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Wednesday, 23 March 1904

Sir WILLIAM LYNE (Hume) (Minister for Trade and Customs) . - I move -

That the Bill be now read a second time.

In dealing with this matter I hope to be able to compress what I have to say in as short a space as possible, principally because on a previous occasion, the right honorable member for Adelaide moved the second reading of an 'almost identical measure, and, in the course of his speech, dealt with numerous points. In submitting this Bill, however, it is impossible to avoid touching upon some of those points and its salient features. It is, perhaps, scarcely necessary for me to recapitulate what has occurred in connexion with it. It will be remembered that when the Tariff was under review in the first Parliament, the consideration of this particular portion of it was not completed. I refer to the matter now, because some honorable members urge that in introducing this Bill, the Government are re-opening the fiscal question. I think I may fairly claim that we are not doing so. When the measure was originally submitted by the right honorable member for Adelaide, he spoke in these terms -

The Bill which honorable members have before them is intended to complete the scheme of encouragement to local manufactures, which was foreshadowed and discussed in connexion with Division' VIA. of the Tariff.

These remarks show conclusively that at that time it was fully intended that this matter should be dealt with in order to make the Tariff complete. I hold, therefore, that we are not reviving the fiscal issue, but simply fulfilling a promise.

Mr Page - The Minister has already stated that the Bill forms a part of the Tariff.

Sir WILLIAM LYNE - I have, but other honorable members declare that it is not, and that is why I am again referring to the matter.

Mr Page - The honorable gentleman is flogging a dead horse.

Sir WILLIAM LYNE - I am doing nothing of the kind. I am rather surprised at the attitude of the honorable member for Maranoa, because if ever there was a case which should appeal to free-traders it is one of this character. To a very large extent a bounty is a free trade inducement to establish industries. Throughout the Commonwealth - and, indeed, throughout the world - free-traders have advocated the granting of bounties in preference to the adoption of a protective Tariff. I am astonished to hear free-traders speak of a bounty as if it were a duty-

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - This Bill raises the financial question as well as the fiscal issue.

Sir WILLIAM LYNE - the honorable member is perfectly aware that the measure is necessary to the completion of the Tariff, and the Government would be to blame if they did 'not submit it. Its consideration was not completed last session, chiefly because the Select Committee which was subsequently converted into a Royal Commission, the right honorable member for Adelaide being chairman, had not completed its labours when Parliament was prorogued. Its report is favorable to the passing of a Bill of this character.' The only new provision in the measure is one which was recommended by the Commission.

Mr Kingston - The right of purchase provision ?

Sir WILLIAM LYNE - Yes. That is the only feature in which it differs from the Bill which was submitted by the right honorable member for Adelaide. The report of the Commission, to which I have referred, contains -some very useful suggestions. It states -

Your Commissioners do not lose sight of the fact that the bonus system in Canada was accompanied by a duty on imports. Your Commissioners, however, do not recommend the immediate imposition of a Customs duty, as, pending 2 d 2 a local supply sufficient for Australian requirements, the result might be to temporarily raise the price to the consumer, which should be avoided.

In this connexion I would further point out that in 1891, when the New South Wales Tariff was introduced, a duty was imposed upon pig iron, but, realizing what was evidently in the minds of the Commissioners who recently investigated this matter, the State Government of the day did not make the duty effective until twelve months later. The delay in bringing it into operation was intended to enable those who contemplated the establishment of ironworks to carry out their purpose. The object thus sought to be attained was to avoid the price being raised before the works had been established. The works, however, were not established, and at the expiration of twelve months the fear that the imposition of the duty in the event of the non-establishment of works would cause the price of pig iron to be raised was realized. The duty remained, and as there was no local output, the price was no doubt increased. This Bill will obviate the possibility of the repetition of such an experience. When the matter was before the last Parliament, the question of the power of the Commonwealth to embark upon the industry was raised, and was subsequently considered by the Commission. The Commission obtained the opinion of the Attorney-General, and that opinion, which is given in an appendix to the report, is to the effect that the undertaking is one which the Commonwealth Government could not enter upon. The question first arose in connexion with the proposal that the industry should be a State monopoly, and that if any of the States refused to establish the necessary works the Commonwealth should step in and commence operations. In the opinion of the Attorney-General, however:, the Federal Government could not take action in that direction. The report of the Commission, which is a very valuable one, is signed by the Chairman, the Right Honorable C. C. Kingston, as well as by Mr. Littleton E. Groom, Mr. J. Whiteside McCay,. Mr. Samuel Mauger, the late Sir Edward Braddon - who dissented from paragraph b of section 20 - and Mr. David Watkins. There is also a minority report.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Signed by the same number of members.

Sir WILLIAM LYNE - Quite so. I cannot refrain,, however, from expressing my surprise that the honorable member for

Bland should have attached his signature to the minority report, which is also signed by Mr. W. M. Hughes, Mr. Samuel Winter - Cooke, Mr. J. W. Kirwan, Mr. George W. Fuller, and Mr. Joseph Cook. That report practically seeks to prevent the establishment of the industry save by a State Government.

Mr Conroy - Do the Government propose to raise the money necessary for the payment of these bounties by means of direct taxation ?

Sir WILLIAM LYNE - When the honorable and learned member puts a pertinent question to me I shall be prepared to answer it. I am not dealing with the point raised by him at the present time, but at a later stage I shall place before him and honorable members generally some interesting particulars relative to the history of the industry in other parts of the world. lt appears to me that there are some persons in this community who decline to take cognisance of what has been done in this direction in other parts of the world, and who refuse to recognise that it is only by the giving of bounties, or the imposition of protective duties, that we can foster and encourage an industry which is perhaps second to none. Before going into details as to the history of the industry elsewhere, I would point out that the report of those who dissent from our proposal sets forth that -

There can be no guarantee that the bonuses proposed would permanently establish the industry, though it is probable the inducements offered might be instrumental in forming speculative companies.

The only parallel case to which we can turn shows that the industry can be established only in the way proposed bv us. In Canada the iron industry was created by the giving of bonuses as well as by the imposition of a duty, and I intend to place before honorable members some information as to the present output of pig iron in that part of the Empire, as well as the number of persons now employed in the industry there, as the direct result of the fostering influences of a system of bounties. Although free-traders may object to the imposition of a duty on pig iron, in this they cannot base their opposition to the Bill, inasmuch as we simply propose for the time being to give bounties.

Mr Kelly - To tax the many for the benefit of the few.

Sir WILLIAM LYNE - The honorable member, if I may be allowed to say so, has not been long enough in the world of politics, nor has he sufficiently studied questions of political economy, to enable him to express an opinion on that point. The question is one that is exercising larger minds than that of the honorable member.

Mr Kelly - Do the Government say that direct taxation will be necessary in order to provide these bounties?

Sir WILLIAM LYNE - I contend that in the end the adoption of this policy will reduce taxation - that the majority will not be taxed for the benefit of the few. The result of the giving of bounties is similar to that which follows the imposition of any properly applied protective duty - as soon' as the industry which it is designed to foster has been established, the general body of the people are benefited, and the riches of the few are certainly not increased.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - What does the minority report say?

Sir WILLIAM LYNE - It is useless for the honorable member to interrupt me, for I do not propose to allow him to lead me off the track. The question is a serious one, and demands something more than the mere smiles of honorable members of the Opposition, who evidently do not care what happens to the labouring classes.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The Government will find it a very serious matter before thev have finished with it.

Sir WILLIAM LYNE - Not in the sense suggested by the honorable member.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The leader of the Labour Party is opposed to the proposal.

Sir WILLIAM LYNE - I have already expressed my surprise that the leader of the Labour Party should have signed the minority report.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I think that the honorable member showed his wisdom by signing it>

Sir WILLIAM LYNE - If the honorable member will restrain himself I shall esteem it a favour. I propose to put forward facts which will show that, although the honorable member for Bland may be doing what he believes to' be right in assenting to the minority report, he is really inflicting an injury on the class that he represents.

Mr Page - The Labour Party represents not a class, but the masses.

Sir WILLIAM LYNE - Whether the honorable member chooses to say that lie represents the labouring classes, or that lie represents the masses, the fact remains that he and his party represent a class. I have touched on the main features of the report, which strongly advocates the establishment of the industry on the lines proposed in the Bill placed before the last Parliament, but suggests that provision should be made to enable a State Government to take over the industry. We have adopted that suggestion, which is to be found embodied in clauses 8 and 9. Clause 8 provides -

1.   All bounties in respect of pig iron, puddled bar iron, or steel, shall be granted on the condition that the manufacturer shall, if required pursuant to this Act, assign as hereinafter provided the lands, buildings, plant, machinery, appliances, and material used in the manufacture of the goods.

2.   The Governor of the State in which the manufacturer manufactures the goods may, if thereto authorized by an Act of the Parliament of the State, by order published in the Government Gazette of the State, direct the manufacturer to assign to the State the lands, building, plant, machinery, appliances, and material used in the manufacture, and upon the publication of the order, the same shall, by force of this Act, be assigned to and vested in the State accordingly. 3- The State shall compensate the manufacturer for the value of the lands, buildings, plant, machinery, appliances, and material at such valuation as is agreed upon, or as is in default of agreement settled by arbitration in the manner described.

Then in clause. 9 it is provided that -

The Minister for Trade and Customs may, so soon as he is satisfied that the manufacture of any goods mentioned in section six has been sufficiently established in the Commonwealth within the meaning of Division VIa. of the schedule to the Customs Tariff 1902, certify accordingly.

This is a slight departure from the provisions of the first Bill, and the only other alteration relates to the dates in the schedule. I referred just now to the establishment of the iron industry in Canada, where for a considerable time past the authorities have been dealing with this question. It was in 1883 that the Canadian Government introduced a system of bounties; and they continued to pay certain bounties up to the year 1899. At the end of that period it was proposed that they should be continued until 30th June, 1907, at a yearly diminishing rate; that 90 per cent, should be paid in 1902-3, and 75 per cent, in 1903-4, and that further reductions should be made every year until in 1906-7 only 20 per cent, should be paid. But by an Act passed in the year 1903 it was decided that the bounties should be continued until 30th June, 1907, subject to annual reductions as follows : - Ninety per cent, to be paid in 1903-4 ; 75 per cent, in 1904-5; 55 per cent. 1905-6; arid 35 per cent, in 1906-7. It. has been urged that the proposal to assist investors to establish a great undertaking of this kind is a most improper one. But during the whole of the period I have named - from 1883 to 1902 - the total money paid by way of bounties in Canada was only £642,840. If honorable members give the matter a moment's consideration they will recognise that, spread over so long a period, the sum thus paid away by the Canadian Government, in order to establish the industry, was not a very large one. For very many years I have taken a great interest in the establishment of this industry in New South Wales. An agreement was practically entered into between the Blythe River Company and the Government of that State to get a certain large order, so as to enable the works to be started ; but at the last moment the company said that they could not proceed with any degree of success, or certainty, or security, unless they got something more. That I declined to give, and the result was that the document was not signed.

Mr Willis - What was the something more?

Sir WILLIAM LYNE - They asked for an order to supply not only steel rails, but all manufactured iron and steel required by the Government of the State.

Mr Willis - Pipes?

Sir WILLIAM LYNE - No. I declined to give them that privilege. But the argument which was used then, and which is used now with very great force, is that not only do the company require to have an incentive to carry out these works, but powerful companies in other parts of the world should not be able to swoop down upon them at any moment with a view to destroy them, and to get the trade here.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Blythe River Company offered to erect works if the Government would give them certain conditions.

Sir WILLIAM LYNE - What that company were willing to do was to take their chance to a certain extent. The offer was made, just before the Commonwealth was established, and of course at that time we could not deal with the Tariff in New South Wales. The company were prepared to enter into negotiations, and expected that the Commonwealth Government would protect the industry. I shall give the honorable member for North Sydney another reason why it is necessary to help the starting of this industry. No doubt he is aware that the works at Lithgow were started by Mr. Rutherford, of Cobb and Co., many years ago. He spent between £100,000 and ^200,000 in attempting to establish it. When he tried to sell his iron to the various houses in Sydney he was threatened that if he attempted to proceed they would import iron and sell it at a loss df £2 a ton until his works were crushed. They carried out their threat, and that is the reason why the works at Lithgow are not the great success they should be to-day.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - A fortune has been made out of the works since that time.

Sir WILLIAM LYNE - I happen to know something about the financial position of the works, and I do not know that a fortune has been made out of them. What we desire to do now is to prevent a repetition of that failure. In Canada the payment of a bonus was commenced in 1883, and it was increased to as high as 12s. 6d. per ton for pig iron. It is now reduced to ns. 3d., I think, and it is falling each year. The following table shows the production of pig iron in Canada and the United States for the years 1884 to 1902, the particulars being taken from the Canadian Year Book for 1902, page 471 : -

The annual consumption of iron and steel and their products in Canada is between 800.000 and 820.000 tons. The united investment at Sydney, Hamilton, Deseronto, Midland, New Glasgow, Radnor, Drummondville, and Ferrona, amounts to nearly ,£5,000,000, which will be increased to £7,000,000 bv new plant now building. Within five or six years the total investment will aggregate, approximately, £10,000,000 Honorable members should not forget that Canada is placed in quite a different position from Australia in this regard. The Dominion adjoins a country that is producing the most iron to-day. The Americans have simply to send their iron or steel across the border, with .the result, it may be, to sweep the industry out of existence in the Dominion.

Mr Glynn - They exported over 100,000 tons from Canada to England last vear.

Sir WILLIAM LYNE - I believe that they did. I know that they exported a great deal more from the United States.

Mr Glynn - It was a case of overproduction.

Sir WILLIAM LYNE - No, the production in Canada is not equal to the requirements, as I shall- show the honorable and learned member presently. In the United States the iron industry was started under the fostering influence, not so much of a bonus, as of a very high tariff, which honorable members opposite, as freetraders, would object to very much more strongly than they , would to a bonus.

Mr Glynn - They had 100 per cent, in


Sir WILLIAM LYNE - The United States produced 7,120,362 tons of iron ore in 1887, 16,036,043 tons in 1890, and 24,6831173 tons in 1899 - not double, but a third more than any other nation in the world - under the strong, influence of a high protective policy. If any nation is competing with other nations successfully, it is the United States, whose iron industry is not only supplying local requirements, but is undercutting, selling, and destroying the industry in other countries in which there is no bonus or duty to protect it.

Mr Thomas - This is raising the fiscal question.

Sir WILLIAM LYNE - It is simply raised in connexion with the completion of the Tariff. The honorable member is fond of a joke, and he is only joking now.

Mr Page - The Government will not find that it is a joke when a vote is taken.

Sir WILLIAM LYNE - We shall see about that. If honorable members are determined to destroy or stop the establishment of the industry that is not my fault. The Government are compelled in the interests of the people of this country, more particularly the labouring classes, to see that an opportunity is given to deal with an important question of this kind. I have not been able to get the returns for the United States since 1899, but I have no doubt that during the last three or four years the figures for that year have been very much added to. In 1899 Germany produced 17,970,679 tons, Great Britain only 14,461,330 tons, France 5,067,500 tons, Spain 9,234,302 tons,' and Russia 4,871,461 tons. I have quoted the returns for the principal iron-producing countries. I think that the figures ought to show honorable members what a danger the industry might run here if it were not protected or assisted in some measure against a nation like the United States, producing as it does that immense quantity of iron each year. There is great necessity to deal with a question of this kind. The production of pig-iron in Canada amounted to 341,554 tons in 1902. I have stated the production in the United States in 1902 to be 19,959,856 tons; and the world's total production for the same year was 49,072,065 tons. It is well known to honorable members that the right to grant bounties is vested in the Parliament of the Commonwealth. If we could say to the States, " You have the power to give this industry a bounty," there might be some reason in any one saying that the Federal Government should not deal with the question, but under the terms of the Constitution that cannot be done. Therefore the grave responsibility is thrown upon this Parliament of seeing that the apathy that has hitherto prevailed does not continue. In regard to the employment which would be given, some years ago I ' had some interviews with a large iron manufacturer in Great Britain, Mr. Carson. He told me that the amount of employment would be larger in connexion with even one established iron works than has been stated in the evidence given before the Royal Commission. He also said that the output would be greater than was there stated. I find that the importation of iron into Australia amounts to about 150,000 tons a year; in addition to which, there is a further expenditure upon imported machinery. In America, 24,000,000 tons of iron ore are produced per annum, and 145,000 hands are employed. Consequently, I calculate that the number of hands employed in Australia would be 3,000. But the information I obtained from Mr. Carson in regard to the iron industry was greater than I have been able to gather from any other quarter. As he pointed out, we have not only to consider the number of men employed in producing the raw material and the manufactured article, but also the . number of hands who would have to be employed in the industries which assist in its production. They include the hands engaged in the production of coal, iri the development of lime deposits, and in obtaining the minerals for flux purposes. Mr. Carson assured me that the amount of employment would be more- than doubled - indeed, I think he said more than trebled - by the extra works which would have their nucleus in the iron industry. So that honorable members can estimate that at least 10,000 men would be employed in connexion with one iron works to produce sufficient iron for consumption in Australia in any one year.

Mr Page - How long would the men be employed ?

Sir WILLIAM LYNE - As long as the works continued ; and if the works developed, as would be the case, the amount of employment would increase.

Mr Page - Should we not rather say - " As long as the bonuses are paid " ?

Sir WILLIAM LYNE - No; and I think that honorable members are ridiculously unfair in some of their remarks as to the bonus.

Mr Page - There is no harm in asking a question.

Sir WILLIAM LYNE - The insinuations sometimes made in connexion with the bonus are unworthy of honorable members.

Mr Page - I have spoken from our past experience of bonuses in Queensland.

Sir WILLIAM LYNE - Such has not been our past experience in connexion with iron works, because they have not been established by means of bonuses in Australia.

Mr Page - It has been our experience in relation to other bonuses.

Sir WILLIAM LYNE - Bonuses have been improperly given in some cases. I know perfectly well that, for instance, in New South Wales a great deal of the money that- was voted by Parliament for the development of mines went into the pockets of the companies instead of to . the miners, as was intended, for the purpose of inducing prospecting and the development of new mines. But that is a question of administration. The provisions of this Bill are such that until the Minister is satisfied, no bonuses will be paid. He has to have good reason for believing that the industry is firmly established, or he need not do anything whatever. If a mere bogus industry is started, is it likely that the Minister will pay money to its promoters? I think that honorable members treat the integrity of the Minister and of the Government very lightly when they imagine that a Government would hand over a bonus to any company until justified in doing so. I believe that the particular company with which I was negotiating will start the works if they get the opportunity. I observe in the speech made by the right honorable member for Adelaide in moving the second reading of the Bonus Bill last year, that he stated that it was estimated that the cost of establishing the industry would range between £800,000 and ,£1,100,000.

Mr Kingston - Evidence was given to that effect.

Sir WILLIAM LYNE - Quite so. But I happen to have seen particulars of the actual amount required in one case. It was £1,100,000. The £125,000 which was stated by Mr. Sandford, of Lithgow, in his evidence, as being sufficient was simply for the production of pig iron ; whereas the £1,100,000 would be required for the production of the best class of manufactured iron - of as good a quality as that imported into the Commonwealth.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Mr. Sandford says the amount is ,£250,000 for manufactured iron.

Sir WILLIAM LYNE - I do not know whether Mr. Sandford has given that evidence; but I am assured - and in this I am supported by the statement of Mr. Carson, who I know was connected with one of the largest firms in England - that works could not be erected and made to pay properly for less than £1,000,000. He said further, that the iron industry was one which must be carried out on a large scale to make it pay, because the company would have to take small profits, and therefore would require to have a large output. That being the case the amount estimated by the right honorable member for Adelaide is fairly correct. The work may possibly be done cheaper. As low an estimate as £800,000 has been given. But experts who have had to deal with iron manufacture in the way that the Carsons have had gave a higher estimate. In addition to that, Mr. Carson told me that, though one works would supply Australia, it would be necessary to manufacture iron and steel for export, or else the works would not pay. He said that he would be prepared to run the chance of exporting iron to the western States of South America in order to keep the mill going all the year round. Under those conditions it is of vast and grave importance that we should deal with this question as early as posible. I cannot understand why there should be any objection to doing so, especially in view of the provisional clauses which I have inserted, giving a State power at any time, either by arrangement or at a valuation, to take over the iron works which may be established. But for Heaven's sake let us do something, and not remain apathetic and lethargic. We have untold riches buried in the earth producing nothing whatever. What would happen, suppose we were cut off by an enemy from the old world and could not import the iron which- we require? We should be in some such predicament as will be the case if we do not mind what we are doing in regard to our ammunition and our guns. We require iron and steel for the manufacture of these things. At present we should be almost helpless, so far as the manufacture of armament, ammunition, and other things, in which iron and steel are required, is concerned.

Mr Mcwilliams - Does the honorable gentleman think that any company would erect works, if the State had the power to take them over as soon as they were a success ?

Sir WILLIAM LYNE - I think they would.

Mr Mcwilliams - I think they would not.

Sir WILLIAM LYNE - I think they would, because I do not think the State would interfere with them. If honorable members are prepared to wait until the States, take up this question, and establish iron works, men who, are looking for work in the industry will be greyheaded before they get it, ' even although they should be young men now. It is for the Commonwealth Parliament to pass a measure of this kind to give some impetus to the establishment of ironworks

On the Blythe River, in the electorate of the honorable member for Franklin, and elsewhere. I have seen the iron mines in that district, and I am aware, from the analysis of ore sent to England, that the Blythe ore is the second richest in the world.

Mr Knox - Why spoil the Bill by introducing the option referred to? Mr. Mcwilliams. - As soon as the works are a success the State will take them over.

Sir WILLIAM LYNE - I do not think the State will touch them, and if the State does take them over, it will be in a way which will not injure the company.

Mr Kingston - There would be no confiscation.

Sir WILLIAM LYNE - Nor should there be. If men were to invest their money, and make the establishment of the industry a success, they would in any case have to put up with what the- Parliament of the State thought best in the interests of the public. One reason why this provision is inserted in the Bill is because such a strong feeling was evinced that the establishment of the iron industry should be taken up as a matter of State concern, instead of Being left to private enterprise. To meet, so far as possible, the objections of honorable members who wish the establishment of the industry to remain in abeyance until that particular time it was thought wiser to insert this provision.

Mr Kingston - I think it was agreed to on the suggestion of the honorable and learned member for Northern Melbourne, Mr. Higgins, before the Commission dealt with the matter.

Sir WILLIAM LYNE - The provision inserted in the Bill is recommended bv the Commission.

Mr Kingston - I think we had almost agreed to it before the question was referred to the Commission.


Sir WILLIAM LYNE - I believe that the right honorable and learned member for Adelaide had practically consented, if he brought in the measure again, to introduce such a provision. It would take up too much time to go generally through the report of the Commission and the evidence taken, but I propose to make some reference to the evidence given by Mr. Jamieson, Mr. Sandford, and Mr. Franki. In answer to question 664 and following questions, Mr. Jamieson said that if the Bill were passed the company proposed erecting machinery and plant, probably in New South Wales. In answer to question 670, he explained that this decision was arrived at on the recommendation of the well-known expert, Mr. Darby, from Great Britain, who reported upon' the v/hole business. I happened to meet Mr. Darby, who was brought out to Australia at the time negotiations were going on between myself and this company. What was agreed to was that 75 per cent, of Blythe River ore should be used, and 25 per cent, of a certain New South Wales ore, described in the report of Mr. Jaquet, and which was to be used to assist as a flux. According to the answer to question 673, the contemplated expenditure was ^1,109,000, to provide for the starting of works capable of an output of 500 tons of metal per day, or 150,000 tons per annum. So that' the output of this one establishment would supply the raw material required for the iron manufacturers of Australia. In answer to question 684, Mr. Jamieson said that a 15 per cent, duty all round on pig iron and steel would suit the company as well as the granting of a bonus only. That would go on after the industry was established, but, as I said previously, the object of doing it in the way proposed, is to prevent any increase of price to the manufacturer of iron, through his having to pay too high a price in the first instance for the raw material, scrap, and pig iron. Honorable members must see that that is so, because the bonus is to continue only for a certain period, and for a very short period.

Mr Cameron - Is the honorable gentleman going to give the industry the benefit of a duty after that?

Sir WILLIAM LYNE - When the bonus ceases. It will be in the discretion of the Minister to say when the industry is established, and then, by proclamation, a duty can be put on. In answer to question 688, Mr. Jamieson said that the annual consumption of pig iron in Australia amounted to 30,000 or 40,000 tons, and in answer to question 757 he said that the total consumption of iron in Australia was about 450,000 tons annually. In answer to a question in connexion with freight, 689, he said that the freightage rates were nothing in favour of the company. In answer to question 701, Mr. Jamieson said that Canada is going ahead enormously in the matter of the development of her iron resources. I have proved that by the figures I have given, showing the increased output which has taken place in Canada under the bonus and the duty also. ' In answer to question 736 he said that if ironworks were established, the local consumers of iron would probably get the material, they require as cheaply as they do now. In that connexion I -wish to point out that it is the intention of the Government - in fact a Bill is drafted now - to introduce a Bill to deal with trusts and rings. If a trust or ring were formed in Australia in any industry to increase the price in the way honorable members seem to think prices may be increased, it would come under the provisions of the proposed Bill.

Mr Cameron - Then the Government will be able to deal with the tobacco business straight away?

Sir WILLIAM LYNE - I may be going a little off the track, but, apropos of the interjection, 1 may be allowed to say, in regard to the tobacco trust, that if anything proves the necessity for legislation in regard to trusts and rings, it is the tobacco trust. ' I believe the circumstances connected with that trust will help me materially in passing through Parliament the measure to which I refer.

Mr Mcwilliams - Will the shipping rings, which now exist, also be brought under the Bill ?

Sir WILLIAM LYNE - I cannot tell the honorable member just now. I may say, however, from my experience that you scratch a Russian to find a Tartar when you touch the shippers, because they have a great deal of power. In answer to question 777, Mr. Jamieson estimated that 3,000 men would be employed during the first four months after the establishment of iron works, and that the average wages paid would be about £3 per week. On looking at the evidence, however, I find that Mr. Jamieson did not use those exact words, but said that after being in " full swing " for four months the works would employ 3,000 men. I have compared that with the number of men employed in the United States, and I find both almost exactly the same in proportion to' the number of tons produced. Mr. Jamieson was evidently quite correct in his estimate, but. as I have already pointed out,, he omitted to mention all the additional men who would find employment in the other industries necessary to make the iron industry a success. In answer to question 987, Mr. Jamieson said that the works would be in full swing two and a-half years after the passing of a law which suited the promoters; and that, I think, is as short a time as can be stipulated. I dare say that the honorable member for Kooyong knows well that works of the kind could not be established under two years, or probably two years and a-half ; and it may be taken for granted, in view of the provision in the Bill, that there will be no unnecessary delay. These are the principal pertinent points in Mr. Jamieson's evidence. Mr. Sandford is another gentleman who is, or should be, well versed in this matter, and he said, in reply to question 11 48, that with a bonus or an alternative duty the works could be started but that there was no hope of the industry being commenced without a bonus. Mr. Sandford doubtless meant that the works could not be started without a bonus or a duty, and he went on to say that a duty of 20 per cent, on iron from outside, and a duty of 10 per cent, on iron from the mother country, would enable the industry to be at once started - that if the market was guaranteed for five years, either by a bonus or by a duty, he would be willing to at once put down the plant. In answer to the last question put to him, question 1197, Mr. Sandford said if the duty and bounty disappeared, he should not be able to continue operations.

Mr Cameron - Are there any wealthy people in treaty with the Government now? Suppose this Bill be passed, will the Minister guarantee that the industry will be started ?

Sir WILLIAM LYNE - I do not like to guarantee anything ; but I believe that both Mr. Sandford and the Blythe River Company will start, one in a. small way, and the other on a large scale, if the inducements are sufficient to protect them - and that is the main point - against powerful ironmasters outside.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The bonus will not protect them.

Sir WILLIAM LYNE - Yes, it will ; if the local manufacturers have a bonus in addition to their profit, outside ironmasters will have to reduce their prices very considerably in order to compete.

Mr Kingston - The bonus ought to enable the local manufacturers to sell more cheaply.

Sir WILLIAM LYNE - That is so, and it will make the. outside "ring," which is going to flood the market at cheap rates, sell still more cheaply.

Mr o'malley - An iron industry is carried on without a bonus by Mr. Ellis, of Penguin, South Australia.

Sir WILLIAM LYNE - Where, I believe," a few horse shoes, and articles of that kind, are produced.

Mr O'Malley - The works employ thirty or forty men, at any rate.

Sir WILLIAM LYNE - I know that the works are doing no good in regard to the manufactured article; at any rate I did not know that the proprietor smelted iron, but understood that he sent it as flux to the Illawarra works. Another witness before the Royal Commission was Mr. Franki, who, in answer to question 1435, said that the capital invested in Mort's Dock, of which he is -the manager, was nearly £500,000, and that he was prepared to pay 2 J per cent, more for the locallymade iron than he paid at the present time, because ,of the greater convenience and greater certainty of the local supply. Those three men, whose evidence I have cited, should know more of matters connected with the iron industry than the other witnesses, and their testimony all tends to show that there is necessity for either a bonus or a duty. For the reasons I have already given, it is not proposed to have a duty at first - that is a step which neither I, nor, I think, the right honorable member for Adelaide favours.

Mr Kingston - Hear, hear.

Sir WILLIAM LYNE - If a duty were imposed during the period of two and a half years, it would cause an increase in the price of raw material to those who require pig and scrap iron for their processes of manufacture.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I thought the Minister was of opinion that a duty does not raise the price of an article?

Mr O'Malley - It is proposed to first give a bonus, and, later on, to extend protection ?

Sir WILLIAM LYNE - That is the provision in the Bill. The honorable member for Macquarie talks very wildly on matters of this kind. What I have always said, and what any one who thinks the question out would say, is, that if a duty be placed on articles which cannot be produced in our midst, the price is raised; but that when the article can be manufactured amongst us, the price is not raised.

Mr Mauger - Internal competition regulates the price.

Sir WILLIAM LYNE - Internal competition, as a rule, reduces the price.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Is this part of the Minister's preferential trade scheme?

Sir WILLIAM LYNE - The honorable member for Macquarie does not seem to be serious enough or to have sufficient brains to understand a very important but very simple question. I do not think that the honorable member ought to seek to defeat, by jeering and jibing, a Bill which is introduced in. the interests, of working people in his own electorate. The honorable member either talks nonsense or says what he knows to be untrue.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The best proof of the contrary is that those people elected me in preference to the Government candidate.

Sir WILLIAM LYNE - Why, the honorable member for Macquarie himself told me that he would not have been returned but for the ladies' votes in. Bathurst.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am proud of- the ladies' votes.

Sir WILLIAM LYNE - The honorable member admitted that if he had to depend on the votes of the miners of Lithgow and the men employed in the Portland cement works he would not have been returned.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - What has that to do with the question before us? At any rate, I beat the Government candidate at Portland, and all round about Lithgow.

Sir WILLIAM LYNE - I have not been able, as I hoped, to obtain the exact figures regarding the importations of iron last year, although I telegraphed to the various States for the information. I have no doubt, however, that an increase will be shown on the figures given by the right honorable member for Adelaide, when he dealt with this question during the year before last. According to the figures then presented, the importations amounted to about 150,000 tons; and that only goes to confirm what has been stated previously with regard to the practice of other countries.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Minister has just said that there was a lesser importation of iron last vear.

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