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Wednesday, 4 July 1906
Page: 1015

Mr ISAACS (Indi) (Attorney-General) . - I think that there is a little misapprehension about the paragraph under discussion, which has for its pivotal consideration, if I may so put it, the preservation of industries in Australia. No distinction is made between State and State. The idea is that if industries are established in any part of Australia we are not to be made dependent upon other countries in respect of such industries, by some one, whether in our midst or from outside, coming here, and, with the intent to destroy or injure our industries, entering into some combination. It is not intended either to set State against State or individual against individual. If New South Wales coal mines can out-distance Victorian coal mines, this provision has nothing to do with them. But if Japanese coal mines send their product here under such conditions of unfair competition as - if that were possible - to close our Australian coal mines, such a case would come under the provision. The point of the paragraph is this : We will assume that there is some Australian industry which ought to be preserved in the interests of the Commonwealth - say the coal industry of Australia, as contradistinguished from the coal industry outside Australia. The expression "Australian industry " is self-interpretative. You have an industry which is Australian, as distinguished from one which is nonAustralian or foreign. The point is that we want to preserve the Australian industry. We do not desire, so far as this Bill is concerned, to preserve an industry in any particular part of Australia. There is no favoritism to be shown to any part of Australia ; and if one part of Australia can beat another by any means whatever-


Mr ISAACS - Whether the competition is fair or unfair has nothing to do with clause 4. If, however, one Australian industry, or one branch of an Australian industry, or one individual in an Australian industry, by some unfair means, with a view to monopolize Inter-State trade, or if a corporation by unfair means, endeavours to run its competitors out of the market, and to monopolize thetrade, that case comesunder the latter portion of the Bill. But so far as this clause is concerned, what we aim at is the preservation of Australian industry without regard to the individuals engaged in that industry, and without regard to the State in which the industry is carried on. It is Australia on the one side and the rest of the world on the other.

Mr Johnson - Would the AttorneyGeneral define what constitutes an ' ' Australian industry " ? What makes an industry Australian?

Mr ISAACS - An industry which is carried on in Australia is an Australian industry.

Mr Johnson - Suppose the industry is carried on in one Stateonly?

Mr ISAACS - If it is carried on in one State it is Australian, just as much as if it were carried on in all the States.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Suppose two industries existing, one for the distribution of English goods and one for the distribution of Australian goods, but both carried on in Australia, which of those is an " Australianindustry " ?

Mr ISAACS - Bothof them. I say that any industry carried on in Australia, by persons here who are subject to the laws of Australia, is an Australian industry. If the American harvester people were to come and set up their factory here, and employ Australians, working at Australian rates of wages - as, of course, would have to be the case -pro tanto they would be carrying on an Australian industry.

Mr Johnson - And they would have the right to do so, notwithstanding that they were entering into competition with the other harvester people?

Mr ISAACS - So far as this particular clause is concerned - yes. I do not care what it is - any industry carried on in Australia is an Australian industry.


Mr ISAACS - Surely the term "Australian industry " carries its own meaning on its face. ' But let me put another consideration, because I do not desire to miss any particular phase of this question. Suppose, . for example, that the American harvester trust were to set up a factory here, and were to say - using the simile which I employed earlier in the day in answer to the honorable member for Lang - " We cannot do what we want from the outside, because your Tariff prevents us, but we will settle down in Australia, and run the Australian coach off the road by undercutting, and when we have the whole of the trade in our own hands, we will do what we like " ; if they did that they would be open to the objection thatthey were attempting to injure an Australian industry.

Mr Fowler - Suppose they sold their goods at reasonable prices, would that be undercutting ?

Mr ISAACS - No; of course not.

Mr Johnson - Notwithstanding that they were selling their machines at a less price than that at which other harvesters were sold ?

Mr Page - We meet thatsortof thing every day in every shop.

Mr ISAACS - That is fair trading, not unfair competition. I ami assuming unfair competition, for the purposeof showing how the Bill will operate. I am not discussing what facts would constitute unfair competition, but am endeavouring to answer the query put to me as to what is the meaning of " Australian industry."

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Suppose the Australian manufacturers tried to run out the Americans after they had arrived and established their factory here?

Mr ISAACS - If they did that for the purpose of monopolizing the trade, they would come under the operation of the later clauses of this Bill.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But they would not be monopolizing the trade, because there would still be competition amongst the local manufacturers.

Mr ISAACS - If they were a corporation they would be hit by the Bill.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - They might be individuals.

Mr ISAACS - Then I should say the only question would be whether, as far as this clause is concerned, they were acting with the intent to destroy or injure an Australian industry.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Would the AttorneyGeneral regard an industry estab- lished here by American manufacturers as an "Australian industry"?

Mr ISAACS - I think that in such a case as that I have just mentioned they would be open to paragraph a, for endeavouring to " restrain trade and commerce to the detriment of the public."

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Does paragraph a cover such a case ?

Mr ISAACS - lt covers such a case as the honorable member has .put, but it would not cover all cases. Paragraph a will not cover certain cases, such as where there is a reduction of price in order to run coaches off the road, which cannot Le said to be directly in restraint of trade, because, although the ultimate object is to restrain trade, the intermediate means employed cannot bear that interpretation.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That would not operate in the case of the local people trying to run off a new company.

Mr ISAACS - It seems to me that both cases come under the operation of clause 4, by reason of the provisions of either paragraph a or paragraph b. Some of my honorable friends have said that the clause is self-contradictory, but I respectfully submit that that is a mistake. An object may be attained directly or indirectly. Trade may be restrained directly, and the public injured thereby, or intermediate means which are not a restraint of trade, such as the" reduction of prices, or undercutting, to get rid of competitors, may be adopted, with the ultimate object of restraining trade. If an American firm came here, and said. " We will sell our goods at such prices that Australian dealers in similar goods will ultimately be driven out of the market," the means adopted would not in themselves be a restraint of trade, although their ultimate object would be the restraint of trade j but we should have to deal with the employment of those intermediate means, and not wait until the injury intended had been affected, because, when capital is once displaced, it is very hard to induce people to re-invest on the same lines. Several of the States of the American Union have passed Acts to regulate trusts and combines. In 1800 the State of Michigan passed an Act - No. 255 - relating to trusts, monopolies, and combinations, in which it is provided that a trust is to include any of several purposes, of which one is to limit or reduce the production, or increase or reduce the price, of merchandize or any commodity.

A provision of that kind might as well be termed contradictory as the provision now under discussion. The ways of persons who have command of a great amount of capital may be devious. They may say, " If we could increase prices we should at once attain our object, but, as we cannot immediately do so, we must reduce them, in order to run competitors out of the market," and, having done that, they would act in restraint of trade, the reduction of prices being only an initiatory step towards the attainment of that object.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - There is no mention of the object here; the clause deals only with the effect.

Mr ISAACS - The object is included, and, in my view, there is no selfcontradiction. The means adopted may be, and probably would be, to use the enormous power of aggregated capital - greater than any Australian firm could command5 - to put on to the market goods constituting a comparatively small proportion of the total output, at prices at which it would be ruinous to sell, because the foreign combination could stand the strain much longer than any Australian manufacturer or dealer could stand it. Then, when the Australian coaches had been run off the road, they would say, " Now we can command the traffic as we please, and will charge high prices."

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Clause 7 deals with such action.

Mr ISAACS - It does not deal with exactly the case which we are now considering. At the then present time, it would be difficult to prove that an endeavour was being made to establish' a monopoly, though there might be very strong grounds for believing that to be the intention.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is necessary to prove that an attempt is being made to destroy an Australian industry.

Mr ISAACS - Yes. It is a question of policy. I think I have shown that there is a distinct meaning in the clause, and that its object is to preserve Australian industries as a whole; not to preserve the industry of one part of Australia as against that of another, or to preserve the industry of one individual as against that of another, but to prevent all Australian industries deserving to be upheld from being obliterated or injured bv the operations of foreign competitors. The question is, are we in favour of preserving Australian industries as such, - not industries which ought not to be preserved, but genuine, valuable industries, which are of use to Australians, and will help to develop our country ?

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The honorable and learned gentleman has said that the distribution of imported goods would be an Australian industry.

Mr ISAACS - In Australia that would be an Australian industry.

Mr Kelly - Is such an industry truly Australian ?

Mr ISAACS - It would depend a good deal on its nature. I do not think that any one could lay down a hard-and-fast rule. But, if by means of such distribution, an attempt is made to kill an industry manufacturing Australian 'goods, and that manufacture is one which, in the interests of workers and consumers alike, ought to be preserved, we do not intend to allow the distribution of foreign good's to have that effect.

Mr Kelly - The distribution of foreign goods must affect the local manufacturer of similar goods in some way or another.

Mr Robinson - Part III. deals with that.

Mr ISAACS - No. Part III. provides for the prohibition of the landing of goods with the object of destroying Australian industries; this part deals with goods which are here.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But the honorable and learned gentleman has said that the distribution of goods which are here is an Australian industry.

Mr ISAACS - It is -protanto, but persons here, whether natural born Australians or Australians by adoption, are not to be allowed to .destroy Australian industries.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Is the honorable and learned member speaking of goods which have been imported?

Mr ISAACS - Yes. The whole of Part II. providing for the repression of monopolies, relates to goods which are already here. We say that any person having goods here is not to enter into a contract or become a member of a combination, for the express purpose of destroying or injuring any Australian industry which, in the interests of the whole Commonwealth, ought to be preserved. Bv Australian industry, we mean an. industry that is Australian in contradistinction from foreign.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - We cannot get at the exact difference.

Mr ISAACS - I think that we can, and that it is a question of fact in each case.

The Committee has now to determine a question of principle - whether we are going to allow Australia to develop its industries without danger of their strangulation by the greater power of capital abroad. Tariffscan apply only to the ordinary transactions of trade, and are based upon the supposition that men will not voluntarily lose money in carrying on their business operations, that they will sell under ordinaryconditions of business and trade; but we know perfectly well that persons desirous of capturing a market are sometimes prepared to make a temporary sacrifice, and will not be deterred by a Tariff from temporarily selling their goods at a loss, inorder that they may eventually command the market. It is for extraordinary operations of trade of that nature that the Bill is necessary. We think that its provisions are essential to the preservation of our industries, over and above any of the ordinary operations of trade which would be covered by the Tariff. Those who think that Australian industries, properly established, and of use and benefit to us all, ought to be allowed to continue on .their career of development, will have no hesitation in voting for the clause, while those who consider that, however well Australian industries may be established, and however useful they may be, they ought not to be regarded if, under any circumstances, and whether temporarily or permanently, goodscan be brought here more cheaply from abroad, will vote against it. It is a question whether we are determined to preserve well-established Australian industries, which are admittedly of use and benefit to us, or are ready to see them destroyed or injured.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Will the honorable and learned gentleman give us a case in: point ?

Mr ISAACS - I have given several, and to repeat them will not add force towhat I have said. I think we seed havelittle hesitation about coming to a decision. Our minds are fairly well made up as tothe side upon which we desire to stand. If we adapt the test which the honorablemember for North Sydney has given to us, and divide upon the question whether the word "or" shall or shall not be in the clause, we shall obtain an expression of the opinion of the Committee, either that Australian industries as such, which are worthy of being preserved, should be preserved, or whether they are to be regarded as possessing no more commercial interest to us than do the industries of Japan.

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