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Thursday, 14 June 1906
Page: 243


Sir WILLIAM LYNE (Hume) (Minis ter of Trade and Customs) - I move

That the Bill be now read a second time.

Honorable members will recollect that in November of last year I moved the second reading of a Bill having a similar object to the measure which is now before them. This, however, is not the same Bill. In one or two particulars it is, if I may say so slightly more drastic than was its predecessor. It is not a long measure, and, therefore, I shall not occupy much time in explaining its provisions. But I think it will be recognised by honorable members that it is a rather important Bill, and one likely to command, not only their attention, but that of a large section of the public. Last night I was reminded by the deputy leader of the Opposition that he would like to hear some reasons advanced why this Bill had been introduced. Before I resume my seat I shall endeavour to supply some of those reasons. In the first place there are many persons who claim that legislation of this character is not re quired in Australia. I venture to say that if they will read the results which have followed the formation of the gigantic trusts which exist in other parts of the world to-day-


Mr Wilks - In protectionist America.


Sir WILLIAM LYNE - Yes, in protectionist America, and which will be created in protectionist Australia if action is not taken to prevent it. This Bill aims at preventing monopolies. If such a measure had been enacted in the United States early in the history of that country, there would not be the huge monopolies which exist there to-day. It is well, therefore, that we should deal with this matter at an early stage in our national life, because the Commonwealth is destined to make very rapid strides. If honorable members have taken the trouble to read' the attempts which have recently been made to cope with certain monopolies in the United States, they must admit that it would be a sorry thing indeed if similar monopolies were created in Australia. This is not a question of free-trade or protection, but of whether capital shall be allowed to be accumulated to such an extent and applied so that it can dominate not only persons and companies as it does in America, but it is alleged even the Senate of that country.


Mr Wilks - Corruption.


Sir WILLIAM LYNE - I do not know anything about corruption so far as America is concerned and I certainly do not for one moment imagine that there is any corruption to be found in our Senate.


Mr Conroy - Corrupt as the United States Congress has been, it has never dared to bring forward a Bill of this nature.


Sir WILLIAM LYNE - If the honorable and learned member will allow me the opportunity, I shall tell him what the legislation of the United States during the past few years has been.


Mr Conroy - That legislation has encouraged the formation of trusts there, and so will this Bill.


Sir WILLIAM LYNE - I am sure that the honorable and learned member will give us credit for introducing a. measure which is not intended to create trusts, but to enable us to dealwith them.


Mr Conroy - I am sorry that it will have exactly the opposite effect


Sir WILLIAM LYNE - We do not think so. The Bill is divided into three parts, the first of which, however, is

1.   Any person who wilfully, either as principal or agent, makes or enters into any contract, or is a member of or engages in any combination to do any act or thing, in relation to trade or commerce with other countries or among the States -

(a)   in restraint of trade or commerce to the detriment of the public; or

(b)   with the design of destroying or injuring by means of unfair competition any Australian industry, the preservation of which in the opinion of the jury is advantageous to the Commonwealth, having regard to the interests of producers, workers, and consumers, is guilty of an indictable offence.

Penalty : Five hundred pounds, or one year's imprisonment, or both ; in. the case of a corporation, ^500. sf. Every contract made or entered into in contravention of this section will be absolutely illegal and void.


Mr Henry Willis - Oh, dear.


Sir WILLIAM LYNE - The honorable member may laugh, but the matter is a very serious one.


Mr Henry Willis - What will the consumers think of the Minister's action in putting up the price of goods? Sir WILLIAM. LYNE.- Commodities are cheaper now than they were under freetrade in New South Wales. Clause 4 must be read in conjunction with clause 5, which provides -

1.   Any foreign corporation, or trading or financial corporation formed within the Commonwealth, which wilfully, either as principal or agent, makes or enters into any contract, or engages in any combination to do any act or thing -

(a)   in restraint of trade or commerce within the Commonwealth to the detriment of the public, or

(b)   with the design of destroying or injuring by means of unfair competition any Australian industry the preservation of which in the opinion of the jury is advantageous to the Commonwealth, having due regard to the interests of producers, workers, and consumers, is guilty of an indictable offence. Penalty : Five hundred pounds.

Honorable members will note that clause 4 deals with the restraint of Inter-State trade. To-day I heard one\ honorable member declare that it is not competent for the Commonwealth to deal with this question as between the States. I have obtained the opinion of the Crown Law officers upon the matter, and they hold that the Constitution does confer this power upon us.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Did not the honorable member refer to trade within the States ?


Sir WILLIAM LYNE - No. The honorable member to whom I am referring said that we could not deal with the individual in a State.


Mr Conroy - That is so.


Sir WILLIAM LYNE - But we can deal with a corporation. If any honorable member disputes that, the Attorney-General will no doubt express his opinion upon the matter.


Mr McCay - We have the power under the corporation clause of section 51.


Mr Isaacs - The honorable and learned member for Corinella has rightly referred to the other portion of the section.


Mr McCay - This is a very ingenious application of that power.


Mr Conroy - It is only a lawyer's application.


Sir WILLIAM LYNE - The two clauses which I have quoted deal with the question of restraint of trade. The Commonwealth is going as far as it possibly can in this regard. Clause 6 contains a definition of what is unfair competition. That provision is simply intended for the guidance of those who have to deal with and' to administer this Act. Clause 7 is a very important one. It reads as follows : -

1.   Any person, who wilfully monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, with the design of controlling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence.

Penalty : Five hundred pounds,- or one year's imprisonment, or both ; in the case of a corporation., Five hundred pounds.

2.   Every contract made or entered into in contravention of this section shall be absolutely illegal and void.


Mr Conroy - I can show the honorable gentleman a law on that very point which is 600 years old.


Sir WILLIAM LYNE - Probably the law has improved since then. Honorable members will see that in the case of a corporation the penalty is£500.


Mr Fisher - There is no imprisonment provided for them.


Mr Glynn - I do not know how the Government are going to arraign a corporation.


Sir WILLIAM LYNE - I do not know either. The penalty in the case of a corporation is£500, but while there is no provision for imprisonment, it should not be difficult to recover the penalty.


Mr Watson - For some of the acts which might be committed by a corporation £500 would be a very small penalty.


Sir WILLIAM LYNE - I quite admit that. The penalty in the case of individuals is£500, or one year's imprisonment, or both, and it may possibly occur to honorable members that in comparison the penalty in the case of a corporation is too small.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Is the honorable gentleman criticising his own Bill?


Sir WILLIAM LYNE - I am not ; but I think it is only fair to point out the difference in the punishment provided in the two cases. We know very well that we cannot imprison a corporation, and it may possibly be thought advisable that in that case the penalty provided for should be increased. I wish to impress upon honorable members that the clause I have just: read is taken from the Sherman Act of the United States, section 2. This is the provision contained in that Act: -

Every person who shall monopolizeor attempt to monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanour, and on conviction thereof shall be punished by fine not exceeding Five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.


Mr Lee - Is that Act effective in America ?


Sir WILLIAM LYNE - It will be effective as far as their actions here are concerned. I shall quote some cases from America later on. I am sure honorable members will permit me to proceed without interruption, because this is a very important Bill, and I desire to give the clearest explanation of it that I can give.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Will the honorable gentleman explain the variation in this Bill from the Sherman Act?


Sir WILLIAM LYNE - I have no wish to go into details at the present time, but I have read the two provisions, and honorable members will be able to see the variation between them. Clause 8 provides that -

1.   Any foreign corporation, or trading or financial corporation formed within the Commonwealth, which wilfully monopolizes or attempts to monopolize, or combines or conspires with any person to monopolize, any part of the trade or commerce within the Commonwealth, with the design of controlling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence.

Penalty :five hundred pounds.

2.   Every contract made or entered into in contravention" of this section shall be absolutely illegal or void.


Mr McCay - Clause 8 is less stringent than is the Sherman Act.


Sir WILLIAM LYNE - I said just now that the Bill is less stringent in some respects than is the Sherman Act, but honorable members will, I think, agree that it is quite stringent enough. Clause 9 provides that-

Whoever aids, abets, counsels, or procures, or by act or omission is in any way, directly or indirectly, knowingly concerned in or privy to -

(a)   the commission of any offence against thisPartif this Act; or

(b)   the doing of any act outside Australia which would, if done within Australia, be an offence against this Part of this Act, shall be deemed to have committed the offence.

Penalty : Five hundred pounds, or one year's imprisonment, or both ; in the case of a corporation, Five hundred pounds.

Clause 10 is a sweeping clause, and is likely to be considered a drag-net sufficiently wide to take in a good many offenders. It provides that -

The Attorney-General, or any person thereto authorized by him, may institute proceedings, in any competent court exercising Federal jurisdiction, to restrain by injunction the commission 01 continuance of any breach or contravention of this Part of this Act.


Mr Conroy - I assume that the AttorneyGeneral will be prevented from practising if that clause is passed, otherwise he will be in a position to blackmail these people to any extent.


Sir WILLIAM LYNE - I am sure that the honorable and learned member will not suggest that.


Mr Conroy - As he knows perfectly well, I am not suggesting that the present Attorney-General would do so, but future Attorneys-General might not be so scrupulous.


Sir WILLIAM LYNE - The next clause provides that -

1.   Any person who is injured in his person or properly by any other person, by reason of any act or thing done by that other person in contravention of this Putt of this Act, may, in any competent court exercising Federal jurisdiction, sue for and recover treble damages for the injury.

That is taken from section 7 of the Sherman Act. Then sub-clause 2 provides that-

2.   No person shall, in any proceeding under this section, be excused from answering any question put either viva voce or by interrogatory, or from making any discovery of documents, oil the ground that the answer or discovery may criminate or tend to criminate him ; but his answer shall not be admissible in evidence' against him in any criminal proceeding other than a prosecution for perjury.

That, honorable members will admit, is also a fairly stringent clause. The sections of the Sherman Act from which these clauses are taken read thus -

4.   The several circuit courts of the United States arc hereby invested with jurisdiction to prevent and -restrain violations of this Act; and it shall be the duty of the several district attorneys of the United States in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to ' prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case, and praying that such violation shall be enjoined or otherwise prohibited. When, the parties complained of shall have been duly notified of such petition, the Court shall proceed as soon as may be to the hearing and determination of the case, and pending such petition, and before final decree, the Court may at any time make such temporary restraining order 'or prohibition as shall be deemed just in the premises.

7.   Any person who shall be injured in I.- is business or property by any person or corporation by reason of anything forbidden, or declared to be unlawful, by this Act, may sue therefor in any circuit court of the United Stales, >n the district in which the defendant resides, ur is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including reasonable attorney's fee.

Honorable members will see that there is very strong legislation in the United States, and the clauses I have just read are adopted from that legislation.


Mr Conroy - The trouble is that that legislation has only increased the evil by putting the business into the hands of the big men, and wiping out the small men.


Sir WILLIAM LYNE - It has not had that effect, because at the present time in the United States prosecutions against big men are going on. I have dealt with the restraint of trade and . monopoly of provisions. I come now to tha part of the Bill which is intended to prevent dumping. Under this part of the measure it is intended to create a Board of three persons. Under clause 15 it will be found that provision is made for the creation of a Board to deal with these matters. If a report is made to the Comptroller-General that certain things are being done which amount to dumping, he is tq make a report to the Minister, and the Minister, if he sees lit, is to have the power to appoint a Board to deal with the matter. I should have preferred the appointment of a permanent Board, but in the discussion of the matter that was found impossible, because it might, be necessary to deal with something which a Board of a permanent character would know but very little about. Mr. Dugald Thomson. - Are these Boards, then, to be composed of persons in the trade?


Sir WILLIAM LYNE - Yes.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - They may be competitors of the persons accused.


Sir WILLIAM LYNE - We shall have to avoid that as far as we can. When the measure was being drafted in the first instance the intention was to obtain the services of a Judge. Some of the Judges were appealed to by the Attorney-General in connexion with the matter, but it was pointed out that it might be unwise for a Judge to undertake to decide such, matters, as it would not be a judicial proceeding, and would perhaps be one of those things which it would be very inconvenient for a Judge to deal with. When we are considering the measure in Committee we shall be able fully and freely to discuss the question, and decide whether we should constitute a Board, or should secure the services of a Judge to deal with these matters.


Mr Fisher - I suppose that the persons appointed to deal with such matters would occupy honorary positions?


Sir WILLIAM LYNE - If a Judge were appointed the work would form a portion of his duty, but I do not think we could expect private persons to act as members of such a Board, and give their time in dealing "with such, matters without a fee. I refer honorable members to the following important clause, defining when competition is deemed to be unfair: -

1   . For the purposes of this Part of this Act, competition shall be deemed to be unfair if - (a) under ordinary circumstances of trade it would probably lead to the Australian goods being either withdrawn from the market or sold at a loss unless produced at a lower remuneration for labour ; or {b) the means adopted by the person importing or selling the imported goods are, in the opinion of the ComptrollerGeneral or the Board as the case may be, unfair in the circumstances,

2.   In the following cases the competition shall be deemed unfair until the contrary is proved : -

(a)   If the person importing goods or selling imported goods is a Commercial Trust :

(b)   If the competition would probably or does in fact result in a lower remuneration for labour :

(c)   If the competition would probably or does in fact result in greatly disorganizing Australian industry or throwing workers out of employment :

(d)   If the imported goods have been purchased abroad at prices greatly below their ordinary cost of production where produced or market price where purchased :

(e)   If the imported goods are being sold in Australia at a price which is less than gives the person importing or selling them a fairprofit upon, their fair foreign market value, or their cost of production, together with all charges after shipment from the place whence the goods are exported directly to Australia (including Customs duty) :

(f)   If the person importing or selling the imported goods directly or indirectly gives to agents or intermediaries disproportionately large reward or remuneration for selling or recommending the goods.


Mr McCay - Disproportionate with what ?


Sir WILLIAM LYNE - That means beyond the ordinary trade charges. It has been clearly and repeatedly exemplified in the case of the Massey-Harris Company and the International Harvester Company.


Mr Conroy - Mr. McKay again !


Sir WILLIAM LYNE - It has been stated that in pushing, the machines commissions to the extent of some £26 and £30 have been given for selling single harvesters, which it has been said only cost £40 each.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Has that statement been substantiated?


Sir WILLIAM LYNE - I think that the commissions given on the sale of harvesters were stated in evidence before the Tariff Commission.


Sir John Quick - They amounted to 26 per cent, on the selling price.


Sir WILLIAM LYNE - That seems to me a disproportionate amount. Who had to pay these commissions ? The farmer !


Mr Lee - Why did not the Minister seize these harvesters in the same way as he seized' a shipment of Panama hats ?


Sir WILLIAM LYNE - I put a stop to the practice, and burst up the ring. During the existence of that ring the farmers in the middle of my electorate, as I was told the other clay, had to pay from£90 to£100 delivered up country for a harvester such as they could buy now for from £60 to£65.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The complaint now is that these harvesters are being sold too cheaply.


Sir WILLIAM LYNE - I do not think that the farmers will say so. This reduction in price has been brought about by the action taken by me.


Mr Conroy - It is the height of effrontery to say so.


Sir WILLIAM LYNE - I have been so greatly abused for what I did in this matter that it is time the public learned that it was in consequence of my action that the ring was burst up, and the price of harvesters reduced to from£60 to £65.


Mr Henry Willis - Has the price of locally-made harvesters also been reduced?


Sir WILLIAM LYNE - I think that the price of the local article has also come down. I am informed that if the farmers combine under certain conditions, they can buy three harvesters for from£50 to £55 each. That reduction in price is due to the action which I took last year, for which I have been so much abused.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The ring had been broken up before then.


Mr Conroy - It was broken up because the importers left McKay. The Minister knows that. , The whole thing was a most dishonest business.


Sir WILLIAM LYNE - The Bill provides that the Comptroller-General shall commence any action in connexion with the dumping of goods, and then a board is to be appointed by the Minister, acting on the information of that officer. Clause 16 provides that the report of the board shall be dealt with by the Governor-General, and goods imported in contravention of the measure are to be deemed prohibited goods within the meaning of the Customs Act of 1 901, and the provisions of that Act will apply to them accordingly. As honorable members know, the Customs Act gives the Minister great1 power, and I have been told bv legal authorities that he has now sufficient power, if he likes to exercise it, to prohibit the importation of harvesters or any other machinery ; but, as I do not think that it was intended b" Parliament that the Minister should exercise such power, I shall decline to exercise it until I am clothed' with the powers provided for in the Bill now before the House.


Mr McCay - Has the honorable gentleman been asked to act under the section of the Customs Act to which he refers?


Sir WILLIAM LYNE - It has been suggested to me that I should do so, but I have declined. Clause 17 provides the methods which the Board shall adopt in investigating and reporting.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Has the Minister drawn any portion of the Bill from another Act?


Sir WILLIAM LYNE - I shall read presently what has been done in Canada, where the Ministry and Parliament have taken action to prevent unfair dumping, such as is going on here. The provisions of the Bill were not taken exactly from the Canadian Act. They are practically the same in effect, but the wording is not the same. I have in my possession a full copy of the Canadian and United States legislation on this subject, which I shall lay on the table.


Mr McCay - I thought that the Government were going to print and circulate it.


Sir WILLIAM LYNE - If must be printed, if it is to be circulated; but it is rather lengthy. In all cases of prohibition, the report of the Board must be laid before both Houses of the Parliament within seven days after the .issuing of a proclamation, or, if the Parliament is not then sitting, within seven days of the meeting of the next Parliament.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - What happens, if Parliament refuses to ratify the prohibition ?


Sir WILLIAM LYNE - Parliament can refuse to' allow the prohibition.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But the Minister may have already acted.


Sir WILLIAM LYNE - If it is not already provided in the 'Bill, the Attorney-

General will, no doubt, draft a provision, enacting that Parliament may upset what the Minister 'has done. There can be no other object, except the securing of publicity, for bringing the matter before Parliament than that honorable members may have an opportunity to express their opinions in regard to these transactions. I have the names of only a few of the trusts in other parts of the world, and it is hard to pick out, from the vast amount of information on the subject, exactly what it is most desirable to give to the House and to the public. I would point out, however, that the International Harvester Trust has under that name a capital of 120,000,000 dollars; the Standard Oil Trust a capital of 97,000,000 or 98,000.000 dollars; and the Steel Trust a capital of 2,000,000,000 dollars, or £400,000.000.


Mr Conroy - There is a steel trust here which is going to get extra duties because its shares have jumped up under some promise made by the Minister.


Sir WILLIAM LYNE - I know nothing about it.


Mr Conroy - The Minister has promised duties on steel for something.


Sir WILLIAM LYNE - The honorable and learned member \$ not fair in saying that.

Mr. -Conroy.- The Minister must have done so. Otherwise there would not have been a jump up in the shares.


Sir WILLIAM LYNE - Honorable members know from my utterances last session what I am in favour of in connexion with the iron industry. I have said nothing more to any one privately than has been stated by me more than once in my public speeches.


Mr Conroy - Nonsense ! The shares have jumped up from £250,000 to nearly £2,000,000.


Mr Kennedy - The honorable and learned member must have been "specking."


Mr Conroy - No, unfortunately. No one told me.







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