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Wednesday, 26 October 1904

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - This is an occasion when honorable members are allowed, perhaps wisely, to skirmish at large over the somewhat wide territory comprehended under the word "finance;" but I have often wondered whether the discursive speeches which are made under these conditions are of any value. The Committee gets into a lazy mood, because no specific issue is before it, and the effect of a speech passes out of men's minds almost immediately after it has been delivered. The speech of the honorable and learned member for Angas, to which I listened with a good deal of interest, fell upon a drowsy audience, which I suppose is resting after the falsetto condition in which it found itself last night. It is, however, refreshing to find that honorable members have put aside the quarrelsome personal tone, and are prepared, tonight, although the attendance is small, to discuss financial problems of great importance. One remark made by the honorable and learned member for Angas gave me great gratification. Three years ago I stood in this Chamber as about the only champion of certain races which, because of the hysterical cry of " White Australia," were being treated as thescum of the earth, and as unfit to come even within sight of our coasts. It is therefore very pleasing to me to hear from time to time evidence of a gradual change of opinion on the part of the people on this subject. The honorable and learned member told us to-night that both Houses of Parliament in South Australia are now willing to seriously consider the advisability of admitting black labour to their Northern Territory.

Mr Glynn - I do not vouch for the accuracy of the statement, and I do not say that the feeling of the South Australian Parliament represents that of the people of the State. I combated the statement when it was first made.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The honorable and learned member is one of the most accurate men in this' Chamber. He always speaks with great caution, and with substantial . data at his back. I am not now dealing with his personal views, but with his statement that both Houses of Parliament in South Australia, so far as he can judge, are now disposed to seriously consider the advantages of admitting black labour to the Northern Territory.

Mr Carpenter - The last Federal elections proved the contrary.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I am glad that a change of feeling is beginning to permeate the people, and that the fever which took hold of the country and of the members of this Parliament, causing them to resort "to the most hysterical measure towards other races., is abating. I am satisfied that, as time goes on. honorable members who were most carried away by the hysterical .outburst to which I have referred will fmd it politic to modify their conduct in regard to other nations. ' As we go on, it will be recognised more and more by the people of Australia, under the influence of outside opinion, that we are making the smallest possible use of a stupendous territory in the northern part of this Continent, which is capable of adding in untold figures to our national wealth, without lessening the employment of the people, of our own race ; for it is clearly recognised, by all who have had much experience of black labour, that its employment invariably involves the occupation of white men as foremen and overseers. I pass from that subject, however, because my chief desire to-night is to direct attention to the two subjects which were dealt with by the honorable and learned member for Northern Melbourne. He dealt in his speech with the distinction between expenditure for the maintenance of the status quo of properties taken over by the Commonwealth under the Constitution, and expenditure upon new material or new buildings in connexion with those transferred services. I listened to him with great care. As a legal investigation of a problem which this Parliament has not -yet solved, his speech- was' all that could be desired'; but it lacked the necessary element of practicality. With regard to the particular illustrations which I put before him, by interjection, he seemed unable to lay down a distinct line of demarcation between the expenditure upon properties as they stood, or were intended to stand under the Constitution, as at the time they were taken over, and the expenditure upon new material, constructed, erected, or purchased after the taking over of the transferred services. If the honorable and learned member were placed in the position of Treasurer, and he made up his mind to observe some such clear distinction in regard to the matter, he would find it quite impossible to do so. The wording of the Constitution makes it impossible to differentiate clearly and unmistakably between the then existing and the new state of things, and yet carry on the business of the country with any degree of despatch. Take, for instance, the Post and Telegraph Department! Every day,- I suppose almost every hour, some question of expenditure arises in the administration of that huge Department in some part of Australia ; and it would be impracticable to observe always this specific distinction in the books in which the transactions of the Post and Telegraph Department are recorded.

Sir George Turner - It could not be done.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I felt sure that the Treasurer would bear me out, because I speak upon the strength of some administrative experience. This is one of those matters that will have to wait until the end of the book-keeping period. It is very easy to point out in an academic way the inconsistencies in the financial treatment meted out to the States roy the Commonwealth. I do not for one moment deprecate such criticisms, because, if the Treasurer is courteous enough to listen to them, they will furnish him with data which will facilitate the formation of opinions as to what should be done. I think it will be admitted that we can wait for the reign of consistency in Commonwealth expenditure until the bookkeeping ' period is over. Then the House would be justified in asking the Treasurer to lay down some specific lines, and to determine how the various financial adjustments should be dealt with from time to time, whether according to the expenditure in the different States, according to their receipts, or according to their population basis. I have no doubt that if the right honorable gentleman is in office as Treasurer at the end of- the five-years period, he will be in a position to place before honorable members some clear and specific principles of adjustment applicable to the conditions - of all parts of the Commonwealth. Another important subject is that of the payments which are to be made to the States by way of compensation for the property which has been taken over by the Commonwealth. We all know that the Constitution provides that the States shall be compensated by the Commonwealth for the properties and other assets which have been taken over in connexion with the transferred services. It is obviously fair that where a State has borrowed money from time to time for the purpose of providing itself with buildings, telegraph lines, telephone apparatus, and other property connected with the Departments transferred, the Commonwealth shall, upon taking over such property, compensate it in some way or other, so as to enable it, if it chooses, to reduce its national debt in proportion to the deduction from its assets. If, for instance, we may take it that the Post Offices in Sydney and the different country districts, which, perhaps cost £3,000,000 or £4,000,000, formed part of the assets which New South Wales had to show its bondholders as security for its national debt, and if that £3,000,000 or £4,000,000 worth of property be taken out of the reach of a State bond-holder and become Commonwealth property, it is obviously fair, irrespective of the Constitution, that the Commonwealth funds should be used for the purpose of compensating a State to that extent, and enable it in some form or other to rediuce its liabilities to the extent to which its assets have been depleted.

Sir John Forrest - A proportion of that amount would be paid by the State itself.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The Constitution provides in very clear terms that the Commonwealth shall compensate the States for the property taken over; and it goes on to say - as I pointed out when I referred to this matter at some length in 1901, when a Bill was introduced by the Government to provide for the method of payment - that the mode of payment or compensation shall be determined by the Parliament. Oneor two members of the present Committee were not here in 1901, and therefore cannot be expected to be aware of the nature of the measure which the Government then brought forward. The Barton Government introduced a measure which provided in effect that the Commonwealth . should compensate the States for the property taken over, but that the States should first of all contribute to the Commonwealth a sufficient sum of money to enable it to pay the States the value of the properties which it had taken over.

Sir John Forrest - That was practically a book-keeping transaction; it was never intended that any cash should pass.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The Bill did not pass, and I do not think it ever would pass. That proposal was very much like my saying to a man, " I want to buy your horse, and I will give you£10 for it, but you must first give me £10, and I will then pay it back to you for your horse."

Sir George Turner - Where are we to get the money if we do not obtain it from the States?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - We must remember this - and I am sure no one realizes the importance of this matter more than does the Treasurer - that we must keep the Commonwealth and the States accounts distinct. It is above all things necessary in public matters, whether as between one State and another, or between the Commonwealth' and the States, or between one Department and another in a State, that every political or departmental entity should stand upon its own merits and upon its own feet. If, for instance, a Railway Department carries goods for the Post Office, it is quite right that the Post Office should pay for the services rendered. If any looser system prevailed, it would be impossible to know whether the railways were paying, or how much the Post Office was expending. The same principle is adopted at the present time on a small scale between the Railway Departments of the different States and the Commonwealth. A contract has been entered into between the Railway Departments and the Commonwealth, under which the former are compensated for conveying members of Parliament to and from Melbourne. It would be very comfortable for the Commonwealth to say, "We are all the same people it is a mixed up sort of affair, and you had better convey the members of- Parliament over your lines for nothing." The Railways Commissioners, however, being business men, and the Commonwealth having business men as Ministers, must recognise that it is infinitely betterthat the States railway accounts should be kept distinct} from the funds of the Commonwealth. Tne very same principle that applies to our own dealings as a Commonwealth with the States railways applies to the States railways in their dealings with other Departments in the States. We require to keep the accounts clear and separate, so that we may know from time to time what the Commonwealth owes the States, and what the States owe the Commonwealth; and we should be no more justified in mixing up in a sort of hotch-potch way, say, the indebtedness of the Commonwealth with that of the States than we should be in mixing up the affairs of the Railways Commissioners with those of the other Departments of' any State. We cannot apply to this question of the Commonwealth compensating the

States any such hotch-potch arrangement, but must proceed upon business lines.

Sir John Forrest - What are the business lines proposed by the honorable and learned member?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I shall tell the right honorable gentleman. In the first place, I do not consider that the Bill, which was introduced by the Barton Government, reflected very much credit on those who framed it. My suggestion is a business one. In 1901, I tried to place it clearly before the House. The right honorable member for Swan was then in the happy position of being the member of a Government which had a substantial majority at its back, and he was so conscious of the power of the Government to resist any criticism that could be directed against it that I venture to say that he did not listen to me. _

Sir John Forrest - I do not think that I was here.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The Government, probably, were so conscious of their strength that half the Ministers did not consider it necessary to attend here, except at intervals ; and the Ministerial benches were frequently quite empty when honorable members who now form the present Ministerial party sat on the Opposition" side, and offered their criticism. I venture to say that tha right honorable gentleman does not know in what year or in what month the Bill to which I have referred was brought forward, and that, if he were to- follow me in this debate he could not tell the Committee the character of the measure.

Sir John Forrest - Oh, yes, I could. I thoroughly understood it, because I had more to do with it than perhaps any other member of the Ministry except the Treasurer.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I am sorry to hear it, because I had formed a higher opinion of the right honorable gentleman's drafting capabilities. According to the provisions of that Bill, the Government, so far from desiring to keep the accounts of the Commonwealth distinct from those of the States, proposed that the States should contribute to the Commonwealth a sufficient sum of money to enable it to pay back to the States the value of their own properties. I hope the Treasurer will direct his attention to this matter, and let the Committee know what his views are - whether he proposes to re-submit the measure to which-

I have-, referred,- in order to have the ques-' tion of compensation dealt with in his, own way-

Sir John Forrest - We have had a Treasurers' Conference since then.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I do .not attach much importance to those Conferences where the Constitution is involved. The right honorable member had possibly forgotten the provisions of the Constitution during the time that he, as a member of the Barton and Deakin Governments, had the support of such a large majority. I do not wish to say unpleasant things, but the right honorable gentleman has made such comprehensive admissions in regard to measures which the Government of which he was a Minister agreed to nolens volens, that it is quite possible that this Bill was included in that category. I do not know how to distinguish between measures which he heartily espoused, and those to which he had to subscribe as the result of party constraint. My idea, however, is that these claims should be paid in accordance with the provisions of the Constitution.

Sir John Forrest - Where is the money to come from?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I shall supply that information in a moment. The Constitution provides that the mode of com:pensation shall be' determined by this Parliament. If -Parliament had determined that the Commonwealth should take over a portion of the debts of the States, corresponding to the amount of compensation to. be paid for the transferred properties, I could have understood the Treasurer's position. If, on the other hand, he had said, " I am not spending the whole of the quarter of the total Customs revenue to which the Commonwealth is entitled," and in handing bade the surpluses to the different States had declared, " I shall debit you with these balances as part payment for trie money which"' we owe you on account of the transferred properties," I could have understood that position. I repeat that the Constitution provides that the mode of compensation shall be determined by Parliament. I have suggested two modes which might be adopted. One is that an arrangement might be made 10 take over such a proportion of the States debts as would partially compensate them for the transferred properties. The other is that any surplus remaining out of the 25 per cent. collected through the

Customs, and which could have been handed over to the States, should be debited to them as part payment for those properties. But the Bill which was submitted bv the Barton Go- vernment did not propose either of these methods of compensating the States. It was unfair, not merely to the people of the. States, but to their bond-holders. If New South Wales has really added to its national debt to the extent of £5,000,000 in carrying out all the ramifications of its postal administration, it has no right to part with those properties, nor has the Commonwealth any right to take them over, with only our assuming, part of the State debt, or substituting some other form of asset as security to the bond-holders of that State.

Sir George Turner - Undet the proposal of the honorable and learned member, we should be taking money from the States to hand it back to them.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) -Under the 'Constitution there is no obligation on the Treasurer to hand back to the States any part of the one-fourth of the Customs revenue to which the Commonwealth is entitled. He has a right . to take the whole of that amount, and to use it:

Sir John Forrest - But it we do noi use it we must return it to the States.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - There are many ways in which the Commonwealth could use it.

Sir George Turner - Should we not be paid by not returning it to them ?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - If, out of his quarter of the Customs revenue . the right honorable member has a surplus of £500,000, after satisfying Commonwealth requirements,he has . the right to do as he wishes, with it . In order to square accounts, he should have provided in the Bill which he submitted that . that money should be used from time to . time to satisfy the claims of the States in respect of the transferred properties.

Sir George Turner - If I had done that I should have been paying the States with their own money.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Certainly not. If the Commonwealth has a right to retain 25 per cent. of the total Customs revenue of the- States, even though it has no other use for it-

Sir George Turner - We can only' retain it if we have a use for it.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The surplus would be constitutionally . used to pay instalments off the indebtedness for the transferred properties.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) (Minister for Home Affairs) - Would that argument apply after the expiration of theBraddon section of the Constitution to the whole of the Customs revenue?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) -I anticipatethat we shall occupy a very different position before that period is reached. The Treasurer might very well have argued, " If I return this money to the States, it' does not matter whether I do so in the form' of surpluses, or in the form of instalments upon money which I owe them."

Sir John Forrest - There would not have been enough money forthcoming.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I do not say that there would have been a sufficient sur-. plus to pay . off the total amount in one, two, or even three years, but the Treasurer could have utilized whatever surpluses he had in that wav. He could have ascertainedeach year which State had suffered most under the altered conditions consequentupon Federation, and could have debited it with part payment for the assets which the Commonwealth had taken over.

Sir George Turner - They would not have relished that. They are now getting those surpluses as revenue, arid are spending them.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The Treasurer now admits that he has to preserve somesort of fairness in distributing those surpluses. Under my suggestion he would havebeen able to say, " I think that this year Tasmania is chiefly in need of funds, and I propose topay it a substantial instalment of the amount which the Commonwealthis indebted to it on account of the transferred properties."

Sir George Turner - Out of the money of the other States ?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Out of themoney over which the right honorable gentleman has control.

Mr Hutchison - A very just proposal.

Mr Carpenter - Would the States beallowed to expend that money as part of their current expenditure?

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - When the Treasurer pays over money to the States hecannot dictate how they shall spend it.

Mr Carpenter - In that case the expenditure by the State would be tantamount to the expenditure of loan moneys.

Mr Bamford - And the bond-holders would be in a still worse position.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Nevertheless, we cannot control the expenditure. Take the case of New South Wales at the present time. Under the regime of the right honorable member for East Sydney, New South Wales used to get along very well with the aid of a land and income tax. But since the Commonwealth has been established it has handed over to that State between £2,000,000 and £3,000,000 annually in excess of the amount which it formerly received. What has been the result? New South Wales has added to her expenditure to such an extent as to involve an additional annual interest charge of £750,000. It has embarked upon a career of expenditure which is without parallel in Australian history. But the fact that the States to which these moneys are returned can expend them without being subjected to any control on the part of the Commonwealth does not affect my argument, which is in favour of a more correct and satisfactory method of bookkeeping. If, instead of handing back the surplus derived from his 25 per cent, of the Customs revenue, the Treasurer had been able to say to any State which was in straitened circumstances, " I intend to give you a large sum of money this year, and to treat it as part payment for the public buildings which we have taken over from you- "

Sir George Turner - Does the honorable and learned member think ' that we could do that under the Constitution, which provides that the Treasurer must collect the Customs revenue of each State, . deduct the expenditure incurred by the Commonwealth for public works within its. borders, and return what remains after deducting its per capita contribution to Commonwealth expenditure? The honorable and learned member's suggestion is that I should hand to Tasmania money which would otherwise be handed to New South Wales.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - This money would not represent a surplus. It would constitute a part of the Commonwealth expenditure. If the Commonwealth requires it for its legitimate purposes the Treasurer is at liberty to retain 25 per cent, of the total Customs revenue of the States.

Sir George Turner - There is no doubt of that.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Surely it is a legitimate thing for the Commonwealth to pay for the transferred properties?

Sir Georgr Turner - The suggestion of the honorable and learned member is absolutely opposed to the spirit, and I believe to the letter, of the Constitution.

Mr Bamford - The honorable and learned member would allocate, say, 10 per cent, of the Commonwealth's share of the Customs revenue to Commonwealth expenditure, and 15 per cent, to paying the cost of the transferred properties.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Let us assume that 25 per cent, of the total Customs duties aggregated £2,500.000, and that for Commonwealth requirements only -^2,000,000 was expended. There would then remain a surplus of £500,000. I quite admit that if the Treasurer has no other * legitimate form of expenditure he would be bound under the Constitution to distribute that £500,000 amongst the States. But he is in a position to say. "I have a legitimate channel of expenditure for that £500,000. I have to pay for the public buildings which have been transferred to the Commonwealth, and I intend to see that a portion of that money is utilized in partly paving for those properties."

Mr Watson - There would be trouble with the States Treasurers if that plan were acted upon.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Before the honorable member for Bland entered the Chamber, I stated that I desired to prevent a repetition of the introduction of the Bill- which came before us in 1901, in which it was proposed, in a most unbusinesslike way, that the States should be called upon to contribute a sufficient sum to the Commonwealth to enable it to pay them for the properties taken over. I said that that was unfair to the bondholder's of the different States, because if we adopted it, we should make serious deductions from the assets representing the debts of the States, and would not enable them to pay off those debts.

Sir George Turner - The honorable and learned member practically proposes the same thing.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) -The right honorable gentleman knows that in his Commonwealth ledger he would have a series of credits to the different States in respect of properties that he had taken over. He knows that every time he made a payment to a State it would be debited to that State, so that in the end he would have to say that' by this method-

Sir George Turner - I should have the property, and the bond-holders would not have the security.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - That is a matter which should not concern the Treasurer. If we had a valuation of, say, £5,000,000, made in respect of New South Wales, that State could do what it pleased with the money. Even if the right honorable gentleman, in order to relieve New South Wales, took over £5,000,000 of its debts, that State could enter into another debt of £5,000,000 in order to stand as it did before, and spend the money in an unwise way- We have to recognise that the Commonwealth cannot control the destination of any of the moneys that it hands to the States. The provisions of the Constitution do not permit anything of the kind. Indeed, Federation would not have been established if the Constitution had provided that the Commonwealth should have power to dictate to the States as to the way in which they should dispose of moneys which it handed over to them.

Mr Carpenter - There is a strong temptation to spend any money which can be regarded as revenue.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - If the people Of the States are not prepared to exercise control over their Governments and politicians - to regulate the expenditure of the moneys which come to them through the Commonwealth - the Commonwealth itself cannot do anything. If we once accept, in all our deliberations, the axiom that we have not, and cannot ever obtain, any control over the expenditure by the States of the money which the Commonwealth hands to them, it facilitates our discussion. We are merely concerned in knowing that up to the moment we hand the money to the States the Commonwealth has acted in a constitutional way.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) (Minister for Home Affairs) - Would not the honorable and learned member's proposal simply cancel the debt, as the Barton scheme proposed? It would do so, not to the same extent, but in the same direction.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - No ; I do not care to suggest schemes-

Sir George Turner - I wish to hear all the suggestions that can be offered on the subject.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - I know that the right honorable gentleman is prepared to iook at this question fairly, and I certainly do speak with a fair amount of commercial and administrative experience. In 1901, when the Bill to which I have referred was introduced, providing that the States should hand over money to the Commonwealth, to enable it to pay for property taken over from them, it certainly seemed to me that the proposition was an extraordinary one. It was criticised not only by me, but by the honorable member for Kooyong, the honorable and learned member for Bendigo, and several others who agreed with me, I think, that it was a most unbusinesslike proposal.

Sir George Turner - The States would have to pay in any case. The Commonwealth has not a single shilling of its own.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - We know that the Commonwealth has funds. The Treasurer said the other day that he had a surplus over Commonwealth expenditure, and -we know that the expenditure of the Commonwealth has been much lower than was predicted by the enemies of Federation. The right honorable gentleman has frequently spoken of surpluses secured over Commonwealth expenditure, and after entering a credit to each State in respect of properties taken over, the Treasurer could utilize those surpluses in making payments on account. That would be a more equitable and business-like scheme. If the Bill of 1901 were brought forward in this House it would require very little exposition on the part of those who endeavoured to understand it, to enable us to completely discredit it. I have been drawn into speaking at such length by the interjections of the right honorable member for Swan, that I am' disinclined to continue ; but I should like to say one or two words about the question of States debts. I watched the proceedings of the' Conference which recently took place between the Premiers and Treasurers of the different States, ' at which a very able and exhaustive statement was submitted by the Federal Treasurer ; but I was scarcely hopeful that anything would come out of it: Although I desired as much as any one that the finances of the Commonwealth and of the States should be placed upon a better basis than at present, I felt then, as I feel now, that the whole institution of Federation was in such bad odour throughout the six States that no one who could enter this House would be able to persuade any of the States to part with any of the powers that theyhave at present. I venture to say that no honorable member would undertake for his. State that it would be possible to induce the Parliament of that State to make any further surrender of power to the Commonwealth Parliament. The whole institution is discredited. I quite agree with the statement made this afternoon that if the issue of Federation or no Federation were submitted to-morrow to the people of Australia, either as a whole or in the six sections represented by the different States, Federation would be negatived by a majority of two to one.

Mr Hutchison - Many who voted against . Federation would now vote for it.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The. wish is not father to the thought, so far as I am concerned. I am not less in favour of Federation to-day than I was. I do not think that I am too severe in my remarks. If we placed the finest ship in existence under bad navigators, with the result that she went ashore, the fault would not necessarily rest with the ship. We started with an excellent Constitution, and whether from misfortune or bad management there is no doubt that the Federal ship, for the time being, has been ashore, and has not yet been rescued from her position.

Mr Carpenter - The people were led to expect too much.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - It would be quite out of place for me to attempt to investigate the causes here, and I am not prepared to essay anything of the kind. But that is the position. When the Conference took place, I felt, as I feel to-day, that no proposal which involved the further curtailment of States powers, or the surrender of any of the existing privileges, or liberties of the States Parliaments, would be entertained by any one of the States Parliaments.

Sir George Turner - The only question upon which we could not agree was as to future borrowing. We practically agreed on everything else.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - That is a verylarge and important reservation.

Sir George Turner - If we had had another day at our disposal, I believe that we should have arrived at an agreement even in regard to that question.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - We may be of different dispositions. The honorable and learned member may be of the sanguine, and I of the pessimistic order, but I do not believe that an agreement, would have been arrived at. I have read the motion of which notice has . been given by the honorable member for Kooyong, as to the establish ment of what is called a financial council, and from what I know of his scheme - and I have had the privilege of seeing some of his proposals in detail - I think that it is an excellent one. It would establish a tribunal outside political influence, and place in its hand's-

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