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Thursday, 16 November 1905

Senator Lt Col GOULD (New South Wales) - Senator de Largie has drawn a clear line of demarcation between the views which he and his colleagues favour, and the views held by, I believe, the majority of honorable senators. As a Socialist belonging to a party which believes in Socialism, Senator de Largie takes up his present attitude.

Senator de Largie - Socialism is the underlying principle.

Senator Lt Col GOULD - I do not want to misrepresent the honorable senator. It appears that the real contest is between those who favour Socialism and those who do not favour that principle, as understood by the Labour Party of Australia. That party has taken great pains, by means of outside organizations, to lay down a clear and definite rule as to what shall be done with all great industries; and their object is to have collective ownership under the Government.

Senator O'Keefe - Does the honorable senator not think that he is incorrectly stating the case?

Senator Lt Col GOULD .- As I said before, I have no wish to misrepresent the views of honorable senators opposite, and am now simply stating what I believe to be the object of those who, like the Labour Party, favour Socialism.

Senator O'Keefe - The honorable senator's mistake is in saying that the desire is to nationalize all industries.

Senator Lt Col GOULD - I said that the desire is to nationalize all great industries.

Senator de Largie - All monopolies.

Senator Lt Col GOULD - I understand that what I have stated is the object of the Labour Party, not perhaps as represented by the individual members of this party in this Parliament, but as represented by outside organizations, under theagis of which the party work. However, that may be, my view is. entirely different from those which I have just indicated. I think that the conduct of industries by individuals produces greater benefit to the community at large than would the system advocated by honorable senators opposite.

Senator Givens - It results in far larger profits to the individuals who happen to be members of those wealthy corporations.

Senator Lt Col GOULD D- After all, men of energy and perseverance are entitled to the legitimate rewards which follow the exercise of those virtues.

Senator Givens - But they are not entitled to other people's earnings.

Senator Lt Col GOULD - Persons who are not prepared to display energy and wisdom in the conduct of their own affairs naturally go to the wall ; and it would be a great mistake, particularly in a young, growing and healthy community, to discourage people from undertaking industrial enterprises. Private ownership and management is incomparably better than State management.

Senator Walker - No Government stroke !

Senator O'Keefe - Privately owned railways, for instance, as compared with Government-owned rail wa y s .

Senator Lt Col GOULD .-I am dealing with general principles. If the honorable senator is referring to railways, and the Post and Telegraph Department, then I think I am as much a Socialist as he is; but the effects of State interference in these matters is not followed with the results which would inevitably be experienced if, forinstance, the sugar industry were nationalized. This industry is only one of a large number which I know honorable senators opposite would like to see treated in this way. Those honorable senators, of course, have a perfect right to their views and opinions ; but we have to consider which policy we shall adopt as best in the interests of the community - whether we shall encourage individual effort and organization, or whether, on the other hand, private enterprise shall be retarded by Government interference.

What is the object of the motion? Senator Givens declares that this industry has become what he terms a monopoly - that it has swallowed up all the smaller similar industries. We must, however, recognise that before this was a great industry it was a small one. The Colonial Sugar Refining Company commenced operations in a comparatively humble way in competition with other companies, and it would never have attained its present position but for the enterprise and energy of those whowere responsible for the management. Individual judgment and skill have placed this company in a wealthy and influential position, and because of that it as proposed to hand over the whole enterprise to the Government. Such a policy will remove the incentive to individual exertion, and reduce the community generally to a position little better than that of " hewersof wood and drawers of water." Under such a system it would be treading on dangerous ground to enter into an enterprise for one's own personal and pecuniary interest, because the moment a certain measure of success was reached, the Government would step in and reap the benefit of our energy and perseverance. I admit that Senator Givens advocates compensation to the value of the property at the present time; but the incentive with most men is the opportunity afforded to acquire and increase their capital. If the incentive to individual enterprise be removed then no one will seek to better himself, and therefore the community as a whole cannot be bettered. A question like this should not be discussed in the light of the great profits made by the Colonial Sugar Refining Company. We ought to work on a broader basis, and proceed in the way which we deem best in the interests of the people at large. If Senator Givens, instead of devoting himself to parliamentary work, had accumulated wealth in some industry, would he sot regard it as a cruel shame if the Government stepped in and deprived him of the results of his labour, when, if he had been unsuccessful, they would have left him alone? Senator Givens complains that the bounty, to a much greater extent than he approves, has found its way into the coffers of the company, and he quoted statistics showing the dividends paid and the amounts carried to reserve.

Senator Givens - Does the honorable senator think that I quoted the figures incorrectly ?

Senator Lt Col GOULD - I accept the honorable senator's statistics as honest and bond fide. It has been pointed out that the capital represented by the company amounts to about £3,000,000 ; and, even if that sum were paid in compensation, an injustice would still be done to the shareholders.

Senator Givens - The capital is £2,127,000, or thereabouts, and the main reserve amounts to £483,000 odd.

Senator Walker - I make it out to be £329,000.

Senator Lt Col GOULD .- I will take the figures which are before me, and say that in March, 1905, the reserves were £414,000, and that dividends of 10 per cent. were paidon the capital of £2,200,000. In March, 1899, the reserves amounted to £419,757, or, in other words, to about £5,000 more than in 1905. In 1899 the company were paying dividends at the rate of 10 per cent. and adding a comparatively small amount to their reserves. This dividend of 10 per cent. was paid continuously up to September, 1904 ; but in 1905 there was a jubilee bonus, which amounted to per cent. on the year's operations.

Senator Givens - That bonus amounted to£54,960.

Senator Lt Col GOULD - Notwithstandingthe sugar bonus from which the honorable senator says the company have obtained such great assistance, they have not been able to increase their dividends. According to the figures given by the honorable senator, the company have been continually paying a 10 per cent. dividend. In order to earn that dividend, not only have they had to utilize the capital and the reserves, but to borrow large sums on debentures.

Senator Givens - How much ?

Senator Lt Col GOULD - I am not aware.

Senator Givens - If the honorable and learned senator will refer to the balancesheet, he will find that instead of borrowing money since the bounty system was introduced, the company have considerably reduced the amount of their debentures.

Senator Lt Col GOULD .- The company, I learn, have reduced the amount of their debentures to £65,000. With the exception of this sum, the debentures were turned into capital, on which dividends had to be paid. Do not honorable senators realize that a company with a capital of £2,250,000 must have an innumerable number of persons on their share-list? The shareholders are not always wealthy men. I know persons who have £200 or £300 invested in shares, and who, of course, are getting the benefit of the 10 per cent, dividends. But they are only small people. I admit that ' the share-list includes the names of wealthy shareholders, but it also includes the names of many poor persons, who are distributing their dividends amongst the public generally in the ordinary way. Honorable senators must realize that this company cannot be said to be a monopoly of a serious or dangerous character. I agree with Senator de Largie that it would be a dangerous tiling for the Commonwealth to increase the bounty. Surely the shareholders in this company, as business men. are entitled to benefit in whatever 'legislation a very liberal Parliament may see fit to pass. It is well known that a large sum had to be distributed for the purpose of >enabling sugar to be grown under conditions which are not natural.

Senator Givens - What are natural conditions ?

Senator Lt Col GOULD .- I refer to the people who naturally would do the work required to be done.

Senator Givens - It is not natural to have South Sea Islanders here.

Senator Lt Col GOULD - With all due respect to Senator de Largie, I submit that it is bad for the white men of this community to be employed in the climate of the northern coastal portions of Queensland. I am sure that white men can do the work in the mills very much better than in the cane-field, and I would far sooner see them so employed.

Senator Pearce - Is the honorable senator prepared to allow coloured labour in Northern Australia?

Senator Lt Col GOULD .- If coloured labour is more suitable than white labour for the industry, it is very much better that the former should be employed.

Senator Pearce - The honorable and learned senator says "if." What is his opinion ?

Senator Lt Col GOULD .- I shall discuss that question with the honorable sena tor at another time. He knows my views with regard to the employment of kanakas in the cane-fields; while I also believe in keeping our country racially pure.

Senator de Largie - When we were at Townsville, we heard a statement made by Dr. Macdonald, of Johnstone River, that Northern Queensland had not only a good climate, but absolutely the best climate in the world.

Senator Lt Col GOULD - In the coastal districts?

Senator Givens - Yes; and that is where the cane is grown.

Senator Lt Col GOULD .- I admit that a man could not get a much better climate than is to be found on: the higher land.

Senator Givens - On the very land where the industry is carried on.

Senator Lt Col GOULD - However, that is by the way. As a New South Welshman, I should not complain about the bounty system, when I know how beneficial it has been to the farmers in its northern districts, who have never required to employ black labour, and who under the bounty system are getting a subsidy of £2 or £3 per ton from the pockets of the taxpayers. If we desire individual enterprise to embark upon great undertakings, we must be prepared to let the rewards which flow from the expenditure of their money to be reaped by them, unless, of course, we intend to say ' to enterprising men, "You may go into these great industries. If they are successful, we shall get Parliament to relieve you of the benefit of your enterprise, but we shall not accept any loss which it may have brought about." Suppose that an industry in which £2.000,000 or .,£3,000,000 was invested had absolutely failed, I can well imagine the speeches which would come from honorable senators opposite if we were to approach Parliament and say : " These men cannot carry on the industry under reasonable conditions, and we want you to give them £2,000,000 or £3,000,000 straight away."

Senator de Largie - That is what we are doing.

Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. GOULD, - Possibly by means of the protectionist system we are saying to these men, "You cannot hold your own in open competition, therefore we shall bolster you up."

Senator de Largie - Why should not the country get the profit as well as foot the bill ? We have to pay through the nose at the present time.

Senator Lt Col GOULD .- In what way have we to pay through the nose, unless it be in consequence of the grant of bounties ? Senator Givens has said that there is a great difference between the Colonial Sugar Company's buying and selling prices. Here is a quotation which he made from the

Age .-

The estimated yield to the grower is given by the officials as averaging, say, £y 10s. per ton o£ sugar for the equivalent quantity of cane. The cost of refining, excise duty, bagging, wharfage, freight, and other charges, it is claimed, brings the total up to £18 per ton. The company's charges, not to consumers, but to merchants and large distributing firms, are as follow : - Brewers', £21 15s. ; No. iX and No. iA, £21 ; No. 1 ordinary, £20 15s. ; No. 2, ^20 5s. ; No. 3j ros.

Senator Givens - I did not rely on those figures at all. In another part of my speech I quoted the official figures. Roughly speaking, the producers of raws get 58 per cent, of the prices, and the company get 42 per cent.

Senator Lt Col GOULD .- It must be remembered that the difference between these prices has to cover not only the cost of manufacture, but also excise, carriage, and disccunts, while the company have to incur considerable expense in refining the raw sugar, and to compete with the men outside the Commonwealth who produce sugar, with the cheapest possible labour. The import duty °f £6 per ton is imposed upon foreign sugar either to protect the local grower, or to obtain revenue, possibly for both purposes. Unfortunately, the revenue is gradually declining, but that is owing to the policy of the Commonwealth. The price of sugar to the consumer in Australia is not by any means excessive when compared with" the price which is charged to the consumer who lives outside the Commonwealth, and has not to make up the bounty and excise charges, It will thus be seen that the whole concern is being conducted upon fair and equitable terms. Although the company is a large one - a Triton among minnows - nevertheless there are other concerns which are interested in - the same industry. Let us assume, for the sake of argument, that honorable senators not only carry this motion, but that the Government succeed in passing an Act to nationalize the sugar industry. How is the industry to be carried on? Is it proposed to extend to the persons/ employed in the industry more generous terms than they have hitherto been receiving? Is it proposed to increase the wages now paid to the employes ? I understand from Senator 3e Largie that, in some cases, for certain classes of labour, from 20s. to 25s. a week is paid. Is it proposed to increase these wages, and reduce the hours of labour, and at the same time benefit the consumers?

Senator de Largie - I think that the consumers would be quite content to pay the present price, if better wages were paid.

Senator Lt Col GOULD .- Do honorable senators really believe that it would be wise to conduct an industry of this character in such a way that political' influence might be exercised in regard to wages and conditions of employment ?

Senator de Largie - Political considerations extend to the industry now.

Senator Lt Col GOULD .- Cannot the honorable senator see the difference between political control and the influence of a number of shareholders in their own industry? If honorable senators opposite engage in a particular industry, would it not be a fair thing if they had friends whom they wished to have employed in it to try to secure appointments for them when vacancies occurred? There is nothing wrong in that. But what I do object to is, that if the industry became a Government monopoly, political pressure would be brought to bear upon members of Parliament to increase employment unnecessarily, and the selection of suitable men would not be left to those responsible. Advantage would be taken of the position to secure appointments for persons without regard to their fitness. We had an example of that in connexion with the railways of these States. Some years ago political influence was exercised in connexion with those great undertakings. They were extravagantly managed, and often incompetent people were employed. Men who were incapable of giving a fair day's work had their billets retained to them by means of political influence. Then came a change. Commissioners were appointed to manage the railways. While that change has been very beneficial, and has secured an important reform, I know that in its early stages it was most difficult to withstand the demands constantly made upon members of Parliament to exercise the old kind of influence that they had been in the habit of using. The greatest difficulty in the world was experienced in killing that system. Indeed, I fear that it has not been absolutely killed yet. That is one . of the evils, which we always find in connexion with anything that is under Government control. I am not blaming members of Parliament or Governments. The evil is inseparable from the system.

Senator de Largie - Does not the same evil exist in connexion with large companies privately managed? Consider the Knox family, for instance, in connexion with the sugar industry.

Senator Lt Col GOULD .- The Colonial Sugar Refining Company stands in an entirely different relation. The late Sir Edward Knox was for many years the general manager. of the company, and his son was a clerk in the office. He worked himself up to the position he holds to-day, and I do not believe that he would have kept it unless the directors and shareholders had been satisfied that they had in him a thoroughly competent man.

Senator Walker - He is a man of brilliant ability.

Senator Lt Col GOULD .- I venture to say that if the sugar industry were placed under the control, of the Government, Senator de Largie himself would have no objection to that gentleman continuing to occupy his position. Honorable senators cannot reasonably complain because a man whose father held a prominent position in a company at length succeeds to the same position, if he has brains, ability, and energy. . We all recognise, whatever we may think of the methods of the Colonial Sugar Refining Company, that \t is an eminently well-managed concern, and has been splendidly successful. I do not quarrel with the company one bit. I only wish that I had had the good luck to have a large number of shares in a company so successfully conducted. But I object to this motion upon the very much broader ground that it is to the interest of the community that we should encourage every individual to exercise the faculties and powers he possesses in his own interest, recognising that at the same time he will be using them in the best interests of the community in which he lives. If we find that big trusts are established it* will be our duty to step in and see that the public generally are not victimized by them. A great trust may be useful, so long as it does not victimize the public. When it does that, Parliament has a perfect right to step in and say that the public good is supreme.

Senator de Largie - We are all agreed on that, but we think that the only thorough remedy is nationalization.

Senator Lt Col GOULD .- Has it been shown that the Colonial Sugar Refining Company has become a vicious trust that is doing injury to the community at large? Has it been shown that the company has conducted its business unfairly and unjustly ? Has not Senator de Largie ' himself admitted that the consumer has no ground for complaint on account of the price which he is called upon to pay for his sugar ? The honorable senator contends that in some cases employes of the company have been very poorly paid. In the first place, I wish to point out that positions in the employment of the Colonial Sugar Refining Company are eagerly sought after. Clerkships in the office, and posts as refiners are much coveted. I believe that the employe's of the company are as liberally, if not more liberally, paid than are employes in a majority of other industries in the Commonwealth. Therefore, these men have no reason to complain about the company. Many of the employes may be relatives or friends of the directors or shareholders. But thev obtain their positions fairly. A person concerned in the management of a company is not bound to put an outside person into a position if there is some one well known to him who is as well qualified for it. I know that the service of the Colonial Sugar Refining Company is regarded as one of the best which a young - man can enter. It is admitted that those who are employed in the mills of the company are libera My paid. Then we come to the men to whom Senator de Largie has referred more particularly, and who, he says, are very poorly paid. I do not doubt the correctness of his statements. But there is always to be faced the question about supply and demand. I am under the impression that the Colonial Sugar Refining Company has experienced a dearth of white men to do its work on the plantations, and has been compelled to employ coloured labour. Perhaps that labour has been employed at the small rates mentioned by the honorable senator. But there must be some cause for it, apart altogether from the company. Let me point out also that if we do not encourage people who have enterprise and ability to concern themselves in businesses of this character, we shall rob the working classes of the opportunity to obtain situations and earn a respectable livelihood. The more we can establish great industries like this the better for the community, because it means more employment for the working classes, a larger population, and a greater spending power for the people. No man realizes more fully than I do what a great advantage it is to have a large population well employed, with a fair amount of spending power.

Senator O'Keefe - We are all agreed as to that ; the difference is as to which is the better method of control.

Senator Lt Col GOULD .- I think I have made my position perfectly clear i« pointing out that no injury is done to the community by the work of this company, and that, in "fact, it absolutely benefits the" country.

Senator Givens - Does the honorable senator think that the company does not go in for unfair competition ?

Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col'. GOULD. - I do not think so.

Senator Givens - I will prove it directly.

Senator Lt Col GOULD - I -think that it would be perfectly possible for a man to invest money in sugar refining, and to carry on business in competition with the company. I admit, however, that it would require a very large capital and that it would be difficult to obtain a footing. But the position of the company in that respect is due to the industry and enterprise of its conductors. It has built up its business.

Senator Givens - Does the honorable senator think that the company never enters into any contract which restrains freedom in industry ?

Senator Guthrie - It grants rebates.

Senator Lt Col GOULD - I do not know the inner workings of the company. I have had no communication with any member of it in regard, to its methods. I simply speak from' a knowledge which I have gained outside. I am not aware that the company has done any harm. I hold that we are 'not justified in interfering with it on the broad grounds of the welfare of the sugar industry, and the desirability of securing to every man the reward of his own labour and ability. I think that Parliament should only step in to interfere with such enterprises when they are conducted in such a way as to be injurious to public interests.

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