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Wednesday, 1 August 1906


Senator FRASER (Victoria) .- I have carefully examined this contract, and, if everything connected with it transpires as we hope it will, I do not know that we shall have a great deal to complain of. However, had I been the adviser of the Government in any way in this matter, I should have insisted upon the ships going on from Adelaide to Melbourne and Sydney, as the Orient Steam Navigation Company's boats are bound to do under the existing contract, and possibly to Brisbane also. I believe that it would not have cost the Commonwealth a farthing more to have made this important stipulation. It seems to me that that would have been a wise thing to have done. As matters stand, there is no power on earth that can compel the new mail company to bring their ships beyond Adelaide.


Senator de Largie - And there is no power on earth that will keep them at Adelaide, either.


Senator Best - They could not carry on the contract unless they did so.


Senator FRASER - I wish to believe, and I do believe, that the boats of this company must come on from Adelaide to Melbourne and Sydney, but they arenot bound under this contract to do so. If they could be so bound, without any further expense, surely it would have been a prudent thing, in the interests of the Commonwealth, to have them bound in that way. Now that they are not bound, the company may make excuses, and there is a remote possibility that the boats will slip across to New Zealand, and it may be contended thatthey will earn as much money in that way as they would earn by coming on from Adelaide to Melbourne and Sydney. New Zealand is only three or four days' sail from Adelaide. If what I suggest had been provided for the producers of Victoria, New South Wales, and Queensland could have made better conditions with thecompany for carrying on their export trade than they will be able to do under this contract.


Senator Guthrie - As Queensland did with the Orient Steam Navigation Com pany.


Senator FRASER - I should have been delighted if, under this contract, the new company had been compelled to bring their boats on to Melbourne, Sydney., and Brisbane, because it would have been of immense advantage to the producers of Victoria, New South Wales, and Queensland to know that they would be able to take advantage of a ship leaving every fortnight from Brisbane for the home land. Under the existing contract with the Orient Steam Navigation Company, that company is not only obliged to bring the boats on from Adelaide to Melbourne and Sydney, but to provide freezing chambers of a certain capacity, and self-registering thermometers in those chambers to insure the carriage of perishable produce under proper conditions. There are no such conditions provided for under this contract. Even though the boats of the new company should come on to Melbourne, Sydney, and Brisbane, without provision for the facilities I have referred to, the producers of the Commonwealth may suffer great loss. The danger is that the new company may take advantage of the looseness of this contract to squeeze from Australian producers better terms than they could otherwise get.


Senator de Largie - Is the honorable senator quite sure of his ground when be says that self-registering thermometers have to be provided on the Orient Steam Navigation Company's boats? -


Senator FRASER - I am perfectly sure of it. I do not state what I am not sure of.


Senator Guthrie - Is that provided for in the agreement with the Orient Steam Navigation Company for the carriage of mails, or in that company's agreement with Victoria for the carriage of produce ?


Senator FRASER - It isprovided for in the Commonwealth agreement with the Orient Steam Navigation Company, of the date of 5th September, 1905, if I recollect it rightly. Honorable senators will remember that the subsidy was raised in the last contract to £120,000, and under that contract the Orient Steam Navigation Company are obliged to carry frozen produce subject to the conditions to which I have referred. We are now about to sanction a contract involving the payment of a subsidy of £1 25,000 per annum for ten years, with a possible extension of ten years more without parliamentary sanction, though I am not quite sure that I am right as to that.


Senator Playford - The honorable senator is wrong.


Senator Best - Where is that provided for?


Senator FRASER - I refer honorable senators to clause 6 of the contract, which provides -

That if during the sixth year of the fixed period of ten years mentioned in clause 2 hereof any competing line of mail ships shall then provide an improved and accelerated service from Europe to Australia, the contractors shall, if sorequired by the Postmaster-General, provide a. service equivalent to such improved and accelerated service upon the following conditions : -

(a)   The notice to be given by the PostmasterGeneral to the contractors requiring, such improved and accelerated serviceand the date such service is to commence from ; and (b.) The amount of the additional annual' subsidy to be paid to the contractorsfor providing such improved and accelerated service ; and

(c)   The extended period for whichsuch improved and accelerated service shall, continue shall, failing mutual agreement, be determinedby arbitration in the manner provided in the said' " General Conditions of Tender."

Notwithstanding the Minister's contradiction, I think that clause enables the company to secure an extended service for a. further period of ten years.


Senator Best - It is ambiguous, but I think that the contract is limited to tenyears.


Senator FRASER - If it is so limited, then paragraphs b and c of this clause arevery loosely worded, and if I were drawing, up such an agreement, I should tellmy solicitor that I would not have it expressed in that fashion.


Senator Best - I quite admit that it: should not be ambiguous.


Senator FRASER - I submit to expert, opinion in that regard. The Orient Steam-. Navigation Company are now carrying on a very satisfactory, service for a subsidy of £120,000 per annum, and are complying, with the conditions to which I have referred in supplying frozen space and selfregistering thermometers in their freezing, chambers. This company is to get a subsidy of £125,000 per annum for a period of ten years. That is certainly a very great advantage. The Orient Company is carry ing out a very successful service for a subsidy of £120,000. But the boats of the new company need not go to Melbourne or Sydney, and it is not bound to provide any freezing space or registering instruments. It is just possible that itmay arrange with- the Government of New Zealand tocarry all its frozen produce, and pick up the Australian mails at Adelaide. Moreover, its. boats would not be obliged to go to London. If they get cargo, it could' be transhipped at Brindisi. It would not be possible, however, to tranship frozen butter.


Senator Stewart - The boats must go on to the United Kingdom.


Senator FRASER - I believe I am right in stating that the company need not send its boats beyond Brindisi. Certainly they should go to an English port. With regard to the term " registered tonnage," whether it be net or gross tonnage which is meant, I am quite satisfied that there is not much in the' objection made. It might, however, be cleared up. The new boats of the present mail companies from England are supposed to be 10,000 tons each. If we get what the ordinary layman understands to be ships of 10,000 or 11,000 tons, I think that there will be nothing to cavil about.


Senator Guthrie - But the ordinary understanding is the registered tonnage.


Senator FRASER - A layman recognises other tonnage besides registered tonnage. A ship of the Orient Steam Navigation Company which is, 10,000 tons nominal register, may be only 7,000 tons net register. One ship which has been built to steam 20 knots may be very narrow, and yet mav be registered as 6,000 tons ; whereas another ship may be built like a tub, with the same tonnage, but with twice or three times her carrying capacity. So that the term " registered tonnage " does not tell us very much. Can the Minister say whether Sir James Laing and Sons will be bound bv the agreement?


Senator Playford - Yes.


Senator FRASER - It was not prudent on the part of the Government to take the signature of an attorney when it was possible to get a cablegram or an assurance from the actual contractor. I should saythat the firm ought to be bound by the agreement, and that no attorney should have been allowed to sign it when a message by cablegram could have been obtained'. I have some doubt as to whether the firm will 'be bound bv the contract.


Senator Playford - We have received a cablegram to that effect from the firm.


Senator FRASER - That is satisfactory. I do not propose to move any amendment. I believe that the Government are anxious to do the best they can. but I am very sorry that the States did not see their way to meet its view, because, after all, it is the producers upon whom the mail contractors will have to depend for their reward. In view of the occurrence of droughts and other difficulties, it is very easy to understand the attitude of the States Premiers. For instance, in Tasmania, last year, there was a very small apple crop, and naturally the Government did not like to be bound by any agreement as to the amount of freight to be contributed'.

Senator Col. NEILD(New South Wales) [4.36]. - I am very much more than dubious about 'the advantages to be derived from this service. Ta begin with, I am very dubious as to whether there is any contract worthy of the name, or any contract in law. It is well known that in important matters an incorporated company! as we are told the firm of Sir James Laing and Sons is, cannot delegate its authority except under seal. What proof have we that any resolution of the shareholders of this firm, or of its board of directors has ever authorized any of the proceedings connected with the proposed transaction ? What knowledge have we that its seal has been attached to any document authorizing the carrying on of these negotiations, let alone their completion ? It is well known to every experienced .man that a resolution of an incorporated company under seal is absolutely essential to give validity to any proceedings of great moment. If we look into this document we find that it really is not a contract beyond that a sum of ^2,000 has been paid by some one to somebody somewhere. When I pressed the Minister this afternoon he could not say who had paid or received that sum. It is said by some persons that it was deposited by Mr. Croker, and by others that it was deposited by Sir James Laing and Sons, but practically no one knows who made the deposit, or where the money is. When the Government propose to let a contract for the erection of a weather-board post office in the back blocks it requires a hard cash deposit of about 10 per cent, of the value of the building. What have' we in this case? We have an allegation of a deposit of ^2,000' somewhere and a bond. When I asked the Minister this afternoon if he had seen the bond, he said " No." He does not know what it contains. What is taking a bond by way of security ? It may be the best possible method of buying a law suit if the contractors fail to carry out the obligations of this option. I wish particularly to emphasize the fact that this is not a contract for a mail service, but merely an option to enable somebody at the other end of the world, but not very clearly defined, to traffic for eighteen months on the Stock Exchange to see whether he, having risked a couple of thousand pounds, can form a company to carry on this work. Senator Millen has pointed out how utterly insignificant is the security. I forget now whether he was referring to the deposit or to the bond. $


Senator Millen - To the whole lot.


Senator Col NEILD - My honorable friend will' see that if he was referring to the bond he was referring to that which, after all, might simply become the subject of an expensive law suit at the other end of t;he world.


Senator Millen - Taking the very best which can be urged on its behalf, it only represents a miserable percentage.


Senator Col NEILD - It represents, only three-quarters per cent, of the value. The Ministry do not know what the bond contains. Apparently they cannot tell us who gave it. We cannot get any information except that, possibly, it may be held by a bank 'in London for the Commonwealth. It cannot be a document made wholly on one side. I suppose that the Commonwealth was a party to the acceptance of the bond. How d:d it give its assent in order to give validity to the transaction? Was it given by Captain Collins, who, after all is said and done, seems to be a kind of superfluous officer of the Commonwealth ? He is superfluous as a Secretary for Defence, if he can be in London for years. We did not know that he was going to London in any capacity other than to deal with war stores. I think that the members of the Senate had no idea that he was to be a kind of general representative of the Commonwealth.


The PRESIDENT - I do not think that the honorable senator ought to discuss Captain Collins.


Senator Col NEILD - I only desire, sir, to discuss the matter to a certain extent, and I think you will see that I am strictly in order.


The PRESIDENT - The honorable senator is only supposing that Captain Collins has had anything to do with the bond.


Senator Col NEILD - That is the only supposition which is possible. This afternoon he was named by the Minister as being concerned in the matter. When our assent was given to Captain Collins going to England, we had no idea that ;he was to be concerned in the manipulation of important Commonwealth matters. There are several points about this business which I think are very unsatisfactory. For instance, there is no agreement for cold storage. Why did the Commonwealth require the use of steam-ships of 11,000 tons net register to carry mails? Why, sir, an ordinary despatch boat would be sufficient to carry all the mails, and might have been obtained at a third of the price.


Senator Playford - We never specified" the exact tonnage of any boat to carry the mails. It was the tenderer who had to say that.


Senator Col NEILD - Why did not the Government stipulate for at least a maximum rate of freight for cold storage? It is of the greatest consequence to the butter-producing interest in Australia that the date of the arrival of shipments in. England should be known with certainty. The date is known in connexion with the mail steamers now employed in the service between Australia and the old country, but the date is net known in connexion with steamers of the tramp class, nor even in connexion with so important a service as the White Star Line. The date of arrival in London of shipments of butter is a matter of very grave consequence to the trade. We know perfectly well that the arrival of a shipment a day late makes a very important alteration in the price obtained. Accuracy of date in the delivery of a cargo so easily damaged as butter is of grave consequence j and I think that when the Government was providing for the construction of - steamers which, I will show directly, are to be, under the law - not in accordance with the fanciful idea of any one, but under the law - 11,000 tons nett meaning 15,000 tons gross-


Senator Fraser - It does not mean that.


Senator Col NEILD - My honorable friend may say what he pleases, but I will read the law to him directly, and that will satisfy him that I know what I am talking about. The Government, in obtaining the service of vessels 15,000 tons burden gross, or 11,000 tons net, for the carriage of mails, leaves absolutely out of account the certainty- that something else is intended in regard to the use of those vessels. It is evident that they are fo be put to some other purpose than the carriage of mails ; and my honorable friend, Senator Fraser, hit it off very correctly when he said just «now - giving expression to something which I have on my notes - that the probabilities are that the steamers will not only traverse the Australian coast ; but after delivering their mails at Adelaide, there is a probability that they will go off to New Zealand. But Senator Fraser did not say what I am going to suggest, namely, that in all probability the New Zealand Government will pay a very handsome subsidy to get those steamers to cross over to New Zealand rather than that they shall - traverse the southern and eastern shores of Australia. And these contractors - :if the thing ever becomes a going concern - will, in .pursuance of the subsidy granted by the New Zealand Government, cause their steamers to cross the ocean, and obtain the advantages of a satisfactory cargo, plus a' Government subsidy which they cannot get by going along the south and east coast of Australia.


Senator Fraser - That is quite possible.


Senator Col NEILD - Absolutely possible ; and I think it is more than possible - it is highly probable.


Senator de Largie - Will it be possible for the steamers to obtain as profitable a trade by going to New Zealand as they would get by calling at Melbourne and Sydney ?


Senator Col NEILD - I think that the possibilities are greater - there is less competition for the shipping trade of New Zealand than for that of Australia ; but I am suggesting the likelihood of the New Zealand Government paying a subsidy as against the advantage to the steamers in going rd Melbourne and Sydney without any subsidy. They will have earned their subsidy from the Federal Government when they have reached Adelaide.


Senator McGregor - Is the honorable senator advocating a Commonwealth-owned line?


Senator Col NEILD - I am not advocating anything of the kind, but I am pointing out that the Government has been hypnotized by a gentleman named Croker, who evidently does not know everything about steam-ship matters, but who, it is a matter of common talk in the city, is receiving .£5,000 for working this option through. Any one can go on to .the Stock Exchange and hear that. I am only relating what is ordinary talk in the city. The Government has been hypnotized by this very eloquent £4,000 gentleman.


Senator Best - £9,000?


Senator Col NEILD - £9,000? Good luck to him if he gets it.


Senator Best - The honorable senator mentioned £5,000 and £4,000 - that makes £9,000.


Senator Col NEILD - The Government has been hypnotized by this gentleman, and has accepted and entered into an agreement, but the dear, good people thought that they were inaugurating a Commonwealth mail service, whilst they were doing nothing of the kind, but only granting an option. Reference has been made to the deposits required in connexion with Government contracts. Let me draw attention to what States Governments have required in connexion with carrying out public or semi-public works by private individuals. I might take a case such as the laying down of a few miles of railway in connexion with a coal mine.


Senator Fraser - I think I had" to deposit £10,000 in connexion with the building of a line 'from Bendigo to Echuca.


Senator Col NEILD - I think it is very probable. I might refer to a case where Parliament grants right by Statute to carry out some work of a semi-public character, such as the construction of a harbor or the carrying out of irrigation works or waterworks. Let me instance one or two cases. A Bill was passed through the New South Wales Parliament - I had charge of it - for the purpose of supplying Broken Hill with water. It was necessary, under that Bill, for the promoters to pay to the Treasury of New South Wales - not a bond which could be litigated upon by-and-by, but hard cash, to the sum of £10,000, within, I think, three months of the Royal Assent being given to "the Bill. , The same thing happened in connexion with a Bill to enable a company to make a harbor. In that case the deposit was the same. The harbor was never made, and the Treasury Accounts were flushed by the £10,000 deposited. I need not occupy the time of the Senate by quoting other instances of the same kind. But surely, in the face of such instances, there is something to be said against the mere payment of £2,000 by somebody, to somebody, somewhere, particulars of which we have not been able to ascertain.


Senator Keating - :The £2,500 - not £2,000 - is in Australia.


Senator Col NEILD - Has it been deposited here?


Senator Keating - Yes.


Senator Col NEILD - That is a little bit better.


Senator Keating - We also have a bank guarantee for £25,000 in London.


Senator Col NEILD - The honorable senator has not seen any document to that effect. He does not know of his own knowledge that the money has been guaranteed. He must, as a lawyer, have had before him in his professional capacity instances where guarantees have been made the subject of very extensive and expensive litigation. The honorable senator will not dare to tell the Senate, either as Minister or as lawyer, that a guarantee or bond is equal to hard cash. Never a law term passes but there are actions upon guarantees and bonds. Cases of that kind are amongst the commonest known to the law. We have had litigation in Australia extending over three, four, and five years, and eventually going to the Privy Council, in regard to guarantees and bonds. In this case, the bond is one which, if it ever has to be enforced, is held at the other end of the world. That bond ought to be here. It is a most unsatisfactorydocument, inasmuch as we know nothing about it, except that we have the bare assertion that it exists. We do not know anything about its terms. All that we are told is that a bond has been entered into by some one, andthat the sum of £25,000 is mentioned. I say that such a deposit as £2,500, with a bond somewhere or other at the other end of the world, is a guarantee altogether at variance with "the practice of the States Governments when they grant to private individuals or public companies, extensive public or semi-public rights. There is another feature of this matter that has not been mentioned, but is of some consequence. There is a condition in the contract that enables the Commonwealth to take over the line of steamers at any time it chooses. But we are told that Messrs Laing and Sons are to be the builders of these ships. Clearly there is no obligation upon them to build the ships except in their own way, on their own terms, and at their own price. They can value them at whatever figure they like.


Senator Guthrie - Plans must be submitted.


Senator Col NEILD - What is to prevent the nominal value of those ships being swollen by well known methods, so that if ever the Commonwealth desires to take them over the owners will be able to set up a claim for a much higher price than they were actually worth? If they were to be built by contract, we should know what the real value was. But they are to be built by the contractors, who are to placetheir own price upon their own work. What is to prevent a sum of as many thousandsof pounds a year as you like to name being debited to these ships by way of management, or on account of chairman of directors, president of the board of management, or whatever you please to call it. Charges can be made to the extent of many thousands of pounds a year for fictitious or semi-fictitious services. The nominal cost of the ships may be piled up in that manner, in a way that would be eminently disadvantageous to the Commonwealth if it desired to purchase them. I do not think that I quite finished - by reason of interjections - saying all that I desired with reference to the failure of the Government to fix a maximum charge for the carriage of refrigerated cargo. The butter trade has grown to such an extent that while the freight some years ago was no less than 3d. per lb., it is now down as low as1/2d. or3/4d. per lb. That fact shows how immensely important the trade is. I may state, with all humility, but at the same time with a degree of certainty concerningthe truth of my utterance, that the Government has lamentably failed in protecting one of the primary industries of Australia, in not' fixing in this agreement or option a reference to the rate of freight which this company - if it ever commences operations - will be entitled to charge. We know that the Peninsular and Oriental Steam Navigation and the Orient Steam Navigation Companies have been working on the same rates of freight. But if this new company comes into being, the Orient Steam Navigation Company will probably be out of the way ; and there wilt be nothing to prevent a new arrangement being entered into between the new company and the Peninsular and Oriental Steam Navigation Company, under which the only two companies with a regular delivery in London ' will be able to charge whatever rates of freight they please for the benefit of their shareholders, but to the detriment of the producers of Australia. It is all very well to say that it is only a question of1/4d. a lb., or something of that sort. But by the time the butter is delivered on the London market, it may mean much more than1/4d. a lb. A difference of1/4d. per lb. freight may make a material difference in the price which the farmer gets for his goods. I desire now to clear away from the mind of Senator Fraser, or any other honorable senator any doubts there may be as to the meaning of " registered tonnage."


Senator Fraser - We all know what the meaning is, but the working out is very difficult.


Senator Col NEILD - The working out is provided for in every detail in the British Merchant Shipping Act, from which I shall read a few passages of importance in this connexion. Let me say, in passing, that many years ago there was a great controversy as to the fixing of registered tonnage for the purpose of levying dues on vessels which passed through the Suez Canal : and after the point had been settled by, I think, an international tribunal, the method of measurement set forth in the Act I have just mentioned was agreed to, and has been acted on ever since. Section 78 of the Act dealing with screw steamers provides -

In the case of any ship propelled by steam or other power requiring engine room, an allowance shall be madefor the space occupied by the propelling power, and the amount so allowed shall be deducted from the gross tonnageof the ship ascertained as in the last preceding section mentioned, and the remainder shall (subject to any deductions hereinafter mentioned) be deemed to be the register tonnage of the ship, and that deduction shall be estimated as follows; (that is to say) and in ships propelled by screws, in which the tonnage of such space is above 13 per cent., and under 20 per cent., of the gross tonnage, the deduction shall be thirty-two onehundredths of the gross tonnage.

Paragraph b provides - and in the case of ships propelled by screws, the contents of the shaft trunk shall be added to and deemed to form part of the space ; and the measurement of the space shall be governed by Rule in in the second schedule of this Act.

I shall read as little as possible, but I must draw attention to a portion of section 79, as follows : -

In measuring or re-measuring a ship for the purpose of ascertaining her register tonnage, the following deductions shall be made from the space included in the measurement of the tonnage, namely : -

(a)   In the case of any ship - (1. ) any space used exclusively for the accommodation of the master ; and any space occupied by seamen or apprentices and appropriated to their use, which is certified under the regulations scheduled to this Act with regard thereto ;

(ii)   any space used exclusively for the working of the helm, the capstan, and the anchor gear, or for keeping the charts, signals, and other instruments of navigation, and boatswains stores ; and

(iii)   the space occupied by the donkey engine and boiler, if connected with the main pumps of the ship.

I could elaborate by reading more, but I think I have read amply sufficient to make the point clear to honorable senators. These sections show most conclusively that in the case of screw steamers - and no doubt the vessels proposed in the agreement will be propelled by screws - all the space required for engine-room, boilers, screw shaft, accommodation for captain and crew, stores of all kinds connected with the working of the ship, and, as provided later on, also the space between double bottoms, if any, is to be deducted from the gross measurement of the ship before the registered tonnage is arrived at. It will be seen that materially more than one-third of a vessel's gross tonnage has to be deducted in thisway ; and therefore, if, for the sake of dealing with round figures, we suppose a vessel to be 15,000 tons gross, some 5,000 tons must be allowed for, leaving only 10,000 tons as the " registered tonnage."


Senator de Largie - Does that system of measurement obtain in Australia under cur Navigation Act?


Senator Guthrie - We have no Navigation Act.


Senator Col NEILD - There can be no doubt that any legal proceedings in connexion with the proposed option agreement - I decline to call it a mail contract - would be taken in England, and that the British Merchant Shipping Act would necessarily be the authority on which the Court, or, it might be, the Privy Council, wouldrely. Apparently there is no one in Australia to actfor the company, because Mr. Croker would disappear from the scene quickly enough, unless he remained in a professional capacity, as he verylikely might do.Clearly there is no probability of litigation at this end of the world.


Senator Best - The British Merchant Shipping Act applies in Australia.


Senator Col NEILD - No doubt it does. Not possessing thelegal knowledge of Senator Best, I was merely pointing out that, as a matter of fact, any suit connected with this option would have to be tried in England, and that the Merchant Shipping Act would be the authority relied on.


Senator Guthrie - In case of a contract made in Australia?


Senator Col NEILD - I do not know where it has been made.


Senator Guthrie - It has been made here.


Senator Col NEILD - I do not think so.


Senator Guthrie - It is signed by the Postmaster-General. Where did he sign it- - in Home?


Senator Col NEILD - I do not know, though we have had an allegation about a cablegram. A cablegram, however, is not good in law unless it be proved who is the sender; just as a bank will not pay money on a telegram, unless there be some proof as to the sender of the message. A cablegram will not bind anybody at the other end of the world, unless there be satisfactory proof, not only as to who sent it, but also .is to the authority for sending it.


Senator Fraser - If the parties themselves send the telegram and get a reply, they are bound.


Senator Col NEILD - The honorable senator is surely forgetting the many vicissitudes that have overtaken people who have innocently entered into contracts they believed to be good and sound, but which have produced an aftermath of litigationsuch litigation as that in which "the legal gentleman concerned in this option would shine, as he did before the Butter Commission. I have pointed out what I conceive to be serious objections to a contract, which, if it: be given vitality in the future, will possess some elements of possible advantage. At present..«however, the agreement is surrounded with much uncertainty, and there is a lack of, I shall not say legal proof, but common-sense business proof, as to the iona fides of those concerned. After all, what we have before us is merely an agreement for an eighteen months' option in favour of certain people at the other end 0^ the world, to whom a well-known firm mav possibly have allowed the use of its name, in prospect of getting a glorious job in the construction of vessels - a finer prospect, seeing that the vesels are apparently to be all on the same model, than, perhaps, exists in the minds of any other ship-builders in the . United Kingdom. Mr. Croker, or somebody else, has deposited a very small sum of money in Australia, but we have no other proof of bona fides beyond a statement that somebody has given to somebody else, somewhere, an alleged bond, and that somebody has despatched a cable from England to the Commonwealth PostmasterGeneral. Yet we are trading away, with all the solemnity of parliamentary sanction, an eighteen months' option .to enable the persons who are manipulating this business to see how much money they can make out of it in financial circles in London. There is the prospect that if the option does eventuate, the steamers may never call at any Australian port after Adelaide, but mav, under a subsidy from New Zealand, proceed to that important Colony - a prospect that we may see no more of the steamers than their arrival in and departure from Spencer's Gulf. I do not think that this contract, or, rather, this option arrangement, furnishes the Commonwealth with any material basis for jubilation. On the contrary, I am afraid that it is an option agreement, which, in the first instance, is very likely to come to nothing. I see that this transaction is being boomed in the newspapers at Home for flotation purposes. Every one with any knowledge or experience of financial methods, is aware that it only requires a certain price te create a boom in certain monetary journals in the city of London. We have all heard of the thousands of pounds which had to be disgorged not long ago bv certain newspaper writers in England in connexion with a scandalous flotation. The new mail arrangement is now being hailed as a great success ; and if the booming is only done industriously enough, some capital will be raised, and. probably a company formed. But the'e is another drawback, which, I am sorry I did not mention before. Under the agreement, it is open to the PostmasterGeneral to permit the assignment of this option to anybody.


Senator Fraser - That ought not to be allowed.


Senator Col NEILD - That ought not to be allowed; it should be subject to the approval of Parliament. I make no suggestion of impropriety, either at present or in the future, but I do say that the transfer of a great contract like the one proposed is too great a responsibility and power to be exercised by the gentleman, whoever he may be. who, for the time being, occupies the position of Postmaster-General. Indeed. I think it is too great a responsibility to be exercised bv even the Ministry of the day. If the Government may not enter into an option bargain of this kind without the sanction of Parliament, why should the greater power I have indicated be given to a future Ministry, or even the present Ministry, if the latter last Jong enough, which I do not think likely? I cannot be accused of saying anything personal, because I cannot form any opinion as to who may be the successors of the present Government. If the present Government feel that this agreement option for eighteen months is a matter of such importance that they cannot deal with it, and must seek parliamentary sanction for it, that is proof enough that any succeeding Ministry should be required to come to Parliament for the sanction of any transfer of the bargain to any one else. If this is James Laing a:nd Sons' contract or option, they are, we understand, responsible parties, but while there is nothing in this agreement to prevent such a thing, there is, on the other hand, every provision in it to enable the PostmasterGeneral of the day to consent to the transfer of the contract or option to anybody - to any parcel of monetary sharks or adventurers calling themselves a company with capital, actual or alleged, and probably alleged more than actual. I think there should be a clause in this contract to provide that it shall not be transferred or assigned to any person, body, or company, except with the approval of Parliament. I have said what I have, because it seems to me that the matters I have mentioned are of paramount importance, and I have not taken up the time of the Senate for a moment longer than I have thought necessary in the discharge of my public duties.







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