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Wednesday, 11 November 1914

Senator GARDINER (New South Wales) (Vice-President of the Executive Council) . - I am sorry that Senator Keating sat down without answering the objection I put forward on a previous occasion. I am afraid that this clause will not only give an advantage to the secured creditor over the unsecured creditor, but will give an unfair advantage. I would like to know on which clause of the Bill the honorable senator bases his opinion that a preference or greater security is given to the owner of real estate?

Senator Keating - I did not say that it was given directly by the Bill; I said that it was given by the law.

Senator GARDINER - This Bill, when it goes through, will become the law. I think the Committee is entitled to have the point I have raised made quite clear. Then comes the question, Are we going to deliberately put in an amendment which, if the argument is correct, will make the position a little better just for those who have the good fortune to secure a debt by a bill of sale? How would a provision of that kind work out with the farming community? Take the case of a blacksmith who is doing work for a farmer week in and week out, and who has no intention to send in his bill until the harvest is gathered. The blacksmith may make a new waggon for the farmer, knowing that when the harvest is gathered he will get paid, but the season may turn out to be a bad one, like the present season. Then some trader, with a bill of sale, will force a bankruptcy, although the bill of sale was issued after the debt to the blacksmith was incurred, and he will get a priority of claim.

Senator Keating - No.

Senator GARDINER - It is all very well for my honorable friend to say no; but I ask him to point out where it is not so.

Senator Bakhap - The mortgagee will be protected as against the blacksmith.

Senator GARDINER - I know how the mortgagee will be protected, because Senator Keating made it clear that it will be a greater security to the holder of a bill of sale.

Senator Keating - Undoubtedly.

Senator GARDINER - That is the position I want to make out. I desire to insure some protection for those people who are engaged in trading - and we have many traders in this country - without going to the trouble of registering a bill of sale. It is well known that many traders give almost unlimited credit, simply because they have full confidence in the men with whom they trade. If the amendment is carried, the danger is that a man who did work for a farmer who continued to trade, although things were getting shaky, perhaps through no fault of his own, would have a priority of claim over a blacksmith who did work for the farmer months before.

Senator Millen - The danger is there, even under your own clause.

Senator GARDINER - Exactly; but it will be accentuated, because a farmer can get no credit anywhere unless it is based on a bill of sale to secure every man who does business with him, and that will mean registration, the giving of innumerable bills of sale, and the making public of a man's position in a way which ought not to be done. As regards the conduct of business, if we lay ourselves out to give much greater security to one class of creditors than to another class, we shall compel a trader to take a bill of sale as soon as credit is given to a person. There were two propositions put forward by Senator Keating in his amendment. One of them I accepted forthwith, because I recognised its fairness; but as regards the other proposition I must stand by the clause.

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