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Tuesday, 11 May 1920

Mr J BT CATTS - Of course. This is the way in which many modern combinations are built up. A small inside ring starts a little company, and a larger company takes in the public, and the circle keeps expanding until the small inside ring is sucking blood from dozens of subsidiary companies.

We have been told that there is a secret arrangement by which the oil is sold to the British people for Admiralty purposes at a reasonable rate, and at the same time we learn that the £5,000,000 of capital su'bscribed by the British Government in 1914 is to-day worth £50,000,000. The concern must have made fabulous profits for the shares to increase in value at that rate within four or five years.

Mr Laird Smith - The Suez Canal Company has made good profits, too.

Mr J H CATTS - We are not asked to put money into the Suez Canal Company, and are not now concerned with its operations. The increase in the value of these shares is in itself prima facie evidence of profiteering to an enormous extent.

There is another reason why the proposal before us should be subjected to examination by a Committee of inquiry. At the present time members do not know what they are being asked to vote for. Probably, with the exception of the Prime Minister, there is not a member of this

House who knows where the agreement will carry us.

Mr Tudor - Nor another member of the Cabinet.

Mr J H CATTS - That is so. It is thought to be infra dig. for a Minister to submit a matter coming within his Department to -the Cabinet; Ministers take the word of a colleague, and, besides, have not time to investigate the affairs of Departments other than their own. Consequently, Parliament is asked to ratify an agreement which comes to it with the authority of virtually only one man, notwithstanding the enormous consequences that the ratification of it may have to Australia.

I have had some experience of the working of companies, and if we are not careful the experience of the Commonwealth in this matter may be similar to my own. I went to a firm of printers with a proposal for the establishment of a newspaper, which they considered a good one, and entered into a company partnership with me for its production. The articles of association seemed very favorable to me, .because, after all expenses had been paid, and the enterprise had been established on a profitable basis, I was to get a good share of the dividends. The printing firm was to print the newspaper in its own office. After I had done the bulk of the work of producing the paper for a couple of years, and had got nothing out of it, I ascertained from other printing houses what the actual cost of printing a publication like ours should be, and having done this, I put my case before the board of directors, on which I had a seat, though no controlling say in the management of the concern.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - Had they more shares than you?

Mr J H CATTS - I do not think so. I think that, like the Commonwealth Government in this case, I had the majority of the shares, but they had a majority of the directors, and that prevented me from having a controlling voice. At a meeting of the board, I said that I was tired of working for two years for nothing. I told them that they were charging from £40 to £50 per week too much for printing the paper. They told me that it meant absolute ruin to them if they lowered their charge. At any rate, after arguing the matter for a fortnight I said to them, " I do not care what you say; next Saturday is my last day with you if this cost is not cut down by at least £40 or £50." As a matter of fact, they could not carry on without me, and when I said I was done with them, without turning a hair, they knocked £40 a week off the cost of producing this little weekly paper. It was a similar arrangement to this agreement, but whereas it dealt with a few pounds, thi3 deals with millions.

Another case is that of the Australian Workers Union, which has contributed £79,000 out of a total of £130,000 capital contributed by the unionists of New South Wales for the purpose of establishing a daily Labour paper in Sydney. By the terms of the company the other unions have the right of electing the majority of the directors of the company, and the Australian Workers Union, which has contributed £79,000 out of a total of £130,000 is in a minority in regard to the control of the company.

It is quite useless for the Prime Minister (Mr. Hughes) to say that in this case the Commonwealth will have a majority of one of the shares. It has absolutely nothing to do with the issue. Everything hinges upon the terms qf the articles of association as to who has control of the concern, and under the terms of this agreement the Anglo-Persian Company is to have the control in the company to be formed in association with the Commonwealth .

There is another little sidelight on the operations of big capital. It is now fashionable for big capitalists to set up industries where they can exploit black labour down to the last point, but they have found that they cannot establish a great refinery in tropical places like Fiji, German New Guinea, or Papua, and employ their scientists there. After a couple of years the scientists get malaria or grow tired of living, in a tropical place, and bolt. Now the scheme is to exploit the coloured labour in producing the article up to a certain point, and then bring it from the tropical regions into a place like Australia and do their refining here. Thus they obtain their exploiting profits out of black labour.

We have an instance of that in the operations of the Colonial Sugar Refining Company, which, as . to the production of sugar, . is - not an Australian company, although it has -a refinery here. Its main, business of growing sugar is in Fiji, where it employs nigger labour at1s. a day under the most deplorable conditions. It brings its sugar up to a certain point of preparation by coloured labour in Fiji, and finally refines it in Australia, in some cases reshipping the refined article outside the Commonwealth. It is not paying income tax to Australia on the great bulk of its profits. These people go to a little place like Fiji, where a few interested persons have arranged with' British capitalists that they can have full control, and where they can conduct their operations with the lightest taxation in the world, and with very little interference so far as labour is concerned. They make fabulous profits out of coloured labour, and although the Colonial Sugar Refining Company finally refines its product in Australia it does not participate in thegeneral government and responsibilities of either Australia or Britain commensurate to its immense dividends earned within the Empire.

Another illustration of the operations of big capitalists is furnished by Messrs. Burns, Philp, and Company. It was an Australian company, which, with the assistance of Australians, built up an enormous business in the southern seas, but it has just formed another company and registered it in Fiji, to which its main office has been shifted'. It has transferred its great business to new territory. To all intents and purposes this company, developed in Australia, has now become a foreign firm. It is an instance of capital leaving Australia, but not while a Labour Government is in power. Its business will now be conducted from outside Australia. It will trade with Australia, but will escape its arbitration laws, and can employ black crews on its ships and develop its industries in the islands with cheap coloured labour, making enormous profits, but avoiding the payment of income tax to Australia.

The Persian Oil Company also illustrates my argument on this point. I have no doubt that we could get evidence upon the fact that they believe there are some rich deposits of oil in the South Sea Islands, and that, for the reasons I have mentioned, they will require a centre for , refining purposes. They will carry, . the crude oil to Australia, making enormous profits, not only by producing it by coloured labour, but also by carrying it here.

Mr Corser - Will it not be of advantage to Australia to have the refinery here?

Mr J H CATTS - Under the terms of the agreement I do not know whether it will be of advantage to Australia or not. I would 'be much better satisfied if a Select Committee took evidence to determine whether the agreement as a whole is a good one or not. I ask leave to continue my remarks on some future occasion.

Leave granted ; debate adjourned.

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