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Thursday, 18 May 1939

Mr JAMES (Hunter) . -In approaching this measure as it has done, the Labour party wishes it to be clearly understood that it is in no way antagonistic to the making of proper provision for the adequate defence of Australia. What Labour opposes is the method that the Government is proposing to adopt, and which to a large extent it has actually adopted, to make such provision. The lettingof contracts for the supply of munitions of war to private enterprise is, in our opinion, a cardinal error. Surely the experiences of the past in other countries, as well as in Australia, have been sufficient to make this clear. Whathas happened in almost every country of the world in connexion with the supply of munitions of war by private enterprise has been shown clearly in the reports of various authoritative commissions of inquiry. These investigating bodies have practically unanimously expressed the view that it is extremely dangerous to allow armaments to be manufactured by private enterprise. 1 direct particular attention to the report of the commission set up by the League of Nations to investigate this subject. This body was presided over by the late Mr. Arthur Henderson, who was a great lover of peace. The commission had shown beyond all question that even comparatively recently, the British, French and Czechoslovakian munitions manufacturers were supplying arms to both sides in the Sino-Japanese war. The Skoda works in Czechoslovakia were supplying munitions to China, whilst Vickers Limited were supplying them to Japan. The Skoda works, like Vickers Limited, are international in their ramifications. Lord Cecil was another notable Britisher prominent in the movement for the abolition of war. He said not long ago that there was no doubt that the armaments ring wielded a terrific power throughout the world and that it was unsafe to allow the manufacture of munitions of war to remain in the hands of private enterprise. The League of Nations disarmament commission made certain definite charges which were amply borne out by its investigations. It declared -

(1)   Armament nrma have been active in fomenting war scares and in persuading their own countries to adopt warlike policies and to increase their armaments.

(2)   Armament firms have attempted to bribe government officials both at home and abroad.

If we allow the manufacture of armaments to get into the hands of private companies in this country, we shall undoubtedly experience a repetition of the corrupt bribing practices that have beenso common in countries overseas. It is well known that troubles of this kind occurred in the United States of America. A committee of the American Senate made an important investigation into this whole subject not very long ago. It was' authorized to call for evidence from all sources. Its report clearly revealed that Ministers of the Crown had been bribed by munitions manufacturers. The inquiry into the operations of Skoda Limited revealed that five Czechoslovakian ministers had been bribed by the Skoda organization. They were, of course, dismissed, but that was like shutting the .stable door after the horses had been stolen. The League of Nations Commission also declared -

(3)   Armament firms have disseminated false reports concerning the military and naval programmes of various countries in order to stimulate armament expenditure.

(4)   Armament firms have sought to influence public opinion through the control of newspapers in their own and foreign countries.

We know very well that guns manufactured by British armament firms were sold to Turkey and were used to shoot down Australian soldiers. I have no desire te weary honorable members by referring to these numerous reports in detail. They may be read in the library. An examination of them will provide ample justification for every statement that I am making. Yet in spite of all these facts, this Government is allowing the manufacture of armaments by private enterprise. On the 4th May, the Leader of the Opposition (Mr. Curtin) asked the Treasurer a question concerning the firms which had obtained contracts for the supply of armaments. The reply to the question was made available to-day. It gave a list of 30 or 40 firms. Prominent among them is the Broken Hill Proprietary Company. That organization, as everybody knows, is allied with Imperial Chemical Industries, which manufactured large quantities of poison gas during the last war. It is deplorable that those engaged in these activities to-day are boasting that, they have invented a better poison gas for the destruction of humanity than any used in the last war. It is a pity that these organizations cannot turn the attention of their skilled employees to some better purpose. If something could be done for the benefit, rather than the destruction, of humanity, how much better off the world would be! In consequence of the ravages of the poison gas used during the last war, many thousands of unfortunate mcn are walking about our streets expectorating their lungs away. They are suffering from a complaint similar to tuberculosis. From the same cause, many others have gone to early graves.

According to Jobson's Digest, which may be seen in the Parliamentary Library, the chairman of the United Australia party, Sir Sydney Snow, is a substantial shareholder in the Broken Hill South Mining Company. The Broken Hill Proprietary Company Limited has been given a contract for the manufacture of 18-lb. streamline shells. The price quoted is £12,719 13s., and for 3-in. 20-cwt. shells, £13,428 8s. 9d. Sir Sydney Snow who, as I have said, is president of the United Australia party, is interested in this contract for these munitions. The international character of armament and munition rings has been disclosed time and time again by royal commissions, various other forms of inquiries and by the special body set up by the American Senate for this purpose. Another iron and steel magnate associated with the Broken Hill Proprietary Company Limited, Sir W. G. Duncan, a member of the Legislative Council of South Australia, will benefit from these contracts.

We are interested in the findings of these commissions and committees of inquiry. We are interested in the worldwide ramifications of armament organiza1:OnS, which, through a subsidized press, create war scares, and pit one country against another in order to increase their profits. Through their agents they will sell a battleship, aeroplanes, guns, &c, to one nation and then through its press, advise another government that it is "slipping" and should provide itself with more armaments. Thus, the business is carried on and larger dividends are earned for the shareholders of these munition enterprises. Even when war breaks out they continue their nefarious activities. They willingly supply even the enemies of their own country with military and naval equipment. Need I remind honorable members that after the evacuation of Gallipoli some of the guns which had been used with such deadly effect against Australian soldiers were found to bear tablets stating that |hey had been manufactured in Great Britain?

Mr Gander - And the lead came from Broken Hill.

Mr JAMES - As I have been reminded by the honorable member for Reid (Mr. Gander) some of the lead used in enemy ammunition came from Broken Hill. I admit that several defence contracts are to be placed with the Victorian railway workshops, but the ' amount involved is not stated. Likewise no amount is given in respect of contracts to be lodged with the New South Wales railway workshops'. The bulk of the contracts for Australia's defence requirements is to be let to private firms which are building annexes and preparing to extend their plants. It is not clear whether or not the Government is paying for the construction of these annexes. I should like to know if the Commonwealth is subsidizing £1 for £1 the erection of additions to private establishments for the manufacture of the hellish instruments of war. If the Government thinks it right to subsidize private firms which engage in the manufacture of war material, why should not similar assistance be given to government or semi-government organizations? Railway workshops, for instance, have the necessary plant to turn out shell cases and various other requirements for munitions manufacturers. Why not extend all these establishments ?

The Government has always professed itself to be anxious to do something to solve the unemployment problem. In this huge defence programme it has an excellent opportunity. The Governmentshould set up its own factories which would be conducted under strict supervision. In this way adequate supply of war equipment could be produced and the profiteering of private manufacturers would be eliminated. The State Government dockyard at Walsh Island, Newcastle, has been closed for some years. It should be re-opened and operated by the Commonwealth Government in the interests of national defence. The Minister has agreed to inspect that dockyard in company with the honorable member for Newcastle (Mr. Watkins) and myself in the near future. I hope that, as a result of that visit, the Minister will see his way clear to take the dockyard over from the State Government which, I understand, is agreeable to the proposal. It was at one time a well equipped dockyard and if it were put in commission again much of the money which it is proposed to expend on the construction of annexes to private industries would be avoided.

In the vicinity of Cessnock there are many locations eminently suited to the establishment of munition manufacturing industries. The sites would be reasonably safe from attack from the air and being situated further from the coast than many of the factories which it is proposed to subsidize, would be much more suitable for defence establishments. I strongly urge that something along the lines which I have suggested be done and that the manufacture of munitions should not be left entirely in the hands of private enterprise. If the control of the armaments industry is to be allowed to pass into the hands of private enterprise there will be grave danger of a repetition in Australia of the profiteering which has taken place in the past in other parts of the world. I for one am not prepared to allow the manufacture of armaments and munitions to be carried out in this country by any one but the Government, which has no incentive to make profits, and is actuated only by an honest desire to see that the country is adequately defended. The reports of various commissions and committees of inquiry set up to investigate the armaments industry have clearly shown that that industry is international in character and is a menace to the peace of the world. It consists of a powerful group of vested interests, the object of which is to promote competition in armaments which must inevitably lead to war. If there is no war, armaments manufacturers cannot pay dividends to their shareholders. To them human life and happiness is a secondary consideration. Their only aim is to sell at a huge profit the instruments of death which they make.

The people of this country must take a firm stand and raise their voices in protest against any attempt to introduce into Australia the system of private manufacture of armaments which leads to profiteering. Time and time again armaments from the foundries of one country have been turned against its people. There is indisputable evidence that this happened during the Great War. What a tragedy it would be if we in Australia were to supply munitions and equipment to a country which, some time in the future, turned these instruments of war upon us. We should make that impossible by demanding that the Government should assume full control of the industry, and carry out the work in its own manufacturing establishments.

At least a fair share of the defence contracts should be given to Common- wealth and State railway workshops and other semi-governmental establishments which have all the necessary machinery and equipment. For instance, the workshops of the Sydney Metropolitan Water Board are quite capable of producing at least some of the equipment and materials required under the Government's defence programme. So, also the huge .workshops of the Sydney County Council's Electric Supply Department are capable of doing various classes of heavy work under government control. The Lithgow Small Arms Factory should be extended. Why not erect a factory in a devastated coal-mining area, such as Maitland, Kurri Kurri or Cessnock, and thus alleviate much of the distress caused by unemployment? This suggestion will be put before the Minister when he visits those localities, as he has promised to do.

Another matter to which I should like to refer is one which 1 have frequently brought up in this House - the state of the coal-mining industry and the important part it could play in national defence. I understand that the honorable member for West Sydney (Mt. Beasley) when opening this debate paid a tribute to my persistence in connexion with this matter. For at least the last ten years, I have, endeavoured to get something done foi this industry. I raised the question long before the international position reached its present critical stage. Assistance should be given to the coal-mining industry, not merely in ' the interests of defence, but also with a view to alleviating the distressing conditions of people who have suffered probably more than any other class of the community. Something should be done to offset the serious setback to the coal-mining industry caused by the introduction of oil fuel, and the internal combustion engine. Despite the fact that I have brought this matter to the notice of the Government on many occasions, nothing has been done. The late Prime Minister (Mr. Lyons) visited the northern coal-fields with me, and various Ministers have done likewise. Promises were made to people on these visits, but nothing has resulted. Alleviation of distress on the coal-fields was a feature of the policy speech of the late Prime Minister at the 1934 general elections, but these areas are still in a state of desolation, and thousands of coal-miners are unemployed.

It is of "vital importance that the Government should take steps to establish the industry for the extraction of oil from coal, and thus make sure that in time of war Australia will be self-contained so far as its oil fuel supplies are concerned. The catch cry used by the United Australia party in one election campaign was " Follow Britain ". If that policy were applied in its entirety we should be making token debt payments in the way that Britain is honouring its war debt to the United States of America. I do not wish to elaborate on that, but if it is to be our policy to follow Britain let us do it by trying to make ourselves independent of foreign oil supplies. Great Britain has gone a long way towards achieving that independence. Cables from London inform us that its air force and oil-burning naval vessels use fuel obtained from coal and shale. We could do the same thing here. The Minister for Supply and Development (Mr. Casey) was asked the other day by myself and the honorable member for Gippsland (Mr. Paterson) to give the cost of a plant for the extraction of oil from coal. The honorable member for Gippsland was concerned with brown coal, and I with black coal. The reply was similar to that given by the late Prime Minister to a question asked by me in 1936, except that, whereas the late right honorable gentleman said that the cost would be between ?8,000,000 and ?9,000,000, the Minister for Supply and Development raised the figure to ?11,000,000. In 1936, I said that the late Prime Minister's reply did not conform to the information given in the House of Commons on the 25th February, 1936, by a man in a far better position than any honorable gentleman here to supply information as to the cost of a hydrogenation plant. I refer to the Secretary for Mines in the British Cabinet, Captain Crookshank. The question and answer are reported in columns 275-77, vol. 309, of the Hansard of the House of Commons, as follows: -

Mr. G.Hall asked the Secretary for Mines if be can give the monthly production of petrol at the Imperial Chemical Industries works at Billingham; and whether the works are now infull production, the total cost of the works to date, the monthly consumption of coal, and the number of work-people now employed at the plant and in the secondary industries?

C aptain Crookshank.- In reply to a question by the honorable member on the 30th July last, I gave a full statement of the position as it then existed at the Billingham plant. At that time 25,000 tons (7,500.000 gallons) of petrol had been produced. By the courtesy of Im perial Chemical Industries Limited, I am able to give the following information with regard to the present position.

Up to the present time a total of about 80,000 tons (24,000,000 gallons) has been obtained, of which approximately 36,000 tons were produced during the three months, OctoberDecember, 1935, or practically up to the full capacity of the plant as given in the earlier statement referred to. During that quarter the total quantity of coal devoted to the manufacture of petrol was 113,500 tons. In addition, tar oils from the high and low temperature carbonisation of coal were hydrogenated. My honorable friend will appreciate that during the first few months in a new plant of this kind, it is to be expected that the output may vary from month to month as modifications and adjustments to the plant need to be carried out as experience is gained of largescale operations.

The number of work-people employed at Billingham in connexion with petrol manufacture is over 2,000, and it is estimated that, in addition to miners directly engaged in producing coal for the plant, something approaching the same number may be employed in secondary industries. I have no information about the cost of the works beyond what was announced by the company in October last, when the plant was officially opened. It was then stated that the new capital expenditure amounted to about ?3,000,000.

Mr Paterson - But that was a much smaller plant.

Mr JAMES - I hope the honorable gentleman is right and that we can get a bigger one. That plant produced 36,000 tons of oil in three months, at the rate of 144,000 tons a year. That gives 43,000,000 gallons a year. If that be the product of a small plant, one big plant will supply the whole of Australia's requirements.

Mr Paterson - The plant is smaller than one which would cost ?11,000,000.

Mr JAMES - There is only one hydrogenation plant erected in England and that is the one referred to by Captain Crookshank and the Prime Minister of this country. However, let us analyse the position. In a war, tankers bringing us our oil would have to run the gauntlet of submarines for 10,000 miles. This country would soon be brought to its knees if it had to rely on such , a precarious source of fuel supply. Even if we were not left entirely without fuel, our supplies would be so limited that the price would soar even beyond the price of whisky. .

Mr Gander - And that is high enough.

Mr JAMES - Yes. I remind the House that in the last war, oil tankers were submarined as soon as they had left New York harbour. In the ItaloAbyssinian conflict, Mussolini had to pay as high as 5s. a gallon for his fuel, and the contracts contained a clause under which a captain of a tanker, if he feared that his vessel was in danger, could run it to any neutral coast, and Mussolini had to be prepared to accept delivery there. The answers that I have received to my efforts to have Australia made selfreliant in respect of fuel oil by the extraction of oil from coal are similar to the .statement made by the honorable member for Barker (Mr. Archie Cameron) in reply to an interjection by the honorable member for Reid (Mr. Gander), who is interested in this subject and has repeatedly brought it before the House, that it was extremely doubtful whether it was a commercial proposition. That was the answer that was given to me by the late Prime Minister and by the present Treasurer. Is a battleship, I should like to know, a commercial proposition? Are lighting aeroplanes commercial propositions? I3 it a commercial proposition to manufacture guns, bombs and other munitions for the destruction of human life ? No ! Why, therefore, argue on such lines ? The defence of Australia should be all-important and, even if what I advocate is not commercially sound, for our protection it should be undertaken. Of what use is it to have an air force, a mechanized army, or an oil-burning navy unless they have the means of operating? Are we to leave ourselves in such a position that after three months of war, with the country in a state of siege, we shall be able to boast, " We have an air force, but it is immobile because we have no fuel. We have a navy, but it cannot go out to engage the enemy because we have no oil " ? For ten long years I have been advocating that this country should do what is done by other countries, which have no indigenous well oil - Great Britain, Germany, Italy and Japan, to name four of them - all of which are thousands of miles nearer the oil-fields of the world than is Australia; that is to say, Ave should develop our coal and shale resources. Australia is lagging behind because the proposition is " not commercial ".

Mr Beasley - The influence of the major oil companies.

Mr JAMES - The inaction of the Government leads to the suspicion that it is in the maw of the major oil companies and dare not move. When the late Prime Minister visited Cessnock, he promised definitely that the Government would undertake the production of oil from coal. He did so after having visited the devastated areas in the northern coalfields where women - shame on us to have to say it - have no decent clothing, men are hungry and little children go bootless to school in the cold winter months. The late Prime Minister saw representatives of 7,000 youths some of whom had reached the age of 25 and had never known what it was to work. Men whose fathers are in receipt of an income of £2 10s. a fortnight are not entitled to obtain relief work or to collect the dole. Some of these unfortunate young men even marry, because they will then be entitled to relief work or the dole. These are the men whom we expect to be patriotic, to fight and die for a country which in peace time ignores their plea for work and whom 1 have to face every week-end when T return to my electorate. I am grateful to learn that the Minister for Defence (Mr. Street) has expressed his willingness to visit the Cessnock district, and I feel sure that he will endeavour to do something to assist these unfortunate people. I trust, however, that he will also give further consideration to the important problem of making this country more self-contained than it is to-day, and independent of the major oil companies, which practically hold this country in the hollow of a hand. Tests on consignments of coal despatched from the Maitland district .to Greenwich show an oil content of from 10 per cent, to 15 per cent, greater than coal obtained in Great Britain or on the Continent. Coal with an oil content of from 10 per cent, to 15 per cent, less than that in the Maitland district is handled for oil extraction on a commercial basis by other countries. Why should not we attempt it?

I also direct the attention of the Minister to the manner in which oil is stored in Newcastle in the vicinity of public schools. Complaints are made from time to time that oil tanks erected in thickly-populated areas are painted white, and are as conspicuous to aerial bombers as a rifleman's target. Moreover, they are close to schools attended by very young children. In other countries these tanks are placed underground. In mining districts, such as Newcastle, there are many abandoned mines in which oil fuel could be safely stored. In other mining districts similar storage space could be utilized. There are electric generating plants and gas works in all capital cities, all of which use large quantities of coal. The coal used for generating electricity and producing gas in Sydney is transported by rail from the coal-fields, a distance of 131 miles. In America coal is not transported over long distances for the production of electricity and gas, hut is treated at the source of supply. In Victoria coal is carried by rail from Wonthaggi to Melbourne, where it is used in generating electricity and in producing gas. Would it not be a commercial proposition for the Government to pay a subsidy to assist in the erection of plants at the pit heads, not only for the extraction of oil from coal, but also to generate electricity? The electricity could then be conveyed to Sydney by cables as is done in America, sometimes over a distance of 1,000 miles, with the assistance of boosting plants, and the gas could be carried by pipes to the point of utilization. If one of these undertakings showed a slight loss it would probably be compensated for by the profits shown on the other.[Leave to continue given.] Not only would the cities benefit, but also those engaged in farming and other rural pursuits between the two points involved would receive cheap electricity and gas which are not now available to them. Under such a system a large portion of the eastern coast of Australia could be supplied with electricity and gas. Generating plants could be erected where coal deposits abound in Victoria to many portions of Victoria, southern New South Wales, the northern district of New South Wales as far up as Werris Greek, and in the western districts, say, in the vicinity of Lithgow. In submitting propositions of this kind to the Government I never exaggerate the position. I have found Ministers sympathetic, and when some have gone overseas they have conducted investigations into certain proposals I have brought forward. I refer now more particularly to the Minister for Health (Sir Frederick Stewart) who, when Minister for Commerce, visited Great Britain and on his return submitted a very valuable report on the extraction of oil from coal. He was satisfied that it was a commercial proposition but no action was taken. The honorable gentleman visited my electorate and at the last show, which he opened, he spoke most enthusiastically of the project. In Great Britain a bounty of1d. is paid on foreign imports, and a payment of 4d. a gallon is also paid to the industry. I believe that the honorable member for Barton (Mr. Lane) and other honorable members recently visited the plant controlled by the Phoenix Oil Extractors Proprietary Limited. In a letter dated the 15th May, the chairman of directors of that company said that certain members of Parliament had visited the plant and he expressed the hope that they would convey their impressions to the Government. His letter concludes with these words, " At present we are in the ' doldrums' waiting to see if our present Government really wants the process before we go elsewhere ". Inventors in Great Britain have been compelled to go to the Continent where they have taken out patent rights of certain laboursaving devices. It would be a tragedy if that should occur in connexion with this company's proposition. The following statement gives some interesting information concerning costs: -



Tlie Phoenix Oil Extractors Proprietary Limited has written to the Prime Minister (Mr. Menzies) who has stated that the erection of a 5-ton unit for experimental purposes is a matter for private enterprise. I do not think that it is. It is one of urgent national importance and the Government should handle it. In replying to the letter from the Prime Minister, the company stated - We do not quite agree with you that the matter of erecting a 5-ton unit in order to establish a standard unit is altogether a matter for private enterprise. In some respects it is, but in a matter of such vital interest to our country such as this is, and has been looked upon as a national matter of great national importance by the Government it becomes a question as to whether the country should take any risk of losing such a valuable asset. We are of the opinion that the Government or Governments should give this every consideration.

This company is anxious to erect a standard unit, the cost of which could be inquired into. The Government of New South Wales assisted Lyon Brothers to erect a unit of a low-temperature carbonization plant. I have never seen the Phoenix plant. On the day that an inspection was made by members of Parliament I had a prior engagement, and was unable to attend. Nor do I know anything of the process used, but if it produces all that is claimed for it, it is only right and fair that the Government should instruct its experts to examine it. When I asked the Minister to instruct either Mr. Sogers or Sir David Rivett, the Commonwealth Fuel Oil Adviser, to inquire into the process, he said that the company would not give Mr. Rogers all the information he required. When representatives of the Phoenix Company waited on me on Saturday last at the Federal Members' Rooms, they informed me that before Mr. Rogers would consent to examine the plant he wished to know what catalyst was being used.

In other words he wanted to go right to the secret of the process before he would examine it. No inventor could afford to give away a secret of that kind. I do not wish to convey the impression that Mr. Rogers could not be trusted with the information, but I quite sympathize with the company in its refusal to disclose it. All that either Sir David Rivett or Mr. Rogers has to satisfy himself about is the correctness or otherwise of the claim made by these people that they can produce from 40 to 50 gallons of oil from a ton of coal, at a cost of 5.4d. a gallon.

Mr Lane - Most people who have watched these units in operation do not know how the petrol is extracted.

Mr JAMES - If the honorable member knew, and I knew, the secret of extraction, probably we also would set up plants. I can inform the honorable member that there is no sleight of hand about it; it is a scientific process.

Mr Lane - The company is asking £15,000 from the Government to develop it.

Mr JAMES - Why should not the Commonwealth Government and the State Government assist them ? As far as I can gather the process is quite a remarkable one, because in all I have read on this question - and I have read widely - I have never been able to find a reference to any other process capable of producing oil from coal under 7d. a gallon. The

Government should be prepared to make inquiries to see if the company is able to substantiate its claim that it can produce oil at 5.4d. a gallon. It has asked that Sir David Rivett or Mr. Rogers should be instructed to inspect the plant. It is not anxious to have Mr. Rogers carry out the inspection. Both Sir David Rivett and Mr. Rogers have had three trips to England to gain first-hand knowledge of processes used for the extraction of oil from coal, but it is extremely doubtful whether he is competent to deal with the subject. In this connexion I direct the attention of honorable members to the following statement issued by the board of directors of Coal Petrol Proprietary Limited, Newcastle, on the 30th April, 1936 :-

At a meeting of the board of directors Mr. Rogers was questioned by the chairman. It was suggested to Mr. Rogers that he was not competent to match his knowledge of processing the Greta coal measures with that of the Lyon Brothers, the company's experts, and Mr. Rogers made the honest and frank reply that he was not.

So much for our government expert. If he is not capable of matching his knowledge with that of two chemical engineers from Newcastle, it is time we got the two chemical engineers to advise us what to do. Both Sir David Rivett and Mr. Rogers, who have reported adversely on the extraction of oil from coal under any process they have inspected, have visited England. Is their knowledge any better than that of the English experts, who have advised their principals to go on with it?

Mr. SPEAKER (Hon. G. J. Bell).Order!The honorable member has exhausted his extended time.

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