Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 9 July 1930

Senator McLACHLAN (South Australia) . - I should have been glad to support this bill, but I feel that its title is a misnomer. The history of the Wilu na transaction is summarized in a letter written by Mr. H. E. Vail, consulting engineer, and addressed to the Hon. P. Collier, when he was Premier of Western Australia. It is dated 16th January, 1930. As one honorable senator has already pointed out, the suggested grant to Western Australia is only a guise under which a guarantee is to be given for the purpose of supporting the bank overdraft of the Wiluna gold-mines. It is obvious from Mr. Vail's letter that the approach was made, in the first place, to the Prime Minister (Mr. Scullin) and the ex-Treasurer of the Commonwealth (Mr. Theodore). Mr. Vail wrote -

The first instructions I received were that

I approach the Federal Government for an advance of a very substantial nature; alternatively to request the State Government to provide a bank guarantee of £300,000. On interviewing the Prime Minister (Mr. Scullin), and the Commonwealth Treasurer (Mr. Theodore), I was informed that it was absolutely impossible for the Government to comply with our request as they themselves were much in need of cash. It then occurred to me to request them to guarantee our bankers rather than to approach the State Government, realizing as I do that the State Government has at all times shown a disposition to assist mining as far as their resources would permit, and that in regard to Wiluna they have gone very far in providing a rail"way for our convenience. I therefore requested the Commonwealth Government to guarantee our bank for £300,000, and while they expressed their sympathy and desire to assist us, they pointed out the inadvisability of making such a grant to an individual company,

That is excellent logic and one pauses to ask, Why this change? but suggested that if your Government would make the guarantee which I desire they would guarantee your Government against loss.

What does that mean? I suppose that the Commonwealth Government felt that there was a difficulty under the Constitution. But let me go a little further back and see what Mr. Vail had in his mind when he sought a governmental advance. Presently, I shall refer to the paucity of information supplied to the Senate. Mr. Vail, in an earlier part of his letter to Mr. Collier, wrote -

The original capital of £1,000,000 provided for the purchase of development and equipment of the mines is now exhausted.

How much of the £1,000,000 really went into the mines does not emerge from any papers placed at my disposal. The report continues -

And according to the estimates provided by our general manager, we require a further £550,000 to complete our undertaking. My principals advise me that this sum is absolutely beyond their ability to raise. They have, however, intimated that if the Government will provide a bank guarantee for £300,000 it will not be beyond their ability to raise a further £250,000 of fresh capital', in view of the confidence which will be inspired by the Government's action in responding in this practical manner.

The Government is really being asked to guarantee this company £300,000, and if it is given, the public will then be asked for the further £250,000 on the ground that the Government has already seen fit to assist the company. The Commonwealth is to be used as a decoy. On the face of that one statement alone, it is evident that the request of the company needs the closest investigation. The Leader of the Opposition (Senator Pearce) stated this evening that an investigation has already been made. An investigation has been made by Mr. Montgomery, a man, I believe, of great competence, who, in the course of his duty furnished a report to his own State Government, so soon as there was a possibility of securing the backing of the Commonwealth..

Senator Sir George Pearce - No, the honorable senator is reading the wrong report.

Senator McLACHLAN - On the 16th January, 1930, Mr. Vail, in his report, set out the whole position, and it is as I have indicated. Instead of playing with a guarantee of £300,000, we should take a broad national outlook, and come to some arrangement that would benefit the gold-mining industry as a whole. Why pick out the Wiluna company for special treatment? This Parliament is being asked to make the Commonwealth liable for £300,000 in the event of the failure of this company. We hope that it will not fail. Mr. Montgomery's first report was made in 1927, and this arrangement was suggested to the Federal Government in 1930 on the reports of Mr. Vail and Mr. Prior, two gentlemen who are intimately associated with the company.

Senator Sir George Pearce - I ask the honorable senator not to misrepresent my position. Mr. Montgomery's report was made in 1927, prior to the arrangement being made between the Commonwealth and Western Australia.

Senator McLACHLAN - The report of 1927 was made to the State Government, and concerned the building of a railway to Wiluna. I accept it as an exceedingly valuable report; but the report upon which we are asked to act is the special report of March, 1930.

Senator Rae - It is a supplementary report.

Senator McLACHLAN - That is all the more reason for rejecting the bill. I fail to see why this Parliament should be asked to commit the taxpayers of Australia to a payment of £300,000, without the Commonwealth Government being in possession of one scrap of information from its own responsible officers.

Senator Daly - The honorable senator wanted to commit this country to the expenditure of millions to provide a bounty on gold of £1 an ounce.

Senator McLACHLAN - The Leader of the Senate is trying to draw a red herring across the trail. If the Government would only take a broad national view of the gold-mining industry there would be no necessity for peculiar transactions of this kind, which cannot but end in a muddle. Are honorable senators prepared to vote blindly without having before them a report of one responsible Commonwealth officer? The services of Mr. Gepp and Mr. Gunn, recently of the Development and Migration Commission, are still at the disposal of the Commonwealth, but the Government has made no attempt to investigate this request on its own behalf. This new process of treating ores may be successful, or it may not. I understand that Mr. Vail himself refers to the methods that are to be employed as pioneering methods. Western Australia may require assistance, but to bring the request for a grant before the Senate under the guise of a guarantee to an individual company strips it of all its merits, and I shall vote against the second reading of the bill. The State reports may be perfectly accurate, but one of them was made over three years ago.

Senator Daly - The honorable senator would not question the honesty of the gentlemen concerned?

Senator McLACHLAN - I am not questioning their honesty, but have we not frequently been misled by wellmeaning and honest men who have been carried away by their enthusiasm? This is a question, not of the magnitude and value of the lode formations at Wiluna, but of a special treatment of refractory ore which is said to be a pioneering method, and which has not yet proved to be a success. Under those circumstances, surely it is the duty of the Government to insist upon the erection of a pilot plant, with which to test the treatment. Many processes have been tried at various times for treating refractory ores and, in this case, failure may result as before.

Senator Sir George Pearce - The success of the treatment has already been demonstrated.

Senator McLACHLAN - There is no urgency for this bill, and there is ample time for an investigation to be made by Mr. Gepp or Mr. Gunn. It is unfortunate that the services of Dr. Woolnough, who is absent in America, are not at our disposal. Without some such inquiry I am not prepared to commit, this country to the expenditure of £300,000 merely on the strength of State, reports which I regard as insufficient and unsatisfactory.

Suggest corrections