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Thursday, 24 September 1942

Senator ASHLEY (New South WalesPostmasterGeneral) . - The approach by the Opposition to the budget debate has been characterized by carping criticism such as we expect from honorable senators opposite. Of that 1 have no complaint to make,, because when members of the present Government sat in opposition they adopted a similar attitude. Whatever excuses may be made for carping criticism in peacetime, I shall leave to those who indulge in it to determine the" degree to which it should be tolerated in a time of war. I am alarmed by many mis-statements which have been made by some honorable senators opposite during this debate. As I proceed I shall correct some of them.' The principal offender in this respect has been the Leader of the Opposition (Senator McLeay). I do not suggest that he wilfully endeavoured to mislead the Senate; but the discrepancies in the figures which he quoted in his speech were so obvious that I checked them up.. My suspicions were justified. The honorable senator declared that, during, the first two years of war, when the Menzies Government was in office, the cost of living rose by 7.9 per cent., whilst after the present Government had been in office for six or seven months it increased by 10 per cent. He added that he understood that the latest figures taken out in July showed an increase of 17.9' per cent. It became obvious that the honorable senator was camouflaging his argument when he spoke of the six or seven months since the present Government took office, because every honorable senator knows that those figures are returned quarterly. In any case, the figures which he gave are totally incorrect. They are not based on factual compilation. Whilst some honorable senators opposite may consider it to be good political propaganda to discredit the Government whenever they get the opportunity to do so, I remind them that they owe a duty to the people of this country at least to tell the truth when making statements in this chamber. I have secured from the Commonwealth Statistician the cost-of-living figures for the period in question, and they disclose a totally different picture from that given by the Leader of the Opposition. They show that during the two years following the outbreak of war, the cost of living increased by 10.2 per cent., and not 7.9 per cent., as alleged by the Leader of the Opposition, whilst for the first six months after the present Government took office, the increase was 4.7 per cent., and not 10 per cent., as the honorable senator stated. In a time of national stress and peril, honorable senators opposite, and particularly their leader, should realize the responsibilities resting upon them. The honorable senator should take steps immediately to correct the figures he gave in this speech.

Sitting suspended from 6.15 to 8 p.m.

Senator ASHLEY - When the sitting was suspended, I was dealing with the cost-of-living figures given by the Leader of the Opposition (Senator McLeay) when he spoke in this debate. The honorable senator has since explained to me that the figures given by him were not intended to convey the impression that during the period in which the Menzies and Fadden Governments were in power the cost of living had increased by only 7.9 per cent.

Senator McLeay - It should have been 10 per cent.

Senator ASHLEY - I said at the beginning of my remarks that I do not think that the Leader of the Opposition deliberately tried to mislead the Senate. I also said that the total increase of 17.9 per cent, quoted by the honorable senator was correct, and I accepted it as correct, but I am concerned because the incorrect figure has gone out to the press of Australia and will be published in Hansard. I hope that the same publicity will he given to the correction that I have just made. Apart from the compilation of the figures, there was no semblance of justice or fairness in the calculations of the Leader of the Opposition. He quoted figures for the period from September to March against, the present Labour Government, and compared them with a different period of the previous year, but to obtain an accurate estimate of the cost of living, we must take two similar periods in two different years. Senator McLeay selected periods for comparison without any regard to the fluctuations that occur as the result of seasonal conditions. If the Senate is to be informed of the correct fluctuations in the cost of living and the increase as between the Menzies and Fadden Governments and the Curtin Government, the only method of securing an accurate comparison is to take the same period in each case.

Senator McLeay - The apology is accepted.

Senator ASHLEY - I made no apology. I said that I accepted the honorable senator's correction of his own figures, but I object to his unfair method of making comparisons. From September. 1940, to March, 1941, the cost of living increased by 3.7 per cent. For the six months from September, 1941, to March, 1942, the increase was 4.7 per cent., despite the fact that during the latter period Japan came into the war. Regardless of the government in power, the safety of Australia required the acceleration and intensification of the manufacture of arms, munitions and equipment in order properly to defend the country. The increase of only 1 per cent, in the cost of living compared with twelve months previously is not only significant but also, I suggest, indicates quite a satisfactory position so far as the Curtin Government is concerned.

The budget provides for an estimated expenditure of £549,000,000, of which £109,000,000 is for civil and £440,000,000 for war expenditure. On the expenditure side there has been no complaint whatever from the Opposition. I take that as a compliment to the Government led by Mr. John Curtin. The Opposition say, in effect, that they do not in any way criticize the expenditure of this Governor! en t, which is at least endeavouring to defend this country properly, and spend its finances in a wise manner. That, is a compliment from the Opposition. The receipts from revenue are estimated at £249,000,000, leaving a deficit of £300,000,000. Honorable senators opposite have made many protests in regard to the £300,000,000, which they call a gap, and various other names. They are very perturbed about it, but not one constructive suggestion for improving the methods adopted by the present Government has come from them. Opposition senators say that we spent £100,000,000 more than we budgeted for last year. If honorable senators opposite had been in office when Japan came into the war, they would not have been stopped by the lack of £100,000,000 from taking effective steps to defend. Australia. If it had cost £200,000,000 or £300,000.000 more, and they knew that, by the expenditure of that, amount they were helping to defend Australia, the expenditure would have been incurred.

Senator Leckie - Who objected to this Government, spending it?

Senator ASHLEY - The honorable senator was one of the main objectors.

Senator Herbert Hays - We approved it.

Senator ASHLEY - Honorable senators opposite would not approve anything that this Government did. Their criticism throughout the debate has justified the exposure that took place in the House of Representatives a night or two ago, when there was produced a letter in which the Leader of the Opposition (Mr. Fadden) asked each member on his side to state what fault he could find with the Government. I admit that £300,000,000 is a large sum of money and that the Government is confronted with the big task of raising it. I accept the declaration of the Leader of the Opposition of his sympathy with the Government in that task, and also his promise that neither he nor any other member of the Opposition will attempt to retard the Government's war effort. However, 1 tell honorable senators opposite frankly that something more than mere declara tions are required, when this country faces the gravest danger that has ever confronted it. We want something practical. I can remember that in the early part of the war and later when the Menzies and Fadden Governments were in office we went on to the platform and asked the people of Australia to help the Government by subscribing to war loans and war savings certificates.

Senator Leckie - We were doing the same thing.

Senator ASHLEY - I hope that the honorable senator will continue to do so. He will only be doing his duty if he does. I said a leeway of £300,000,000 is indicated in the budget, which is a huge sura for the limited population of 7,000,000 to provide, but we were faced last year with a deficiency of £120,000,000, and the fears now being expressed in this chamber were expressed last year. The people of Australia, however, showed their confidence in the Labour Government by over-subscribing the amount asked for, without any assistance whatever from the trading banks. Senator Spicer in his criticism of the budget referred to what he called the Treasurer's simplicity. I have here the printed budget, speech for 1941-42 delivered on the 25th September, 1941, by the Right Honorable A. W. Fadden, Prime Minister and Treasurer of the Commonwealth of Australia. Senator Spicer said in his sarcastic manner that the present Treasurer had done correctly a simple sum to this effect : " We received £120,000,000 last year and. if we double that we will be a long way on our way ". I draw attention to what the Treasurer said in 1941. These are his words -

The total amount to be borrowed in Australia for war is therefore £122.000.000 compared with about £80,000,000 in 1940-41.

He does not even give the actual amount. He simply says, " Compared with about £60,000,000 in 1940-41". He does not even say, " We shall want, double that amount". I say definitely that the implications contained in the previous Government's financial proposals, and those of the present Treasurer are identical. Honorable senators opposite have ridiculed the proposal to raise £300,000.000 by way of loans. In fact some of them have expressed the opinion that only onehalf of that amount will be forthcoming. The Leader of the Opposition said that according to newspaper reports, a statement to that effect had been made by the Commonwealth Bank Board. I challenge the honorable senator to prove to me that any such opinion was expressed by the Commonwealth Bank Board. Obviously, the Opposition is still thinking in terms of peace-time conditions. No attempt has been made to assess the effect of war-time changes in the money market. Factors which made possible the raising of £120,000,000 in l941-42, compared with an average of about £15,000,000 during the three financial years preceding the war, include control of capital issues, control of building, restriction of imports, petrol rationing, newsprint rationing, and the reservation of many basic raw materials for war purposes. During the past six months war-time economic control has been added to by drastic restrictions affecting almost every form of civil expenditure. Control of capital issues has been tightened up to the limit and only building essential for the war effort is now permitted. Rationing has been imposed upon clothing, sugar and tea. The production of consumer goods from iron and steel, copper, industrial chemicals, rubber, cotton, tinplate, wool, &c, has been prohibited or severely restricted by governmental orders. The production of goods such as furniture, bath-heaters, vacuum cleaners and washing machines has been prohibited. Travel has been restricted, supplies of liquor have been cut, and the manufacture of hundreds of other item.-! has been restricted or prohibited. This policy must inevitably result in curtailment of excess expenditure and consequential increased savings. Evidence of this has already appeared in increased savings bank deposits for the past two months of this year amounting to £15,000,000 which is equal to a rate of £90,000,000 a year.

One of the main points made by the Leader of the Opposition was that the war should bo financed by national contributions. The 1941-42 Fadden budget - the fatal budget - provided fora scheme of compulsory loans or post-war credits by which it was hoped to raise £25,000,000, but during the year 1941-42, this Government raised an additional £75,000,000 - three times as much - by way of taxation. After all, it does not matter whether the money is raisedby taxation or compulsory loans because it comes from the same source. There has been general support for compulsory loans and post-war credits by all honorable senators opposite. In fact. Senator James McLachlan, in an elaboration of a scheme which lie propounded, said that the additional tax he suggested would represent a weekly contribution costing not more than a packet of cigarettes It has been admitted by honorable senators on the other side of the chamber that the most that could be raised by a system of compulsory loans is about £30,000,000.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - £37,000,000.

Senator ASHLEY - I am taking a figure between the £25,000,000 and the £37,000,000. My figures are based on the British rate which was also the basis used by the honorable senator. Therefore, it is apparent that had the compulsory loan scheme been brought into operation by the Fadden Government, or any other government, we should be £30,000,000 short of the £75,000,000 that has been raised by means of increased taxation. I concede that when the Fadden budget was prepared, there were no definite indications that Japan would become a belligerent. I have no wish to deny credit where credit is due, and I admit that had the Menzies and Fadden Governments expected an early entry into the war by Japan, they would have intensified the manufacture of arms, munitions and equipment. There is only a limited number of sources from which finance can be obtained. First, it may be obtained by means of taxation; secondly, from loans, whether they be voluntary or compulsory; and thirdly, by means of bank credit. I am sure that honorable senators opposite will not deny that recent governments of which they were supporters utilized bank credit to some degree. There has been every justification for the utilization of bank credit, and should the safety of this country be more gravely imperilled the justification will he even greater. I contend that this Government has met the problems of finance during the last financial year in exactly the sarnie way as the Fadden Government or any other government would have met them in similar circumstances. It is true that this Administration has made use of bank credit, but I am sure that it would have been used in the same manner had the present Opposition remained in control of the treasury bench.

Senator Follreferred to the Lakes Entrance oil-field, and I am sorry he is not in the chamber.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - He is absent on military duties.

Senator ASHLEY - Apparently he was able to leave his military duties last night when he assisted to retard our war effort by supporting the motion for the disallowance of certain National Security Regulations moved by the Leader of the Opposition. In the course of his speech., Senator Foll said, "Be fair and get on with this .undertaking, but do not attempt to give effect to your policy of socialization ". I have made inquiries regarding the Lakes Entrance oil-field. In order to make a thorough investigation of the field, arrangements were made early in 1.941, through the Australian Minister in Washington, to secure the services, in conjunction with the United States of America Bureau of Mines, of two oil technologists to report on this field. The services of Messrs. Leo Ranney and Charles Fairbank were procured for this purpose. These two gentlemen submitted a report dated the 24th July, 1941, in which they favorably assessed the prospects of recovery, over a period of not less than five years, of 1,160,000 barrels of oil, equal to 40,600,000 gallons, from a test area of 400 acres on the Lakes Entrance oil-field. They stated that this oil could be recovered on a commercial basis, and would be of asphaltic base, containing 15 per cent, of light fuel oil, 72 per cent, lubricating oil, and 13 per cent, of bitumen. The methods of development proposed were to sink a shaft of 1,200 feet by .8 feet in diameter, encased with 1 foot of concrete, and at the bottom of the shaft build a circular chamber approximately 25 feet in diameter, from which hori zontal holes of .great length were to be drilled in the oil-bearing formationEstimates submitted by Messrs. Ranney and Fairbank put the cost of doing this at £100,000, including 20,000 feet of 3-in. holes. It was anticipated that when this drilling had been carried out the project would become revenue-earn ing, but a total of 50,000 feet of drilling would be required altogether.

Following upon the receipt of the report, discussions took place between representatives of the Commonwealth and the Victorian Governments, and on the 21st August, 1941, the Premier of Victoria advised the Prime Minister that his Government would be prepared to provide a sum of £16,667, subject to the Commonwealth providing £33,333, and subject, also, to the syndicate concerned, the Austral Oil Drilling Syndicate providing £50,000. Government moneys were to be made available by way of loan. The matter was considered by ,a full Commonwealth Cabinet on the 5 th September, 1941, when it was decided to accept the proposals made by the Premier of Victoria. This decision was conveyed to the company on the 9th September, 1941. The matter was again considered by the Commonwealth Cabinet on the 25th November 1941, when the decision to provide £33,333 from Commonwealth sources was re-affirmed. It was decided, also., pending the flotation of a company by the Austral Oil Drilling Syndicate -

(i)   To arrange for the procurement of horizontal drilling equipment and accessories from the United States of America -under lease-lend (total commitment approximately £22,000).

(ii)   To retain the services of Messrs. Ranney and Fairbank, involving a total commitment of about £1,800.

(iii)   To purchase, transport and assemble electrical generating plant at a cost of approximately £10,000.

(iv)   To provide, at a later stage, necessary dollar exchange to cover the services in Australia of Messrs. Ranney, Fairbank and other Americans required for the development of the project.

It was to be understood that liability in respect of all these matters, with the exception of about £600 to cover special services to be rendered for the Commonwealth by Messrs. Ranney and Fairbank, was to be assumed by the company to be formed to develop the project. In addition, in order to expedite development, approval was given on the 23rd December, 1943., for an advance of £15,000 for preparatory work in connexion with the shaft-sinking programme.

The Austral Oil Drilling Syndicate formally intimated during April, 1942, that in view of the Government's limitation of profits, it was found impracticable to approach the public for the necessary subscriptions. The syndicate would, however, proceed with the registration of the company to be known as Lakes Oil Limited, so as to establish an entity to undertake operations when the time was propitious. Further discussions ensued between the Commonwealth and Victorian Governments, when it was decided -

(i)   To resume the area under National Security (Minerals) Regulations and to operate the project as a government enterprise.

(ii)   That the Commonwealth would provide £1.12,500 and the Victorian Government £37,500, making a total of £150,000 for the development of the project.

(iii)   That the project would be placed under the direct control of the Controller of Minerals Production.

(iv)   That the equity of the Austral Oil Drilling Syndicate be fixed as the equivalent of 25,000 fully-paid £1 shares, and that the syndicate would be entitled to a share of the profits of the enterprise in proportion to what this amount bore to the total capital invested, such total capital to include value of plant supplied by the governments.

Following on this decision, the property was resumed by order of the Controller of Minerals Production, dated the 15th May, 1942. The appointment of a supervisor then occupied the attention of both governments. It was eventually decided on the 19th June that this position should be offered to Mr. C. S. Demaine, managing director of Austral Oil Drilling Syndicate, at a salary of £750 per annum, on the understanding that Mr. Demaine and the enterprise should be subject to the general direction and control of a departmental executive comprising the Controller of Minerals Production, Mr. Newman, Mr. George Brown, Secretary, Department of Mines of Victoria, and Mr. A. C. Smith, of the Department of Supply and Development. This executive was to have power to co-opt the services, when required, of other persons, such as technical experts, including Mr. Baragwanath and Dr. Raggatt.

The Austral Oil Drilling Syndicate has made repeated representations for a variation of conditions of resumption of the property. In the main, the syndicate sought a 25 per cent, share of the profits ; a waivure of a condition under which the Commonwealth has the right at any time to purchase the syndicate's equity outright for a sum of £25,000, and a share in the management of the enterprise. A culminating stage was reached in this regard when a deputation led by the honorable member for Gippsland (Mr. Paterson) met the Minister on the 11th July. After further consideration, Mr. Paterson was informed on the 13th August that the Commonwealth Government was not at present prepared to vary the conditions, but, if the capital sum of £150,000 proved to be inadequate, further consultation would, be necessary on the part of the two governments, and when this consultation took place the question as to the proportion of the profits to which the syndicate should be entitled would receive further consideration. It was also intimated that consultation would take place as between the two governments before the Commonwealth exercised its right to purchase the equity of the syndicate, and that the syndicate could therefore be assured that, in the exercise of such right, the whole of the circumstances as they then existed would be taken into consideration. Pending the results of these representations, Mr. Demaine has not yet indicated whether he will accept the appointment of supervisor.

In the meantime, work at Lakes Entrance has been proceeding satisfactorily. At the request of the Controller of Minerals Production, Mr. Demaine has continued to exercise supervision over operations. An electric generating plant has been installed-, the boiler house has been completed, a pipe-line for water supply has been established, fuel tanks have been installed, a pilot well has been sunk to a depth of nearly 300 feet to determine structure in advance of shaft sinking, and the collar of the shaft has been completed. Work done on the pilot bore has shown that high water pressures may be anticipated on passing a depth of 200 feet. Tenders will therefore be called to cover the first 200 feet of the shaft, and steps are now being taken publicly to invite tenders.

The Government has been criticized because it has not an oil expert associated with the Lakes Entrance project. The main job at the moment is to get the shaft down 1,200 feet through high water pressures. This is a hazardous job, and the man now placed in charge, Mr. Cook, is experienced in this class of work. Mr. Demaine has had no such experience, nor for that matter is he an oil expert. He is a consulting electrical engineer by profession, and has gained a little knowledge about oil through his association with the Austral Oil Drilling Syndicate. When the shaft is sunk, Messrs. Ranney and Fairbank, the American oil technologists, are to instal the horizontal drilling equipment and to supervise operations. The Commonwealth Government can call upon the services of Dr. Raggatt, the Common wealth Geological Adviser, or Mr. Baragwanath, the Director of the Geological Survey of Victoria, for advice as required. Mr. Dem aine was offered the position of supervisor at a salary of £750 per annum. He deferred the acceptance or rejection of this offer for over two months, and then made his acceptance conditional upon the admission of various items of expenditure incurred by the Austral Oil Drilling Syndicate which are not likely to be accepted by the Commonwealth. In addition, a member of the syndicate has made it plain that the terms under which this property was resumed by the Commonwealth will be challenged in the courts, and it can be assumed, therefore, that reliance will be placed upon the evidence of Mr. Demaine to support their case. It would place the Commonwealth in an untenable position if Mr. Demaine were at the same time the Commonwealth supervisor of the Lakes Entrance project. The equity of the syndicate was fixed at the equivalent of 25,000 £1 shares. The syndicate had expended about £40,000; but, with the exception of about '£5,000, the whole of this amount has been expended on direc tors' fees, managers' fees, and overhead costs. It is not true to say that the Austral Oil Drilling Syndicate has brought this project to a stage where success could be more or less anticipated. The fact i3 that the project was languishing until the Commonwealth brought Ranney and Fairbank from America. The Commonwealth paid all expenses associated with the visit of these gentlemen, and the present plans for the development of the project by horizontal drilling methods are based entirely upon advice tendered by them. It may, therefore, be said that the Commonwealth gave a semblance of life to the corpse. Through lack of funds the Austral Oil Drilling Syndicate was unable to continue its resuscitation, and that responsibility has now been assumed by the Commonwealth and Victorian Governments.

At a special meeting of shareholders of the Austral Oil Drilling Syndicate, held on Monday, the 22nd December, 1941, Sir Richard Linton read a report, which was signed by three members of the committee. There had been some difference of opinion on the part of shareholders, and a committee was appointed to submit a report. A summary of the report is as follows : -

That shareholders, ' in consideration of special services rendered to the syndicate, make the following allocations: To Miss E. L. Lowe, 10 shares; to Mr. E. Smith, 10 shares; to Mr. J. Beveridge, 5 shares; to Mr. C. Carpenter, 5 shares; to the directors holding office on the 6th August, 1941, namely, Messrs. Ellis Davies, W. E. Foster, A. W. Imray, J. M. Stearns and C. Demaine, 40 shares each; to Mr. C. S. Demaine, £3,500 in cash.

One shareholder asked the cash position of the syndicate, to which the chairman replied: " £S00 in the bank and £5,000 on fixed deposit ". An adjourned meeting was held on the 19th January, 1942. The recommendation of the committee evidently caused dissension among the shareholders. Addressing the meeting, Sir Harold Gengoult Smith deplored the squabble taking place and advised the directors not to accept the committee's recommendations. He said he was prepared to recommend that the Government take over the whole business. That is not my suggestion, but the statement of an ex-lord mayor of the City of Melbourne who understood the position thoroughly. The Government has no desire to interfere with the Austral Oil Drilling Syndicate, but it has a duty to the people of Australia in connexion with the financing of concerns of this 'kind. It has, therefore, taken steps to protect the funds which will be invested in the industry. The Government is as desirous as honorable senators opposite to encourage the development of oil supplies in Australia, particularly flow oil.

Honorable senators may be interested in the work of the Postal Department. It will be appreciated that the war has imposed a very heavy burden on that department, but despite the many difficulties with which the department has been confronted in regard to securing adequate supplies of plant and equipment, it has not only effectively undertaken its normal job of providing and maintaining normal postal, telegraphic and telephonic services for the community, but has also met the very exceptional demands made by the fighting forces for communication facilities which are so necessary in the successful prosecution of the war. The department has co-operated in the war effort in a most definite manner and has assisted in the expansion of many industries and organizations that are associated directly with the defence, security, and welfare of the -community. Every opportunity has been taken to extend the availability of postal and telegraphic facilities throughout Australia, and since the outbreak of hostilities arrangements have been made to ensure that during the present critical times essential services shall be maintained on a full day-and-night basis. At the same time, I have been fully conscious of the imperative need for effecting economies wherever practicable, and for setting an example to the community in the avoidance of waste and the elimination of all activities which are not essential to the conduct of the war. In consonance with the recently expressed desire of the Prime Minister for a more austere way of living, the Postal Department is co-operating to the utmost possible degree. Already, as the result of a critical examination of the practice and procedure of the Postal Department, considerate time, effort and stationery have been saved, thus enabling the staff to be either released for service with the armed forces or in war-time organizations, or re-allotted to better advantage in the department. In this respect it is of interest to mention that up to date over 4,000 employees of the Postal Department have joined the fighting forces, and nearly 600 trained officers have been loaned to other Commonwealth departments to assist in war activities.

Some time ago a comprehensive review was made of all postal facilities with a view to determining the extent to which normal services could be curtailed withoutaffecting the war effort or imposing undue hardship on the community. As a result of that review, substantial economies in man power have been effected, through the withdrawal or modification of facilities which, although justified in times of peace, are not warranted during the war period, when restrictions in normal laving conditions are inescapable. Honorable senators will recall the economies in man power, material and services affected by the Postal Department and announced by the Prime Minister when the austerity appeal was launched. [Extension oftimegranted.] In considering the question of modifying peace-time arrangements, close attention has 'been paid to the possibility of employing females in many avenues previously restricted to males. These include letter sorting, delivery of correspondence, motor driving, machine telegraph operating, and ako nightattendance at telephone exchanges. As an indication of what is being accomplished in this .respect it is of interest to mention that the replacemen't of male telephone operators by women has resulted in the release of about 400 young men for the fighting services. The (matter of effecting further economies is under review, and as a result of a recent examination of the position respecting the telegraphic service it is proposed to prohibit -from the 1st October, the acceptance of tipster and betting telegrams for the duration of the war.

A critical review of telegraphic transactions indicates that since the outbreak of war, the volume of transactions ha= risen substantially. In a period of three years the business has increased by over 40 per cent. It will be appreciated that this remarkable increase of traffic has presented many difficulties in respect of both labour and plant, and in consequence the department is obliged to explore every avenue in an endeavour to effect economies. The telegraph service is being used extensively to-day for war purposes, and it is essential that such traffic should be disposed of with the least possible delay. In the circumstances, therefore, it is thought that, as tipster and betting telegrams are in no way concerned with the war effort, they should be affected immediately by any restrictions which it is thought desirable to impose. It is realized, of course, that some inconvenience will result, but this cannot be regarded as being serious. By far the greater proportion of this class of business is lodged on Friday afternoons and Saturday mornings, and it is estimated that the time of telegraphists alone in dealing with this class of traffic represents a total of over 12,000 man hours of labour annually. Not only is it necessary to incur heavy overtime expenditure in the treatment of this business, but also other traffic, some of which is of the important priority category and concerned with the war effort, is being delayed. As a further step in the direction of the conservation of telegraphic plant and man power, consideration is being given to the abolition of the lettergram service. This facility was originally introduced for the purpose of utilizing costly telegraphic plant at night time, when it would otherwise be idle. Under war-time conditions, however, the available channels on all the main telegraph routes are fully occupied, often into the early morning hours. In view of the changed circumstances therefore, it is felt that the department would be justified in suspending the lettergram service for the duration of the war. I pay a tribute to the work of the officers and staff of my department, from the Director-General of Postal Services, to the most recently appointed message boy. I. do not omit the women employees of the department. Like Senator Gibson, who occupied the position of PostmasterGeneral for many years, I have been able to observe the valuable work that they perform. People who complain of delays and inconvenience in connexion with the delivery of mails have no idea of the magnitude of the work performed by the department. I regret that last night the Senate carried a motion which has affected the department considerably, as arrangements hadbeen made for the transfer, over a period, of 1,000 males from the department to war departments.

Senator Gibson - The matter should not be discussed now; it was dealt with last night.

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