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Thursday, 12 May 1921

The PRESIDENT (Senator the Hon T Givens -Thehonorable gentleman may submit a motion in regard tothe paper which he has just laid upon the table only by leave of the Senate. Is it the pleasure of honorable senators that the Vice-President of the Executive Council have leave to move a motion without notice ?

Several Honorable Senators. - Hear, hear !

Leave granted.

Senator RUSSELL - I do not intend to ask honorable senators to carry the motion which I am abouttosubmituntil to-morrow,but I desire tomake a statement in order that they may understand the position. I move -

Th at the Senate approves the agreement made and entered into on the 27th day of April, 1921, between His Majesty's PostmasterGeneralin and for the Commonwealth of Australia of the one part, and the Orient Steam Navigation Company Limited of the other part, for the carriage of mails and services to be performed as therein provided, a copy of which agreement has been laid upon the table of the Senate.

Senator THOMAS (NEW SOUTH WALES) - Does the honorable gentleman desire us to agree to that motion to-morrow ?

Senator RUSSELL - We intend to make an attempt in that direction.

Senator THOMAS (NEW SOUTH WALES) - If the Government desire to adjourn to-morrow for a few weeks, it is rather a stiff proposition to put before us, because it is something which is entirely new.

Senator E D MILLEN (NEW SOUTH WALES) - The agreement is being tabled now so that between the present time and to-morrow honorable senators may have an opportunity to study it and to see what action is necessary.

Senator RUSSELL - I propose to read my statement, because itrelates to a very close, technicalmatter. It is asfollows: -

The present contract with the Orient Steam Navigation -Company Limited was entered into on thel5thNovember,1907, and provided for a fortnightly mail service between Australia and Great Britain,which, alternating -with a fortnightly service entered into between the British Government and the Peninsular and Oriental Steam Navigation Company, gave us a regular weekly mail service. The Orient Company gave us twenty-four calendar months notice to terminate the contract, which will expire oh the 18th September, 1921.

In view of the approaching termination of the present agreement, negotiations were entered into by the Government with representatives of the Orient Company. The latter stated that, in their opinion, it was desirable to treat the immediate future as a transitional period, and that it would be unwise for the Commonwealth Government to enter into commitments of an onerous and far-reaching character at thepresent level of prices, whilst the same reason,combined with the uncertainty as to future revenue, would make such commitments wholly unacceptable to the company. They, therefore, proposed that an arrangement of a temporary nature, which would cover the transitional period referred to, and which could be terminated by either party giving twelve calendar months' notice at any time. Their proposal provided for thirteen despatches per annum each way at four-weekly intervals (which was the most frequent service they could give with the vessels at their disposal), and was based generally on the terms and conditions of the present contract.

The result of the negotiations was that an arrangement has been entered into under which the Orient Company have agreed to continue to carry mails under the terms of the present contract, subject to the following alterations: -

1.   That the contract be terminable on twelve months notice by either party, which may be given at any period of the year.

2.   That the company will provide a four- weekly service, instead of a fortnightly service as in the original contract.

3.   That the mail ports be Marseilles or Toulon (or other approved European port) and Fremantle, instead of Brindisi (or other approved port) and Adelaide. It may be stated here that all first class mail matter now comes from Fremantle by train, and it is proposed, apart from this agreement, to bring second class mail matter also.

4.   That the period of transit shall be632 hours out, and 644 hours in return.

This is only six' hours less each way than the present contract period between Brindisi and Adelaide, although the distance from Toulon to Fremantle is 500 miles shorter, but the company state that it is impossible to do the voyage more quickly with the coal now supplied to them, " which, they say, is the best they can get.

5.   That the subsidy be £130,000 per annum for afour-weekly service, asagainst £170,000 for a fortnightly service.

6.   The company will call at Adelaide, Melbourne,Sydney, and Brisbane, as under the present contract, and Hobart three times a year (itwas six times -under the fortnightly service), giving the Postmaster-General power to omit Hobart, as in the present contract.

7.   Refrigerated space will be provided for in four regular steamers,but if necessity arises they have power, as in the present contract, to use one other steamer which may not be refrigerated. They state that the extra steamer which they intend to use is the Ormuz, which is now being refrigerated.

8.   Instead of their charges for butter and fruit being fixed as in the present contract, the new agreement stipulated that the contractors shall not, without the written approval of the PostmasterGeneral, charge, demand, or receive, for the carriage of butter or fruit upon a mail ship, any higher rates of freight than the current ruling rates of freight charged or received (after deduction of all rebates allowed or allowable) for the carriage of butter or fruit on other lines of steam-ships regularly engaged in the trade between the ports of call in the Commonwealth and the port or ports of discharge of the mail ship.

9.   The contract is subject to the British Government arranging with the Peninsular and Oriental Company for an alternate four-weekly service, thus enabling a regular fortnightly service between Australia and Great Britain.

Articles of agreement on the lines of the present contract, amended to carry out the aforesaid alterations - omitting or modifying such conditions as the altered circumstances render inoperative or inappropriate, as, for instance, the clauses relating to the building of new ships, the option of the Postmaster-General to purchase the steamers, &c. - have been entered into.

The agreement is the best we can secure at the present time, and will provide for a regular fortnightly service (for there is little doubt but that the alternate four-weekly Peninsular and Oriental service will be arranged), and being terminable on short notice will enable the Commonwealth Government, as soon as the opportunity arises, to make provision for a service of greater frequency and travelling speed. It is subject to the approval of Parliament.

Debate (on motion by Senator Gardiner) adjourned.

Motion (by Senator Russell) proposed -

That the resumption of the debate be made an Order of the Day for to-morrow.

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