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Tuesday, 19 June 1906


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I very much regret thatthe Minister in charge of the Bill is not in his place to-day.I am aware that the AttorneyGeneral is quite capable of appreciating any suggestions or criticisms that may be offered, but I think that as the Minister of Trade and Customs has been absent on one or two similar occasions he should atleast have endeavoured to be present when in important measure of his own, which mav have serious effects upon the commerce and industries of Australia, is under consideration. We have had examples of the confusion that may arise through the absence of a Minister whilst the House is considering a Bill which he will have to administer. When the Commerce Bill was before us. the Attorney-General, on one occasion, had charge of the measure, and gave assurances - genuine assurances I have not the least doubt - as to the effect of the proposals embodied in the Bill, but with regard to grading, for instance, the Minister of Trade and Customs has since acted in a manner absolutely contrary to the view expressed bv the Attornev-General . Such confusion is apt to arise when the Minister in charge of a measure has to ask one of his colleagues, who may not have given the Bill full consideration, to conduct it through certain stages. I am sorry that I have not had an opportunity of perusing the Hansard report of the Minister's speech. Possibly, however, I have not lost much. The Minister did not favour us with much information regarding the details of some of the most complex clauses. He read the measure through - in fact, his was a literal second reading, because I assume that he had read it once before - but he failed to furnish honorable members with information which should have been forthcoming as to the incidence, the intent and the possible effect of the provisions. In addition to reading the Bill, he gave us a few samples of statistics, and then handed over the bulk of his figures for publication in that inoffensive volume, Hansard - a proceeding which I think is rather questionable. I shall possibly have to deal more with the clauses of the measure, and less with the Minister's arguments, than I would have done had his remarks been more enlightening. A measure, such as that before us, however good its object may be, must be viewed most critically by honorable members. It seeks to confer upon the Minister powers which Parliament has hitherto fought first to obtain ; and, secondly, to retain in its own hands. It mav l>e that some of the powers sought to lae taken could be exercised with good effect, but the proposal to surrender to a. Minister powers which affect even the control of the public purse, of which Parliament has been especially jealous, must be regarded as a serious one, and if agreed to, should be surrounded with the fullest safeguards. I do not desire that my remarks should be regarded as having anypersonal application to the present Minister. 1 am not referring personally either to himself or to any future occupant of the office, tout I think I shall be able to show that it is proposed by this Bill to confer upon the Minister powers that Parliament will have to resign if the measure be passed as it stands1 - powers that we should hesitate to give. It may be said, of course, that Parliament can always rescind the action of the Minister, that it may take back any power which he has abused. Yet, while that is the position of every Parliament, we know that all Legislatures are exceedingly loth, even in such circumstances, to part with powers that mav seriously affect the commerce, trade, and industry of the community. Another point I should like to bring under the notice of the Minister is that we are asked to deal with this measure without having thrown upon it that full light which would have been obtained had we waited for the reports of the Tariff Commission - a Commission appointed by Parliament for the express purpose of inquiring into the conditions of Australian industries, and suggesting remedies for any anomalies or injustices under which they may labour.


Mr Wilks - There will be no necessity for a Tariff Act if we pass this Bill.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - At all events, the necessity will largely disappear. The Tariff Commission has been sitting, for months. lt has already furnished reports relating to certain trades, and I understand that it is preparing others which will shortly be available. That being so, surely we should have had the advantage of its labours before being asked to pass a measure which largely affects the Tariff. Passing from those matters, and doming to the Bill itself, I may say that I, and also, I believe, every honorable member on this side of the House, recognise the great danger of the modern development of trusts and combines to the people of a nation, the industry of a nation, and the nation itself. This development is new in system, but not in essence. In the past, and even in the present day, it has been, and is, a common thing in misruled countries for the Government to farm out taxation - to allow certain persons, in return for the payment of a lump sum, the right to impose taxes within a given area, and to permit those persons to drag from the unfortunate people whatever they can over and above that amount. At other times there have been grants of monopolies to individuals. The right to trade in a certain article has been given to one particular firm or individual, and that individual, in return for a lump sum, or some considered advantage, has been permitted practically to tax the people by his charges. In modern times, where reformers have abolished these systems, we find that there have arisen, especially in the most energetic of the nations, men of large brain power, and few scruples, who endeavour to take that which was previously given, and by obtaining power or control over the sources of supply, the means of production, and also, it may be, the means of conveyance and distribution, seek to place themselves in a position to make not a legitimate profit, on their industry, but to tax the whole community, regardless of the wrong they do to the people, and the injury they inflict on their country. I admit that, although that evil has not arisen to any extent 'in Australia, it is perfectly right that, before it does so, we should seek a means of resist- ing it. So far as I think the Bill goes in that direction I shall support it; but to the extent that it goes beyond or is not likely to effect that object I shall criticise it and try to secure its amendment. I can assure the Minister in charge, however, that so far as this one object of the Bill is concerned,he will have no opposition from me, nor do I think he will meet with any from any honorable member on this side of the House. But we have to remember that there are combinations that are beneficent in their objects and effect, and we must be careful not to confuse the beneficent with the destructive ones.


Mr Watson - How many are beneficent ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The honorablemember has used the same argument. I have not plagiarized, but I have repeated the statement of a sound authority.


Mr Watson - I said that some combinations might be beneficent, but I do not know of any.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Some of them are.


Mr Watson - Where are they?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - In different parts of the world. I could name some of them if the honorable member desired, but I am not prepared at present to give a detailed list. The honorable member for Bland will admit that a combination which is formed to reduc? the cost of production - as combines often can do - and which effects n. reduction both in the cost of manufacture, and it may be in distribution, thus being able to secure a better price for the producer, andto give the goods at a reduced price to the consumer, is a beneficent one.


Mr Watson - It might be able and yet not willing to do these things.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - There are a number of cases in which they have been both able and willing to do so, and it is these T have in mind. I am referring to those which, refusing to take advantage of opportunities to mulct the people in heavy charges, confer a benefit on the producer, the consumer, and the country in which they are formed, creating as they do an industry that can not only supply the wants of their own country, but can export their products to other parts of the world. Having in mind these two classes of combines. I propose to glance at the provisions of the Bill, which, as I have already said, I may have to scrutinize more closely than I should have had to do if the Minister had dealt fully with them. In the first place, PartII. of the Bill is headed " Repression of Monopolies." The persons dealt with in this part are covered by clauses 4, 5, 8, and 9. They are - Any person orfirm engaged in trade with other countries, or among the States; any foreign corporation or trading or financial corporation formed, and trading within the Commonwealth, and those who wilfully monopolize or combine or conspire to monopolize any part of the trade or commerce with other countries or among the States. Then we have foreign corporations or trading or financial corporations formed within the Commonwealth, and trading within it, who are guilty of this last offence. It will be recognised that an attempt is being made here - I suppose it is the AttorneyGeneral, who, with considerable ingenuity, has made it - to use the provision in the Constitution giving the Commonwealth power over foreign corporations or trading or financial corporations formed within the Commonwealth. But even if that attempt be legally sound - and I am not questioning it - the Commonwealth will still be unable to interfere with combines operating in only one State.


Mr Isaacs - If they are corporations, it will be able to do so.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But not if they are not corporations. Even if we pass this legislation, all the objectionable practices of a. combine will still be possible within a single State. I am not suggesting that this is the fault of the Bill-


Mr Tudor - The brick combine in Melbourne, for instance, would still go on.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Any of the combinations whose operations are confined to one State would still be able to carry on.


Mr Bamford - So that the Colonial Sugar Refining Company would not be affected bv the Bill.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Its operations are not confined to one State; but I shall deal with it later on.


Mr Isaacs - If a combine is a registered company, it will be struck by the Bill.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If it is not a corporation - if it consists of individuals or firms - it will still be able to carry on its operations within anv one State. I recognise that under the Constitution the States themselves will have to take action to perfect any measure in this direction that may be passed by us. I draw attention to the fact that whilst corporations carrying on operations within a State can be dealt with if they combine, individuals or firms cannot. The Minister will agree that that is so.


Mr Isaacs - If it be purely Intra-State in its operations, a firm cannot be dealt with.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Quite so. The offences are shown in clauses 4, 7 and 8. They comprise anything done in restraint of trade or commerce to the detriment of the public or anything 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.

I need not refer to the offences named in clauses 7 and 8, as I have already alluded to them, further than to say that under them the doing of anything to the detriment of the public in regard to the supply or price of any merchandise or commodity is an indictable offence. It seems to me that in paragraphs a and b of clause 4 there are two entirely opposite policies outlined. In the first place, a penalty is imposed by paragraph a upon any person doing anything in restraint of trade or commerce, to the detriment of the public.

That would include the raising of prices unduly to the consumer. But in paragraph b the policy is quite opposite. If an Australian industry is interfered with, and it is one which it is desired to preserve; if prices are lowered by the competition of a trust or by the importation of the goods of a trust, then a penalty will be imposed upon the trust!. It seems to me that there is a very narrow plank to walk there. In the first place, prices must not go up to the detriment of the public. That I quite agree with, and that is the provision in the Sherman Act in America. But a condition is added : that there must not be interference or unfair competition with any Australian industry by any corporation or trust, and the further provisions make it evident that that unfair competition will consist in forcing down the price of the Australian article to the consumer.


Mr Mcwilliams - What is the definition of " unfair competition " ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is dealt with in a later clause. That, I re peat, is a very narrow plank between the two provisions. How any one administering the Act is going to distinguish I do not know. I think that the first provision is quite sufficient, at any rate to begin operations with, and that is that nothing should be done to the detriment of the public. I would ask the Attorney-General how far paragraph b is meant to extend? Evidently it does extend to preventing unfair competition with an Australian industry by any outside trust or any corporation within the Commonwealth. Is it intended to extend to a corporation engaged in an industry in Australia interfering with the other members of that industry, to its detriment ? For instance, there may be a corporation conducting a boot industry. Would competition with that industry be considered unfair if it were carried on by a corporation or firm in the Australian trade?


Mr Watson - What clause is the honorable member referring to?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am re'ferring to paragraph b of clause 4, which reads in these terms -

Any person who wifully, either as principal or as agent, makes or enters into any contract . . .

(i)   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.

Suppose that a person were engaged in the Inter-State trade in that very industry, would he, by reducing prices^ - unduly as the others might think - be considered to be unfairly competing with the industry? I cannot get at the sense of the clause, and I want the Attorney-General, if he can by interjection, to tell me what it really means.


Mr Isaacs - It would need a very long interjection, and I would prefer to wait until I speak.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I think the honorable and learned gentleman understands the difficulty.


Mr Isaacs - I think I do.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If a person be engaged in the Inter-State trade in an industry, must the unfair competition with the industry come from outside, or, if an individual member of the trade within Australia engaged in the Inter- State trade, were to reduce his prices, could he be then brought up for unfair competition in the industry? That I think the AttorneyGeneral will admit, whatever his answer may be, is an important point.


Mr Bamford - In each case it would be for the jury to decide.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Is everybody who lowers a price to be liable to be haled before a court? Surely that would not be in the interests of the public.

Mir. Skene. - No clearing sales.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - No. I do not think it is a power which is intended to be extended by the House.


Mr Isaacs - It does not go as far as that.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am not si lawyer, and, therefore, I do not profess to be able to give a legal reading of the clause. I have found difficulty in interpreting its meaning, and I want enlightenment on that point, because, if the Bill be meant to deal, not merely with attempts to destroy an industry from outside the industry, but with every fluctuation of price within the industry, it would be impossible to conduct business. I do not think that the House, if it understood that to be the intention, and I do not say that it is, would pass the clause in its present form. There is another point which I have had difficul tv in deciding from my reading of the Bill. Clause 5 says : -

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 competition to do any act or thing - («) in restraint of trade or commerce within the Commonwealth to the detriment of the public, or

(b)   with the design of destroying or injur ing by means of unfair competition any Australian industry.

Under that clause, would a bill of lading be a contract ', or must it be a contract for a combine? Suppose, for instance, that a bill of lading were .signed at a lower rate of freight by one steam-ship company than by another, would it become a contract within the meaning of the clause, and would the party signing it at a lower rate be guilty of unfair competition? I do not think that this is meant, but I should like an assurance from the Attorney-General on that point. Otherwise we shall be in this absurd position: that whilst it is sought to reach combines in Australia which are thought to be detrimental to the public, or to be doing things detrimental to the public, under this other provision we should be preventing a man from doing anything which might be considered unfair competition, al though it might be a reduction of prices or rates of freight which were deemed too high, and he might be trying to benefit the public.


Mr Isaacs - How could that possibly be to the detriment of the public?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Not the reduction ; but there might, be said to be an interference with an Australian industry.


Mr Isaacs - How could' that be wilfully done with the desire of destroying an Australian industry ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It might be said at once that if the freights or prices were reduced as the person proposed then he was injuring the industry.


Mr Isaacs - But paragraph b says' that it must be done " with the design of destroying."


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - How could one prove design ? It could only be inferred, and it might be inferred that the design was the destruction of the industry. When we find a. Bill of this sort, we have to remember that powers previously given to Ministers, where it was not absolutely clear as to the extent to which they were meant to be applied, have been applied in a very extreme manner, therefore we ought not only to know what the intention is-, but, if there is any ambiguity in the clauses, we ought to remove it. Again, I think the Attorney-General will recognise that the proposed penalties, which ever is right, are very unequal, namely, a. penalty of ^500 and imprisonment, or both, in the case of an individual, and a penalty of £500 in the case of a corporation.


Mr Isaacs - That has been said very often, but a corporation can only act through individuals. and these persons, whether directors of managers, or holding other offices, are met by clause 9. You cannot do anything more to the corporation themselves, but you can affect those persons who, being members of the corporation, were parties to the act.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I very much doubt whether when you have imposed a penalty of ^500 upon the corporation you can impose a separate penalty upon an individual.


Sir Philip Fysh - That is the maximum penalty. There is an Act which defines all penalties.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I know that is the maximum, but in the case of an individual the penalty is a fine of ^,"500 and a year's imprisonment.


Mr Isaacs - But persons controlling the affairs of a corporation may be severally liable for a joint act.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - When a clause states that the penalty in the case of a corporation shall be up to .£500, I tlo not see how it would be possible to bring individual members of the corporation into the matter.


Mr Isaacs - Not under that clause.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If it could be done at all, it could only be done under a succeeding clause. Then there is a special reference - which is, I think, unusual in a case of this sort - to the opinion of the jury. Does the honorable and learned gentleman intend that these cases shall always be heard before a jury ?


Mr Isaacs - Yes, for criminal purposes, certain! v.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But thev will not all be criminal cases. Paragraph b reads -

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.

That is what the jury will have to decide. Apparently there is nothing else intended to be decided by them.


Mr Isaacs - These words are, perhaps, superfluous. It is only to indicate to the House that we mean that it would be for the jury to adjudicate upon criminal cases. In substance, the honorable member is right, I think. The cases would have to go before a jury if thev were made indict-" able offences*.


Mr Watkins - Does this clause applyto corporations outside the Commonwealth?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - No, but paragraph b of clause 9 does. It would seem that that is all that the jury has to decide.


Mr Isaacs - Oh, no.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - By expressing the powers of the jury the Bill seems to limit them.


Mr Isaacs - I will make a note of that point.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But apart from the question of criminal law altogether, some of the matters dealt with by this Bill ought to be decided bv a judge. They are intricate; if the Bill is passed, they will be brought under a law operating for the first time in Australia; they will require the keenest attention of trained minds ; and the Judges will have, as in the case of other laws and in other countries they have had to do, to create precedents, which in time will be recognised as the standards of the law itself. There may be some reason in what the Attorney-General says - that in criminal cases a jury should act.


Mr Isaacs - If we make it an indictable offence, the Constitution says it shall be tried by a jury.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Without proposing to say how the object should be accomplished, I think that a Judge is the proper authority to try the great bulk of such cases.


Mr Isaacs - Will the honorable member look at section 80 of the Constitution ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - We ha.ve imposed penalties in other cases without their being tried by a jury ; but in this Bill we specifically state that the cases shall be tried by a jury. It would be difficult in such matters to get even independent juries - juries that were not personally affected by some of the results of the decisions. But even if we could get independent juries, some of the questions that will arise are so intricate, and require such research and examination, that a Judge ought to deal with them ; and in my opinion we could not have too good a Judge for the purpose. A clause upon which a good deal of the previous provision hangs is that which declares what is " unfair competition." The unfair competition is very delightfully explained as being competition' " which is, in the opinion of the jury, unfair in the circumstances; " which really amounts to saying that unfair competition! is unfair competition. But the clause goes, on to say that competition shall be deemed to toe unfair - until the contrary is proved, if the defendant is> a commercial trust or agent of a commercial! trust ; and also -

If the competition would probably or does infact result in a lower remuneration for labour ;-

Or -

If the competition would probably or does infact result in greatly disorganizing Australian industry, or throwing workers out of employment.

I think that the principle there stated isvery undesirable - that a man is to be considered guilty until he is proved to beinnocent.


Mr Kingston - Very necessary sometimes.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is necessary in some cases, but it can be, and has been, improperly used. I see no necessity for it here. Surely the Government should prove its case, if it has a case, where it is necessary, and where it is so difficult as I will show, under the sub-clause, for the defendant to disprove the charge, then I think there is likely to be gross injustice to individuals, and that harm and wrong will be inflicted. Of course, we deal with a matter of fact in sub-clause a. It is, perhaps, a little difficult to prove sometimes, and perhaps not so difficult to disprove, whether the defendant is "a commercial trust or agent of a commercial trust." But there are two sub-clauses, according to which, unless the person charged can prove the contrary, he is to be held guilty and punished, not perhaps for the fact that he has done what is charged against him, but because he is unable, owing to its being beyond his knowledge, to prove the contrary. The Minister has simply to assert, without any supporting evidence, that the competition of the defendant would probably - not actually does, even, but probably would - or does, in fact, result in lowering the remuneration for labour. I should like to know how a man who was not in the particular business in connexion with which the charge arose could prove the contrary.


Mr Watson - He could get assessors, I suppose.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - He might get other people to express their opinions, but he could not prove the contrary. He would have to rely on. other people. Why should he be held guilty under such circumstances? Why should not the Government put in their assessors, and prove that the charge is probably true?


Mr HUME COOK (BOURKE, VICTORIA) - In any case, such a matter is one of political opinion


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Largely.


Mr Watson - Not necessarilv.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It may be on some occasions that these matters are largely matters of Tariff.


Mr Watson - The question of the effect of prices on wages mav be free, from Tariff considerations; altogether.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It may; but even then it might have Tariff aspects. If the competition does result in greatly disorganizing Australian industry, or throwing workers out of employment, and if the defendant cannot prove the contrary, he is to be found guilty. Now, any competition - and there is surely not going to be an abolition of 'competition - must to some extent disorganize an industry which it affects. It may throw out of employment some workers in a particular industry ; though, on the other hand, they may find employment in the concern which is taking that part of the trade, and which others are losing, and the loss of which is disorganizing the industry to some extent. The Minister has only to say, for any reason or no reason, that a man is disorganizing Australian industry, and charge him with it ; whereupon he is brought before the Court, and if he cannot prove that the result of his operations is not to disorganize industry, and not to cause some workers to be thrown out of employment, he is to be found guilty. Well, that will tend to create glorious monopolies in Australia. The very evil we are trying to avoid and suppress by this measure will be created by it within our Tariff wall. What will be the effect of such a provision? If firms with new and active ideas, carrying on business outside Australia, or even within Australia, doing Inter-Stale tradeintroduced new systems, new processes - it might be a patent process - they would, of course, disorganize, to some extent, Australian industry, and might throwsome men out of employment. Is that to be prevented ? Is a man to be found .guilty, punished severely, and hindered from continuing his operations, because certain forms of industry hang back or are unable to develop processes equal to those of the competing firm ? If I read a previous clause aright it need not be an outside firm that effects this. I say that it would be bad for Australia if we were to offer such restrictions to inside or outside enterprise. The best thing for Australian industry is that it should have to keep up-to-dai?, and on an equality with other similar industries in the world; that its activities should be maintained ; that it should go in for development, and employ new processes, and by that means be able to compete with other industries elsewhere. Anything that restricts this does not tend to' the development of Australia, and especially does not tend to benefit the consumers 6f Australia1. I am sure that if honorable members find that the Bill has that effect in any particular they will endeavour to amend it. We can often best see what we are doing, its bearing and its reasonableness or unreasonableness, by looking at the probable effect upon ourselves, if others were to apply the same principle to our trade. We export very large quantities of wheat to England. We know that wheat can be grown in England. It is not the lower wages paid in Australia that prevent its being grown there; but it is die variety of advantages which we possess that enable us to put our wheat into the English market at a cheaper rate than that at which it can be produced there. As a consequence, if wheat is to be produced in England it must be at beggarly wages. We are placing England in that condition by our competition. England might turn round and say, " You are disorganizing English production; you are throwing our workers out of employment ; you are forcing a lower remuneration to be. given for labour than our workmen ought to get. We intend to bring the industry under the provisions of such a Bill as your Australian Industries Preservation Bill, and to exclude your wheat altogether from our markets." Such, I am sure, is not the intent of most of the members of this House in connexion with a Bill of this sort, and if by the insertion of such clauses as I have specified, it can be used in a most arbitrary and drastic manner, it ought to be amended. The only object of the Bill ought to be simply to repress the gigantic and unfair interference by trusts, anxious to destroy an opponent by any means, which we all recognise to be injurious. It shows the danger of measures of this sort when these provisions can be used as I have explained. Whether they will be so used or not must depend on the administration. But we, have to look at the powers which we give. Some Ministers would take full advantage of those powers; and, as I have said already, Parliament should reserve to itself the right in connexion with a measure of this sort, dealing with the trade and commerce, and the industries of Australia, to fix the lines on which interference would be justified, and not give too ample powers to any Minister. Clauses 7 and 8 deal with wilful monopoly, or attempts to monopolize, and clause 7 provides that -

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 wilh other countries, or among the States, with the design of con- trolling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence.

In connexion with these provisions, I heard the Minister state that the Colonial Sugar Refining Company was one of those concerns which he had in his mind when these provisions were inserted in the Bill. The Colonial Sugar Refining Company is a New South Wales company, or, at any rate, commenced operations originally in New South Wales, and I have in my possession information which was supplied at a recent meeting of- the company, and has been amplified since, showing the manycharges made against the company to be altogether unfounded. I have not the information with me now, but I may give from memory some of the replies to the charges which have been made. I should say that I have no interest- whatever, direct or indirect, in the Colonial Sugar Refining Company, but I contend that if this Bill is to be used to interfere with and destroy a company which has done so much for Australian industry as the Colonial Sugar Refining Company has, we are getting into a very serious position indeed. This company was founded in 1855. and its growth has been gradual. From personal experience, for a time, as one occupying a supervising position in connexion with a competitor of the Colonial Sugar Refining Company, I am aware of the fact that itssuccess was not gained by cutting down the price paid to the producers of sugar in Australia, and by taking advantage of its position to make gigantic profits. The authorities of the company state that thev are willing to show that their profits per ton are not gigantic but reasonable.


Mr Watson - They are certainly very large as compared with the profits derived from sugar refining in other countries.


Mr Harper - Not per ton.


Mr Watson - Yes, per ton.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am not prepared to say that they are. Will the honorable member for Bland say that the profits of the Colonial Sugar Perming Company are large compared with those of Spreckles. of California?


Mr Watson - Yes.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I do not think that they are.


Mr Watson - I have expert authority for the statement that they charge for refining double the price charged by Spreckles.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - We shall see whether that is so directly I was saying that, having had some supervision of the business of a competitor of the Colonial Sugar Refining Company, 1 know that the difficulty with competitors of the company was not that the Colonial Sugar Refining Company cut down the prices of cane to the growers, but that they gave higher prices than their competitors could afford ro pav.


Mr Bamford - Then, they have altered their policv.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I shall deal with that also. I arn afraid that in connexion with these matters, there is a good deal of misapprehension abroad. At all events, if my statements are wrong, they can be contradicted. As tha result of the prices they had to give growers, and as a result also of the sugar crisis in the early 'eighties, when prices abroad, which affected these markets, came down to a very low level, practically the whole of the competing, sugar-mills in New South Wales ceased operations. The Colonial Sugar Refining Company did not take advantage of that position lo lower the rate paid to the growers. Immediately after that, and since that time, they have actually been giving the growers higher prices than they paid them when the competition of other nui] ls was going on.-. The success of the company is easily accounted for. It. has been an enterprising company in the hands of men greatly experienced in the sugar industry. Some of the ablest men in the industry have been brought up in the service of the company. They have encouraged invention, and when they had an invention of their own, or when inventions were discovered elsewhere, to Improve processes, they have never hesitated to immediately sacrifice machinery, the original cost of which was very large, in order to put in improved machinery at whatever outlay. Thev have thus been able not only to secure a very large share of the sugar trade of Australia, but, as I know from the experience I speak of, they have saved the industry for Australia, when,, in the hands of a less progressive and less capable concern during the sugar crisis, it might have gone out of existence.


Mr Tudor - Is it not a fact that they have only increased the prices to the grower since the Queensland Central Mills were started?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am speaking of New South Wales a.t present, and' I know that they have increased prices in Queensland since the imposition of the Federal duty.


Mr Tudor - But prior to that - since the Central Mills were started in Queensland?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I believe that is not so, but the honorable? member can submit evidence to the contrary if he pleases. I am informed that they have increased prices to the grower since the Federal Government took the matter in hand in Queensland. There is no protective d'utv now on refining. A great deal of sugar is now refined in Australia in bond, and the ^6 per ton duty is paid upon it. I may mention that one of the competitors of the Colonial Sugar Refining Company finds it to its advantage to import sugar from Java and refine it in bond. There were no duties that protected previously in Queensland, but when the Federal duties were imposed, the sugar-grower got the advantage of them to the extent of 3s. rod. per ton of cane.


Mr Watson - There were duties on sugar in Queensland; but they were not operative.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That is so; they afforded no protection, because the supply was infinitely beyond the consumption of sugar in Queensland.


Mr Watson - Then low prices are sometimes consistent with, a protective policv ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - When there is an export of the article concerned. That is what we always say. When you come to export an article, the protection afforded by Customs duties ceases, and prices must come down to the prices in the markets of the world.


Mr HUME COOK (BOURKE, VICTORIA) - Low prices are not inconsistent with high wages, either.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Thev had no protection really in Queensland, but the growers were given protection under the Federal Customs Act, because the whole of the markets of Australia were then opened to Queensland sugar producers, and the Queensland supply was not equal to the demands of those markets. Then the protection of the sugar duty operated, and the growers got 3s. iod. per ton more for their cane.


Mr Watson - Does 3s. iod. per ton of cane represent the whole of the difference in the price of sugar plus the duty ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I remember that the Minister of Trade and Customs stated that they should divide the duty between them, but what the Colonial Sugar Refining Company say in this connexion is thai the difference is retained by them ro cover the loss anticipated if the abolition of black labour causes them to withdraw their refineries from Queensland.


Mr Watson - That bears out what I said a little time ago - that they are getting too great a profit under present conditions.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If conditions are imposed from which a loss may be anticipated, the honorable gentleman will admit that the company must prepare for that loss.


Mr Watson - It is problematical whether any loss will be sustained.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The authorities of the company are acting on their knowledge of the business, and I believe that they have recently offered still higher prices to the grower.


Mr Watson - To whom will they hand the accumulated profits if there is found to be no such loss as is anticipated.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) -They will no doubt set them against some' other unexpected loss, which the honorable member knows is always occuring in business.


Mr Watson - It is one of their inner reserves.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Dealing with a question of opinion differences may exist, but we will come to practical issues, and to practical comparisons. From a return obtained of the operations of the Central Mills, during the period from .1901 to 1904, showing the total number of tons of cane handled and the prices given for it, it was found that the Central Mills paid the growers 3d. per ton less for their cane than the prices paid by the Colonial Sugar Refining Company during the same period. The company, in the first place, are charged with giving too little to the grower, although it is shown that they have given 3d. per ton more than has been given by the Central Mills, established with Government money at low rates of interest, and in which the Queensland Government have some interest since the liabilities of <"he mills have not all been mei. If the Colonial Sugar Refining Company can he accused of making too much out of the buyer then .what do the Central Mills, which are assisted by the Queensland Government, make out of them, when it is shown that they get their cane for less, while they obtain the same price as the Colonial Sugar Refining Company for their sugar? It must be remembered that some 12 J tons of cane go to a ton of sugar, so every penny or shilling per ton of cane has to be multiplied accordingly to arrive at the effect on a ton of sugar. I do not give this explanation merely because the Colonial Sugar Refining Companyare operating an industry originating in New South Wales, but I do think that, when an industry started early in our history, which has been only a short one, has been gradually and successfully established, and has been the means of creating interests not in Australia alone, but outside of Australia, in New Zealand and Fiji, instead of attacking it when there is no good reason for doing so, we should be proud of it, and should desire to encourage it. We do not find the people of New Zealand, in connexion with their great industries such as that of the_ Union Steamship Company, taking so little pride in them, and we do not find them trying to destroy them, especially when no good and sufficient reason can be shown for any such action. Of course, it is said that the Colonial Sugar Refining Company is a company of capitalists. I have not the information with me. but particulars have been published in the press which show that, so far from that being the case, the company is composed of some 1,300 odd shareholders. It is admitted that less than one-fourth of the number maybe described as capitalists, but the rest are trustees and others interested .for families, widows, and so on, and the employes of the company have a considerable interest in its shares. They have a provident fund alone holding 3,000 of the shares. In these circumstances, if this Bill is to be used to attempt the destruction of an industry of that nature, it will be a very unfortunate application of its provisions.


Mr Kennedy - Is it not a first condition that this corporation must be doing something detrimental to the public before it can be interfered with?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am replying to certain charges that have been made, and to a remark of the Minister in connexion with the Colonial Sugar Refining Company. I am sure that the honorable member for Moira will bear with me in putting forward what are stated to be facts to which the Colonial Sugar Refining Company have given publicity. I think that any aompany attacked in this House is entitled to have its side of the case put before honorable members, especially when a Bill is being brought in one of whose objects has been indicated to be to deal with that company. I pass now to the third part of the measure, which requires the most keen examination, since the powers given in it are extraordinary. If Parliament passes this part as it stands, it will no longer have occasion to consider the Tariff, because the Minister will be independent of any Tariff. Hitherto, Parliament has been supposed, according to the opinions and lights of its members, freetraders and protectionists, to fix what are considered reasonable duties to impose for purposes of revenue or to enable Australian industries to compete with manufactures from abroad. We have arranged such a Tariff, and have appointed Commissioners to investigate its working, but, after we have dealt with their report, it will, under the Bill, be competent for the Minister, whenever he chooses to do so, to come in, and say to any importer, "You are unduly interfering with an industry in Australia; you are doing what I term dumping." He can then refer the case to a Board of his own appointing, the views of whose members he may know before he .appoints them, and he can act on the decision of that Board. The Board will not decide what is to be done; it is the Minister who will do that. The Minister alone acts, and he can absolutely exclude goods to whose importation he objects, or he can place such conditions on their admission as he sees fit.


Mr Kelly - The members of the Board may be trade rivals of the importer.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Yes. I shall presently deal with that aspect of the case. This is an extraordinary power for the Minister to ask for. No Minister has a right to have such authority. If such provisions were agreed to, Parliament should have the right to decide when they should be imposed. But there is no need for great hurry in these matters. Even looking at the matter from the Minister's stand-point - personally I do not agree with many of his proposals - it is not one shipment but continued shipments which would do injury, if injury is to be done, and therefore Parliament would have plenty of time to deal with any abuse that might arise. The parties to be dealt with under these clauses of the Bill are not those in regard to whom the previous parts of the Bill take effect ; they are the importers of goods, or the sellers of imported goods - everybody who imports goods, or sells imported goods. The offence for which they will be liable to penalties is unfair competition with Australian industries. We have determined by the Tariff what is fair or unfair competition; but it is here proposed to set tip a tribunal, with practically no responsibility, to settle that matter for us. Then it is provided that the Comptroller-General, or the Board, shall decide what industries may be advantageous to the Commonwealth, having due regard to the interests of producers, workers, and consumers, and1 that they shall also decide what is unfair to Australian industries. This is a most extraordinary provision, as I think the Attorney-General will see if he looks at it. Under clause 13 the Comptroller-General, or the Board, as the case may be, is to decide what industries are advantageous to the Commonwealth, while in the other portion of the Bill similar questions are to be decided by a jury.


Mr Isaacs - No jury is provided for in this part of the Bill.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - No, but there is a Board, though the ComptrollerGeneral can decide these questions independently of the Board. He has no such power under the other portions of the Bil!'.


Mr Isaacs - He decides matters only for the purpose of his own certificates, not for the purpose of the Board, or for the purpose of the Minister.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That is not at all clear. The clause says, " industries, the preservation of which, in the opinion of the Comptroller-General." The Comptroller-General, or the Board, as the case mav be, may also decide what is unfair competition. That power is given in paragraph b of sub-clause 2 of clause 14.


Mr Isaacs - For the purposes of his own action.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The clause does not say so.


Mr Isaacs - "As the case may be" shows, that.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It seems to be very involved.


Mr Deakin - There is no question as to what the object is.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - No, that may be ; but the meaning might be made clearer.


Mr Isaacs - -If any words can be suggested which would make it clearer, I will accept them.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The honorable and learned member, if he sets out to make a thing clear, can do so without the help of any suggestion. Paragraph a of clause 14 is the most extraordinary provision in the Bill. Competition shall be deemed unfair, not only if it may lead to Australian goods being withdrawn from -he market or sold at a loss1, unless produced at a lower remuneration for labour, but if it would probably lead to that. This has nothing to do with the legislation against trusts. This is anti-dumping legislation. ifr. Page. - Who .is to decide the matter?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The members of the Board, who are to be experts, and. consequently, interested parties, and possibly competitors of those concerned.


Mr Page - The Minister is not serious about the clause.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Competition is to be deemed unfair if importation is likely to lead to goods being withdrawn from the market, or sold at a loss, unless produced at a lower remuneration for labour.


Mr Isaacs - In other words, unless the goods cannot be produced if labour is not ground down. Is the honorable member prepared to allow that?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The AttorneyGeneral is wrong again. The first provision deals with goods being withdrawn from the market. How can goods be imported and sold without causing other goods to be withdrawn, for the time at any rate, supposing the market to be already full ?


Mr Harper - Things adjust themselves again.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Yes; but any importation under such circumstances must for a time cause other goods to be withdrawn from the market. This provision would allow a Minister to keep out goods, and importers would not know what to do. We must depend to some extent upon importations. I am in sympathy with the desire to create Australian industries; but a large amount of our requirements must be brought from abroad, and we shall be the most extraordinary Parliament under the sun if we hamper our business people, and prevent our merchants from trading effectively. Under this provision anything and everything could be shut out, either on the ground that its importation would lead to goods being withdrawn from the market, or that it would lead to goods being sold at a loss unless produced at a lower remuneration for labour. We know perfectly well that occasional shipments of goods do not affect the remuneration for labour ; in other words, that wages are not thereby altered. Every firm, paying what wages it may, has now and then to lose money in consequence of competition ; but it looks to reap a larger profit on some other occasion. The proposed measure may be administered by a free-trader, who will not be anxious to bring into force any of its provisions ; or it may be administered by a protectionist, who willi be anxious to bring them all into force, and, by doing so, if he appoints a Board of the same views as he himself holds, he will practically shut out everything. Surely these powers are too serious to place in the hands of any Minister, or of any Board. According to the Minister, the Board is to consist of experts - men who understand the business with which they are dealing. Where are we going to get these men, if we do not get men who are interested in some, way or another in the matters with which they would have to deal ? They will have to decide cases on which depend the livings of other men, who may be their trade rivals. If matters have to be dealt with in this way - .though I do not see the necessity, even from the Minister's stand-point - they should be dealt with by the most honorable and intelligent Judge that we can find. Even if an article is not produced here, its importation could, under this provision, be prohibited on the ground that importation might prevent the manufacture of Australian goods ;. or a little of the article might be manufactured here for the sake of excluding a similar article manufactured abroad, in regard to which it might be perfectly true to say that it could not be manufactured here without lowering the rates of wages, because its manufacture might be absolutely unsuited to Australian conditions. What is proposed is to provide for prohibition, which we have not hitherto attempted to bring about. I have never yet heard a protectionist argue in this House in favour of prohibition for the exclusion of anything. Protectionists recognise that we must import many things, if only for the development of our own industries, and for that reason have allowed certain articles to be placed on the free list.


Mr Kelly - If the proposed measure is put into full operation, the Commonwealth will ha.ve to look beyond the Customs duties for a new means of revenue.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Yes. I do not mean to say that the Minister intends to press its provisions so far. The decisions of the Board would have to be in accordance with the clause, and the Minister would have to act in keeping with its provisions. That would bring about a very serious position. Certain articles which form the bases of industries, can be produced in some parts of the world much more advantageously than in others, and many of our industries would be seriously affected if, because such goods could be produced in Australia, though at a much higher cost, some one could come along and demand their exclusion, or the imposition of such conditions that they could not very well be imported. Therefore, we should be careful not to confer any such powers. It must be remembered -also that the competition with which our manufacturers have to contend, does not always come from countries where low* wages are paid. Some of She competition complained of by the Minister comes from countries which pay high wages, and in which the trusts' operations are conducted. Therefore, if we attempt to interfere with the operation of natural laws, so far as Australian trade is concerned, we shall prejudice our own interests. Clause 14 contains some extraordinary provisions. The second sub-clause reads as follows : -

In the following cases the competition shall be deemed unfair until the contrary is proved : - («) If the person importing goods or selling imported goods is a commercial trust : (/>) If the competition would probably or does in fact result in a lower remuneration for labour :

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

In other words, guilt is assumed unless the contrary is proved. Paragraph d provides that competition shall be deemed unfair until the contrary is proved, if the imported goods have been purchased abroad at prices greatly below their ordinary cost of production where produced, or the market price where purchased. In such cases, goods can be absolutely excluded I should like honorable members to consider how such a provision, if literally construed, would affect trade. Goods are often sold abroad in the same way that they are frequently sold in Australia, below the cost of production. The market may go against a producer, and id may be impossible for him to sell at or over the cost of production. In the event of the market going back, perishable goods must frequently be sold at less than the cost of purchase or production.; otherwise they will deteriorate and involve the holder in serious loss. Then, again, goods frequently go out of season or out of fashion, and it is well recognised among, the wholesale houses in England and elsewhere, thai at the end of the season certain goods must be sold for what they will fetch, even if the price be below the cost of production. Some of these goods reach Australia in season, because our fashions generally follow those of the older countries. Is it contended that goods should not be admitted here if thev have been purchased below the cost of production ?


Mr Mauger - Who gets the benefit of that?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - -The consumer gets the benefit in a case such as I have mentioned, in the same way that he loses when the market goes up.


Mr Ronald - Not if there is a monopoly.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is of no use talking to the honorable member as to the course of trade and the markets, because he cannot for a moment claim to be an authority upon such subjects. If an article such as wheat or rice-


Mr Mauger - Say clothing.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - T shall deal with clothing afterwards. If the market goes against the holder of, say, wheat, nothing on earth will enable him to obtain a price equivalent to the cost of production.


Mr Ronald - Except a monopoly.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - A mo- .nopoly could not be brought about if there were markets throughout the world to which purchasers could go, or if there were overproduction. No man could hold his goods for ever, especially perishable goods.


Mr Ronald - But a ring could do so.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - No, it could not. It would be impossible for a ring to hold grain for ever. Another ring would soon operate - a ring of small insects - and quickly relieve the owner of his goods, if not of his obligations. There should be no need for me to repeat what I have said on this subject, because it is really the A B C of business. If the market goes absolutely against the holder of perishable goods, which can be purchased from others at rates lower than he has paid, he must reduce to sell. That is perfectly clear. As regards seasonable goods, such as clothing, it is well known that at the end of the season in London or Paris-


Mr Mauger - Say in Berlin.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It does not matter which. When it is anticipated or known that there will be a change of the fashion - and a change usually does take place - the wholesale houses fmd it necessary at the end of the season to get rid of their goods at whatever prices they can obtain.


Mr Page - That is business.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Of course. In the same way, if the honorable member had certain liabilities to meet when low prices ruled in the sheep market, he would have to sell his stock at the prevailing rates. Many of the goods such as I have mentioned reach us in time for our season, which usually follows that of the older countries. Should all these goods be excluded? If that course is to be followed the Bill will provide one of the greatest means of taxation that has ever been submitted to this Parliament.


Mr Kennedy - The provision referred to by the honorable member would not exclude such goods.







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