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Wednesday, 15 August 1906


Senator DOBSON - There is an authority whichsays that, whether the combinations are reason- ' nb'e or not, thev are illegal.


Senator Sir JOSIAH SYMON - If the honorable and learned senator thinks that fixing prices- is in restraint of trade he will act on that ' opinion.


Senator Best - There are several cases inwhich the Courts say so.


Senator Sir JOSIAH SYMON - There arenot, as Senator Best will find. I have looked" into the cases with some care.

I, too. have looked into the matter with-, some care, and the result of my investiga-, tion is as I have stated. The cases that I"' have quoted to the Senate distinctly show that whether the contract is beneficial or injurious, reasonable or unreasonable, if it be in restraint of trade that fact in itself is sufficient, and the contract is illegal. ' Senator Millen graphically put before the Senate this state of affairs. He said ' that the New South Wales Government had entered into a contract with a combination of wire netting manufacturers* in the old country for the supply of some 5,000 miles of wire netting. Holding up the Bill, he said, " This Bill is going to declare that contract to be illegal, and therefore null and void." He went on to say, "But I challenge the Minister of Defence, with all his army, to keep that wire netting out of New South. Wales !" I wish to tell my honorable friend that this Bill does not declare a contract of that kind to be void at all.


Senator Millen - My whole argument was that the Bill either meant prohibitionor it was a nullity. Senator Best supports everything that I said, and proves that the Bill will be a nullity.


Senator BEST - I understood my honorable friend to say that under this Bill the contract made by the New South Wales Government would be a nullity. My answer is that such a contract would not be a nullity, unless it could be proved that it was a contract detrimental or injurious to the public. Otherwise it would be- perfectly proper, and would not be affected by the terms of this Bill.


Senator Millen - The honorable senator overlooks clause 6, paragraph b.


Senator BEST - I will undertake to deal with that provision. Then my honorable friend referred to a contract entered into, or about to be entered into, by a number of dairymen with some capitalist, who undertook to erect butter factories on condition that those dairymen gave him their trade. Mv reply to -that is that, unless mv honorable friend can assure me that the contract is injurious and detrimental to the public, it is a perfectly good one, and. if this Bill were passed tomorrow, would not be affected by it in any shape or form.


Senator Millen - It is a restraint upon trade.


Senator BEST - Such a contract would be bad under the Sherman Act, so much admired bv honorable senators who oppose, this Bill, but it would be perfectly good under this measure. I promised honorable senators that I would point out the English principles upon which this Bill is founded. I have shown that under American law any contract in restraint of trade, whether beneficial or 'injurious, is bad. As regards English law, the principle is laid down in the case of Nordenfelt v. Maxim, reported on page 549 of the Appeal Cases of 1894. Lord Herschell laid down this well-established and fundamental principle -

I would adopt in these cases the test which in a case of partial restraint was applied by the Court of Common Pleas in Horner v. Graves (1), in considering whether the agreement was reasonable. Tindal, C. j., said: "We do not see how a better test can be applied to the question, whether reasonable or not, than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in favour of whom it is given, and not so large as to interfere with the interests of the public."

Lord Watson said -

It does not seem to admit of doubt that the general policy of the law is opposed to all restraints upon liberty of individul action which are injurious to the interests of the State or community.

So that the British principle is that a. restraint in trade may be reasonable or it may be unreasonable. If it is fair and reasonable, that restraint in trade is good,, according to British law. If it is unfair or unreasonable it is bad. And it is so under the terms of this Bill. It is only in cases where there is, with intent, restraint of trade to the detriment of the public, or where an offence is committed, or a man enters into a contract, or continues in a combination, with intent to destroy or injure by means of unfair competition any Australian industry, the preservation of which is advantageous to. the Commonwealth, having due regard to the interests of producers, workers, and consumers - whose interests are so exclusively looked after by my honorable friends who oppose this Bill - that the action is illegal. This measure, therefore, is founded on British principles. There is another important matter to which I have been asked to make reference, and which requires a great deal of attention. That is the question of our power to interfere with persons who confine themselves to trading simply within the limits of a particular State. The question is : What are 'the powers of the Commonwealth in regard to triose persons ; and, also, what are the powers of the Commonwealth in relation to foreign corporations that attempt to trade within the Commonwealth? The difficulty will, no doubt, appear to some honorable senators to be more of less intensified when I say at once that I differ from the view of my honorable friend, Senator Symon. I should say, however, in justice to him, that I believe that if he had not overlooked the matter to which I am about to refer, he and I would probably be in complete agreement. Senator Symon said in the course of his speech -

Honorable senators will recollect that we have no power to deal with trade which is confined in its operations to any one State. Our only power in this matter is to deal with trade and commerce between the States and with foreign countries. Clauses 5 and 8 are certainly couched in a form of words which makes it extremely doubtful if an attempt might not be made under this measure to interfere with trade which is absolutely confined within a particular State.

I do not know how we are going to get at a foreign corporation.

He expressed doubts whether clauses 5 and 8 of the Bill, are constitutional, and relied upon certain American cases in support of his view. But my honorable friend overlooked the important fact that our Constitution is not the same as that of America. It is wider. The feature of our Constitution which is not embodied in the American, and which makes all the difference, is paragraph 20 of section 51, which authorizes this Parliament to-make laws " for the peace, order, and good government of the Commonwealth," with respect to -

Foreign corporations and trading or financial corporations formed within the limits of the Commonwealth.

That is not in the American Constitution. If it were there, then, in my opinion, we should not have the America decisions to which Senator Symon has referred in support of his contention. Consequently, it is by reason of section 51 of the Constitution, paragraph 1 -

Trade and commerce with other countries and among the States - together with paragraph 20, that we are enabled to enact clauses 4 and 7, which must be read together, and clauses 5 and 8, which must also be read together. I propose to explain as carefully as I can our constitutional powers in regard to these matters. Clause 4 provides that -

Any person who, either as principal or as agent, makes or enters into- any contract, or is or continues to be a member of or engages in any combination, in relation to " trade or commerce with other countries or among the States."

That follows the wording of paragraph 1 of section 51 of the Constitution. If hon- orable senators will refer to clause 7, they will see that precisely the same words are, advisedly, made use of as regards trade or commerce -

Any person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, with intent to control, Fo the detriment of the public, the supply or price of any service, merchandise, or commodity, is guilty of an offence.

That again follows the terms of the provision in the Constitution, so that it will be observed that when dealing with a person as against a corporation, clauses 4 and 7 refer to trade or commerce done by that person, with other countries, or among the States, and not to trade or commerce confined within the limits of any one StateThen under paragraph xx. of section 51 we have power to make laws in regard to -

Foreign corporations, and trading or financial corporations formed within the limits of theCommonwealth.

If honorable senators will refer to clause 5 of the Bill they will see this provision -

Any foreign corporation, or trading or financial corporation formed within the Commonwealth, which, either as principal or agent, makes or enters into any contract, or engages or continues in any combination - to do so and so, shall be guilty of an offence. Then, in clause 8, the constitutionality of which was doubted by Senator Symon, precisely the same words are used again -

Trade or commerce within the Commonwealth,, with intent to control, to the detriment of thepublic, &c.

In clauses 5 and 8 there is no such limita-' tion as in clauses 4 and 7. In other words,, the Bill seeks to control the trade or commerce of the corporation referred to, even, if confined to the limits of a State; and,, according to my view, paragraph xx. of! section 51 gives us full power to do so.. So that the constitutional position appears, to be that we, as a Commonwealth, have nopower to deal with or control any tradecarried om by an individual within the limits, of a State. If, however, he attempts, to deal with other States, or with' trade and commerce beyond the Commonwealth, we have full constitutional powerto control him in the terms of clauses 4- and 6 of this Bill. But let us now take the other contingency. In regard toforeign corporations, I contend we have complete and unlimited control. If a. foreign corporation chooses to establish itself in a State of the Commonwealth, even if it confines its trade to the limits of that State, we have complete control over it.


Senator Millen - Does not the honorable senator think that the Federal power over corporations is necessarily limited by the power conveyed in the trade and commerce provision ?


Senator BEST - No; the power over corporations is given by paragraph xx. of section 51 of the Constitution.


Senator Millen - All under one general provision.


Senator BEST - By the combination of paragraphs 1 and 20 of section 51 we have complete control over foreign corporations, whether they confine their business within the limits of a State or not. My view is that each of the paragraphs in section 51 is covered by the opening words of the section giving Parliament power to make laws for the peace, order, and good government of the Commonwealth ; that each paragraph confers jurisdiction as to the subject to which it refers; that each can be read independently almost as though the other thirty-eight paragraphs were absent ; and what is most important, that the "words or phrases of each paragraph are to be given their fullest meaning, and are to be construed in their widest sense. These are the principles followed in the interpretation of the American Constitution.


Senator Millen - The honorable senator will, get a shock when the point is determined by the High Court.


Senator Findley - What can we do to corporations or combines within the Commonwealth ? We cannot put them in gaol.


Senator BEST - I shall show how they can be dealt with.


Senator Playford - We can touch their pockets sometimes.


Senator Findley - We can touch the pockets of private individuals, but we cannot touch the pockets of corporations and combines.


Senator BEST - I shall deal with that matter if. my honorable friend will allow me. We have complete control over a local or foreign corporation.


Senator Findley - What does the honorable senator mean bv "complete control " ? '


Senator BEST - A foreign corporation, or a trading or financial corporation formed within a State, and confining its trade to the State, comes within the Commonwealth-' control and jurisdiction. That is, I think, the proper constitutional view of the matter, and that view is certainly carried, out by the terms of the Bill. Senator Findley has interjected, " We cannot put a corporation in gaol." That is quite true; and the Bill deals with a contingency of that kind by clause 9, which says -

Whoever aids, abets, counsels, or procures, or by act or omission is in any way, directly or indirectly, knowingly concerned in or privy to - . (a) the commission of any offence against this Part of this Act; or

(b)   the doing" of any act outside Australia which would, if done within Australia, be an offence against this Part of this Act, shall be deemed to have committed the offence.

If there are any local directors, or if there is a local manager or agent carrying on the * business of that concern, and it has committed an offence, against the Commonwealth, they or he will be liable to imprisonment.


Senator Findley - That is all right; but each corporation will get a secretary who will take those risks.


Senator BEST - That may be; we cannot do impossibilities. We have power to control their goods, so that we could soon stop their operations. I hope that I have made it clear - and I admit that the matter is a subject of much confusion - in what circumstances individuals and corporations will be amenable to the terms of the Bill.


Senator Mulcahy - Why are we restricted in the case of an individual who confines his business to a State?


Senator BEST - Because the Constitution says so.


Senator Millen - No; because Senator* Best says so.


Senator BEST - My honorable friend* need not be offensive. I trust that I am at liberty to give an opinion on this subject.


Senator Millen - Yes ; but it is not cor- rect to assert that the Constitution says so. That is only the honorable senator's interpretation of the provision.


Senator BEST - In my opinion, the Constitution says so, and I challenge my honorable friend to controvert that view. I contend that we have no control over any individual who confines his trade to. one State.


Senator Mulcahy - Where do 0'. . get power over art individual when he extends his trade beyond .the limits of a State?"


Senator BEST - Under paragraph 1 of section 51 we have power to make laws in regard to -

Trade and commerce with other countries, and among the States.


Senator Millen - The honorable senator says that that is limited to an individual, not to a corporation.


Senator BEST - I do not say anything of the kind.


Senator Millen - The honorable senator said so just now.


Senator BEST - I said that it includes individuals as well as corporations. Senator Symon asks what is the meaning of the word " service " in clause 7 of the Bill. He says -

Does it mean labour? I think it is quite clear that the trade unions would come under the provision. I think it means labour.

Again, I have to differ from my honorable and learned friend. The clause says -

Any person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize; any part of the trade or commerce with other countries or among the Stales, with intent to control, to the detriment of the public, the supply or price of any service, merchandise, or commodity, is guilty of an offence.

It will be seen that the " service " has to form part of the trade and commerce.


Senator Dobson - The honorable' senator does not think that it applies to labour?


Senator BEST - According to my view, certainly riot. The service must be part of the trade and commerce. There are certain American cases which deal with the matter. There is a case known as the United States v. Knight and Company, heard in 1895, and reported in 156 U.S.I:, of which I have a short note - "

American Sugar Refining Co. (N. J. Corp), by buying up four Philadelphia corporations, acquired practical monopoly of manufacture. Manufacture is 'not commerce. Transaction bore no direct relation to Inter-State commerce.

That means to say that those engaged in manufacture are not engaged in trade and commerce. But then there are certain other cases. There is, for instance, the case of the United States v. the Trans-Missouri Freight Association, in which it was decided that -

Restraint provisions apply to contracts between competing carriers, relating only to rates for transportation.

Not necessary to prove purpose, to restrain, if necessary effect is to 'restrain.

Application, to all restraints - reasonable or unreasonable.

That is supported by certain other . cases, including the United States v. The Joint Traffic Association, and also the Addyston Pipe and. Steel Company v. United States, . which has already been referred to. So that " service " in clause 7, being part of the trade and commerce, means transportation, and, according to my view, cannot have any regard to the labour engaged. I wish to attack another matter of which my honorable friends have made much. They have objected that this Bill is a mere scheme and pretence for further protection, and inquired why do not the Government boldly and honestly introduce Tariff proposals for increased duties.


Senator Mulcahy - That would be much more honest, anyhow.


Senator BEST - I shall try to satisfy my honorable friend that Tariff proposals and this Bill have two totally different objects in view.


Senator Mulcahy - Not according to my reading of the Bill.


Senator BEST - Even if the members of the Government did introduce Tariff proposals, my honorable friends would not be satisfied, but would be equally strenuous in their opposition. The Bill is certainly introduced with the. object of further protection in one aspect, but not as generally understood.


Senator Dobson - Canada and New Zealand fell ,back upon protection for a remedy.


Senator Best - That may be ; but I wish to answer the objection just mentioned. Protection is very important. The object of Tariff proposals is to equalize conditions. We take our industrial conditions and star dard of life, and then we raise a barrier, so as to give our own people a fair show.


Senator Mulcahy - Do not the protec'tionists go a long way beyond that sometimes ?


Senator BEST - Will my honorable friend hear me out?


Senator Mulcahy - I know that they do. I do not mind it sometimes, but it is well to be frank about it, is it not?.


Senator BEST - I hope that I am very frank. The objection of my honorable friends is that all that is sought to be achieved, bv the Bill could be achieved bv Tariff proposals, and that that would be a more honest way of dealing with the subject


Senator Mulcahy - Yea


Senator BEST - The terms and objects of this Bill could not possibly be achieved by Tariff proposals, unless, of course, we framed a prohibitive Tariff, and that point i shall come to later on.


Senator Millen - Then this Bill means prohibition.


Senator BEST - No; that is exactly what it does, not mean, and that is what my honorable friend is disappointed to learn. Its design is to provide for emergencies as they arise, and -under circumstances mentioned in the Bill to prohibit. Tariff proposals are of general application. This Bill is of special application, and is only intended to meet emergencies. Tariff proposals deal only with normal conditions. This Bill seeks to deal with abnormal conditions. Tariff proposals, to a . greater or less extent, encourage trade on fair conditions. This is a Bill to prevent trade on unfair conditions; in other words, it is intended as an emergency measure, with the view that, if Messrs. Rockefeller, or other unscrupulous multi-millionaires of his type, attempt to swoop down upon our industries, we shall have at hand legislation to enable us to cope with them. (Personally, I do not hesitate to say that I object to a prohibitive Tariff. At the same lime, as a protectionist, what I seek to achieve is fair play for our own industries. If we attempted by means of the Tariff to secure what is aimed at by this Bill, we 1 should require to have a general prohibitive Tariff, under which unfair combinations, seeking to do injury to our industries, would be treated only in the same way as the fair trader. Such a thing we do not desire. We desire to encourage, trade on fair conditions, but we will not submit to colossal combinations or trusts bringing goods here- with the object of crushing our industries. According to honorable senators in opposition, in honesty this should only be done by a prohibitive Tariff. But, as we object to a prohibitive Tariff, which would punish the fair and the unfair traders alike, we prefer to resort to the means provided by this Bill. The contingencies proposed to be dealt with are well illustrated by what has taken place within our own experience. I ask honorable senators what it is that the International Harvester Company have attempted to do? I have had put into my hands one or two letters, to which the attention of the Senate might well be directed. Honorable senators are aware that some time ago the International Harvester Company boasted that they controlled 90 per cent, of the trade in agricultural implements.


Senator Playford - In the States.


Senator Findley - That was only the boast of a traveller.


Senator O'Keefe - Is that 90 per cent, of the United States trade?


Senator BEST - I think it was the trade of the world that was referred to, and they had certain designs on the remaining onetenth.


Senator Trenwith - They claimed to have 90 per cent, of the world's trade in harvesting machinery.


Senator Millen - The honorable senator could not make that statement on his own responsibility.


Senator BEST - -No, I could not; but I shall read the letter which is my; authority for the statement.- It speaks for itself. This letter has evidently been printed and circulated, and I presume that it is authentic in every way. It is a letter from the International Harvester Company to an agent of the Sunshine harvester, and is dated 3rd February, 1905 -

Dear -sir,

We regret to note that you have the agency for' the sale of McKay harvesters.

Now that we have not only the most complete but no doubt the best line of harvesting and seeding machinery in Australia, .we would ask you to discontinue McKay harvesters, as we are positive you could do .much better if you handled our goods exclusively. The inducement we offer you in the way of commission and competent salesmen and experts should be an incentive to you to stand by the company, that is not only in a position to give you the largest line of goods to which they are adding every year, 1 but are ever ready and willing to treat fairly with you in assisting you in every way possible to make a success.

You are no doubt aware that the International . Harvester Company of America manufacture and sell 90 per cent, of the world's output of harvesting machinery, and it goes without saying that this company will continue to grow, and under such circumstances we are sure you would prefer to be identified with a company that will be . the most .useful to you from a remunerative stand-point.

There is also another advantage for you particularly to note, viz., a' very considerable saving of your time and horse flesh in being able to take care of the whole of your machine business during one visit, with the one salesman of proved ability and experience. There will be a saving of your valuable time on sales and keep: ing accounts and in correspondence.

We feel that our full line should be distinctly represented by each and every agent with whom we contract, and when one of our agents handles other lines of goods that are in direct competition. with ours or part of ours, we feel that our business suffers thereby to a certain extent, and we are therefore inclined to the opinion that should we be obliged to transfer the agency on this account, even if the new agent were unable the first year to sell as many machines of a certain kind asthe former agent did, that in the aggregate he would do a better business for us than the agent who sells only certain lines of our goods to the exclusion of the balance.

We are placing this matter fairly before you in order that you may see it from our view point, and we trust that this letter will be the means of securing to us an exclusive contract with you for the McCormick line.


Senator Millen - Does the honorable senator think that it is unreasonable that a manufacturer should ask his agent to confine himself to the interests of his employer ?


Senator BEST - That might be perfectly legitimate. I am not complaining about that ; but I wish to show the whole of the tactics that were adopted.


Senator Pearce - Lawyers sometimes get a retaining fee.


Senator Millen - And they want it.


Senator BEST - Here is another letter addressed to Mr. McKay, and dated 25th October, 1902 -

Dear sir,

I have been offered£70 cash on starting for a Sunshine harvester. Kindly inform' me if you will accept it, it is going into a new district, and my client has been offered good terms by the International, and intends going for one if you cannot do a Sunshine at this price offered.

I was present when the International representative offered thefollowing terms, viz. : - 1. or 2 machines at... ...£60 cash. 3 machines at ......£150cash.

So you can see what is being done. He sold two at£120 to one man. Ofcourse, I could not go near him at your prices. Early reply will oblige.

That is important, because when the Minister of Trade and Customs raised the valuation of these machines for Customs duty to £65, there was a great outcry against his action. I understand that these people set to work to secure the trade by reducing their prices, although at one time they represented that, in view of the cost of "manufacture and expensive sale, they could not sell at a reasonable profit below £81.


Senator Millen - That was when they were in the combine with McKay.


Senator BEST - I have nosympathy with the combine, whether Mr. McKay was a member of it or not.


Senator Millen - He has no sympathizers, but he finds many preparedtoputforward his views.


Senator BEST - I understand that at one stage the International Harvester Company said that they could not sell at a reasonable profit under £81 for each machine.


Senator Trenwith - They said that they could not sell at a reasonable profit at£8i.


Senator Millen - McKay said the same. Senator BEST. - Notwithstanding that fact,we have it recorded in the letter I have read that they not only attempted to sell, but actually did sell, one of their machines at £60, and three others for £150,or£50 each. What is the object of this? This indicates in a small way whatwe have reason to expect will develop.


Senator Findley - Did McKay never sell a machine for less than £81 ?


Senator BEST - Very likely he did, and 1 remind honorable senators that the object of this Bill is not merely to regulate the International Harvester Company, but likewise Mr. McKay. Mr. McKay's trade is not confined to one State. It extends throughout the States, and he has also an export trade. Consequently if he transgresses in any way the provisions of this Bill, he will be liable to the punishment provided for offences against the measure. The law is that, if persons conspire for the purpose of committing a criminal offence upon an individual, they will be liable to punishment, and if they conspire for the purpose of injuring any Australian industry, they will, under this Bill, be guilty of a criminal offence, and liable in that case to punishment also. According to my view, the Bill is one which should be supported by free-traders and protectionists alike. I will take, for example, the instance of an industry in New South Wales-if it is possible that any industries have been established there under free-trade, and I do not know whether there have been any.


Senator Millen - What a lamentable want of knowledge.


Senator BEST - Perhaps, or it maybe due to obtuseness. However, let us by a stretch of imagination assume that an industry has been established in New South Wales under free-trade.


Senator Millen - Is the honorable and learned senator certain that there is such a place as New South Wales to start with?


Senator BEST - I believe that there is such a place. I understand that the Federal Capital is to be established in that State. I take, for example, an industry established in New South Wales, if honorable senators please, under free-trade, and I would ask my honorable friends from that State who are opposed to this measure, whether they would quietly stand by if they saw a nefarious effort, on the part of Mr. Rockefeller, to whom I refer as a typical individual, or on the part of the International Harvester Company,, or any other vast capitalistic combines being made with the deliberate intention of wiping out that New South Wales industry?


Senator Millen - - How is the honorable and learned senator to prove the intent?


Senator BEST - If that was not proved the effort would not be punishable under this Bill.


Senator Millen - Then the Bill would become a nullity.


Senator BEST - In that case, the honorable senator should not object to it.


Senator Millen - 1 certainly do object to our wasting time in plastering up ;i. placard.


Senator BEST - The honorable senator's objection now is to wasting time, but I understood that his objection to the measure was that it would bring about fearful disasters, and that it was for that reason he proposed to vote against its; enactment.


Senator Millen - - The honorable and learned senator must be aware of the fact that he is not correctly stating my objection to the measure.


Senator BEST - Did the honorable senator not predict disasters under the Bill?


Senator Millen - I said that under the Bill one of two things would happen - prohibition, which would mean disaster, or nullity, which would mean waste of time here.


Senator BEST - The honorable senator predicted all sorts of extraordinary disasters from the operations of the Bill ; and now he contends that it will be a nullity.


Senator Millen - Not only now; I made the same contention last Friday.


Senator BEST - If the Bill be a nullity, the honorable senator need not be so terribly fearful and apprehensive concerning it, because it will do no harm. I ask honorable senators whether they would quietly stand by and see aru industry, which had been established in New South Wales, wiped out by a nefarious combination such as that to which I have referred ? 1 say that it would be unpatriotic on their part to do so. I desire to emphasize the fact that the Sherman Act is designed primarily to meet free-trade conditions, and to urge that free-traders ought to support this Bill. As I say, the object of the Sherman Act is to provide against monopolies under the free-trade which exists throughout the United States. Let us assume that Mr,. Rockefeller, or the International Harvester Company-


Senator Trenwith - Or Mr. McKay.


Senator BEST - Mr. McKay,or 'anybody else, set to work with the determination to wipe out all opposition and capture the whole of the trade of Australia im any particular department of trade - say agricultural implements, by way of example. Let us suppose that such combination or monopoly, seeing sufficient field for their labours, decided to confine their trade to the Commonwealth alone. Under these circumstances, what would be the value of a prohibitive Tariff?


Senator Findley - What would be the value of the Bill ?


Senator BEST - The Bill would meet such circumstances, but a prohibitive Tariff would not.


Senator Mulcahy - Would the Bill meet the circumstances ?


Senator BEST - Undoubtedly.


Senator Trenwith - It would, unless the members of the combination were unscrupulous and clever enough to dodge it.


Senator Mulcahy - Which they always are.


Senator McGregor - They are sometimes caught.


Senator BEST - I ask again how, under such circumstances, the remedy of a prohibitive Tariff, proposed by Senator Millen, would be of any value? Of course, there is no answer.


Senator Mulcahy - Senator Millen does not propose a prohibitive Tariff.


Senator BEST - Senator Millen said that a prohibitive Tariff would be honest.


Senator Mulcahy - It was I who said that.


Senator BEST - The Tariff suggestion is a mere bogy. The object of the Bill is clearly defined - namely, to prevent any deliberate effort to injure our Australian industries. Before I conclude, I desire to glance for a moment or two at the development of monopolies and trusts, and the

American procedure to combat them. At first, the combination or trust was simplybrought about by an agreement to regulate trade and prices. That agreement was held by the Courts to be in restraint of trade, and fundamentally wrong, and, consequently, it was declared to be illegal. In order to, elude that decision, the next step was taken of vesting the stock in trustees, which it was thought, in the absence of an agreement, would not be a combine. The trustees were empowered to declare how they would hold the stock, and by this means they managed to regulate trade. The Courts, however, again decided that this procedure was in restraint of trade, and therefore illegal. The next step was to form a new company, the business of which it was to hold the stock of other companies ; but the final blow was struck even at this device. It was held, in what is known as the " Northern Securities case," that such a holding company was in restraint of trade, and illegal. What I have indicated are the policy, experience, and decisions under American legislation. We have to remember how relentlessly the United States Courts have pursued trusts and combinations, in spite of all the ingenuity and skill of the greatest commercial intellects in the world. It is true that the American Courts have only been able to discount that ingenuity ; but that is no reason why we at the outset of our career, and before combinations and trusts have secured a grasp of the Commonwealth trade, should not take every possible precaution to secure ourselves against the dire contingencies to which I have referred. If we do not curtail the powers and influence of combinations and trusts at the very beginning, they will ultimately become so tyrannical and intolerable as to be an alarming menace to the community.


Senator de Largie - Will trusts and combinations not grow, no matter how we legislate?


Senator BEST - They may to some extent; but that is no reason why we should not clip their wings as far as we can. When experience shows that we are unable to effectively deal with trusts and combinations in any one direction, we should take advantage of the opportunity presented to so amend the law as to make it effective, and we should follow these trusts and combinations, as has been done in the United States.


Senator O'KEEFE (TASMANIA) - Has the honorable senator considered the alternative of nationalizing such trusts?


Senator BEST - That course does not meet with my views or approval; but it isa question into which we need not enter at present.


Senator Millen - Six weeks or two months hence will be time enough for that.


Senator BEST - The Bill has been framed with care, with a view to nullifying, all unreasonable restraints, and unreasonable restraints only, on trade and commerce. The suggestion that it may become an engine of oppression, and may inflict all sorts of cruelties, at the hands" of theProtectionist Party, is unjust criticism-. I should now like to deal with certain other objections which have been raised during the course of my remarks. I desire to show' exactly what would have to take place in a prosecution under this Bill - the proofs necessary before a conviction could be obtained under clause 4. Let us take the case of a man who was charged with making or entering into a contract, or, if honorable senators like, with continuing to be a member of. or engaging in, a combination. The first thing that would have to be proved* would be that the contract had been entered into. I desire honorable senators tofollow me, because I propose to show where presumptions would come in. Then it would have to be proved that the contract had been made with intent to restrain trade or commerce to the detriment of the public On this point, there would have tobe distinct proof - no presumption. Inother words, there should be no presumption- in criminal cases.


Senator Millen - How does the. honor-, able senator propose to prove intent in a case of the kind ?


Senator Keating - How is intent proved* in any criminal case?


Senator BEST - Intent will be proved .inthe same way as in any criminal case.


Senator Millen - By the act and itsconsequences ?


Senator BEST - By circumstantial evidence, and so forth.


Senator Keating - Such proof is essential in every criminal proceeding


Senator BEST - Then there would haveto be proved the existence of an Australian industry which was going to be destroyed or injured, with intent, by means; of unfair competition. This would be ar matter of fact which would have to be proved - no presumption.


Senator Mulcahy - What constitutes an Australian industry ?


Senator BEST - The "honorable senator knows what an Australian industry is.


Senator Mulcahy - I wish to know the honorable senator's .idea.


Senator Millen - Seeing that Senator Best did not know whether any industries existed in New South Wales, he may pardon the question.


Senator Mulcahy - Does Senator Best mean an industry employing one hand or an industry employing ten hands, 100 hands, or 10,000 hands?


Senator BEST - It may be, as the honorable senator suggests, an industry employing either ten hands or 10,000 hands. What I am pointing out now is what would have to be distinctly proved in a prosecution. Further proof would have to be forthcoming that the industry threatened was one worth preserving, or, to repeat an expression I used in 1896, not a " polar tear industry." In' determining whether the competition was unfair, due regard would, under the Bill, have to be paid to the efficiency of the management, the processes, the plant, and the machinery employed or adopted in the Australian industry. We have now reached the stage at which presumptions would take place. The onus would now be thrown on the defendant of proving, say, that he was not a member of a commercial trust. He would also have to prove that the competition would not probably, or in fact, result in inadequate remuneration of labour in the Australian industry, or create substantia] disorganization and throw workers out of employment.


Senator Millen - And if he could not prove that-


Senator BEST - Then he must suffer. If it were proved that a defendant had come into the Commonwealth with the deliberate design to crush out an Australian industry, he would deserve to suffer.


Senator Mulcahy - But, supposing the defendant did not come in at all?


Senator BEST - Then he would not come under clause 4- I would point out that those presumptions in the case of unfair competition would not apply in the event of a charge being laid relating to intent to restrain trade or commerce to the detriment of the public, but only when it could be proved that the intention was to destroy or injure by means of unfair competition an Australian industry worth preserving.


Senator Millen - As to that, the jury decide.


Senator BEST - No; by clause 13 there would be no jury except in the case of a second offence. These matters would not be referred to a protectionist tribunal, but would have to be decided by a Judge of the High Court. Clause 13 says -

Any offence against this part o,f this Act (not being an indictable offence) shall be tried before a Justice of the High Court without a jury.

Then sub-clause 2 provides that -

Any offence against this part of this Act committed by a person who has previously been convicted of any offence against this part of this Act shall be an indictable offence, punishable, on conviction, by a penalty not exceeding ^500, or imprisonment for any term not exceeding one year, or both; in the case of a corporation, by a penalty not exceeding £1,000.

So that it will be seen that for the first offence the offender is to be tried by a Judge, and in the event of a second or more cases an indictable offence is committed ; and, according to section 80 of the Constitution, an indictable offence has to be tried by a jury. What is more, to show that this process cannot be frivolously resorted to, the Bill provides that -

No criminal, proceedings shall be instituted except by the Attorney-General or some person authorized by him ; and no civil proceedings shall be instituted . without the written consent of the AttorneyGeneral.

I would also point out in connexion with the case raised by Senator Millen that where no intention can be proved, but where the objects are such as are set out in clauses 4 and 5-


Senator Mulcahy - It is impossible to prove an object ; you must judge by results.


Senator BEST - If the Judge is satisfied that the restraint of trade is detrimental to the interests of the Australian public, and that the effect is to destroy by unfair competition an Australian industry worth preserving - that is to say, if he is satisfied in the language of paragraph- a of clause 10 that the action is - in restraint of trade or commerce to the detriment of the public - arid if he is satisfied, moreover, that the action is, as a matter of fact - destructive or injurious by means of unfair competition to a->y Australian industry, the preservation of which is advantageous to the Commonwealth, having regard to the interests of producers, .workers, and consumers - then the Judge of the High Court, after judicial inquiry, can issue an injunction. I do not propose to deal at length with an amendment which I intend to propose later on; but I think an amendment should be made to meet certain improper practices in connexion with the system of granting rebates. I will show that there is a definite public opinion on this subject. I have here an extract from the Dairy Farmer and Agricultural News, in which it is said -

The notorious Standard Oil Trust evidently means to fight the Commonwealth Government on the Anti-Trust Bill. A few weeks ago it announced the withdrawal of the rebate it gives distributors, provided they make a declaration they have not handled or sold any other oil but the Trust's. This rebate has again been resumed, and officers of the Trust openly jeer at the ability of the Government to suppress illegal monopolistic practices. The Standard Oil Trust is the parent of the evil brood of Trusts now affecting the world. The Harvester Trust is its progeny, and the Deakin Government would become a laughing stock if it allowed its laws to be so openly defied by this monopoly.

There is an improper practice existing by means of which the Standard Oil Trust insists upon the whole of a man's trade being confined to it, and, in the event of that trade being so confined, certain rebates are paid to him. I shall move an amendment upon this point in Committee, to the effect that these practices shall be regarded as prima facie unfair competition. I shall confine mv further remarks to the clauses relating to dumping. Thev ' are contained in part 3 of the Bill. I point out at the beginning .that rio criminal liability attaches as regards dumping. We have been told during the debate that the effect of the clauses would be to rob consumers of the cheap goods and bargains which hitherto have been a feature of some forms of trading. In my view importers can trade under these clauses just as freely as at present, provided that they do not so trade with the deliberate intention of crushing local industry. Ordinary normal trading, including the selling of cheap goods and bargains subject to the Tariff, may go on precisely the same i,ri future as in the past.


Senator Mulcahy - A tradesman or merchant never has that intention. His idea is always to make a profit.


Senator BEST - If he has no deliberate intention of doing so, he will not be affected.


Senator Mulcahy - What is the good of the clauses, then?


Senator BEST - They are excellent provisions. If my honorable friend thinks, that they will be of no use, he cannot reasonably complain if a number of other honorable senators think that they will be of substantial value.


Senator Mulcahy - I am not- complaining about them.


Senator BEST - Then I do not realize what the honorable senator's objection is.


Senator Mulcahy - I wanted to bring out further argument.


Senator BEST - My contention is that under these provisions trading can go on as hitherto, provided that it is not deliberately injurious to any Australian industry. So much is made clear in, clause 19.'


Senator Drake - Where does the honorable senator find the word " deliberately " ?


Senator BEST - The word " intent " covers that. The clause provides that -

The Comptroller-General, whenever he has received a complaint in writing, and has reason to believe that any person . . ' . either singly or in combination ... is importing into Australia goods . . . with intent to destroy or injure any Australian industry by their sale or disposal in unfair competition with any Australian goods, may certify to the Minister accordingly.

My honorable and learned friend, Senator Symon, said that the goods would be held up. Thev may or ma<- not be held up. If they are, it will be largely the fault of the importer. First of all, they are not to be held up during the consideration of the matter by the Comptroller-General. It will be his duty to give the importer notice to enable him, if he can. to clear himself. If he does not, the certificate of the ComptrollerGeneral will go on to the Minister.


Senator Millen - The goods would be held up because the importer could not pass them through the Customs.


Senator BEST - According to mv view there is nothing in the Bil] which says that the goods shall be held up while the ComptrollerGeneral is acting. -> Senator Millen. - The Customs will refuse to give clearance.


Senator BEST - Whatever powers the ' Customs possess thev mav exercise, but I am talking about this Bill. There is nothing in it which says that the goods may be held up.


Senator Millen - If the goods may be cleared from the Customs, what is the use of subsequent action?


Senator Macfarlane - Clause 20 says that they shall not be imported.


Senator BEST - That is after the Minister has come to the determination to refer the matter to a Judge of the High Court. The next point is that if the importer wishes to have his good's he can give a bond. Then he can continue his trade as hitherto. I point out. further, that the Judge is to be guided by - . - good conscience and the substantial merits of the case without recourse to legal forms "and technicalities, or whether the evidence before him is in accordance with the law of evidence or not.

The question which the Judge will have to decide is whether the goods are being imported with the intention alleged, and if so, whether the importation should Le prohibited absolutely or limited. If we are ready to commit to our Courts the decision! of our various differences on other business matters, and if we have confidence in their justice, why cannot we trust them to say whether these goods are being imported with the view of injuring any Australian industry, or not? Surely the decision of the Court on a matter of that kind may be reasonably and fairly accepted. I will conclude by a few remarks in reference to -what was said by Senator Symon upon the wording of clause 21. That clause says that-

The Justice shall proceed to expeditiously and carefully investigate and determine the matter.

Senator Symonobserved that to talk of a Judge of the Supreme Court in that fashion was not complimentary or courteous. But it is a coincidence that the same words are used in an Act which Senator Symon, himself ultimately put through this Legislature. In section 23 of the Conciliation and Arbitration Act, those very words are used -

The Court shall in- such manner as it thinks fit carefully and expeditiously hear, inquire into, and investigate every industrial dispute of which it has cognisance.

So that when Senator Symon takes exception to the words used in the Bill before us, it is a fair retort that he is at least equally responsible for the same words being used in this Act.


Senator Drake - He merely took' control of that measure; it was not drafted by him.


Senator BEST - At any rate, he put it through.


Senator O'Keefe - He and his Government were afraid not to put it through. .


Senator BEST - In concluding. I simply point out that, as the result of investigation and careful thought, I have come to the conclusion that this is not a measure from which the disasters that have been predicted will accrue, but that it is a fair and .reasonable precautionary measure, which it is wise that we should adopt. It is complementary to the system of protection that already exists in the Commonwealth. According to my view, it is therefore wise and prudent to thus further protect our industries, and I think that, with possibly a few verbal exceptions, the Bill can be commended as one which is in the best interests of the Commonwealth.







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