope that I have given the Minister an indication of the lines along which a sane government would proceed.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I. think I have some knowledge of what the honorable senator would do, if he had the opportunity.

Senator COLLINGS:

– I have cast my pearls of wisdom before the honorable senator; if he does not understand my meaning, there is a lack either of comprehension on his part, or of definiteness on mine.

We are told, in accents which almost make us nervous, that 500,000 bondholders outside Australia hold our securities. If I had had the opportunity which the Resident Minister in London (Mr. Bruce) has had, I would have told those bondholders long ago to look around at the world at large, in which case they would realize that Australia is the best country in the world. I would have told them that Australia can, and will, pay its just debts; and that, therefore, this country demands a square deal, which is something it is not getting to-day. And when those 500,000 bondholders began to challenge Australia’s position, I would speak to them to the following ‘effect: “Ladies and gentlemen, do not be deceived. To-day you are worrying about the interest and the interest rates; but if you are not careful the day will come in Australia, as it has come in other countries within recent months, when not only the interest on your bonds, but also the principal itself, will be in jeopardy.”

I shall now begin where I intended to begin earlier, and deal with grievances. To-day I asked a question on notice regarding Bonds Industries Limited. I desired to know whether that company had been compelled to refund bounty overpaid to it. I also asked whether it was a fact that old-age pensioners were being forced to repay any overpayment of pensions. Whenever some wealthy corporation, representing big business and vested interests, gets into a legal entanglement with the Commonwealth Government, as many of them have done at different times - I mention, by way of illustration, Sir Sidney Kidman and his land tax, and the Mayoh shipbuilding contract - there are months of delay before it is forced to disgorge its ill-gotten gains. In each of these cases, we are told that we must deal with it carefully, that the matter is sub judice, or that an investigation is about to take place; but when, through no fault of his own, an old-age pensioner is paid by the department more than a strict observance of the regulations entitles him to be paid, there is no delay; there are no entangling legal proceedings. The old-age pensioner, struggling with poverty in the evening of his life, receives a curt official notice saying that, since he has been overpaid, say, £3 10s., his pension will be reduced by 3s. a week until the whole amount overpaid has been refunded. I mention these things because I have been told that this is my opportunity to air grievances. The treatment meted out to old-age pensioners brings to my mind the following lines by George E. Phair -

page 2002

OLD MEN

In savage tribes where skulls are thick,

And primal passions rage;

They have a system, sure and quick,

To cure the blight of age.

For when a native’s youth has fled,

And years have sapped his vim ;

They simply knock him on the head,

And put an end to him.

But we, in this enlightened age,

Are built of nobler stuff;

And so we look with righteous rage,

On deeds so harsh and rough.

For when a man grows old and grey,

And weak and short of breath;

We simply take his job away,

And let him starve to death.

And yet we boast of our civilization!-

I shall now deal with a subject not in any way connected with the debate which has occurred to-day. I have not consulted my party about it; but I have no doubt where its members stand. I am afraid that a deliberate and studied attempt is being made to belittle the Senate. I probably feel this matter more keenly than do” those honorable senators who have other means of livelihood. What is going on to-day is slowly, but surely - whether designedly or not I do not know - making it increasingly difficult for working-class representatives, with no other income than their parliamentary salary, to remain members of the Senate. We adjourned in December last, and were not called together again until last week. Some of us arrived in Canberra after a day and two nights in the train ; other honorable senators may have had an even worse experience. We reached Canberra at 5 o’clock in the morning, and at 3 o’clock in the afternoon we were at work in this chamber. We were immediately threatened with an all-night sitting; and although it did not materialize, we certainly had an all-day sitting, for we remained here until after midnight. The next day we assembled at 10 o’clock in the morning, when we were told that we must put through the remaining business by 8 o’clock the same evening. I did not watch the clock, but in a very few minutes the Senate passed, without the slightest attempt to give intelligent consideration to it, a Supply Bill for over £5,000,000. 1 do not know of anything more calculated to discredit the Senate and belittle senators, to drive the youth of Australia desperate, or to cause a lack of faith in constitutional and parliamentary institutions, than such hasty and ill-considered legislation.

Senator COLLINGS:

– It is true that it was discussed in another place; but is that any reason why the Senate, which is elected on a different basis altogether from that of another place, should not have had an opportunity to discuss it? We are sent here to safeguard the rights of the States, and we should not have legislation thrown to us like a bone thrown to a dog, and be told that we may get what nourishment we can from it in a few minutes.

Senator McLachlan:

– It will be fully discussed here on the budget.

Senator COLLINGS:

– I wanted to know in what ways some of the money was to be expended. As a matter of fact, I was able to ask a couple of questions in the hurry.

Senator HARDY:

– The same tactics were adopted in connexion with legislation dealing with the wheat industry.

Senator COLLINGS:

– The Senate is either an integral part of the legislature of this Commonwealth or a body of no account whatever. In future, in no circumstances whatever will I be a party to the same procedure. Today, Wednesday, we assembled at 3 o’clock in the afternoon. Next week we shall make a semblance of being in earnest by starting the week’s work on Tuesday. Why should we not assemble on Monday morning, and keep working until the job we have to do is finished? It is my intention to go back to the workers of Queensland, to whom I look for votes, and tell them the true position. I shall either earn my money, or tell the people who sent me here that this chamber is the fraud that some people want it to become. There is continued propaganda in the press against the Senate. The weekly newspapers contain glaring headlines notifying the public that after five months’ holiday, the Senate has again started work. That is not true, for some of us have been working during the recess. Those of us who have no other livelihood do not dare to neglect our work. We cannot afford to ask for leave so that we may absent ourselves from the Senate for months at a time. This propaganda against the Senate is gaining credence throughout the country largely because of the procedure we adopt in dealing with legislation - a procedure which I shall describe as unsatisfactory, although I should like to use a much stronger term.

I desire to refer now to the hotel accommodation for members when in Canberra. When we left here in December, 1932, we were comfortably accommodated at the Hotel Kurrajong, where the tariff, although not low, was reasonable. During our absence, the Government suddenly decided to close that hotel, it having previously made arrangements for the other government-owned hotels, except the Hotel Canberra, to be disposed of to private enterprise. In the National Capital of Australia, a “Nationalist” Government leased these properties to private enterprise, with the result that those Queensland senators who believe in State ownership have been forced either to seek accommodation at a privately-controlled hotel, or to go to the Hotel Canberra where the extravagant charges are beyond our means. I do not mind saying that I find a way of dodging those charges; I get most of my meals away from the hotel. It appears to me that there is a definite and studied attempt to make the Senate a social club to which only the well-to-do have any chance of aspiring. If, by a stroke of good fortune, others enter the Senate, they cannot afford to remain there. I ask the Government to see that a reasonable hotel tariff is arranged so that honorable senators will not have to spend all their substance in riotous living. I’ suggest that this state of affairs has probably come about, owing to the fact that for many years the Labour party has had little representation in this chamber, and that the senators on the Government side have become arrogant. They apparently believe that it is their privilege alone to be members of the Senate, that the common, ordinary garden variety of senator, like Senators

Brown, MacDonald, and others on this side of the chamber, are not worth much consideration, and that if the Labour senators cannot afford to stay at the Hotel Canberra, they should stay at some other place which is not so convenient in respect of both distance and accommodation.

I wish also to refer to the continued and studied attempt to sabotage Canberra. I feel strongly indeed on this matter. This capital city is the finest” experiment of its kind that has ever been attempted in any part of the world. “We should go ahead with a sane policy of developing it; we should make it the cultural centre of all Australia. Everything that is best in our national life should be centred here, because of the wonderful opportunity that we have been given to rid ourselves of the pettiness, the sordidness and the graft experienced in other capital cities of Australia. - In Canberra we have a unique opportunity - none better has ever presented itself to any government - to establish a proper seat of government. But what do we find ? A conference that had been planned to meet in Canberra and to be attended by railway commissioners, railway ministers, and transport officers, is now to be held in Melbourne. A cordite factory is to be added to the munition works in Victoria, because, we are told, that there is already a cordite factory in that State. I am not suggesting that we should bring the already established factory to Canberra, but I do say that this Government has no right whatever to establish outside of this- National Capital, any governmental activity. In any case we owe that to the lessees of properties, businesses and residences in the Territory, because they were brought here deliberately under false pretences. They were told that Canberra would have a certain population. Many of those people have become insolvent, and others are trying to make the best of a bad bargain; all because the Commonwealth Government has refused to undertake the proper and necessary development of this capital city. Every public department should be brought here. I understand from the press that one highly-placed officer has refused to be transferred to Canberra, and has challenged the power of the Commonwealth to bring him here.

If I had my way, that gentleman would be brought to Canberra as soon as the first train could bring him here. I know that we cannot transfer the whole of the public departments to Canberra without previously making housing provision for them, but there is nothing to prevent this Government from putting into operation a housing scheme so that public servants, who, when they obtained their positions, signed for service in any part of the Commonwealth, should be gradually transferred to Canberra. As a matter of fact no Premiers Conference or Loan Council meeting should be tolerated outside of Canberra. Everything connected with governmental activities should be undertaken here. In Canberra senators are free from the vicious influence of vested interests in the capital cities of the States. Recently the officials of the Patents Office inundated the members of this chamber with statistics and type-written documents in an endeavour to show that, people who had taken out patents would not receive the protection of the department if it were established at Canberra. That is all nonsense. Here is the place for them, away from the degrading and gross influences attaching to every department located in a State capital, situated as it is in the toils of big business and easily got at, threatened or cajoled as the case may be. I am .delighted to have, had this opportunity to air one or two grievances which to me are real indeed.

Senator MacDONALD:
Queensland

, - I welcome this opportunity to join in a general discussion on matters affecting the Commonwealth, and I am pleased that the Minister helped towards that end. The subject, of course, which is ostensibly before us, is the tariff, but I shall refer to that at the second-reading stage. The tariff debate has been delayed too long. Eight months have elapsed since the Ottawa Conference, and we now have advice of the holding of a “World Economic Conference, which will probably nullify the effects of the Ottawa agreement. At this stage, therefore, it is not inopportune to deal with the world monetary system, the failure of the Commonwealth Government to solve the unemployment problem, and the depression which has adversely affected every section of the community.

Great Britain has. now entered into trade agreements with Denmark, the Argentine, and other countries, and because of that, the Ottawa agreement has been put very much out of joint. Australia has, up to the present, moved humbly in an Imperial orbit round the central London sun. We might be prepared to continue in bondage if our financial masters overseas were making a success of their command of the world. But with bankruptcy facing most nations, the deep depression and increasing unemployment and misery everywhere, we are entitled to make cur voice heard, even if we are so impolite as to raise it in order to attract attention. Why should we, as members of the advanced democracy of Australia, be expected to sit idly by without making vehement protest against the humble position in which we find ourselves today in relation to the British Empire, and the rest of the world? I am satisfied that in view of our advanced stage of education in Australia, and our forward political system, we should be able to suggest to the other countries, including Great Britain, that they release their grip of the world by what is known as the world money power. Surely we are entitled to make pertinent suggestions to the rest of the world about the economic and industrial failure that is apparent everywhere. There is no doubt that we are in the midst of probably one of- the greatest cataclysms ever experienced by the world ; but 1 make bold to say, with the exercise of comparatively ordinary ingenuity we can reasonably hope to escape from it. As a result of my readings and studies over a large number of years, I have come to certain definite conclusions, which I hope to place before the Senate. It may be that from the World Economic Conference some scheme will be evolved to redress the wrongs inflicted upon the world at large by the nations in the northern hemisphere, including the United States of America. The main causes advanced for the international economic and industrial terrors of to-day are : the development of machinery, the mania for mountainous tariff walls, excess production, the paralysing burden of war debts, the hoarding of gold in a few countries, and the lack of a proper basis for extension or maintenance of credit. But it seems to me that the main cause is the undoubted squeeze exercised by the bondholders who have thousands of millions of pounds invested in war and other loans and in industry, so that they could gain greater value for their interest - that is, a larger purchasing power for goods and materials, including labour, power and social services. About ten years ago, T contended in this House that if prices were forced as low as 50 per cent, below war levels, there would be a world-wide disaster, because the burden of interest on our war and other loans would break us down. That view was also expressed by many prominent people, not only in Australia, but in other parts of the world as well. Senator Collings has emphasized the fact that the debtor nations have to pay the creditor nations three bales of wool or three bushels of wheat, where, at the time these loans were obtained, two would have been sufficient. In some cases, the burden has become so heavy that now two are required where formerly one was sufficient.

Senator McLachlan:

– What would have happened had the reverse been the case?

Senator MacDONALD:

– I am glad of that interjection, not only because it shows that the Minister is taking some interest in what I am saying, but also because the point that he has raised is covered by the argument that I hope to elucidate as I proceed. Some simple folk cling to the notion that blind economic forces or industrial developments have unleashed the wolves of depression, are responsible for the tremendous amount of unemployment that exists, and have brought semistarvation upon us. I have said, previously, that I hold the view that this squeeze of the international money power has been a deliberate act. I do not say that there are not inter-acting forces; but I do say that the main cause is that at which the Minister has hinted - that for a time the conditions operated against those who have thousands of millions of. pounds invested in war loans and bonds, as well as in the loans due to the vast export of capital by wealthy nations like

Great Britain and the United States of America. The appeals for financial aid that were made to the United States of America during the war put that nation for the first time right in the financial saddle of the world. That is significant, and I should like it to be particularly noted, because it is one of the strong points that I wish to make in my observations, which I feel should be made in this debate. Thousands of millions of pounds were loaned to the Allies, the J. P. Morgan financial group of the United States of America being the principal directive force. I think it will be remembered that at the time that Great Britain sent a delegation to the United States of America, Mr. Morgan, as the representative of that vast financial group headed by the J. P. Morgan Company, undertook the management of those loans, which, so far as the Allies were concerned, were floated successfully. Those who have followed American financial developments even cursorily, must know that in those war years, about 1916 and 1917, when the financiers of the United States of America placed their financial resources at the disposal of the Allies, that big American republic necessarily had to follow its dollars into the struggle ; and that is what happened. To show what the money power, and the rule of the Morgan and Rockefeller groups mean in the United States of America, I need only say that Chauncy Depew, a famous American ambassador whose name is probably familiar to honorable senators, stated that, if they wished, no more than six big financial magnates could, within 24 hours,’ cause the wheels of industry of that great nation to stop revolving. That was a deliberate statement, made prior to the heat engendered in the war years, and I feel sure that it represented the facts of the situation. It illustrated the great power of a few magnates in regard to the financial and monetary system of that great country of then at least ] 00,000,000 people - a country which, one might say, was then, if not the richest, at’ least’ the second richest, country in the world. I wish to place before the Senate confirmation of that statement. William Bliss, in his Encyclopaedia of Social Reform, an American work published twenty years ago, quoted an American author - Murphy - in a book entitled On Trusts, as having stated that, if the Rockefeller and Morgan groups put their heads .together - and only two heads were needed - the industrial and financial policy of the United States of America was settled. That showed the fine point to which the money power in America had organized itself, and also proved that that power rested in a few hands. When Mr. Franklin Roosevelt enunciated his startling programme a month or so back, I was intensely interested in the columns of cables that appeared on the matter. What Mr. Roosevelt did, we might expect Senator Barnes to do, if he were given the task of enunciating a monetary reform policy for the whole of Australia. I read Mr. Roosevelt’s statement with great interest, but I also perused the cables very carefully to see if either the Morgan or the Rockefeller group had made any pronouncement concerning the wonderful programme that had been put forward; and I was more than slightly interested to learn that some one in America was so intensely concerned as to inform the world that Mr. Morgan approved of it. I do not know whether any honorable senator noticed that. I daresay there are hundreds of thousands of persons in Australia who do not know who Mr. Morgan is. Straws are said to show which way the wind blows. It, therefore, was of immense importance to those who follow the ramifications of the money power throughout the world - and I may say that in past years, in the course of my work, it was a part of my duty to follow them, more or less as a student - to learn that Mr. Morgan approved of the programme put forward by Mr. Franklin Roosevelt. This one man’s opinion waa of more importance to me than all other opinions combined, because it showed that the American money power was behind the proposal. It is known that the cousin of Mr. Franklin Roosevelt - Mr. Theodore Roosevelt - when President of the United States of America, posed as the strong man who delighted in the strenuous life. He was going to banish the trusts to the devil and beyond; but they continued to be very much alive, and to do as brisk business as they had ever done. It was afterwards pointed out - and this may be news to some honorable senators - that while Theodore Roosevelt was enjoying the political limelight and posing as the strong man, the one man who was going to save America from the money trust and its industrial agents, he was taking his orders from a Senator Piatt, who was the agent of this very money power that he was supposed to be out to combat. That is not esoteric; there is nothing secret about it; it has been stated and printed before. I printed it myself, and I have never found any denial of it. It shows what the money power does in America. It rules Congress as well as the State legislatures ; and, since the war, in conjunction with the British money power, it has ruled the world. It may set whatever pace it likes so far as the monetary system is concerned ; it may cause depression and deflation to suit its own ends; and when it finds that the screw has been applied hard enough, it will probably remove the pressure, and, after the World Economic Conference has been held may be found advocating inflation.

To many persons it is obvious that i.t has been greatly to the advantage of the money power to reduce the prices of goods and materials, labour power, social services - which have to be bought just like a shirt or a pair of trousers - and all other things except the interest on war debts and foreign loans. In some cases the interest on those debts and loans was not nearly so high as the current market price of money during the boom period, when, as is known, the price of money in the open market was as high as 8 per cent. The interest on some Australian loans, as Senator Greene has said, was then as low as 4 per cent., but on some of our loans owed to the British investing public it is -now as high as 6 per cent., and efforts, are now being made to effect a reduction to 4 per cent. When, during the boom years, the price of money in the open market rose to 8 per cent., people holding war loan stock naturally felt that they were not receiving as much as they ought from their investments. The reason for the recent vast international squeeze is thus obvious. The main portion of the blame for it should be laid at the door of the money power, operating on behalf of the bondholders in war and other loans throughout the world.

The importance of the rates of interest on all loans was emphasized as recently as 1928, before the depression reached Australia, by Mr. J. B. Brigden, a well known economist in this country. Mr. Brigden, who is now employed in Queensland, was then domiciled in Tasmania. Speaking on the subject, “ The Economic Outlook of Australia “, in a Pitt-Cobbett lecture at the University of Hobart, he said -

In 1914, Australia owed £224,000,000 abroad at interest rates averaging less than 4 per cent. We were using the railways and other works in which these loan funds were invested, and their establishment to-day at higher prices and higher interest would cost us about £10,000,000 a year more than we were paying. The result was that old overseas investors were paying half of our war expenses, and we were borrowing half from new overseas investors.

His point was, that we were having a better time than we deserved, because wc had the benefit of cheap money and were practically robbing overseas investors, because, if. they were free to invest that money in new loans or other enterprises, at the current market rate, they would obtain a return of 8 per cent, from it, and if we had to re-borrow at the existing rate, the additional cost to us would be £16,000,000 per annum. His object was to indicate that we should not flatter ourselves about doing well ; that the British investors had helped us along by advancing those enormous sums each year, so enabling us to have a wonderfully “ prosperous “ time. Now, by a process of deflation, the money power of the world has brought about a position which is diverting, for Australia is now engaged in seeking to effect a reduction of the rates of interest on its overseas loans to 4 per cent. The enormous importance of interest rates on thousands of millions advanced on loan, is thus made clear to all, and one can realize why the bondholders, in the years immediately prior to 192S, when there was a world boom, and interest rates in the open money market ran to as high as 8 per cent., felt that they were being robbed, and ought to do something drastic in order- to obtain better returns from their investments. Their quickest way was to bring about a reduction of the cost of goods, material and labour. So there followed a smashing of the world trade boom which began during the war, and continued until about 1928, with a consequential glutting of markets, and a huge decline of employing agencies. One method that was employed was to stop the export of capital. So far as I can gather - and nobody seems to be certain on the subject - no definite statement has been made as to why Great Britain stopped the export of capital to Australia. Until 192S, this country was receiving from £20,000,000 to £30,000,000 annually from the Mother Country, and it appeared that that inflow of capital would continue for many years, for this is a young country in which there is plenty of room for development. Incidentally, it is general knowledge that the banks are literally bursting with money. Only last week the successful flotation of a £5,000,000 loan afforded an excellent example of the fact that there is plenty of money to be had in Australia when the banks, insurance companies, and other financial institutions are in the mood to release it. Senator Collings has said that some £370,000,000 was raised in Australia for war purposes. Money should also be raised now that we are engaged in a commercial world-war, so that we may relieve unemployment, and dissipate the frightful effects of the depression, the aftermath of war.

All sorts of reasons have been advanced for the stoppage of the flow of capital from Great Britain to Australia. It was declared that Australians were loan drunk, and that we were a most extravagant people, and were living beyond bur means. “We were told that we would have to live on our financial fat for an indefinite but long term. It might be years; it might be decades. Why this had not been discovered and the remedy applied ten or twenty years before only the money powers in London and New York know, but could not be expected to explain. From present indications, it is certain that it will be for years, if not decades, before the flow of capital to Australia is resumed. That flow of money from Great

Britain to Australia had been going on for from 60 to 70 years, in fluctuating amounts bordering on £30,000,000 per annum. Great Britain, like Rome of old, had become the great wealth exploiting centre of undeveloped countries throughout the world. However, it is pretty evident that at present, the principal world money power has its centre in Wallstreet, New York, and works hand in glove with the London money power.

Both Great Britain and the United States of America have exported vast amounts of capital to the different countries of the world. Great Britain was earlier in the field, and for a long while was pre-eminently the great creditor nation of the world. It is well known that she has £4,000,000,000 invested, of which only £2,000,000,000 is within the Empire. That indicates that money has no national or even Imperial barriers. The Argentine alone has received an export of capital from Great Britain of £500,000,000. But it is not so well known that the American total exports of capital, which increased tremendously during and since the war, are now equal to those of Great Britain. I should like to make a quotation on the subject from an American official of undoubted authenticity, Mr. Paul D. Dickin, the compiler of an official publication which is issued by the American Bureau of Commerce. The extract, which is taken from the official publication in 1930, states -

Investments of American capital in foreign countries are so great at the present time, and their growth has been so rapid in recent years, that popular and scientific interest in the subject seems insatiable. This is the first attempt ever made on a world-wide and detailed scale to obtain statistics direct from American business men as to the actual value of their foreign property.

The article goes on to say that the survey is but a snapshot of a rapidly-changing panorama. The details of that vast exnort of American capital overseas may be news to honorable senators. According to a bulletin that was issued by the Department of Commerce Trade Information Bureau in September, 1931, the American private long-term investments in foreign countries at the end of 1930 amounted to between $14,900,000,000 and $15,400,000,000 or over £3,000,000,000. This did not include the principal of the war debts outstanding, which was $11,640,000,000, figured on a 4 per cent, compound discount basis. I shall give a little information as to the disposition of these enormous exports of capital from the United States of America. Naturally, Europe has obtained more than any other country, the amount to that area being $4,500’,000,000. Next in order comes Canada, with $3,790,000,000, and then South America with $3,040,000,000. Canada leads among the individual countries, and is followed by Germany, Cuba, and the Argentine. Then come Mexico and Chile, and even Great Britain is included’ in the list. Among the debtor nations to the United States of America are Brazil, France, and Japan. When Japan sets up a government in Manchukuo, the Government of the United States of America has naturally to consider its Japanese investments before being stampeded into any action by the League of Nations. It is similarly situated with respect to Germany, in which country the United States of America has invested between $1,350,000,000 to $1,500,000,000, the great bulk of which has been loaned since October, 1924, when the Dawes plan loan was floated. Whatever Herr Hitler does, it seems to me that, when the American money power speaks, he will have to listen, because the American export of capital abroad is backed up by the armed force of a nation of 120,000,000 people, who are quite ready to put into effect the Monroe doctrine in converse fashion. To indicate how the American money power has developed, I need only remind the Senate that in 1900 the foreign investments of the United States of America totalled only $500,000,000; in 1912, the amount had increased to $1,920,500,000, and in 1930, to the huge total of $14,900,000,000, or approximately £3,000,000,000. These investments, I should add, were distinct from war debts, which, in the case of Great Britain, amounted to about £800,000,000, and in the case of France, Italy, and other allied nations, to about £1,000,000,000. Exclusive of war debts, the increase of foreign investments by the United States of America in eighteen years was over $13,300,000,000, and is now about equal in volume to those of

Great Britain, which has funded its war debt to the United States at a lower average rate of interest than that originally fixed, and has arranged for its repayment over a period of 60 years.

The contraction of foreign investments by the United States of America, which, from 1912 to 1929 had averaged about £150,000,000, has been largely responsible for the industrial depression, deflation, and unemployment which have caused a slump in the consumptive capacity of those countries which had, for so long, been drawing upon that great reservoir of wealth. Its effect upon European and other countries was precisely the same as the sudden stoppage of the export of capital from Great Britain to her overseas dominions, including Australia, because it is well known that foreign loans are paid, not in cash, but in the export of machinery, manufactured goods, and other commodities. Senator Greene presented one side of the picture in regard to rates of interest on loans. I felt it my duty to show the other.

Having- ascertained the cause of this widespread unemployment and misery to millions of people in all countries, we may hope that the approaching economic world conference will tackle the problem, and recommend proposals for its solution. Any proposal that does not seek the elimination of the root cause - the control of the money power - will be merely to tinker with the problem. No one will deny that the interest burden on our oversea debt is crushing the Australian taxpayer, and retarding the development of this country. It is the duty of the Resident Minister in London (Mr Bruce) to put our position plainly before British bondholders. I am fair enough to admit frankly that in 1928, when the trade . balance was in our favour, the interest charge was not oppressive; but owing to the catastrophic decline in commodity prices we are now fully justified in asking British investors to agree to a reduction of the interest debt to at least 4 per cent, which., in the present state of world economics, is a very good average rate. If the Resident Minister in London does not place before British bondholders, as forcibly as possible, the real position of the Commonwealth, he will be shirking his duty, and should be recalled as soon as possible.

This basic cause of the world’s troubles is admitted by many well-known authorities. Mr. Arthur Kitson, the English economist, discussing the manner in which this money power has been employed during the last 50 years, states - lt lias been steadily and insidiously growing, and increasing its grip on the world’s trade and industries, and in fact upon all human activities. This money power works secretly. It is above the law. It owes allegiance to no one, but it controls statesmen, monarchs, rulers, legislators, universally.

He instances the crisis in Great Britain last year, and remarks that the Prime Minister, Mr. Ramsay MacDonald, received orders from banking magnates of the economies which had to be enforced throughout Great Britain. Mr. Kitson continues -

No longer have the British people the right to determine their own financial policy - according to recent theories propounded by the financiers. On the contrary we are now told that our national finances must ho regulated according to the dictates of international money lenders. The world is now hopelessly enslaved to this money power by a bonded indebtedness which can never be redeemed according to the terms which the world’s governments have imposed on their own people. In short the people are faced with two alternatives of either being submerged in irredeemable debt slavery or repudiation.

Dealing with the export of capital, Mr. G. H. D. Cole, another British economist, points out -

Of late the export of capital has suffered a check, and world demand has failed to keep pace with the expansion of productivity capacity; whereas the displacement of labour through mechanization has been going on faster than ever. There has therefore arisen an apparent deficiency of consuming power in relation to the capacity of the productive system; and the world’s most pressing problem has come to be, not a further increase of the power to produce, but the devising of means for the full use of the productive resources already at hand.

I have come to the conclusion that this Senate, as representing the whole of Australia, should have something to say on the matter. We should be better employed dealing with subjects of this kind than in spending a month debating this futile tariff which has been before the country for eight months, and which should have been dealt with last year. It is now out of date, especially in view of the approaching World Economic Con- ference. We have been told to expect something great as a result of the conference, something that will affect, not only Britain and the rest of Europe, but also the whole of the British Empire. I join with Senator Collings in protesting against the manner in which the Senate has been made to look ridiculous. It is not playing the part intended for it by the framers of the Constitution. We have been treated like a lot of children, and told what we have to do; and if we do it we shall, no doubt, be patted on the head.

This Senate should have something to say to the rulers of the world - the money powers of New York and London - who are ordering our affairs. If I thought there was any prospect of finding support on the other side of the Senate, I should move a motion to the effect that strong action should be taken to prevent a continuance of this senseless deflation that has been going on for too long, this cutting down of wages and prices which is ruining every one. Senator O’Halloran could paint a picture of the pitiful condition of the farmers in South Australia, and I know something of what the farmers are enduring in my own State. I represent farmers, as well as workers and wage-earners, and have had an interest in a farm myself. My two brothers are farmers, and, during the boom period, sold the farms they then occupied. Part of the money was paid down, and the rest was loft on mortgage. The interest was paid regularly for some years, but when this man-made depression hit the country, a moratorium was imposed, and now no more interest is paid. My brothers are working other farms which, at present prices of commodities, are returning them only barely enough to live on. Conditions such as these obtain, not only in Australia, but practically all over the world. In the most recent number of Gurr eni’ History there is an article by Mr. Page, the son of the famous American Ambassador to Britain during the war. He paints a dreadful picture of the condition of the- farming classes in the cotton States and eastern States of the United States of America. He states that the banks are failing, and that the farmers have been driven off their holdings. These farmers have shown wonderful patience, but unless something is done, red revolution must be the outcome. If the Commonwealth Parliament had any respect for itself it would, as the representative of a great nation, protest to the money powers against this artificial depression. We are being made a cockshy, and, unless wo are as stupid as a lot of kingfishers, we ought to do something about it. If one throws a stone at a kingfisher sitting on a bough, and happen to miss, the bird will take no notice. If- another stone is thrown and it misses, the bird still stays there. It is too stupid to know that it is being made a cockshy, even after three or four stones may be thrown. Australia, in common with other countries, is being made a cockshy. The Government of Great Britain, which I always distinguish from the British people, has made an Aunt Sally of Australia. So long as the people of this country are foolish enough to refrain from protesting against the treatment to which they are being subjected, the money lords of Great Britain and the United States of America will continue to profit by deflation. It is high time that a vigorous protest was made. We all know that equity in house property, like equity in farms, has almost disappeared. It is impossible to-day to soil property of any kind except at a tremendous loss. This has been a hard blow to the thrifty family man who has endeavoured to work hard and to do his duty by his country and his family. Only people of the phlegmatic British race would continue to suffer such treatment. I hope that before very long there will be a revolt against the money lords, and that- they will oe shown that people will not allow themselves to be squeezed until they lose their last drop of blood. If I thought that by moving a motion of protest it would stir our opponents to action, I should move it. Perhaps a more suitable opportunity for such action may present itself later.

The World Economic Conference may take steps to stop the ruinous, devastating policy used by the world money power to deflate the costs of present production, materials and labour power, and so exalt the value of interest on loans; but until that step is taken, there is little hope for countries like Australia, which humbly follow the old policy, good or bad, and allow its people to suffer deep distress without offering to the Old Country, with its old and false economic creeds and industrial policies, a single manly suggestion for improvement, let alone the vehement protest which its present alarming subservience to the money power deserves.

It is high time that this Senate, as the most venerable, if not the greatest, legislative body in Australia, took a searching look at itself, and, instead of raking seriously this latest tariff contrived at Ottawa nearly a year ago, launched out on a thorough-going debate on what is wrong with the world. We know the facts : The peoples of all lands, including this young and partly developed country,, are worried and tortured beyond endurance, in many cases, through a breakdown in the world’s monetary system. Hundreds of thousands of workers are demanding that a solution be soon found, and tens of thousands of farmers are desperately hanging on to their homesteads hoping against hope for the salvage of their derelict positions. Action must follow debate. A determined protest should be sent overseas to those authorities to which we are said to owe allegiance. Otherwise Australians will be still further convinced of the futility of parliaments.

We shall waste our time if we simply discuss the individual items of this tariff, because the whole tariff may go by the board in consequence of the decisions of the World Economic Conference. We should be discussing the world economic problems, particularly as they affect our own people. Wc shall certainly do nothing to help the . situation if we simply follow the old course. If the confidence of the people in parliamentary government is to be justified, we must, in this Parliament, find some solution for the present deplorable condition of our people.

Debate (on motion by Senator Hardy) adjourned.

Senate adjourned at 10.28 p.m.

Cite as: Australia, Senate, Debates, 31 May 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330531_senate_13_139/>.

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