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Wednesday, 25 March 1942


Senator ARTHUR (New South Wales) . - I shall cite two or three specific instances in order to show that these regulations ate essential to the safety of Australia. Regulation 4 provides that -

Where a tribunal is satisfied, on application by any person, that, by reason of circumstances attributable to the war or the operation of any regulation made under the National Security Act 1939 or under that act as subsequently amended, the performance, or further performance, of a contract or agreement to which the person is a party, in accordance with the terms thereof, has become or is likely to become impossible, or, so far as the applicant is concerned, has become or is likely to become inequitable or unduly onerous, the tribunal may make an order cancelling the contract or agreement or may make such order as it thinks just varying the terms of the contract or agreement, or may provide for the repayment, in whole or in part, of any amount paid in pursuance of the contract or agreement.

I bring to the notice of the Government a particular contract which is governed by this regulation. First, I refer to the admission to Australia of two aliens less than twelve months ago, who became enemy aliens when Rumania entered the war. Permission for the admission of these two gentlemen was given by Senator Foll when he was Minister for the Interior. Their names are D. E. Sheaffer and J. Nacht. Shortly after their arrival in this country they combined with other aliens to form a company known as Austral Hardware Proprietary Limited. Early in July last year they entered into a contract with another company which is making a unit that is essential in every engineering workshop throughout Australia engaged in the manufacture of munitions. Prior to the war the manufacturers of this unit entered into a certain contract with the Bank of New South "Wales under which this bank secured a debenture for £7,500 over the assets of the manufacturing company. After the outbreak of war, when the owner was putting all profits back into the factory in order to speed up the production of war materials, he came into contact with the two aliens to whom I have referred, and those two gentlemen lifted the debenture from the Bank of New South Wales. Immediately after completing this transaction the same two gentlemen entered into a similar contract with another company in Sydney engaged in the manufacture of munitions, and thus secured control of another factory. In the latter case they took the factory out of the hands of two other enemy aliens, two brothers named Vider, who were interned and later released on appeal last January. Sheaffer and Nacht later purchased by contract the undertaking of A. P. Donney and Sons, . and Components Proprietary Limited when the latter company was in liquidation. When Rumania came into the war, these two men became enemy aliens and were interned last Tuesday. They immediately initiated litigation, which resulted in the holding up of the manufacture of the particular units to which I have . referred. The manufacturers undertook to carry out their part of the original contract by utilizing all profits made by them for the purchase of material from which the particular unit is manufactured. On the 17th February, however, the two aliens, in order to defeat that procedure, served a notice on . the manufacturers demanding that the debenture be reduced by the sum of £300 monthly, plus the sum of £178 every three months by way of interest at the rate of 8 per cent. The manufacturers immediately complied with that notice and posted a cheque for £300 on the 19th February. On the 11th March the two aliens served this notice on the manufacturers -

Austral Hardware Proprietary Limited hereby demands from you the payment to it forthwith of all sums of money due by you to it under and by virtue of -

(a)   Equitable Charge dated the fifteenth day of March One thousandnine hundred and thirty-eight made by you in favour of the Bank of New South Wales as varied by Variation of Mortgage made between you and Austral Hardware Proprietary Limited on the fourth day of September One thousand nine hundred and forty-one which said Equitable Charge was transferred to Austral Hardware Proprietary Limited by Assignment dated the fourteenth day of July One thousand nine hundred and forty-one, and

(b)   Equitable Charge dated the seventh day of April One thousand nine hundred and thirty-eight made by you in favour of United Dominion Export Company Proprietary Limited as varied by Variation of Mortgage made between you and Austral Hardware Proprietary Limited on the fourth day of September 1941 which said Equitable Charge was transferred to Austral Hardware Proprietary Limited by Assignment dated the eighth day of July One thousand ninehundred and forty-one.

The aforesaid sums of money including interest amount in the aggregate to the sum nf Seven thousand three hundred and seventyiour pounds seventeen shillings (£7,374 17s.) and accordingly Austral Hardware Proprietary Limited hereby demands from you the payment of the said sum of £7,374 17s. together with interest on Seven thousand two hundred and sixty pounds three shillings and seven pence (£7,200 3s. 7d. ) of such sum at the rate of eight pounds (£8) per centum per annum calculated from the eleventh day of March instant until payment.

Dated this eleventh day of March 1942.

These aliens have virtually hung up the production of a unit which is essential to munition production.


Senator Darcey - What is the unit?


Senator ARTHUR - Grinding wheels. The manufacturers supply these wheels to the following important concerns : - Garden Island, the Government Railway annexe, New Sou,th Wales, the Tramway annexe, New South Wales, Amalgamated Wireless (Australasia.) Limited, Colonial Sugar Refining Company Limited, Stewarts and Lloyds (Australia) Proprietary Limited, Broken Hill Proprietary Company Limited, General Motors-Holdens Company Limited, and i he Lithgow Small Arms Factory. The financial difficulties encountered by these manufacturers arose directly out of the war. Under these regulations these manufacturers may, therefore, secure relief from the terms of the contract with which I have dealt. If the Senate disallows these regulations these men will not be able to secure any redress whatever, and, consequently, the production of munitions will be held up. After these two aliens were interned they refused to sign a cheque last Friday, the 20th March, authorizing the payment of wages to employees of the manufacturers. Any honorable senator who votes for the disallowance of these regulations will deprive these manufacturers of the opportunity to secure relief from difficulties arising from the war, and will hold up the production of war material just as effectively as these aliens are capable of doing in the absence of regulations of this kind.

I now refer to contracts" which have been entered into by hotel licensees with the brewing companies. The latter are very well represented in Canberra at the moment. I saw here to-day Tom Watson and his henchman, Tom Murray, and also representatives of Tooheys Limited, the Tasmanian brewing interests and the Carlton "crowd". They are hanging around the lobbies to-day.


Senator Allan MacDonald - What do they want?


Senator McLeay - They have come here at the invitation of a Minister.


Senator ARTHUR - Probably they have come here with the object of trying to pass on to the public any loss involved in the latest imposition placed on the brewing trade, just as they passed on to the public the recent increases of duty on alcoholic liquors. Many hotel-keepers have entered into contracts to pay from £2,000 to £15,000 annually for hotel leases from the brewing companies. Recently their trade has been restricted by one-third. This restriction is due to war causes. It will have no effect on hotels which are run by managers for the brewing companies. Such hotels will still be able to obtain unlimited supplies. I have no doubt, however, that the restriction will be fully enforced in respect of hotel licensees who have paid thousands of pounds to tlie brewing companies under their leases. Under regulation 4 such licensees will be able to seek relief from the terms of their contracts, on the ground that their difficulties are due to war causes.

Another class of contract which comes within the ambit of these regulations is represented by that which has been entered into by Commonwealth Aircraft Components Limited, of Lidcombe, Sydney, with a number of enemy aliens in conjunction with another Sydney firm for the supply of a certain kind of hammer. These hammers are being manufactured by a firm of enemy aliens for 9s. each and are supplied to Smith, Sons and Rees, of Wentworth-avenue, Sydney. The latter firm has not a factory, but has a contract for the supply of the hammers to the Commonwealth Government at 12s. each. Surely that is a contract which is subject to war conditions, and should come within the ambit of these regulations. The disallowance of these regulations is not advisable ; in order to help the public they should be kept in force. I have given two or three instances in which they could be brought into operation, and I have also given one instance in which, if the regulations were disallowed, we should be playing into the hands of enemy aliens who, as late as Friday last, refused to sign the cheque for their employees' wages. These people are doing everything possible to restrict the production of a necessary unit which is required in munitions and other factories throughout the Commonwealth. I hope that the regulations will stand and that the Government will be allowed to go ahead with business vitally connected with our war effort.







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