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Thursday, 4 October 1906

Senator PLAYFORD (South Australia) (Minister of Defence) . - I do not agree that those who vote against this Bill will, when they go before their constituents, be liable to the charge of being opposed to the nationalization of monopolies in jurious to the public. The Bill proposes thathe Constitution shall be altered by adding the following paragraph to section

51 : -

XL.   The nationalization of monopolies with re spect to production, manufacture, trade, and commerce.

The first question to be decided is :. What is a monopoly ? How would the High Court interpret the word monopoly?I think I shall be able to show that if this measure were passed it would not have the effect desired, because the High Court would put a strict construction on the word " monopoly."

SenatorFindley. - The honorable senator said that of the amendment I carried in the Excise Tariff (Spirits) Bill.

Senator PLAYFORD - And we have yet to learn what will be the effect of that amendment. In my opinion the High Court would not allow the loose construction commonly put upon the word " monopoly " to govern it in the slightest degree. The High Court would go to the best authorities on the subject to discover the strict meaning of the word, and would apply that meaning. It will be admitted that the best authorities are our dictionary authorities.

Senator McGregor - We should fix that up in the Bill introduced to take over any particular monopoly.

Senator PLAYFORD - Honorable senators might put what they pleased in the Bill, and the High Court might decide that it was unconstitutional. I take for instance the so-called tobacco monopoly, which has been chiefly discussed, though there has been a slight reference to the sugar monopoly, and I say that it is not a monopoly in the strict meaning of the word. Honorable senators who have read the history of the past will know something of the granting by the Crown of monopolies for a consideration in money. These monopolies were for the exclusive right to do something. If we take the instance of the monopoly secured by the East India Company we shall find that they had under it an exclusive right to trade with the East Indies. If we consider the monopolies granted by Elizabeth to trade in any particular article, such as the salt monopoly,' we shall find thatthey were always grants of an exclusive right to trade in some article. ' That will, I think, be found to be in accord with the meaning of the word " monopoly." as defined in any reliable dictionary. I refer honorable senators to the Century Dictionary, one of the latest and best published, and they will find in that work lengthy definitions of the words " monopolist," "monopolistic," "monopolize," and "monopoly." We shall get the leading idea from the definition of the word " monopolist," and this is the definition given -

One who monopolizes or possesses a monopoly. One who has exclusive command or control of any branch of trade or article of commerce.

It will not be contended that the so-called tobacco monopoly comes within that definition, and should this measure become law it would be impossible under it to take over the so-called tobacco monopoly.

Senator Pearce - Will the honorable senator suggest a better word?

Senator PLAYFORD - No; but I can suggest a better, fairer, and straighter way in which to accomplish the object aimed at in the Bill - a way in which it will be possible to let the people know what they are being asked to vote upon.

Senator Findley - The honorable senator does not suggest that this is not a straight method?

Senator PLAYFORD - It is a straight method from the point of view of honorable senators who support the measure, but it will not accomplish their ' object. I do not pretend for a moment to say that it is not straight, but I say that one man voting at a referendum on this measure would vote in one way,according to his idea of what a monopoly was, and another, holding a different idea, would vote in another way. There is a general complaint in America, as well as amongst ourselves, and especially amongst writers on matters connected with so-called monopolies, as to the loose manner in which the word "monopoly" is applied. In this connexion Iquote from Eddv on Combinations. . This" is a well-known American authority on monopolies, trusts, combinations, conspiracy, and contracts in restraint of trade. At page 28, paragraph 29, of this work, the writer sets out certain elements., which he considers essential to a monopoly. and he says -

From a review of the authorities cited, it is apparent that the following elements are essential to a monopoly : -

(a)   A grant commission or franchise from the sovereign authority :

(b)   To a certain definite grantee - which may be a person or persons or. a corporation ;

(c)   Of an exclusive privilege - usually for the sole buying, selling, making, working, or using of some thing. {d) Whereby the public in general is re strained from freedom or liberty enjoyed before - that is, restrained from following trades, pursuits, or callings theretofore free.

Shortly, it must be agrant to a person of the exclusive right to do something. In paragraph 30, on the same page, the writer deals with the indiscriminate use of the term "monopoly," and he says -

By long and indiscriminate usage the term "monopoly" has come to be applied to any control of any product, industry, or enterprise, whether the control be absolute or not.

Unless the exercise of the control is absolute, the word " monopoly" cannot be properly applied to it -

An agent having exclusive sale of any commodity in any given locality is spoken of as having a monopoly. A railroad between two points is referred to as a monopoly, notwithstanding the fact that its franchise does not grant exclusive privileges, and the field is open to capital to construct a parallel and competing line.

Solong as the opportunity is given to somebody else to compete with the Individual in possession of the so-called, monopoly, the trade, calling, or business carried on by that person cannot be correctly described as an absolute monopoly.

Senator Pearce - Does not the Quotation the honorable senator has madeshow that the meaning of the term has altered, and that in the' general acceptation of the term to-day absolute control is not involved ?

Senator PLAYFORD - No; the changed meaning isonly in the loose phraseology of the people. In America, England, and the British Colonies, the word is used indiscriminately, and not in the strict sense, as meaning an exclusive right to do a certain thing. I therefore emphasize my first statement that if Senator Pearce is successful in securing the alteration of the Constitutionwhich he has proposed, he will not have got any further towards the achievement of his object than he is to-day. I now come to the Question of the referendum. I have been in favour of the referendum for many years, and was one of the first to advocate it in the South Australian Parliament. I was at the same time strongly in favour of a reform which I should" like to see established here, and that is the substitution of elective Ministries, as in Switzerland, for the existing system of what is called responsible government by Cabinet Ministers. Much of the trouble with which we are now afflicted is due to the existence of rival parties in Parliament who are concerned not so much with the question whether any measure submitted to their consideration . is deserving of their support, as with its effect upon their political position. Under this system members opposed to the Government are anxious to pick holes in Government measures, and to oppose any measure which they think is likely to add to the popularity of the Ministry bringing it forward, and especially before elections they are accustomed to declare that such measures have been introduced with the object of currying favour with the electors, and of discrediting those opposed to the Government.

The PRESIDENT - Does "the honorable senator think that these observations have anything to do with the matter contained in the Bill?

Senator PLAYFORD - I connect them with the referendum. I point out to Senator Pearce that a clear-cut issue should always be submitted to the people at a referendum. The question put before them should be one which they will thoroughly understand. They will not be able to understand this proposal. One will read it in one way, and another in another way There is. however, a way in which the honorable senator might put before the electors a clean-cut issue on this subject. He might propose an alteration of the Constitution, giving the Commonwealth power to manufacture tobacco, cigars, and cigarettes. He might put to the people the Question : Will you give the Commonwealth Parliament power to manufacture tobacco, cigars,, and cigarettes, and the control of the imports of those articles? The control of all imports would be necessary. In all countries in which the manufacture of tobacco, cigars, and cigarettes is a State monopoly, the State retains control over imports. I have here suggested to the honorable senator a clearcut issue, and a question to which the people could say "yea" or "nay," with a thorough understanding of what they were doing. In all these matters I am willing to trust the people. If there was strong feeling on the subject, and good reasons could be shown why the Commonwealth should take over the conduct of any trade or manufacture, I should t>e prepared to let the people decide whether what was proposed should be done. Wherever the opinion of the people has been sought by means of a referendum the decision has been mostly given on the conservative side. lt is very singular that, as a rule, the people are more conservative than they are represented to be. When I last referred to the figures, I found that in Switzerland the people had said " no " in fifteen cases, and "yes" in only live cases. Politicians are very apt to go ahead of public opinion, honestly believing that it is with them. There is nothing like- appealing to the whole body of the people, and ascertaining their view on a particular proposition. The position which the Government take up in regard to monopolies is plain. We believe that we can prevent persons engaged in trade. from injuriously affecting the public weal, from entering into combinations in restraint of trade, and inflicting hardship upon the public bv making them pay more for goods than otherwise they would be called upon to pay.

Senator Pearce - The honorable senator had better try to define a monopoly.

Senator PLAYFORD - I have defined the term. There is a monopoly which is beneficial to the public ; there is a monopoly which is neither good, bad, nor indifferent; and there is a monopoly which fleeces the public, and of which we have many examples in the United Slates. We hold that under the Australian Industries Preservation Act we can prevent the injurious effects of combines. The Labour Party say-, " We will give you the right to tr\. if you can; but we believe that you will fail." WV reply, " We do not think that we will fail." The Labour Party say, "Look at what is taking place in America. The chances are that you will fail here." We reply, "Give the system a trial. If you want to take over any particular business, then submit that issue to the electors, and say what you want them to do. Do not take the power to deal with any monopoly ; but submit to the electors a clean-cut issue, such as the manufacture of tobacco or the refining of sugar. We, as a Government, believe that we can stop the injurious effects of monopolies, and that, therefore, there is no necessity for the Commonwealth to take over any business. But if we should fail to prevent monopolies which gain such enormous power bv combination that they practically,, control the output of a product, and by that means are able to fix their prices to the detriment of the public, then we shall be prepared to help you to nationalize them." That is the position which the Government take up. We believe that our legislation will produce the effect desired, and prevent any monopoly or combination from doing harm to the people as a whole, and to the consumers in particular. I ask the honorable senator to withdraw the motion.

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