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Wednesday, 25 July 1906


Mr WATSON (Bland) - I d° not agree with those who argue that only a small class of the community benefits by rapid mail communication, or that the payment of a subsidy, or the incurring of loss in some other way, is not justified to secure that end. I agree with the honorable member for North Sydney that rapid communication with other parts of the world for the conveyance of our mails, passengers, and produce, is of advantage to the whole Commonwealth, although the direct benefit may appear be confined' to a comparatively small section of the population. I think it worth while for this community to make some effort to insure rapid and regular communication, with a view to cheapening commercial transactions, and am content that that should involve a loss, such as in most cases is sure to be involved where communities are as isolated, and as distant from the markets of the world, as we are.

Of course, we may pay too great a price for the benefits of rapid communication.


Mr Wilks - Would the honorable member make a contract for a period' of ten years ?


Mr WATSON - I will deal with that matter in a moment. I am not in favour of paying an exorbitant mail subsidy such as, in relation to the benefits received, we have paid in the past. But, assuming that it is a right thing to make some sacrifice to secure a rapid and regular mail service, I am bound, in contrasting the terms of the present contract with the conditions which have previously obtained, to say that, while some of these terms are ambiguous, and should, before the completion of the arrangement, be made more exact and clearer, the contract seems to be a vast improvement on all that have preceded it. It is claimed that the Orient Steam Navigation Company has done good work for Australia, and I should be the last to deny that claim'. It entered into the trade when there was comparatively little encouragement to competition, and has served the community reasonably well. But we cannot ignore the fact that most of its boats are now -comparatively obsolete, their speed being low, and the facilities they offer not being such as the trade and position of Australia justify us in demanding. The steamers to be employed under the new contract are to be of a minimum tonnage of 11,000 tons register, which I take to mean gross register, because, as the honorable member for North Sydney has pointed out, vessels of 11,000 tons net register are very few.


Mr Wilks - A vessel of 11,000 tons net register would be about 17,000 tons gross register.


Mr WATSON - I think that it would be even larger than that. Vessels of a tonnage of 11,000 gross register would be of about the size of the White Star steamers or the largest Norddeutscher-Lloyd steamers which now visit our ports.


Mr Deakin - They will be larger than any of the Peninsular and Oriental Steam Navigation Company's steamers which come here.


Mr WATSON - They will be larger and a little faster than the largest of the Peninsular and Oriental Steam Navigation Company's steamers which come here, and may, therefore, be expected to afford greater facilities for the carriage of produce, while the saving of two and a half days on the journey will be of considerable moment, and an advantage which it is worth while to make some little sacrifice to secure. The honorable member for Dalley asked whether I favour the making of a contract for a period of ten years. In my view, it would be idle to ask a syndicate or com.pany to construct vessels for a service of this kind without offering at least a ten years' contract, because it must be remembered that these vessels will be of a special class. They must be constructed to carry a larger quantity of coal than is carried by the steamers crossing the Atlantic, because of the longer distances which they will have to travel at a comparatively high rate of speed.


Mr Deakin - And because they will have to pass through the Suez Canal.


Mr WATSON - Even if they came by way of the Cape of Good Hope, and maintained the speed which we ask for, they would have to be given special bunker space to enable them to carry the coal necessary ffor the voyage.


Mr Tudor - The vessels (trading between Australia and England coal at various ports along the route.


Mr WATSON - Yes; but they cannot coal as frequently as do the vessels crossing the Atlantic.


Mr Johnson - The proposed vessels must not draw more than 30 feet of water.


Mr WATSON - I think that the depth of water at Brindisi, and even at Sydney, does not exceed 30 feet.


Mr Mcwilliams - The other day a vessel drawing only 28 feet had to leave Sydney, and finish her coaling at Hobart.


Mr WATSON - I am glad to be able to say that the shallow patches in Port Jackson can be deepened at a comparatively small cost, and I -am under the impression that the Sydney Harbor Trust is now taking steps to get rid of the small difficulties to navigation which now exist there. For all these reasons, it will be necessary to build boats of a special class, and it would be idle to ask any firm to do that, and to enter into competition with the companies already in the trade, without offering something like reasonable security of tenure. Therefore, under the circumstances, I do not regard a period of ten years a9 too long.


Mr Wilks - Assuming that the boats have to be built.


Mr WATSON - Yes. Even if the Orient Steam Navigaion Company had tendered on similar terms regarding size and speed, it would have had to get boats specially built. In any case, we must contemplate the construction of new vessels, and be prepared to offer reasonable inducements for the use of the right class of vessels. In my opinion, the proposed new service will give conveniences to the Commonwealth far greater than we have hitherto obtained. The only question which remains, therefore, is whether its terms are likely to be fulfilled. A great deal has been said about the possibility of the tenderers being merely a speculative syndicate, which has obtained the concession with a view to hawking it through the financial world, London, and is willing to risk a certain amount because of the probability of success. I do not know sufficient of the firm of Sir James Laing and Sons to be able to express an 'Opinion on the subject.


Mr Johnson - A good many of us feel 1 doubtful upon the point.


Mr WATSON - Those of us who are not members of the Cabinet must necessarily be at a disadvantage in trying to arrive at a conclusion on this head. ' If the Government have not assured themselves of the likelihood of the contract being carried out, they have no right to ask us to indorse it, because it would be an exceedingly serious matter if we approved of the contract, losing the chance of securing other tenders, only to find that it was not to be carried out. In that case, we should have to make hurried arrangements at the last moment, and might find ourselves cornered. Therefore, it is important that the Government should know that the tenderers are me'n of substance, and not men of straw ; and they must be held responsible for the stability of those with whom they have contracted. Private members have not access to the sources of information which are available to the Government, but it is only reasonable to suppose that they have taken all possible steps to satisfy themselves that the contract, if approved by Parliament, will be carried out.


Mr Higgins - If it is not, we can still fall back on the poundage system.


Mr WATSON - I regard the poundage system as likely to be unsatisfactory.


Mr Higgins - Still, we are not likely to be cornered.


Mr WATSON - No; but. the probability is that, a few months later, we shall be in a worse -position to make a satisfactory contract than we a.re in now, when the present contract has yet some time to run. As I have said, several of the clauses in the contract appear rather ambiguous. That which relates to the making of an extra payment to the company, should the Commonwealth pass laws relating to shipping, might be mad.e much clearer. I have no doubt as to the intention, and I believe that the contract with the Orient Company contains a similar provision ; but we must look to the possibility of litigation arising, and of claims being made, under this provision. I do not anticipate that laws will be passed which will materially affect the position of oversea companies ; but there is that contingency, and the provision to meet it should be clearly expressed. It should be stated that the laws referred to in the contract are laws directly relating to shipping. Two or three other points with which I shall not deal have been brought forward by the honorable member for North Sydney and others, and the Government will do well to give them attention before the contract is finally ratified. There is before the House an amendment moved by the honorable member for Barrier, consequent, I assume, to some extent upon the information which he has gathered as Chairman of the Royal Commission which recently took evidence throughout Australia on this subject. The Commission did excellent work in making public information which was either not generally known, or imperfectly understood, by the great body of the people. It seems to me the appointment of the Commission has been abundantly justified bv the results of its investigations into the methods of the coastal steam-ship companies, which interfere with legitimate trade. In its inquiries as to the action of the Shipping Conference in England, and its effects upon Australian trade, and into the conditions of the rebate system, and in various other directions, the Commission has also done excellent work, and I am glad to join other honorable members in complimenting its members on their report, and the information contained in it.


Mr Johnson - I do not think honorable members complimented the Commission on their report, but rather congratulated the Chairman upon having delivered an excellent speech based upon such flimsy material.


Mr WATSON - Honorable members have certainly referred to the valuable information contained in the report itself, and I think that a great deal of it will prove useful, even to honorable members who may not agree with the conclusions arrived at by the Commission. With regard to the amendment, I do not sympathize with some of the objections put forward byhonorable members opposite. I have no fear whatever of Governnent ownership. Honorable members in their references to our railway management, appear to me to have shot very wide of the mark.

The railways of Australia, although they may not always have been managed with the best results, have on the whole proved of incalculably greater benefit to the people of Australia than would have 'been the case if they had been in private hands. ' The honorable member for Parramatta not very long ago, when addressing a public meet.ing, spoke about the losses that hae- been incurred in carrying on our railways, and in running our Post and Telegraph Department. When speaking of the losses involved in connexion with the Post Office, for instance, one has to look at the whole of the surrounding circumstances. It would be an easy matter to wipe off the loss to-morrow - and no one knows that better than does the honorable member for Parramatta - by cutting out the unproductive and expensive services that are now maintained upon the outskirts of civilization. But who would deliberately advocate that these conveniences, such as they are, should be withdrawn from those who are performing pioneering work in the interior of the country? So it is also with the railways.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - As a matter of fact, we have imported railway managers who have cut down the outlying services in order to produce a good balance-sheet.


Mr WATSON - I was speaking of the Post and Telegraph Department.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I say that the Post and Telegraph Department could be made ro pay.


Mr WATSON - Of course it could, but who would wish to make it pay bv adopting the most obvious means of bringing about that result - a means of which a private company would avail itself to-morrow ? It would immediately cut down the unprofitable services in connexion with which possibly it might cost half-a-crown. or even five shillings, to deliver a letter.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - That is not the only way in which the Department could be made to pay.


Mr WATSON - That is the means which, would at once appeal to a private syndicate or company. Sneaking of the railways in New South Wales, I mav point out that we have frequently run branch lines into districts, before thev were developed, with the object of opening them up, and naturally, for a time, we have incurred a, loss upon such services. A number of the so-called losses upon branch lines, however, do not really exist. The Commissioners in New South Wales - and, I suppose the same principle is adopted in other States - credit the branch lines only with their proportion of the revenue derived from the total mileage of freight, ignoring the fact that the branch lines are most important feeders of the main lines, and bring to them traffic that otherwise would not be carried on them at all. Many of the branch lines show an apparent loss, but if the railway service were considered as a whole, they would show an absolute profit. Although the loss incurred upon many branch lines aggregates hundreds of thousands of pounds, the earnings of the main lines are, in someyears, more than sufficient to counterbalance the loss That was the case lastyear. I admit that where there is a deficiency in the returns from the branch lines which do not contribute to the main-line traffic, the loss is absolute. However, the so-called losses upon branch lines frequently do not exist, and are evidences of good management rather than bad management. With all the mistakes that have been made on our railways, and with all the inefficiency that may be here and there apparent, the results, so far as the taxpayers are concerned, have been beneficial. Let us contrast the action of the States railways - the socialistic railwavs, as some people call them - during the last drought, with that of two privately-owned railways in New South. Wales.


Mr McWilliams - And also contrast it with the action of this Parliament.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) -And of the honorable member and his party.


Mr WATSON - If I remember aright. I formed one of the deputation that waited upon the Minister of Trade and Customs and asked for the suspension of the fodder duties at the time of the drought.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I bee the honorable member's pardon. I thought that he had voted against the suspension of the duties.


Mr WATSON - I do not remember as to that, but I am sure that I was a member of the deputation. I was about to point out that during the last drought, the Railways Commissioners in New South Wales reduced the freight charges upon starving stork and fodder down to an absolutely non-paving point. They carried fodder for any distance up to 1,000 miles for 2s. 6d. per ton, and conveyed stock at similarly low rates, in order to save the pastoral interests.


Mr Johnson - Nevertheless, the railways are not socialistic.


Mr WATSON - I think they are. The man who does not appreciate that fact, cannot know what Socialism is.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - They do not represent the ultimate objective of the Labour Party.


Mr WATSON - The honorable member is fond of deliberately twisting the ultimate objective of the party. As I was stating, the State railways of New South Wales carried stock at an actual loss, whilst the company that own the line between Deniliquin and Moama, earned the largest profit ever made by it. They did not make the slightest reduction of freights, but took the fullest advantage of the desperate condition of those dependent upon them. So it was also with the Silverton Tramway Company. In the same way, every private syndicate is prepared to take advantage of any conditions that may operate in its favour. However, I shall not pursue that subject further. After all, it is only a side issue.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member is not how at Surrey Hills, describing all private enterprise as sweating and robbing.


Mr WATSON - That is another instance of the honorable member's misrepresentation. I did not say that all private enterprise was sweating and robbing. I should be sorry to say anything of the kind, and I certainly did not make that statement at Surrey Hills.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member is reported as having said it.


Mr WATSON - I do not care what I am reported to have said. I said nothing that could bear any such construction. It would be such a silly thing to say. As I have before stated, I have no fear whatever of Government ownership. I believe it can be attended with as good results, from a business stand-point, as can private enterprise, whilst better results can be secured to the general public. It has been proved that an absolute monopoly exists in connexion with the Inter-State shipping trade, and immediately there is a prospect of success, I am prepared to vote for the taking over of the coastal shipping services, in order that they may be run on behalf of the public. I am convinced that the shipping companies are now bleeding consumer and producer alike, and, whenever an opportunity occurs, I am prepared to help to nationalize these services, because I believe that that course would be in the best interests of the people. It has been proved that a monopoly exists, and that overcharging has taken place. For this reason, I think that it would conduce to the welfare of the people if they could have the service in their own hands, instead of their being at the mercy of a set of private individuals who, no matter how well-intentioned they may be, are primarily looking after their own pockets. I do not agree with those of my colleagues in the Labour Party who believe that there is the same grave necessity ' for the Commonwealth purchasing or constructing steamers in order to establish a State-owned oversea service. In the first place, it has not been demonstrated in my view that, with respect to the oversea trade, there exists a monopoly to anything like the same degree that obtains along our coasts. My conception of the necessity of Government interference, so far as the nationalization of services is concerned, is that we should undoubtedly take over a proved monopoly that may be, or probably is being, used to the detriment of the people, and that,' in cases where it is demonstrated that the services could be more economically performed on behalf of the people if they were run by the Government, we should be prepared to extend the sphere Government operations. It has not been demonstrated to my satisfaction that a monopoly exists in respect to our oversea trade.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I thought that the honorable member said recently that the trade was governed by the shipping ring in London.


Mr WATSON - A shipping conference exists, but whether, as a united body, it exercises common control over the freight of the mail steamers I am not prepared to say.


Mr Thomas - It exercises control over all outward cargo from England, but not over our exports.


Mr WATSON -That shows that there is some little flaw in the organization of the monopoly. They have not been able to arrange for the full control of the cargo from Australia. Whilst I know that a great ship-owners' ring exists, and that the freight steamers work under some arrangement, the distinct' competition! that has lately taken place between the mail steamers and ordinary cargo tramps, indicates that there is not a monopoly in the same measure that such exists in connexion with our coastal trade.


Mr Thomas - They have a monopoly of the cargo from England to Australia, but not in respect of that from Australia to England.


Mr WATSON - Until this new company entered the arena there did seem to be a combine between the various companies interested in the running of mail steamers. That was evidenced by the fact that when, some eighteen months ago, we invited tenders for the carriage of our mails to Europe, we received practically only that sent in by the Orient Steam Navigation Company. I take it that the advent of this new company is an indication that the monopoly is not complete


Mr McDonald - The PostmasterGeneral will not promise to insert in the contract a clause that the company shall not join the combine.


Mr WATSON - I intended to refer later on to that point. I repeat that the advent of this new company is an indication, to my mind, that the monopoly is not yet complete, and that is why we should gather more information in regard to the whole position before entering upon the construction and running of a Commonwealth line of mail steamers.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Meantime, the general election will be over.


Mr WATSON - I dare say that the honorable member is already congratulating himself upon the fact that at the next general election the opposition shown to the Labour Party by steam-ship owners engaged in the coasting trade, whose concerns should be nationalized, is likely to be more strenuous than that which will be shown to us by the few people interested in steamers trading between Australia and England. The honorable member must have a very poor idea of electoral possibilities if he pretends to believe that my attitude is dictated by considerations as to the next general election. If I were out for voles, and desired to disarm opposition, I suppose that I should sooner vote for the nationalization of this service than for the nationalization of the shipping services engaged in the coastal trade. I should be quite prepared to risk the course suggested by the honorable member for Barrier if the only alternative were that there should be a continuance of our dependence upon one company, already a member of the shipping conference.


Mr Thomas - I do not think that this agreement will come off, so that we may yet claim the honorable member's vote.


Mr WATSON - That is another question. The agreement now before us places a different complexion upon the matter. I am faced with the position that, under it, the Government will have power to at any time take over the vessels of the company. At any moment the Government may step in and say, " This service shall be nationalized." The Postmaster-General is also to have the right of supervising in some degree the building of the steamers necessary for the service. I take it that he will be able to insist on any alterations necessary to make the vessels suitable for this service.


Mr Thomas - There is no answer from the Minister.


Mr Austin Chapman - The whole matter is explained in the papers.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Then, notwithstand ing the denials, it is, after all, a socialistic sop.


Mr WATSON - If it is2 I think that it is a very good provision.. The honorable member for Parramatta said yesterday that he was not opposing the amendment moved by the honorable member for Barrier because of theoretical reasons - he opposed it because, in his opinion, the figures submitted did not demonstrate its practicability. The honorable member for North Sydney also said this afternoon that he did not deny that a time might arrive when it would be absolutely necessary for the Government to take over the vessels of the company, and conduct the service. He said, so far as I can remember, that if it were shown that there existed a monopoly which was detrimental to the interests of Australia it might be necessary for us to step in.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - In fact, there is nothing between us.


Mr WATSON - If that be so, there are surely abundant reasons for providing that the Government shall have' the power to step in and resume these vessels when sufficient cause is demonstrated. I am faced with the position that, on the one hand, we have an opportunity to secure a contract that is far and away superior to that now existing, whilst the alternative is to vote against that contract in favour of a proposal to nationalize the service, although we know that there is not a majority in the House to carry that proposal into effect. It is clear that there is not a majority in the House in favour of nationalizing the service, so that if I were to vote against the acceptance of this contract I should stand ai fairly good chance of sacrificing the substance for the shadow. The substance is of such value to the people that I am prepared to accept it, conditionally of course, on the assurance of the Government that the contract will be carried out - that those behind it are men of substance, and able to insure its 'fulfilment.


Mr Mahon - We ought to provide for Australian seamen being employed on board these steamers.


Mr WATSON - I agree with the honorable member, just as I think that the British Government will, later on, find it necessary to insert in their own postal contracts a provision for the employment of a minimum proportion of British subjects on their mail steamers. A stipulation of that kind ought to be made in connexion with all subsidized lines. If we are to be guided by articles which have appeared during the last, year or two in the press and the magazines of Great Britain, there has arisen there a strong feeling that an effort should be made to maintain the reserve upon which the navy must depend in the event of any real trouble arising.


Mr Thomas - That is a recommendation by a Select Committee of the House of Commons.


Mr WATSON - It is a very proper one. Every other nation attends to the matter, and I fail to see why we should be any less exacting in that regard. The power to take over the vessels engaged in the service tides us over any difficulty that may reasonably be advanced. If the1 new company joins the shipping conference, and takes part in an attempt to exact unfair conditions from our producers - if it fails to give reasonable facilities for the transport of perishable products to the old world - then, under the terms of the contract, as soon as there is in Parliament a majority in favour of the Government stepping in, the will of that majority can prevail. In spite of all that the so-called anti-Socialists may say, I have no doubt that, if the monopolistic system that has obtained were continued by the new company, there would be found in Parliament a majority iri favour of action being taken in that direction. It would be most unfortunate for Australia if the producers were allowed to be at the mercy of any combination of private.individuals in respect of the oversea trade. This very useful provision offers a way out, as soon as it is found that a majority of the Parliament are of opinion that the Government should step in. In all these circumstances, I intend to vote for the acceptance of the contract.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I wish to make a personal explanation. I made an allusion a few minutes ago to a speech delivered at Surrey Hills recently by the honorable member for Bland. I think I said that on the occasion in question the honorable member referred to private enterprise as being synonymous with sweating and robbery, and I find that I made a mistake in regard to only one word. What the honorable member said was this--


Mr Watson - What I am reported to have said.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Yes.


Mr Watson - Perhaps the honorable member will allow me to state what I did say.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I am quoting from the Worker.


Mr Watson - The Worker is not more accurate than is any other paper.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - It seems never to be accurate, according to the honorable member.


Mr Crouch - On a point of order, I wish to know, Mr. Speaker, whether, since the honorable member for Bland has denied the statement attributed to him, and has asserted that he was misreported, it is competent for the honorable member for Parramatta to read from a newspaper an absolutely contradictory statement.


Mr SPEAKER - I do not know what the honorable member for Parramatta intends to read, but he claims that he has been misunderstood or misrepresented, and is therefore entitled to make an explanation.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - What the honorable member for Bland said in the course of what is described as " an eloquent exposition of the labour platform " was this -

Mr. Reid,who was afraid to declare his policy for fear some one should steal it; Mr. Joseph Cook, Sydney Daily Telegrafh, and the rest of them, supported and advocated private enterprise with its sweating conditions and pay.......

I am justified in assuming from that statement that the honorable member used the two terms as synonymous.


Mr Watson - No.


Mr Webster - Oh, no ; it would apply only to the honorable member for Parramatta.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - I am glad, at all events, to have the Webster revision of the speech. The honorable member for Bland said, at any rate, that those who believed in private enterprise believed in sweating conditions and sweating pay. Clearly the inference is that the two terms are synonymous.


Mr SPEAKER - Order ! I would point out that any honorable member has a right to make a personal explanation in order to remove a misapprehension, but he is not entitled, under cover of a personal explanation, to attempt to prove something that has been disputed. If the honorable member desires to do that, I cannot allow him to do so.







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