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Thursday, 30 June 1921

Senator THOMAS (NEW SOUTH WALES) . - I am against this Agreement, though on altogether different grounds from those which have influenced Senator Gardiner. I do not agree with much that the honorable senator said. I would scrap all contracts of this kind if I had my way at the present time. If we are to carry on in the old way, the Government may be said to have made a fair bargain under this Agreement. But things are very different from what they were some time ago. The last contract we had with the Orient Steam Navigation Company involved the payment of £170,000 per year for a fortnightly service. It is now proposed that we should pay £130,000 a year for a monthly service. We shall he getting considerably less relatively for tho money we pay. The reason I would scrap this Agreement is because I believe in something quite different from what is here proposed. In the first place, this is not merely a mail contract. It is rather a misnomer to speak of it as a contract for a mail service to Europe. A mail contract purely would cover the transport of mail matter to and from London and Fremantle within a certain time. The reason we are asked to pay £130,000 for a monthly service is not because of the carriage of the mails, but because of what is expected from the company besides the carriage of our mails. The Agreement is based, to a great extent, upon agreements of the past, but it is more than a mail contract. One of the conditions of the contract is that the boats must start from London, and they must go to Adelaide, Hobart, Melbourne, Sydney, and Brisbane. If this were merely a mail contract, why should it be provided that the boats must start from London and go back to London ?

Senator Russell - They must go to Tasmania for apples.

Senator THOMAS (NEW SOUTH WALES) - Why should they, if this is merely a mail contract? When the Postmaster-General makes a contract for a- mail service in a country district he asks the contractor to carry mail matter from one place to another.

Senator Senior - He sometimes insists that a certain kind, of vehicle shall be used for the carriage of the mails.

Senator THOMAS (NEW SOUTH WALES) - I admit that. It is quite clear that this is a contract for more than the carriage of mails.

Senator Russell - We get our mails carried more cheaply because the company's boat3 are able to earn other revenue than the subsidy paid for the carriage of the mails. The honorable senator would not send a boat from England to Australia with only mails on board.

Senator THOMAS (NEW SOUTH WALES) - I am not suggesting anything so ridiculous.

Senator Russell - No one can use the cargo space on the mail boats without paying for it.

Senator THOMAS (NEW SOUTH WALES) - I admit that. But -under. this Agreement the mail boats are expected to go to certain places, whether it suits them to go there or not.

Senator Wilson - To take the mails to those places.

Senator THOMAS (NEW SOUTH WALES) - If the honorable senator knew anything about the matter he would know that they do not take the mails to those places. The mails are taken out of the boat at Fremantle. I am afraid that Senator Wilson is a Rip Van Winkle. He appears to have forgotten that we have a trans-continental railway. Under the Agreement the company is not required to take the mails any further than Fremantle. There ie provision in the Agreement that the ships shall have a certain area of insulated space for the carriage of butter and other perishable produce, and it is provided that the company shall not charge more for the use of this insulated space than i3 charged by vessels other than mail boats.

Senator Senior - Is that not reasonable, in view of the subsidy paid for the carriage of the mails?

Senator THOMAS (NEW SOUTH WALES) - That is what I turn coming to. The mail boats are faster than other vessels engaged iu the carriage of perishable produce, and, therefore, those making use of the insulated space in the mail boats are given an advantage. The mail boats are run to a time schedule, and persons using them for the export of butter are in a position to say, within an hour or two, when their butter will reach London. Shippers of perishable produce, therefore, prefer to use the mail boats.

Senator Rowell - Not for the export of fruit.

Senator THOMAS (NEW SOUTH WALES) - I admit that the honorable senator speaks as an expert on that subject, but I still say that those who make use of the mail boats for the export of other perishable produce gain a decided advantage over those who 'must use the ordinary boats for the That advantage has to be paid for, and it is to be paid for by the subsidy of £130,000 which, under the Agreement, is to be paid to the Orient Company for the carriage of our mails.

Senator Russell - We previously paid £324,000, and a subsidy of £130,000 is reasonable as compared with that amount.

Senator THOMAS (NEW SOUTH WALES) - What we paid was £200,000, and that covered a period of four years. Are the poundage rates higher ?

Senator Russell - No.

Senator THOMAS (NEW SOUTH WALES) - If the poundage rates would not involve more than a subsidy, why cannot the mails be carried on that basis?

Senator Keating - The poundage rates would apply to other vessels, as well as those of the Orient Company.

Senator THOMAS (NEW SOUTH WALES) - When a subsidy is paid it benefits those who send goods to Great Britain. The percentage of butter that is shipped to Great Britain by mail boats is comparatively small, as it is about one-half of what it was before the war, because, instead of a mail boat leaving, every week, as was* the case in pre-war days, there is now only a fortnightly service.

Senator Senior - Is the .honorable senator suggesting that, this is a bad bargain?

Senator THOMAS (NEW SOUTH WALES) - From the stand, point of mails, I say that we are making a bad bargain, because the contract includes other service.

Senator Senior - The honorable senator is losing sight of the fact that Great Britain's claim for £321,000 was reduced to £200,000, because Great Britain shared in the benefits of the service.

Senator THOMAS (NEW SOUTH WALES) - I shall deal with that later, when discussing more fully the poundage rates. In connexion with the £130,000 contract we asked that boats of a certain class should trade between Australia and Great Britain throughout the year. The big shipping companies, if they had their own way, would hot send vessels of a certain class here all the year round. Before the war it was the custom of the Orient Company and the Peninsular and Oriental Steam Navigation Company to utilize their best vessels in the Australian trade for about four months, and during the remainder of the year to send vessels of a somewhat inferior type:- During ' certain periods, when the passenger traffic is slack, it would be possible for a saloon passenger to promenade the deck, and say that he was . monarch of all he surveyed, because, in some voyages,, there- would not be more than a half-a-dozen passengers on the boat. The Government, in accepting this contract, have insisted that boats of a certain class shall run throughout the year; therefore I do not think the shipping companies are asking too much, and in that respect I differ entirely with the opinions expressed by Senator Gardiner.

Senator Foster - Does the honorable senator think that the companies would conduct the service with two types of vessels, using boats of an inferior class in the off season?

Senator THOMAS (NEW SOUTH WALES) - It is the policy of the company to utilize their best boats during the busy season ; but ' under the contract they must use vessels of a certain standard. It is obvious that they would prefer to utilize the smaller boats during the slack season, and those of a more luxurious type when a larger 'number of people were travelling. Instead of paying the companies a subsidy I think it would be better to have our mails carried on a poundage basis, although there would not then be such regularity in the delivery of letters.

Senator Foster - We would have to take our chance.

Senator THOMAS (NEW SOUTH WALES) - Exactly.

Senator Payne - That would be fatal to business.

Senator THOMAS (NEW SOUTH WALES) - The money saved by carrying mails on a poundage basis could be devoted to improving the cable service, which would enable messages to be transmitted from Australia to England, and vice versd, at cheaper rates. Most of the business is at present done by cable, and is confirmed by letter.With a cheaper . cable' service business would increase, and the trans-Atlantic cable connecting with the Pacific cable by the land line which crosses Canada could be utilized, and messages sent at 3s. per word.

Senator Keating - That line is already congested.

Senator THOMAS (NEW SOUTH WALES) - It was during the war period.

Senator Russell - It still is.

Senator THOMAS (NEW SOUTH WALES) - Well, we should have another line.

Senator Keating - That would not cheapen the cost of cabling.

Senator THOMAS (NEW SOUTH WALES) - It would. Much of the expense at present incurred is in consequence of the Atlantic cable being in the hands of private companies. Sanator Keating said that the cost of cabling would not be reduced if the service were duplicated; but it must be remembered that at present a very good profit is being made.

Senator Duncan - We could not send documents by cable.

Senator THOMAS (NEW SOUTH WALES) - I know that. But commercial men are doing much of their business by cable and confirming it by letter. Under the poundage system, letters could be' delivered in Great Britain as frequently as at present. The subsidy has been used as a means of opening up trade overseas. When our forefathers first came to Australia subsidies were paid, and they were to some extent responsible for us having vessels of the present type in the trade. I am inclined to think that the Orient Company would prefer carrying mails on a poundage basis, because at present there are certain conditions which they are compelled to fulfil. If the Orient Company carried mails on that basis during the four months when the traffic is heavy, they would be able to utilize their vessels to the best advantage. When the Government enter into a contract with a shipping company it is provided that mails shall be delivered within a certain number of hours.

Senator Russell - The honorable senator must not overlook the coal position.

Senator THOMAS (NEW SOUTH WALES) - No. The number of hours occupied in transport is greater under the new contract than under the old. If we subsidize the company and compel it to deliver letters all the year round within a certain number of hours they base the time to be taken on the period occupied by the slowest boats. If a company is informed that letters must be delivered within a certain number of hours, it naturally arranges that the time occupied by the faster vessels shall not be less than that taken by the slower vessels. If the more modern ships were to complete the trip in, say, forty-eight hours less, the Government would naturally expect other vessels to make the trip in the same time. A similar understanding exists in connexion with mails delivered by coach in the back country. There would be a contract to carry mails from, say, Broken Hill to Wilcannia, in so many hours. Sometimes the journey could be done in less, and I have been on mail coaches when they would not arrive ahead of time. They did not want to exceed the contract time, which was based not on a good trip, but on the average trip. So it is with these boats. Under the poundage system, we should have for four months in the year a quicker and better service, and for the remaining eight months the possibility is that, so far as letters were concerned, we should not have quite so good a service, but even that is open to question. We should however, have more competition. The subsidy does away with competition with this kind of boat. Senator Gardiner was quite right in saying that if we give the mail boats a subsidy to carry the mails, we grant them a monopoly. They are in a ring ; they will not compete one against the other. If, however, we throw that system overboard, and simply institute poundage rates, we shall leave it open to any boat we choose to compete for the carriage of the mails. We need not give the work to boats which we consider too slow. We should give it only to those which we thought were good enough. Immediately we did that, we should have more boats coming to this country.

Senator Duncan - Does the honorable senator seriously argue that the chance of getting a few tons of mails to carry would induce ship-owners to send their ships to this country?

Senator THOMAS (NEW SOUTH WALES) - No ; we could- put the mails on any boats we chose. The mail boats have- an advantage so far as passengers are concerned when they have the subsidy. They put that all in, and have to arrive to time, and maintain a certain rate of speed, all of which has to be paid for. It is quite possible that, with the poundage system, we might not have such quick boats during a certain portion of the year, but we should have more boats competing for our trade and commerce, and we should therefore have a larger mercantile fleet coming here. At present, we have more boats than we need, if what Senator Payne told us yesterday about five Commonwealth vessels lying idle is correct. As there are more boats here at present than we need, there is no immediate necessity for more competition, but this is an abnormal time, and I am confident that the day is not far distant when we shall want more boats than are coming. There was never a time in the history of the world when Europe needed our raw material more than it does to-day. The reason why we cannot send it there is that Europe has not the money to pay for it. Still, the need is there. and the time will come when we shall want all the boats that we can possibly get. The Agreement provides that the Orient boats must go as far as Sydney and Brisbane, and can, if so desired, go to Cairns, so long as that does not interfere with their leaving Brisbane and Sydney to time. That is very kind and nice of the Agreement, but if we had poundage rates, the boats could go to Cairns if it suited them, and to Brisbane if it suited them.

Senator Senior - And if it did not suit thom, they would not call there.

Senator THOMAS (NEW SOUTH WALES) - They would not; but some other boat would go there. One reason why we have no competition in some of our ports is the subsidy we give to mail steamers. The payment or nonpayment of subsidies has been a . great question in England, but the system is being done away with now. It is pointed out that it does not help shipping, as trade and commerce is quite sufficient, and a subsidy given to a shipping company only grants it a monopoly to the disadvantage of other lines. Some years ago the Cunard Lino was subsidized by the British Government, and letters from England to the United States of America had to be carried in the Cunard boats. The White Star Line then initiated a much swifter service. Two steamers used to leave Liverpool on the same day, but the unsubsidized White Star boat would reach New York about forty -eight hours ahead of the subsidized Cunard boat. Merchandise would be put on the White Star boat and be in New York for about forty-eight hours before the letter advising of its despatch arrived. The Americans did not do anything so foolish. They paid no subsidy, but simply allowed the letters to go by the first boat that left. I believe that in America subsidies have now been, to a great extent, abolished. I stand for the poundage rates, by which we should get a better service for four' months in the year than we are getting now, and for the other eight months we should, in a very, short time, get an equally good service. The letters might not be delivered quite as regularly, but we can look forward to having a better cable service, and to the extension of the wireless system, so that that would make very little difference. I should say that the ordinary business man would prefer to do more of his business by cable than he does to-day. I stand also for cheaper cables, so that not only business men, but also people who come here on social visits may have the opportunity of using the cable service freely. It would bring us nearer to England and we should utilize it to the fullest possible extent. Immigrants are coming here, and we want them hero. We want to be in touch with the Old Land, and the Old Land wants to be in touch with us. This can be brought about if the cable service i3 cheapened, and I see no reason why it should not be if the matter is properly looked into. The money could be much better spent in that way than in paying a subsidy to mail steamers, and asking for these other things which are mentioned in the Agreement besides the carriage of mails. We should simply pay poundage rates and leave all the other matters to look after themselves. I do not expect the Government to accept my scheme at present, but the time will come when we shall all of us be a little more sensible.

Senator Russell - Perhaps we will collect our own poundage on our own beats.

Senator THOMAS (NEW SOUTH WALES) - We may. Apart from the poundage rates, the Government, in asking, as they do, for the boats to run to time, and to do other things, and to be of a certain character, have not made too bad a deal, considering the position of affairs to-day. I am glad, however, that the Agreement has not been entered into for a long period. It can be terminated by either side on giving twelve months' notice. That, I think, is a very fair provision. Failing our being prepared to go in for poundage rates, I do not see that the Government could do very much better than they have done.

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