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Wednesday, 20 May 1914


Senator GARDINER - Yes ; the contractor is getting 2s. 6d. per cubic yard for the embankment. Mr. Kelly is reported in a Sydney newspaper to have said that my statement was farcical, but I want to tell him that if he had the least knowledge about the nature of the work to be performed under the contract he . would never have agreed to give anything like 2s. 6d. per cubic yard for carting this dirt 100 feet. I am prepared to let my reputation in the matter rest with the men who have worked on railways in this country, with the men who have sunk tanks in the back country, with those who have built our roads, quarried the ores in our mines, and dug out our coal. I know what they are likely to say when I tell them that Mr. Kelly states that 4s. 6d. per cubic yard is a fair price for cuttings in the softest country that could be imagined, for the greater part of the contract, and that 2s. 6d. per cubic yard is a fair price to pay for shifting soil to an embankment. A cubic yard of stuff taken from the cutting will make 1? or 1 cubic yards in the embankment, and I may therefore safely say that 8s. per cubic yard is being paid for all stuff shifted 100-ft. on this contract. There is a gain of1s. 6d. per cubic yard on the embankments and 2s. 6d. per cubic yard on the cuttings, and at a rough estimate there will be a profit on the contract of between £20,000 and £25,000. I am making full allowance for all the difficulties connected with the contract. We are told that water has to be carted, as the work is being carried out in dry country. I never saw a railway contract in connexion with which difficulties had not to be surmounted in the carting of water. No matter where railways are constructed the water does not run up hill to the cutting; it has to be taken up to the nien who are employed in it. I want to make it quite clear that I make no complaint against Mr. Teesdale Smith. In my previous remarks I said that I looked upon him as a shrewd business man. I believe he is all that. If I were in Mr. Kelly's position, or in that of Mr. Cook, who is really the Minister responsible, I would not be prepared to run the risk of a huge claim for extras and large law costs against a man of the calibre of Mr. Teesdale Smith. So far as the difficulties of providing water is concerned, I may inform honorable senators that Bellamy's wells are within four and a half or five miles from the contract work. Mr. Smith laid down pipes to convey the water from Bellamy's wells to the work. That cost some money, but it brought the water right up to the beginning of his cuttings at 92 miles. The greater part of the cuttings and the most difficult cuttings are between the 92-mile and the 96-mile peg, so that the water has to be carried for four miles to the furthest of those cuttings. The expense in laying the pipes was justified, and the Government might have undertaken that expenditure. I can give them advice, which is not that of an engineer, that before the contract is completed they should take over the pipes from Mr. Teesdale Smith, because by doing so they would have the water at their hand. It would cost the Government more than the expense of laying the pipe track from Bellamy's wells, to have to cart the water for the additional four or five miles. The pipe track was laid for a comparatively small expenditure of perhaps about £400, and if brought the water right on to the contract. So much for the difficulty of providing water, which is one of the reasons put forward to justify the extravagant prices paid under the contract. I should not object if the Government did not accept the lowest tender for construction on this line so long as they accepted a tender under which the contractor would be in a position to pay fair money to those who worked for him. No one desires that the men working upon the construction of that railway shall be cut down to the last penny. All engaged upon it are entitled to be well paid for their services, whether they be workmen or contractors. But when contracts are let under the grossest form of favoritism that has ever yet obtained in our Public Service the Government should be prepared to put forward a legitimate reason for their action. Mr. Kelly put forward the reason that time was the essence of the contract. Senator Millen complained about my playing upon that statement and saying that time was money and that was the essence of the contract. The honorable senator wished to construe that statement into a charge of corruption, but I never intended any such thing. I intended to say what I did say, and that was that the only ground upon which time could be regarded as the- essence of the contract was that time was money. I can show this from the reports of the officers of the Department. I have here a letter from Mr. Deane, written not on the 9th February, when the contract was begun, and not in January, when the negotiations were entered into with Mr. Teesdale Smith. Mr. Deane writes -

I suggested, however, sonic time ago, to some mcn of experience, that they should go to Port Augusta and inspect the work, with a view to submitting prices.

Yet the Government have put forward the excuse to the general public that time was the essence of the contract, though their engineer was inviting men of experience - Mr. Falkingham amongst them, I suppose- to inspect the work. At that time there was nothing to prevent the publication of notices in the Sydney, Melbourne, and Adelaide newspapers of the desire of the Government to receive tenders for the construction of the line, and then every contractor would have had a fair opportunity of tendering. So that, according to an official paper laid on the table, time was not the essence of the contract. I am. aware that Mr. Kelly very cleverly tried to shift the blame on to the shoulders of the Engineer-in-Chief, Mr. Deane.


Senator Needham - He hid himself behind that officer.


Senator GARDINER - This is the Government that was going to set a better example and to restore responsible government! What is to become of our Public Service if, whenever a Department is attacked, the Minister responsible for its administration holds his officer up in front of him, and blames him for the matter complained about? The saddest aspect of Mr.Kelly's defence is that no man could rise from reading it without feeling that, in so far as he was inclined to exonerate Mr. Kelly, he must blame Mr. Deane. No man with an open mind can rise from reading the defence of the Government without feeling that if he frees the Government he must blame their EngineerinChief.


Senator Stewart - Hear, hear ! He is up to his neck in it.


Senator GARDINER - I say that, so far as the late Engineer-in-Chief is concerned, he is a man who has grown grey in the Public Service of the country, and he is not in this Parliament in a position to defend himself. If the Minister was so lost to a sense of his Ministerial duty as to refuse to speak for his officer, I am not inclined to join in the clamour against a man who is not in a position to defend himself.


Senator McDougall - This is more of the freedom of the party opposite.


Senator GARDINER - This is more of their responsible government and more of their Liberalism - entrenching themselves behind their officials. As I understand it, the duty of a Minister is to be the mouthpiece of his Department in this Parliament.


Senator Oakes - The honorable senator knows that when Mr. Kelly accepted the tender he did so on the advice of the EngineerinChief of Railways.


Senator GARDINER - But responsible government is based on the assumption that a Minister in charge of a Department is possessed of common sense.


Senator Oakes - Mr. Kelly has admitted it, and taken the responsibility in another place.


Senator GARDINER - I do not care what his words may have been, because his action has recalled to my mind with a flash an incident which was common enough in my day at school. Boys used to be asked to hold up their hands in order to show that they were clean, and , I can remember boys wiping their hands on the backs of those in front of them, and then holding them up. Mr. Kelly has been wiping his hands on the late Engineer-in-Chief, and then holding them up to show that they are clean. We are told that we should not speak of Mr. Kelly in this way. I am speaking of Mr. Kelly, as the mouthpiece of his Department, and I want to give honorable senators an idea of how careful he is of the reputation of this Parliament. It is not long ago - it was only on the 2nd May last year - that he was reported in the Sydney Morning Herald to have delivered a typical speech at Waver ley. Now he is engaged in defending his action in entering into this infamous contract - I can call it by no other term. This is the method which he adopted when attackingno less a person than Mr. Andrew Fisher, the leader of our party. He said-

Large sums of money werebeing swallowed up in contingencies. These could not be traced. But there were other forms of extravagance. They swamin champagne at both ends of the transcontinental railway line.


Senator Oakes - That is not true, is it?


Senator GARDINER - The honorable senator is either so tricky or so dense that he will not, or cannot, see the point I am making. I challenge the Government to point to one shilling of expenditure on the part of their predecessors which cannot be traced. Mr. Kelly added -

It was estimated that these two banquets cost £11,000. The banquet at the christening of Canberra cost £4,000, the Geelong Naval College cost £1,000. The course of the steamer could be traced by a stream of empty bottles. They took over Cockatoo Dock at which these was a banquet. What it cost no one seemed to know. But it must have cost a good deal, as they sacked a couple of hundred men the next day. The travelling allowance of Ministers, too, needed looking into. The arrangement of taking £400 a year for that purpose was agreed upon in the early days of the Federal Parliament. But at a very late sitting last night it was decided to pass an additional allowance per day for every day they were absent from Melbourne. A month or two was spent going round Australia. On one occasion there were only two Ministers looking after the affairs in Melbourne. Besides having all his expenses paid, £50 went to Mr. Thomas during his trip to the Northern Territory. While the Ministers were on tour electioneering, they were drawing these allowances. Mr. Fisher drew them, too. while ho went to Brisbane to take part in the strike.

That is the statement of Mr. Kelly, who now complains of public criticism of his blundering, or worse, in connexion with this contract.


Senator Oakes - What portion of his statement is not true?


Senator GARDINER - Will Senator Oakes say it is true that Mr. Fisher drew his allowance when he went to Brisbane to take part in a strike? If the rules of debate permitted me to do so, I would give that statement just the abrupt Australian denial that it ought to get. That was the method of speaking which Mr. Kelly adopted when other men were in office. Yet he now complains that we cannot attack him without degrading Parliament. How long is he going to be permitted to degrade Parliament by holding Ministerial office? There is not another Government in " Australia which would have permitted such a blunder to be passed over without demanding his resignation. But the matter is not yet finished. We are only just commencing with this trouble. We who hail from New South Wales remember the old contract system which obtained there. We have vivid recollections of the McSharry case, in which the fees of the barristers employed ran into as much as did the contract.


Senator Oakes - And we have recollections of the Prince Alfred Hospital.


Senator GARDINER - Yes, and of the railway station contract. But I was inviting special attention to the McSharry railway contract - a contract which was entered into owing to the blunder of the Minister of Railways.


Senator de Largie - Who was he ?


Senator GARDINER - I would not like to make a mistake, and, therefore, I do not care to incur the risk of mentioning a wrong name. But before proceeding further, I wish to point out that not only was a contract let to Mr. Teesdale Smith for one end of the transcontinental railway, but a contract for both ends of it. That undertaking Mr. Kelly afterwards withdrew. It was withdrawn months before Mr. Fisher said anything about the contract. Mr. Kelly also wrote a minute to his Department, in which he told his officials that all these contracts must be submitted to the Minister. I say that ifany good cause existed for letting a contract from the 100 miles to the 106 miles of the route, an equally good cause existed for letting a contract from the 106 miles to the 112 miles. But why did Mr. Kelly suddenly wake up to the fact that he must cancel by telegram a contract which had been deliberately entered into?


Senator McColl - By whom?


Senator GARDINER - By Mr. Kelly and Mr. Teesdale Smith.I would like to be perfectly sure on this matter, because Mr. Kelly, in a letter to the Crown Solicitor about this contract, said that "on the advice of Mr. Deane, he had applied the rubber stamp to it." Mr. Deane, in his first letter, wrote -

In the event of your carrying out the foregoing work to my satisfaction, it is understood that that portion of the line between 122 and 129 miles will be carried out by you under the same conditions.

To my mind, any self-respecting Government would regard that as a contract Mr. Teesdale Smith had their assurance that if he carried out his first contract to their satisfaction he would get the contract at the other end of the line. In clause c of the draft agreement will be found the following -

That in the event of the work to be carried out, performed, and completed by the contractor under this agreement, being carried out, performed, and completed by the contractor to the satisfaction of the said Engineer-in-Chief, the parties hereto will enter into an agreement similar to this agreement in respect of that section of the Kalgoorlie to Port Augusta railway lino as lies between a distance of one hundred and twenty -two (122) miles from Port Augusta aforesaid to one hundred and twentynine (129) miles from Port Augusta.

I repeat that Mr. Kelly himself, in his letter to the Crown Solicitor, stated that he had put the rubber stamp to that agreement. I want to know how the Government are going to get out of that?


Senator McColl - By whom was the agreement drawn up?


Senator GARDINER - It was drawn up, I take it, either by the Crown Solicitor or the ex-Engineer-in-Chief. It was agreed to verbally in the Minister's room in the presence of Captain Saunders, Mr. Deane, Mr. Teesdale Smith, and Mr. Kelly. The only gentleman who does not remember the matter being mentioned during the course of their conversation is Mr. Kelly. Unfortunately for the Government case, if Ministers intend to fight it in a Court, all the other parties to the conversation have put the subjectmatter of it in writing, and the Government have put it in print. Cap- tain Saunders states that when Mr. Teesdale Smith asked that the agreement . arrived at should be put in the contract, he said that the matter had been discussed in the Minister's room. But the Minister did not say so. There was no reason for him to say so. An agreement was entered into "with Mr. Teesdale . Smith, which provided that if he satisfactorily carried out one contract he should be given the other. When Mr. Kelly wrote to the Crown Solicitor, he naked the ex-Engineer-in-Chief about the prices paid in South' Australia, and on receipt of his assurance in regard to them ho says that he stamped his approval on the paper. This contract was kept a secret from the public for some time. That is responsible government, as Ministers understand it. Then, on the 26th February, after the Minister's approval had been stamped on the paper, and after the contractor had been at work for eighteen days, Mr. Kelly became actively desirous of breaking his contract with Mr. Smith. He broke it most effectually. I say that the reputation of the Commonwealth Parliament is not safe in the hands of men who will break agreements merely to suit party purposes. Even if a bad bargain had been entered into I would infinitely prefer them to see it through. I would rather that "they should see it through to the bitter end than that any Australian Ministry should earn the reputation that not only their pledged word, but even their stamped contract, cannot be taken by a contractor. That leads me up to the plant that they said was needed to carry out this work. Mr. Kelly sent a telegram cancelling the contract, and Mr. Teesdale Smith immediately sent back a protest against the cancellation. I made a rough statement to-day of the plant required to carry out the contract. It was a very rough statement. I said that very little plant was required, but I actually over-estimated the amount of plant that Mr. Smith had on the job when the contract was let to him. Senator Millen was at some trouble to quote the actual value of the plant in hand, and balanced the amount at somewhere about £11,000.







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