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Wednesday, 20 June 1906

Mr WATSON (Bland) ._I spoke last session on a measure almost identical with this, and I do not therefore propose to detain the House at so great a length as I should probably do if this were the first proposal of the kind submitted to Parliament. It. seems to me that there are a few aspects of the general question involved which may be pertinently referred to at the present moment. Perhaps one of the most interesting features of the debate that has gone on for the last two days has been the attitude assumed towards this measure by our honorable friends, who have dubbed themselves the " Anti- Socialist Party." They have continually asseverated, until, I suppose, they have at least succeeded in convincing themselves of the truth of the assertion, that this is not a socialistic. measure, and that it is quite reasonable for the anti-Socialist to support a measure of this description. To my mind that attitude predicates either that the honorable gentlemen who make up the " AntiSocialist Party " have not studied the economic difference between the position of the individualist, and that of the collectivist, or that they are dubbing themselves by a name to which they are not entitled. What becomes of all the eulogies of private enterprise indulged in by the right honorable gentleman who lead's the Opposition during the past few months? Everywhere throughout Australia that right honorable gentleman has been telling the people that 'to, impede the development of the individual, to put shackles upon the people's enterprise, is to work dire injury and disaster to the State as a whole. He has told us that our position in the world to-day, the present condition of civilized man, and his advance from savagery, is due to private enterprise working through competition, the friction of mind against mind. That is the right honorable gentleman's explanation of the condition of things we witness to-day, as compared with the state of things existing a few hundred or a thousand years ago. All through, the right honorable gentleman and those supporting, him have been eulogizing the free play of private enterprise and competitive institutions. That is the correct attitude undoubtedly for a convinced individualist to assume. But to-day we find that honorable gentlemen opposite have gone back upon that position, and now admit that this much-lauded private enterprise is capable of producing such evils as constrain even them, reluctant as they are to interfere with anything of the sort, to attempt to put some regulatory law into force, so that the interests of the community may be conserved. I say that that is an abandonment of, at any rate, the theoretical position which those honorable gentlemen are supposed to occupy.

Mr Skene - There is a use and an abuse in everything.

Mr WATSON - If the honorable member admits that it is a proper thing in some circumstances to use the power of the State to restrain the unscrupulous private enterpriser, then he has no right to call himself an " anti-Socialist. " He may pose, properly enough, as a man who holds that the Labour Party, or any other party in the State proposes to go too far in the direction of Socialism, proposes too rapid progression in that direction, but he cannot logically and legitimately claim tobe an " anti-Socialist."

Mr Skene - That is cheese-paring.

Mr WATSON - - In fact, so many of our honorable friends opposite are gradually slipping away from political virtue, and so steadily falling from grace, that directly we shall probably discover that the only anti-Socialists left amongst us are the honorable and learned member for Parkes, and perhaps the honorable member for Wilmot.

Mr Skene - According to the AttorneyGeneral, there has been none since Adam-

Mr WATSON - I am rather of the opinion that the Attorney-General was quite correct in saying that there have been very few individualists, strictly speaking, in the history of the world. For the sake of humanity, I am glad; to be able to say that there were a vast number of the people who have taken a leading part in the direction of the world's affairs who have been to a greater or less degree Socialists, in that they have believed in using all the machinery of government, and all the resources of civilization, for the protection of the weak against the strong. After all, that is ^what Socialism resolves itself into, it seems to me. However, I do not intend to debate that any further than to say that it does seem to me a highly illogical attitude for honorable members opposite to assume in consenting to support the passage of any measure of this description, no matter how they qualify their support.

Mr Cameron - It is simply because they know they are in a minority.

Mr WATSON - Is that all? This is. quite a new reason for the failure to object, and one that I should have expected least of all from the honorable member for Wilmot.

Mr Cameron - The honorable member does not yet know whether I shall divide the House on this question. I am not speaking for myself.

Mr WATSON - If the honorable member does so, I shall give him every credit for sincerity, but if he is speaking for other honorable members opposite, and is entitled to speak foi them, his statement sheds a new light upon the attitude they assume.

Mr Cameron - I am expressing only my own opinion.

Mr WATSON - I shall not' pursue that phase of the question any further. It has been argued in connexion with this measure that there are to-day no trusts in Australia. The right honorable gentleman who leads the Opposition only recently said that there were no trusts in Australia, or, if there were any, that they were so insignificant as to be utterly unworthy of serious attention at the present moment. I do not wish to pursue at any length even that aspect of the question, because during last session I instanced the shipping combine, which, in my opinion, is playing a part more disastrous alike to producers and consumers in Australia to-day than is any other single agency. I instanced again the tobacco trust, the existence of which is beyond question. How far they have gone in utilizing the power which is in their hands to-day is, I admit, a question on which there is room for a difference of opinion, but as to their possession of practically uncontrolled power there can be no doubt whatever. Then, again, there is the Colonial Sugar Refining Company, which, though not a trust in the correct acceptation of the term, constitutes a monopoly that, in my view, notwithstanding all that was said in the company's favour by the honorable member for North Sydney yesterday, is to-day a distinct menace and danger to the people of this Commonwealth. If this company has not a monopoly in Australia to-day, the position it occupies approaches so closely to complete control of the whole trade as to constitute a virtual monopoly. I contend now, as I did a few months ago from this positionin the Chamber, that the Colonial Sugar Refining Company is charging a wholly unwarrantable sum to the people of Australia for converting raw sugar into refined sugar. I make that statement on the evidence of individuals who have made a close study of the question, and are well qualified to express an opinion.

Mr Deakin - Has the honorable member read Mr. Jodrell's evidence about the prices paid by the company for cane as compared with the prices paid by Government mills ?

Mr WATSON - No, I have not; but I was going to say in that connexion that the remark of the honorable member for North Sydney, that the Colonial Sugar Refining Company practically gave the growers all the benefit received from the Tariff will, on examination, be found to be incorrect. I do not for a moment mean to say that an honorable member who is so careful in his statements as is the honorable member for North Sydney has put forward any statement concerning the accuracy of which he is not personally satisfied, but I think that his information is at fault, and that, if the matter is investigated, it will be found that the Colonial Sugar Refining Company has retained a considerable proportion of the profit given by the increased price of sugar, compared with the price which it pays for cane. This salient fact stands out, that the average price paid by the company for cane supplied to its mills is rather below that given by the Stateconducted and co-operative central mills of Queensland.

Sir William Lyne - I am informed' so, too.

Mr WATSON - There is no doubt about it.

Mr Deakin - The difference is about 8s. 6d. a ton.

Mr WATSON - I am informed that the highest difference is 8s. 6d. a ton, and that the average difference right through is very considerable. Thus one of the awful results of the pernicious system of Socialism in connexion with the cane industry is that the growers of Queensland receivehigher returns from mills assisted, and in some instances controlled, by the State Government than they receive from the monopolistic private company which has been so highly extolled by my honorable friends on the Opposition benches.

Mr Bamford - The farmers do not consider the company a benefactor to them.

Mr WATSON - No. If they ever held that opinion, I think that they are being rapidly cured of it. But it is not merely the farmers who are interested in this matter ; the consumers of sugar throughout Australia have to suffer when this company asks more than a reasonable price for its services to the community in supplying it with sugar.

Mr Kelly - How is it that the Colonial Sugar Refining Company is able to buy cane, if the mills of the State Government are willing to purchase it at higher prices ?

Mr WATSON - The cane can be sold only to mills situated within a certain distance of the fields where it is grown, and it does not pay to erect a mill within a certain distance of another mill.

Mr Kelly - Would it not pay the State Government to do so, if it is prepared to offer higher prices for cane than the company will give?

Mr WATSON - If the honorable member possessed business experience, he would know that, although the immediate effect of erecting a new mill might be to raise the price of cane, those responsible for its erection might get no advantage from the transaction.

Mr Cameron - The Bill is intended to prevent that sort of thing.

Mr WATSON - I do not know that it can be prevented. I am speaking now only of evils which exist. Another factor which has a very considerable influence in the matter is that, in many cases, the Colonial Sugar Refining Company has made contracts for the purchase of cane which have yet long terms to run, and, in some instances, has sold) land subject to the condition that the cane grown on it must be delivered to its mills during a certain period at certain prices. The honorable member will see that those conditions would make successful competition impossible in many cases.

Mr McCay - But the honorable member's illustration shows that there are advantages in competition.

Mr WATSON - Competition is, in many instances, an advantage, though not where it implies waste. I think that the public as a whole is more likely to benefit by competition than by monopoly, where industry is controlled by private enterprise, because monopoly confers power, and that power will be taken advantage of, and, if placed in the hands of irresponsible persons, the public are likely to suffer by its exercise. I differ from the honorable and learned member in thinking that monopolies should be under the control of those who are dependent upon them, either as consumers or producers.

Mr McCay - I think that there should not be monopolies.

Mr WATSON - I do not know how the honorable and learned member would prevent them. Some of the members of the Opposition are strongly of opinion that some kinds of monopoly cannot be kept down, and the deputy leader of the Opposition stated yesterday that it is a natural law that large enterprises must continue to expand.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I did not say anything about monopolies in that connexion.

Mr WATSON - Did not the honorable member say that the continued concentration of business is a natural law ?


Mr WATSON - Concentration means a gathering into one control, and that necessarily brings about a monopoly.


Mr WATSON - If one control is not a monopoly, I do not know what a monopoly is. A single control may not be harmful, but it is nevertheless a monopoly. I agree with the general idea lying behind the honorable member's remarks, though he spoke of a natural law, and I think it wouldtake a very able man to discover what the natural laws of trade and commerce are. I would term what he refers to natural development.

Mr Fowler - It is a mere commercial tendency.

Mr WATSON - A commercial tendency to go steadily in one direction.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - All over the world, and in relation to everything.

Mr WATSON - I differ from the honorable member only in regard to the calling of it a law.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I did not call it a law.

Mr WATSON - I do not think that it could be stopped, even though it is merely a tendency, because it has proved more effective in returning profits to those engaged in commercial industry than any other method yet discovered. For that reason I think the general trend to which I am referring is inexorable, and cannot be stopped, as the honorable member for Parramatta said yesterday, by any puny efforts of a regulative character that we may put forth.


Mr WATSON - The honorable member said that it is not likely that our puny efforts will keep back a natural law, or, at all events, that was the tenor of his statement.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - That was a very general remark.

Mr WATSON - The honorable member's speech yesterday consisted chiefly of general remarks. However, I do not wish to bind him down to any set terms. I understood him to recognise that the tendency towards concentration and centralization of control, and the better organization of industry, is a natural development, which, in the very nature of things, must and will continue.

Mr Fisher - We do not object to it.

Mr WATSON - I, for one, do not object to it, because it tends towards economy of production by the elimination of waste and the saving of human energy.But, as it is found practicable to better organize industrial production, the community is very unwise which allows a few persons to reap all the benefits resulting from the accompanying economy. Can any one deny that the- result of our coastal shipping combine has been a marvellous saving in the conduct of our shipping business, or that a still greater economy would be effected if there were only one management, because, notwithstanding the existence of a pool, the companies still have different managers. and there is the unnecessary expense attaching to the duplication of staffs?

Mr Kelly - Does the honorable member suggest a nationalized shipping industry?

Mr WATSON - If the coastal shipping were owned and worked by one company, having one staff, larger economies would be effected than those already brought about by the existing combination. But has the public obtained any real benefit from this combination ? On the contrary, the additional profit which has resulted has gone into the pockets of the shareholders of the shipping companies. Personally, I should be prepared to-morrow to vote for the nationalization of our coastal shipping industry, because in principle there is no difference between the conveyance of passengers and goods on land by means of railways and their conveyance on water by means of steam-ships. Although it is said that railways may constitute a monopoly, while the sea affords a pathway free for all to compete upon, we know that to-day there is no competition in Australian waters.

Sir John Forrest - There is some.

Mr WATSON - In the main lines of trade there is no competition amongst the coastal shipping.

Sir John Forrest - I think that there is.

Mr WATSON - The Treasurer ought to know that there is a combination amongst the big shipping companies.

Sir John Forrest - Thev are not all in it.

Mr WATSON - Practically all the freight and passenger steam-ship companies are in it.

Sir John Forrest - Then it has happened only very recently.

Mr WATSON - There are two companies outside the ring, one of which does not carry passengers, but looks after freight contracts only, and, while their competition has affected the combine slightly in regard to one or two little matters, roughly the whole of our coastal shipping business is under the control of the combine. By a system of rebates, of which the Treasurer probably knows something, the shipping companies bind their constituents to them so that they cannot escape, struggle in the net as they may.

Mr Carpenter - And no State suffers more from these operations than does Western Australia.

Mr WATSON - The State represented by the Treasurer has suffered most from these operations ; but they have also caused every producer in the eastern States to suffer. I do not wish to pursue this matter further, however. In my view, there is room fpr considerable effort on the part of the community to deal in some fashion with trusts. The leader of the Opposition and his deputy, anti-Socialists though they call themselves, admit the necessity for social action in regard to the regulation of monopolies. If it be expressed in the State or in the municipality, or in any other way, it is still social action by society to defend itself.

Mr McCay - Social action is not Socialism.

Mr WATSON - No, but it is socialistic. Nothing is Socialism except it aims at a complete revolution of the existing industrial system ; but I contend that it is socialistic to employ the resources and machinery of Government to protect from the rapacity of a few individuals those who are unable to protect themselves. That is definitely socialistic, and' it argues a confusion of terms if any other name is applied to it.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The end and aim and object of State action differentiate it.

Mr WATSON - In that case, all that is between us and honorable members opposite is a question of degree, and whatever other name honorable members may apply to themselves they have no right to the title of anti- Socialists. I stated in Sydney recently that the right honorable member for East Sydney was a bogus antiSocialist, and I say to-day that all his followers are bogus anti-Socialists. They may think thev are anti-Socialists, but they are not. The honorable and learned member for Parkes is the only "Real Mackay" amongst them. Honorable members opposite admit the necessity for regulating monopolies, but they are eloquently silent as to the method by which they should be regulated.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Does the honorable member believe in regulation ?

Mr WATSON - I shall deal with that point in a moment. Honorable members opposite have offered no suggestion as to the method that should be adopted with regard to regulation. The speech delivered yesterday bv the honorable member for Parramatta, who presumably spoke on behalf of his party, consisted of a number of generalities, and of criticisms of some of the proposals of the measure, but offered no alternative. Perhaps the honorable member will say that it is no part of his duty as acting leader of the Opposition to offer an alternative.

Mr.Joseph Cook. - It is strange for the honorable member to accuse me of using generalities.

Mr WATSON - On this occasion the honorable member departed from his usual practice. He, no doubt, found himself in an awkward position, and felt at a loss how to make it appear logical, even to himself. The honorable member asked me if I believed in regulation. As far as I am concerned - and I think I can speak for the Labour Party- I do not believe that regulation will cure the evil. We believe that nothing short of collective control, in some shape or other, will effectively dispose of the evils that result from monopolies, trusts, and combines. Where these large enterprises have already passed into the hands of a few individuals who can monopolize them to the detriment of the people, nothing short of collective control by some body representing the people will prove effective. When the honorable member for Parramatta suggests, as he did yesterday, that we should vote against any proposal for regulation-

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I said that from the point of view of the honorable member's party, they should do so.

Mr WATSON - The honorable member is kind enough to assume for us a point of view. I do not know that he is the best judge as to that.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - That is very good, coming from the honorable member, who has been assuming a point of view for us and criticising us.

Mr WATSON - I havebeen pointing out the illogical position occupied by honorable members, and have been asking them to justify it. We assume a perfectly logical attitude. We are prepared to take one step at a time. If this legislation should prove ineffective, we shall be ready to go further and ask the people to adopt such methods as will effectively deal with what is rapidly becoming a cancer in the body politic.

Mr Cameron - Your party would be prepared to go " the whole hog." Why not say so?

Mr WATSON - We would not.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - From the point of view of the honorable member, would a soundly-regulated trust be in a stronger or weaker position than one which was intolerably tyrannical ?

Mr WATSON -What point of view does the honorable member mean ?

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - From the socialistic stand-point - the point of view of one who believes in taking over monopolies.

Mr WATSON - If that question were addressed to a man who believed in nothing but Socialism as the immediate panacea for all evils, it would be an appropriate one. I have never contended that we should be justified, under present conditions, in doing more than nationalizing monopolies, and provide for such extensions of governmental interference in that direction as are proved to be practicable step by step.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - My point is: Wilt an enterprise prove stronger or weaker if it be a regulated or an unregulated monopoly ?

Mr WATSON - If the Bill proves effective it will minimize the necessity for taking over these monopolies. I have very considerable doubts as to whether it will prove effective.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member and his party aim at the ultimate overthrow of private enterprise.

Mr WATSON - I do nothing of the kind. So far as the Labour Party of Australia are concerned, they are not committed to the overthrow of private enterprise as such. With regard to monopolies, however, they say that they will nationalize them as soon as an opportunity presents itself.

Mr Kelly - But Socialism is the objective of the party.

Mr WATSON - We are denounced by the Socialists in many parts of Australia as being bogus; in the same way that we say that honorable members opposite are bogus an ti- Socialists. I do not suppose that we shall ever be able to satisfy all parties in that connexion.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - We go on a little, whereas members of the Labour Party stop at their immediate programme.

Mr WATSON - We can at least claim that our programme exists. That of the honorable member and his friends is so nebulous that it is impossible for the public to perceive it at present.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The members of the Labour Party admit that their programme is only a step in the direction of their objective.

Mr WATSON - We hope that the honorable member .himself is only a step in the evolution of mankind. He is prepared to take no step at all, and I do not think that the country believes in marking time.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - What is in my mind all the time is the sine qua non.

Mr WATSON - That phrase sounds somewhat familiar. We are taking practical steps as opportunity offers. So far as combines are concerned, the Labour Party take up a very distinct attitude, and the passing of legislation of this character will not in the slightest degree infringe upon their position. It is distinctly a step of a socialistic character, and if, as "we have reason to believe from the experience gained in the United States, it fails in its purpose, there will be the greater reason for taking the only other practicable step that we commend to the people in connexion with monopolies.

Mr Johnson - There is another more practicable step, namely, the adoption of free- trade.

Mr WATSON - Monopolies exist even in free-trade countries. I mentioned a number of cases of that kind when I spoke upon a similar measure last session. The honorable member for Lang is conveniently deaf and blind with regard to many things that emerge from free-trade conditions, but thev exist all the same.

Mr Johnson - I have never heard of any monopolies.

Mr WATSON - That shows the truth of my remark with regard to the honorable member's condition. His ears have been carefully_ stopped against any complaint.

Mr McCay - Turkey is a 'free-trade country, and is full of monopolies.

Mr WATSON - England is also a freetrade country, and is not free from monopolies. It is interesting to consider the position of affairs in the United States to-day. The Sherman Act has been in operation for the last sixteen years, and to-day trusts are as prevalent, combines are as numerous, and monopolies are as power.ful as thev were before that Act came into existence. Therefore, looking at this experience, I am not one of those who believe that this Bill is going to achieve all that its promoters hope_ for. ^ I am willing, however, to give it a fair trial, and to assist in making it as effective as it can be made under the Constitution.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - At the same time, the honorable member does not believe that it will prove effective.

Mr WATSON - I do not believe that it will destroy the pernicious power that now lies in the hands of monopolies and trusts.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Then are we not now wasting time?

Mr WATSON - I am prepared to allow the experiment to be tried. If the Labour Party were not willing to vote in favour of an experiment of this description, we should immediately have our so-called antiSocialist friends stating that we were afraid to permit of regulations, because we knew that they would prove effective. I am willing to allow the leader of the Opposition and his party to propose all the regulative methods which they say they favour, so that the community may see that thev are ineffective, and that something else will remain to be done before the disease can be cured.

Mr Johnson - We shall have no trade then.

Mr Batchelor - Not after honorable members opposite have regulated it. I believe that the honorable member is right.

Mr WATSON - What has been the experience in America? Mr. Garfield, the president of the Bureau of Corporations, Department of Commerce and Labour, Washington, who was appointed by President Roosevelt, after the consideration by Congress of the message to which the honorable member for Parramatta referred last night, writes -

Under the present industrial conditions secrecy and dishonesty in promotion, over-capitalization, unfair discrimination by means of transportation and other rebates, unfair and predatory competition, secrecy of corporate administration, and misleading or dishonest financial statements, are generally recognised as the principal evils.

In a book which was issued this year, Mr. Spelling, a lawyer, of New York, and the author of quite a number of legal works, makes' t!he following remarks as being applicable to the present time: -

Not only the gas and oil one burns, but the milk and meat he buys, the flour he bakes, the hats, shoes, and clothing he wears, everything he touches, tastes, and handles, are controlled by trusts, aided by discriminating freight tariffs. . . . How long before merchants will be deprived of the privilege of handling trust-made goods on any terms? Probably the time is soon to come when the " Beef Trust " will establish its own commodious meat shop and fruit store in. each city and town. The Standard Oil Company already has its own warehouse and delivery waggons in some localities. The American Tobacco Company has already aggressively taken much of the retail trade away from its former patrons. How long before the other trusts will follow the example of these monopolies?

That is the condition of things existing in Americato-day, according to two wellknown and highly reputable authorities. Surely that fact does not argue that any very great result will flow from legislation of this character. The honorable member for Parramatta said yesterday that, in his opinion, a great deal - I am not sure whether he said the major part - of the wealth aggregation of the United States was due to the existence of patent monopolies.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I said that I had seen it stated that it was so.

Mr WATSON - That seems to me to be opposed to all the experience of America as it is related by those who pose as publicists and as leading authorities. There the position is that, because of the uncontrolled efforts of private enterprise, practices have been rendered possible which would never be tolerated in communities such as ours. The control of different avenues of industry - irrespective altogether of fiscal conditions! - has enabled a few people to build up gigantic monopolies, but these, so far as I can ascertain, are in the main quite free from patent monopolies as they are ordinarily understood.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I think that all these trusts have a great many patents of one sort or another.

Mr WATSON - Take the great beef trust as an instance in point. It has not a patent in the purchasing of cattle or in the packing of meat-

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - How does the honorable member know ?

Mr WATSON - I have read a book upon the subject, which was written by Mr. Russell, and I base my statement also upon a conversation which I had with him in Sydney a few months ago. He informed me that the operations of the beef trust consisted merely in manipulating the market. Similarly, the operations of the oil trust have been assisted by its power to manipulate the railway rates. It has no patent rights, but it bought the legislators.

Mr McWILLIAMS (FRANKLIN, TASMANIA) - Has not the dishonest politician in America done more to create trusts than has anything else ?

Mr WATSON - I think it is just the other way about. The existence of people with large private interests at stake, and of wealthy companies which desire to purchase concessions, was the direct cause of the corruption of the Legislature. The honorable member for Kooyong - although he said that he would vote for the second reading of the Bill - spoke against the general idea underlying legislation of this character, and quoted, in opposition to the Sherman Act, a statement by Mr. Chauncey Depew. That gentleman was eulogized by him as a representative American of high standing. Perhaps it is news for the honorable member to learn that, a little time ago, Mr. Chauncey Depew was compelled to return - " disgorge," some people would call it - some hundreds of thousands of dollars which he had improperly taken from the Equitable Life Insurance Company. Here is what one American paper - according to the Cosmopolitan Magazine of March last - wrote in regard to that gentleman : - " Depew stands convicted of being a corrupter of the law makers of the commonwealth," and " had the audacity to cajole or bribe the chief magistrate of the State into indorsing one of the greatest frauds ever perpetrated.

As a result of the public inquiry which was held into the transactions of the Equitable Life Insurance Company, Mr. Depew was compelled to disgorge some hundreds of thousands of dollars which he had improperly appropriated, and I do not think that much reliance can be placed upon the denunciation of legislation of this character by such a man.

Mr Page - Who lauded him?

Mr WATSON - The honorable member for Kooyong.

Mr Kelly - He merely read his letter, but did not agree with its contents.

Mr WATSON - He read his letter evidently under a misapprehension. Clause 4 of the Bill seeks to. repress injurious monopolies, and provides that -

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 .... is guilty of an indictable offence.

That clause is copied from the Sherman Act of 1890.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Which the honorable member says has made things worse.

Mr WATSON - The honorable member is entitled to his own opinion. Personally, I say that, in attempting to deal with difficulties of this kind, it has marked a very interesting experiment indeed. But that particular clause, I maintain, has proved ineffective in stopping the formation of trade combinations . and trusts in the United States. It has been ruled that, unless the agreement under which a combine is working is clear as to its intention, or gives some indication of its desire to monopolize the trade of the community in a certain direction, its creation is not illegal.

Mr Higgins - The difficulty lies in the proof.

Mr WATSON - As Spelling points out, if the beef trust were unwise enough to put their understanding in writing and to allow the officers of the Court access to it, the Court would be able to punish them under the Sherman Act. But when they are attacked in one form they immediately assume another; so that, though an injunction of the Supreme Court was out against the beef trust for twoyears, it was ineffective so far as exercising a restraining influence upon its operations were concerned. With regard to another clause in the measure which was not embodied in the Bill of last session, I think there is room also for a little criticism.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I am wondering why the honorable member bothers about the details of the Bill, seeing that he declares that it will accomplish no good.

Mr WATSON - There are parts of it that I think will do good. . I hold that those portions of the Bill which are aimed at internal combines and monopolies will not accomplish any good'.

Mr Kelly - The honorable member thinks it is easier to hit the fellow who is outside the Commonwealth than it is to hit the man who is inside it.

Mr WATSON - There is no other method of hitting them than through the Tariff.

Mr McWilliams - It is safer to hit the man who is outside theCommonwealth.

Mr WATSON - I am prepared to hit both the individuals outside the Commonwealth and those inside it who engage in these practices. Another of my objections relates to the definition of the word " monopoly." In the Sherman Act it has been found very difficult to secure any effective definition of the term, so far as repression is concerned. Take the case of the Colonial Sugar Refining Company as an example. That company deals with about 80 per cent, of the sugar which passes into consumption into Australia. But it is not a monopoly in the complete sense of the word, although it is virtually one. Similarly, the shipping combine is not a monopoly, although it is so close to being one as to make very little difference, so far as the community generally is concerned. Then I would ask, " What will constitute an attempt to monopolize, and how. can we prove such an attempt?" It seems to me that a company or an individual may attempt to monopolize without giving any evidence to the public which could be used against them in a Court of law. That being so, it would be very difficult indeed to make this portion of the Bill effective.

Mr McCay - Its value lies in the fact that if a company started a business it could be got at before it had succeeded in its improper object.

Mr WATSON - I do not at all object to the use of the words, but I say that it will be in the highest degree difficult to secure a conviction.

Mr McCay - That' is always the difficulty.

Mr WATSON - Here is the opinion of Spelling. After quoting a great number of the decisions of the Supreme Court of the United States, he says -

It seems to be settled by these cases that the mere manufacture and sale of a commodity, upon however extensive a scale, and though the sales are largely for delivery to citizens of other States, and though one manufacturing and selling company have a virtual monopoly, yet that does not render it a violation ofthe provision directed at those who " monopolize or attempt to monopolize Inter-State commerce." It seems that to constitute a violation of the statute there must be a precedent agreement in restraint of Inter-State trade, and that no amount of actual monopolization, in the absence of suck agreement, will constitute persons or corporations violators of the statute.

That seems to me to open up the question of how far we can amend these clauses so as to make them more effective than the Sherman Act, from which they have been copied almost literally, has proved to be. There is great necessity if the law is to have a fair chance to avoid the pitfalls which the Sherman Act has disclosed in the course of sixteen years' working.

Mr Deakin - What is the particular weakness to which the honorable gentleman refers ?

Mr WATSON - I refer to the difficulty of proving that any person or corporation wilfully monopolizes or intends to monopolize.

Mr McCay - The Sherman Act practically broke up the then favorite form of monopolies.

Mr WATSON - Just so ; but the point is that, while it broke them up inone form, they immediately assumed another, and successfully evaded the law. The Court decided in a case where the articles of agreement of a company gave some indication of a purpose to monopolize, that its operations were against the law, and then other companies, working just as much injury to the people, gave no such indication of their purpose, and thereby escaped scot-free. That is a condition of things which we should endeavour to meet in the framing of the provisions of this measure.

Mr Isaacs - I think that later cases have gone a little beyond that.

Mr WATSON - I have some quotations here, issued some months ago, by a very competent man, which cover cases of the character I have indicated of so recent a date as up to the end of last year. I shall have pleasure later in showing them to the Attorney-General.I have thought it right to call attention to the deficiencies in the Sherman Act, which are continued in this measure, but whether it is possible to remedy them I am exceedingly doubtful. I know of no measure we can draft which would be sufficiently comprehensive to get at a combine of the character of the beef trusts within our own borders. If such a measure can be suggested I shall be very glad to see the way to deal with such combines pointed out. There is another part of the measure - Part III., referring to dumping - which I can support, and from which I believe some good will result. I do not wish to go into the whole question of free trade and protection, but I will say that I was glad last night to hear the deputy leader of the Opposition admit that there can be dumping of a character which would be ruinous to the industries and welfare of the community. The honorable member did not say that dumping had arrived at that stage yet in Australia, but I understood him to admit that he could conceive of dumping of that character. That being so, I think it will be admitted that there is not the same degree of interference with fiscal matters in this measure as some honorable members seemed at first to imagine. I do not assume that the honorable member for Parramatta would utter such sentiments if he thought they would injure his faith in free-trade, which I know has been very strong for a long time past. But even if the measure involved the whole fiscal issue, I should still say that we are justified in making some effort to save our industries from unfair competition from abroad.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - My point is that where competition ceases monopoly begins.

Mr WATSON - If there is the slightest evidence of a monopoly amongst our local manufacturers I shall be one of the first to take any step that will dispose of that monopoly in the interests of the people. I am as strongly opposed as any one can be to our local manufacturers taking advantage of the market to the detriment of the consumers ; but I say that while we have some chance of dealing with the man or men who attempt to monopolize trade locally, I see no other way than that proposed in this, Bill, or some proposal akin to it, by which we can deal with those who attempt unfair competition from outside our borders.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Does the honorable member not think that it would have been a fair thing for the Government to wait until the Tariff Commission had reported?

Sir William Lyne - No, certainly not.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I was not asking the Minister. The honorable gentleman, I know, wants a placard.

Mr WATSON - So far as the report of the Tariff Commission is concerned, at most it can only deal with one or two industries, and the principle will remain just the same, whether the Tariff Commission reports adversely, or not, with respect to the conditions in those industries. The question whether Mr. McKay, who makes harvesters, is being unfairly competed with is to my mind, a small matter compared with the general principle involved in legislation of this character. I feel strongly that we should take steps to protect local industry against competition that is provedto be unfair. I am not one of those who say that our manufacturers should be encouraged by methods of this description to do without the latest machinery. . But surely if it is shown to the satisfaction of a competent authority that unfair methods are being resorted to, with a view, not of se- curing a share of the market, but of taking complete charge of it to the eventual detriment of the consumer, we are justified in taking drastic steps to prevent such a position of affairs being brought about.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The figures supplied by the Minister show that that is not the case, so far.

Mr WATSON - In that event nothing can be proved before a competent authority, and the Bill will be inoperative. As to the constitution of the tribunal which is to decide the question of unfair competition, the Government have not, in my opinion, offered an adequate suggestion in this Bill. I was one of those who last session protested against the idea thata Minister should be allowed to appoint one, two, or three men to give a decision in matters of this sort.

Mr Deakin - We did endeavour to discover if the services of a Judge could be obtained, and the difficulty pointed out was that it would not be a judicial decision.

Mr WATSON - I want to say that it is for this Parliament to say what the duties of the Judges shall be.

Mr Deakin - But we must put them in such a form that their performance of their duties will involve the giving of a judicial decision.

Mr WATSON - We should put them in such a form as to prevent the Judges being placed in an undignified position.

Mr Deakin - Not an undignified position, but an extra-judicial position.

Mr WATSON - They are asked in the Arbitration Act to decide matters of an extra judicial character, beyond the mere interpretation of law and concerning matters of fact. There is no greater departure from established usage in asking a Justice of the High Court to decide matters arising under this measure than in asking him to adjudicate in matters arising under the Arbitration Act. There is the same weighing of evidence, and commercial considerations should enter into the decision of industrial arbitration matters as largely as into the decision of cases arising under this measure.

Sir William Lyne - I quite agree with the honorable gentleman that these matters should be dealt with bv a Judge if that can possibly be arranged.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Of course, the honorable gentleman agrees with the honorable member for Bland.

Sir William Lyne - That is agreeing with a better man- than is the honorable member for Parramatta.

Mr WATSON - I understood members of the Government to say during the diebate that a Justice of the High Court had been approached in this connexion.

Mr Deakin - Yes, last year.

Mr WATSON - And that. the Government had received no encouragement.

Mr Deakin - It was pointed out that the first proposal, as we were able to draft it then, did not involve a judicial decision, and that in order that a Judge might be able to discharge the duties cast upon him it was necessary that the measure should take such a form, and we were not then able to discover such a form.

Mr WATSON - I do not care what form the proposal takes so long as some competent and responsible person is charged with the duty of deciding matters so important. Personally, I object strenuously to placing the whole prospects of the commercial community - because it might amount to that at one time or another - in the hands of individuals - appointed temporarily at the whim of a Minister, no matter how upright and honorable he might be - and who necessarily in the circumstances would not be possessed: of that sense of responsibility which it seems to me is essential to the authority deciding matters of such great importance.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Then the honorable member agrees with the Attorney-General who favoured the appointment of a Judge.

Mr WATSON - I stated last session that I thought that a Justice of the High Court should be appointed, and in replv to the suggestion that a Justice of the High Court would not be available, I said that I would prefer that Judges of the Supreme Court of the States should be asked to do the work rather than that it should be handed over to private individuals temporarily appointed.

Mr Batchelor - The objection is to persons being temporarily appointed.

Mr WATSON - That is my objection. If we took men already in the Civil Service, or appointed men to permanent positions of this description, we should no doubt get men as reliable in every way as are the Justices of the High Court.

Mr Batchelor - And probably more competent for this purpose.

Mr WATSON - But we do not antici pate that cases under this measure will be of such frequency as to justify the making of new and permanent appointments for this purpose. There does not seem to be any justification for that.

Sir William Lyne - In addition, I intend to propose an amendment in reference to the jury matter.

Mr WATSON - I am quite agreeable to that. The Canadian method of dealing with trusts within the borders of the Dominion, as instanced by the right honorable member for Adelaide some considerable time ago, is to refer the question of Tariff to a Supreme CourtJudge, and I think that the Minister acts on the report of that Judge as to whether the Tariff should or should not be lowered. At any rate, reliance is placed on a Judge in regard to a matter which is, to some extent, extrajudicial.

Sir William Lyne - Is that in connexion with the interpretation of the' Tariff ?

Mr WATSON - No; in regard to whether, in order to circumvent trust operations in a particular industry, the Tariff shall or shall not be lowered. Power is given to lower the Tariff under certain conditions.

Sir William Lyne - New Zealand has an arrangement something like that, which expires next October.

Mr WATSON - I do not remember the New Zealand provision, but there seems to be a necessity for some alteration of the Bill, and as the Government is prepared to make an alteration, I am satisfied.

Mr Batchelor - Has the Government dropped its proposalalready?

Mr WATSON - I took the Minister to say that he is prepared to make an alteration in this respect.

Sir William Lyne - In regard to what matter ?

Mr WATSON - The tribunal.

Sir William Lyne - Certainly. I say most distinctly that I prefer a Judge to a board, and I wish to alter the provision about the jury so as to make the jury a permanent one.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The Minister is always willing to take a hint from the right quarter.

Mr WATSON - I do not think that I need detain the House with regard to the other portions of the Bill. I think that, like myself, most of the members of the party with which I am associated are willing to give legislation of this character a fair trial, and to assist the Government in making it as effective as it can be made. Although I have no great hope that it will prove advantageous, it is only reasonable that a step which has been tried elsewhere for dealing with evils such as trusts and combines should be tried here, with a view to demonstrating its real character.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Then the honorable member is only enacting a farce.

Mr WATSON - The honorable gentleman himself is always farcical.

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