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Navigation Act Royal Commission - Reports - By Mr. J. H. Prowse, M.P. (Chairman), and Mr. A. C. Seabrook, M.P.; by Mr. F. Anstey, M.P., Senator C. S. McHugh, and Mr. G. E. Yates, M.P.; by Senator W. L. Duncan and Senator H. E. Elliot


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1923-24.

THE PARLIAMEN'f OF THE COMMONWEALTH OF AUSTRALIA. '

REPORT

OF TH;E

.ROYAL COMNI ISSION ON NA VIGATIC)N LL\_CT.

P·resentecl by Oommancl; ordere cl to be printccl, 20'h Aug'Us/, 1924.

THE ·

[ Cost of Proper :-Prepa ra tiou , not gt,-en; 980 copi es. ; a pproximate cost of p ri nUng and publishing, £142 .]

P1·inted and Published for the GOVERNMENT of the COMMONWEALTH of AUSTRALIA by H. J . GREEN , G overnment Prin ter f or the State of Victoria ,

No. 103-F.l5346.- PRICE 2s . 6D.

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COMMONWEALTH OF AUSTRALIA.

GEORGE THE FIFTH, by the Grace of God, of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas King, Defender of the Faith, Emperor of India.

TO OU?· Trusty and Well-beloved JOHN HENRY PROWSE, Esquire, M.P. ; Senator WALTER LESLIE DuNCAN ; Senator HAROLD EDwARD ELLIOTT·, G.B., C. M.G., D.S.O., D.O.M. ; Senator CHARLES ·STEPHEN McHuGH; FRANK ANSTEY, Esqu·ire, M.P. ; ALFRED CHARLES

SEABROOK, Esquire, M.P.; GEORGE EDWIN YATES, Esquire, M.P.

GREETING:

KNOW YE that We do by these Ou1· Lettet·s Patent, issued in Our name by Ou1· Deputy of Our Governor-General of Ou1· Commonwealth of Australia, acting with the advice of Ou1· Federal E xecutive Council and in pursuance of the Constitution of Our said Commonwealth, the Royal Commissions Act 1902-1912, and all other powers him thereunto enabling, appoint you to be Commissioners to inquire into and 1·eport upon the effect of the operation of the Navigation Act 1912-1920 upon Australian trade and industry and upon the development of the Commonwealth

and the 'l'e1-ritcrrie.s (including Mandated Te1-ritm·ies) of the Commonwealth.

AND WE APPOINT YO U, the said JoHN HENRY PROWSE, Esqnire, M.P., to be the Ohainnan of the said Oommissioner8.

AND WE DIR ECT · that -for the purpose of taking evidence fou1· Commissioners shall be s ufficient to con stitute a .quorum, and . may proceed with the inquiry unde1· these Our Letters Patent.

AND WE REQUIRE you with as little delay as possible to 1'epm·t to Our of Ou1· said Commonwealth the Tesult of your inquiries into the matters intrusted to you by these Ou1· Letters Patent.

IN TESTIMONY WHEREOF we have caused these Letters to be made patent and the Seal of Our said Commonwealth to be thereunto affixed.

(L.S.)

WITNESS Ou1· Trusty and Well-beloved SIR WILLIAM HILL IRVINE, K niqht Commander of the Most Distinguished Order of Saint Michael and Saint George, Our Deputy of the Governor-General in and over Our Commonwealth of Australia, this seventh day of Septemher, in the year of our Lord One thousand nine hnndred and twenty-three, and in the fourteenth · year of Ou1· R eign .

W· H. IR V I NE, lJepnty of the Gover-nor-General.

By H·is Excellency's Command, Ll. ATKINSON, for Acting Prime Jv!inister.

Entered on 1·ecord by me, in Register o} Patents, No. 25, page 233, this eighth day of September, One thousand nine htmdred and twenty­ three.

W. N . ROWSE.

CONTENTS.

Re.port by the Chairman (Mr. J. H. Prowse, M.P.) and one other Commissioner (Mr. A. C. Seabrook, M.P.)

'" Report by Three Commissioners· (Mr. F. Anstey, l\:LP., Senator C. S. lVJcHugh, and .Mr. G. E. Yates, M.P.) 35

Appendix I. -Particulars of cargoes, 1913, 1914-15, 1919-20 to 1922-23 66

Appendix 2. Retail prices of Western Australian Timber (Karri and J arrah) at yearly intervals from June, 1914, to July, 1923

Appendix 3. Report by the AssistaNt Director of Navigation on the effect of application of the Navigation Act to the Territories of Papua

New Guinea ...

Report by 'l\vo Commissioners W. L. Duncan and Senator H. E. Elliott)

the and

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REPOR1, BY THE J. H . . PROvVsE, M.P.)

ONE COJ\II.MISSIONER (J\IIR. _A. C. SEABROOIC, lVI.P.).

To His Excellency the Right Honorable HENRY VVrLLIAl\1, BARON FoRSTE:R: ct JJtlernber of His J11a}esty's Most Honorable Privy Council, ]{night Grand Cross of the Jliost Distinguished Order of Saint and Saint Ge01·ge, Go verno 1·-Genera l and Comrnander-in-Ohief of the Oornmonwealth of A ustntlia.

MAY IT PLEASE YouR ExcELLENCY :

We, the undersigned Commissioners appointed by Royal Letters Patent to inquire into and report upon the effect of the operation of the· Navigation Act on ttade, industry, and development in Australia and the Territories (including Mandated Territories) of Australi a, have the honour to make our first Report.

Thjs, your CcHnmissioners' fir st Report, is the result of investigations rnade In each of the States of the C01nmonwealth. Circumstances have prevented us visiting the Territory of Papua and the Mandated Territory of New Guinea; but it is intended to visit these Territories in the near future, and it is anticipated that the second Report will deal chiefly wjth the effect of the application of the Navigation Act to New Guinea and Papua.

We regret that unanimi-ty co uld not be reached by the whole of your Con1n1issioners, but so wide is the divergenee of the co nclusions draw n frmn the ev icl e:nee that sepa rate report:;; beeame neeessary.

Your Conunissioners entered upon their inquiry on the 24th Septe1nher, 1923 . Ninety-five sittings have been held, and evidence has been taken fron1 139 witnesses.

In addition to the oral evidence, we have received and considered a large of

statistics, anrt re)atjng to the subject of the inquiry. '

In the course o.E their investigation your Con1missioners viRited each of the States, and the capital city, and chief ports of each State.

In presenting this Rep.ort we have follovYed the order indicated by the following headings :- ·

Part T. The I-Iistory of the Navigation Act, and its purpose. Part II. New South Wales and Victoria. Part IIT. Queensland--(a) High fre ights affecting various industries .

(b) Fruit and Vegetable export trade. (c) The Timber ind1;1stry. (d) The Meat industry.

Part IV. South Australia-(a) Timber. .

(b) Spencer's Gulf and Eyre's Penin ula shippj1) g servicL::. .

Part V. Tasmania- · (a) The decline of shipping services to Hobart, and the effe ct thereof on-. (i) The Tourist traffic.

(ii) The Timber industry. (iii) The Fruit industry. (iv) Trading generally . (b) Launceston and the North-west Coa.'t port . .

Part VI. Western Australia- -

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( a) Primary production. (b) The Timber industry. (c) The restricted shipping facilities o£ Albany. (d) The restricted shipping faciht:es of Gerald ton. (e) Permits granted to certain vessel · trading on t he N01 th-\vest Uoast o£

Western Australia. (j) The effect of the Act on the whaling ind 1stry.

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Part VII. The Shipping Companies of Australia---( a) The relationship to the Overseas Shipping Con1panies. (b) Their relationship to one another. . Pc1rt, VIII. The effect of high freights on prirnary and secondary industries generally, Part IX. The "Permit " system. Part X. Port and Harbour Dues. Sumn1ary of Principal Conclusions. Hecommendation.

PAHT I.- THE HISTORY OF rrHE NAVIQ-ATION ACT, AND ITS PUHPOSE. The Navigation Bill was o.riginally drafted in under the direction of the late Honorable C. C. Kingston, and, on his retiren1ent from the first Com1nonwealth Governn1ent, in 1903, the drafting of this measure was handed over to the late Sir Harry \V ollaston. The Bill was fir st introduced into the Senate in 1904, but was withdrawn> and in June of that year a Hoyal Comn1ission

was appointed to exarnine the proposed legislation, and to report. The report of the Commjssion, with the draft Bill, was presented in June, 1906. In 1907 an Imperial Conference of representatives froin the United Kingdom, Australia, and New Zealand was held in London, on the subject of "Merchant Shipping Legislation," and the main principles of the Hoyal Comn1ission' s draft Bill w·ere considered. Australia represented on this Conference by the late Sir Willian1 IJyne (Minister for Trade and Custorns), Mr. \V. M. Hughes (Chairman of the Hoyal Comn1ission) , and the late :1_\.fr·. Dugald Thomson (a member of the HoyR.l Commission).

The Conference recomn1ended, inter alia :- · " That the coastal trade of the Comn1onwealth be. reserved for ships· on the Australian register, i.e., ships conforming to Australian conditions, and licensed to trade on the Australian coast." This resolution was embodied in the draft Bill, which was again introduced into the Senate in September, 1907, but lapsed. It was again introduced .. in 1908, again in 1910, and in 1911, and was ultimately agreed to by both Houses in 1912.

By the tin1e the Act had received the Royal Assent \Var had broken out, and, at the request of the British Government, the operation of the Act was postponed. The first group of sections-the Coasting Trade provisions- came into effect, by_ Proclamation, on the 1st July, 1921. Shortly after this portion of the Act became operative the owners of a nun1ber of interstate ships tested the validity of the application of the Inanning and accommodation provisions of the Act to their ships, and the High Court decided that these provisions did not apply to vessels solely engaged in the domestic trade of a State. In consequence of this judgment, the Government decided not to enforce the provisions of the Act then in force on any intra-state ships.

Other portions of the Act came into operation, as shown ·

1st November, 1921 Wireless, and n1edical inspection of seamen. 1st 1\iarch, 1922 Mercantile Marine Officers. 1st February, 1923 Provisions, medicines, effects of deceased seaman, wrecks, and salvage. .

1st 1darch, 1923 1st October, 1923 Collisjon, boat and fire drills. of masters, mates, and engineers; survey

and ships ; load-lines; life-saving and fire

adJustment of compasses; and of

manne Inquiry.

At the present time only forty-six sections of the Act, out of a total of four hundred and twenty-five sections, remain inoperative; the majm;ity of these inoperative sections deal ·with pilots and pilotage. Seeing that the Navigation Bill had so n1any years of consideration, moulded by expert draftsmen, considered by a Commission, by an In:perial Shipping Conference, and by Parliament for years, It Is necessary to look closely Into the reasons why the Parliament, after such exhaustive consideration, finally placed the Navigation Act upon the statute-book.

Your Cmnmissioners have studied these reasons, have perused the reports of the Royal Comn1ission and of the Imperial Shipping Conference, and read every important speech on the Navigation Bill by Minist ers, members of the House of Hepresentatives, and Senators, with the result that Your Commissioners find that the main reason which actuated the Parliament in placing the Act upon the statute-book, and which lifted the subject to a plane of great national importance above the ordinary considerations of party politics, was the desire to build up an Australian Mercantile Marine.

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· . 'fo build up an Australian Mercantile Marine it \Vas necessary to extend the pro-tective policy of Australia to its merchant shipping. To · protect the Australian ship-owner fron1 unfair competition fron1 subsidized foreign ships or poorly-paid crews fron1 other countries; it was necessary to prevent other vessels con1peting against him unless such vessels complied with Australian rates of wages, provided the same accomn1odation for their seamen, and had the saine

n1anning scale. · In short, to treat all -nations alike, and yet to protect our own coastal shipping. · Parliament. recogniz-ed that, as an island continent, we are largely dependent upon the strength of our n1erchant shipping for our communications. The Australian coastal trade was to be reserved for Australian-owned ships, which were to be the source of a supply of skilled and trained

Australian sean1en in tin1e of war, even as the British :Niercantile l\1arine, during the recent war, helped to n1an the auxiliary cruisers, n1ine-sweepers, transports, and other adjuncts of the British Navy. ·

_ . These things 'vere considered by the Parliament to be of great national importance . frrmghts on the coast would be :1little higher as a result, but that would he the price of our national necessity-an Australian lVIercantile lVIarine. But the position, as Your Commissioners find it; is that an Australian-owned l\!I:ercantile . Marine does not exist, nor is it likely to come into being by reason of the Navigation Act. This

conclusion is fully explained in Part VII. (a) of t-his Report. The Navigation Act has so- far, therefore, failed in its purpose.

PART II.- NEW SOUTH W.A.I .. ES AND VICTORIA. Your Commissioners, after taking evidence in all the States, were particularly impressed with the fact that the greater the distance from the industrial centres of New South Wales and Victoria, the greater the outcry against the effect of the Navigation Act; and the farther the people

are removed from railway facilities and are dependent on sea carriage, the stronger is the de1nand for the removal of the restrictions placed on shipping services by reason of the imposition oJ the Act. Thus your Commissioners found that while Tasn1ania and Western Australia bitterly resent the hardships imposed by the Act, the business con1munity inN evir South Wales and Victoria appear for the most part indifferent, and regard it generally as an inconvenience, but not a serious handicap.

Your Commissioners certainly had evidence placed before them in N·ew South Wales and Victoria in regard to the hardship of high freights, and the inconvenience and delay through no longer being able to travel between Australian ports by overseas vessels, but these complaints are similar in every part of .Australia, and are dealt with under other heudings . There are no distinct complaints in 1these two States which are not con1Inon to all States.

The main reasons why New South Wales and Victoria are not affected by the operation of the Navigation Act to the san1e degree that trade and industry in other States are affected by it are, in the opinion of your Commissioners, as follow :-1. New South Wales and Victoria are well served by railways.

2. New South \Vales and Victoria have large local n1arkets for produce. The high freight question does not, therefore, play such an important part in the disposal of such produce. 3. The Navigation Act tends to bring about centralization of shipping, trade, and

industry, which leaves less reason for con1plaint from the big centres of popu­ lation, but aggravates the difficulties of the outlying portions of the Commonwealth.

PART III - QUEEN-SLAND.

(a ) HIGH FREIGHTS AFFECTING VAinous I NDUSTRIES . Your Coinn1issioners, having regard to the following staten1ent contained in the report hv the Tariff Board, dated 29th June, 1923, viz :--" Much of the benefit conceded by the Tariff is" lost through the additional cost in freight on Australian go ods, and our primary and manufacturers will not be able to obtain the full share of the markets they are entit led to, nntil some other methods can be a::lopted to provide a service that will not place our shippers

at a disadvantage " , found many case which bore out t his statement, . orne of th e ca ·e. being a. set forth hereunder. Queensland Cement I nd'ustry. - The Queensland Cement and Liine Con1p any placed evidence before Your Commissioners to the effect that the hiQ 'h freight on cement on the Queen land is seriously handicapping the operations_ of Company. . . . . 1'-'

This Company has £275 ,000 capital Inve ted. The capacity of It work · L ' D4,000 ton · of cement per annum. It pays £60,000 per annum in wages . It u. e 20,000 ton. o£ coal, and half a million bags per annum, which are manufactured in Queer land.

. . The Company has been operating for Beven years. For the first :five years it paid no. d1v1dends, ?ut put its profits into extending phmt. Last year it paid £8,000 in dividends. The Company a1ms at supplying the whole of Queensland with cement, and it does not do business beyond that State.

. . With regard to freights, the position at present is that cement can be imported from Great to Cairns, Townsville, Ho ckhampton, and Brisbane at 24s . per ton, while the freight from

Br1sbane (wl1ere the cement works are situated) to Cairns is 4l s. and to Townsville 35s. The Company has received a concession of 6s . per ton off these rates. In 1914 the freight on cement from Brisbane to Townsville was 22s. and to Cairns 30s. per ton.

· . Last year 11 ,000 tons of cement were imported into Queensland from overseas; 75 per cent. of tlns came from Great Britain and the remainder from Denmark. . . While the Company finds that it can successfully compete with British andforeign cement m Bnsbane, and within a certain radius of its cement works, yet in North Queensland, in spite of duty on British cement of 20s . per ton, and on foreign cement of 30s. per ton, the Queensland art1cle has to be sold at a loss in order to comnete, and in order to sell its-cement at Rockhampton, and Cairns, where the demanl is great, the Company that it requires a

considerable reduction in freight or an increase in duty on -imported cement. The latter remedy would, of course, add a duty which is not required in the other States where the Australian-ma<).e article is suffi.ciently protected ; it would add an undue amount to the profits of the cement companies in other States, and add to the costs of users of cement throughout the Commonwealth.

Your Commissioners are, therefore, of opinion that the failure of the Australian industry to compete in North Queensland with imported cement is one of the most striking examples of the correctness of the fore going statem,ent of the Tariff Board.

Calyx Porcelain Company of Western Australia.- \iVhile at Cairns your Commissioners took the evidence of a merchant in connexion with the goods of an Australian industry, the Calyx Porcelain Company of Western Australia. The followino- is part of the evidence in connexion with the matter:-

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W. J . Stillman, MeTchant, Cairns.

7428: vVhat company did yo u order from in Western Allstralia ?- The Calyx Porcelain Company. We bad certain f'MDJ:llcs submitted t o us about twelve months ago , and we were so pleased with them that we gave a n open order for a crate of plates, cups, and saucers, and a sample of all t he company's manufactures. 'I;Ve considered that the price was reasonable compared with British goods, and we thought we could gi.ve t h·e people of our own co untry an opportunity to buy an article equal to the British, p1·obably at reduced pri ces . On getting the shipping receipt, however, we found that it was a matter o£ impossibility.

7429. What was t he price of t hat shipment ?- It was 36 cubic feet. charged for at the rate of 90s. for 40 cubic feet. That amounted to £4 1 s., and the stacking charge of I s. 6d made a total of £4 2s . 6d. The freight from LonO.on to Cairns is 70s. for 4 0 cubic feet. ·

7430. Do you now import from overseas ?- Yes . 7431. What is t he duty from overseas ?-25 per cent. 7432. Do your shirments £rom Lo ndo n come direct?- Yes, as a rule. 7441. Would the machin ery of the Calyx Company be as up to date as that of companies in the Ol d! Country?--­ I cannot say, but I understand they have the latest machinery an d have brought potters out from Staffordshire.

74A2. ls the article equal in quality to the import.ed goods ?- At present it looks qui te equal to English stuff of i.he same class . 1rYe have not noticed any crazing.

The foregoing evidence discloses a clear case of the high coastal freights of Australia the effect of the protective tariff.

Jl1aize.--Another example of how the high freights affect primary production is afforded by the coastal fre ights on maize. Your Commissioners had evidence placed before them that the normal maize production of Australia is about 7,000 ,000 bushels per annum, of which Queensland grows about 3,000,000, and exports about 1,200,000 bushels to the other States.

At the present time t he freight on maize from Cairns to Sydney is 37s. 6d. per ton, and from Cairns to Melbourne L 12s. 6d. For the purpose of comparison, at tention is drawn to the £act that the freight on ·wheat from Melbourne to the United Kingdom is 35s. per ton. The largest producing area of maize in Queensland is the Atherton Tableland, for which the port is Cairns . The freight rate on maize fro m Cairns to Melbourne is 1s, Of d. per bushel, and

the freight on maize from South Africa is 1s. 2d. per bushel. It will be readily seen that with this small difference between Australian coastal freights a.nd South African freights to Australia, there is always a serious menace to the Queensland maize industry from the black-grown product of South Africa, in spite of the protective duty of l s. per cental, and a" clnmping" duty of about 'ld. percental on South African maize. .

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. From.the 1st January, to ,31 st August, bushels of maize imported

Austraha fr?m Africa. 'Ihese :figures are sigmficant , and show tbat thiN branch of

pnmary productiOn IS handicapped by higher frei ght rates and costs of production than the mdustry can stand.

Fre1:ght Grass-seed.-As example of hi gh freights on the North Queensland coast, the case of a shipment of grass-seed1s quoted. A witness at Atherton, North Queensland, stated that .l!e purchased 1,003 lb. of Rhodes Grass-seed, and had it shipned bv a coastal steamer from Maryborough, its being Cairns. The shipping freigli{ charged on this consignment was £13 2s . 6d., amountmg to 37/ 10d. per lb. ·

The shippi:r:.g company stated that this evidence was correct, and attempted to justify the charge by that the grass-seed was charged for at the measurement freight rate, that it measured 168 cubiC feet, and the total freight was made up as fo ll ows :-

to Brisbane- 22s. 6d. per cubic feet

Bnsbane to Cairns- 40s. per cubic feet ..

£ s. d.

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8 8 0

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. Your Commissioners have no hesitation in asserting that this fr eight rate was unreasonable, and would tend to hamper production.

(b) FRUIT AND VEGETABLE ExPORT TILI\DE .

The Queensland fruit and vegetable export industry is of considerable magnit ude . The markets are chiefly in New South \Vales and Victoria. For the year 1922--23 the following were the interstate exports of fruit and vegetables :- -Bananas 522,000 cases .

Pineapples . . 229,890 cases .

Citrus 29,600 cases .

Tomatoes and cucumbers 239,500 cases.

Vegetables . . 83,000 cases .

Mixed fruits 47,127 cases.

About 90 per cent. of this export is carried by special fruit trains, \vhich run to Sydney and Albury. The remaining 10 per cent. is carried by interstate steamers.

It is claimed by the representatives of the fruit industry that the lack of suitable shipping accommodation is responsible for the inauguration of the fruit-train traffic. It is also claimed that the lack of cargo space for the interstate export of banana s was responsible for the banana­ growing industry declining in the north of Queensland, and increasing in South Queensland, where facilities for getting the fruit to market are available.

The iollowing is taken from t he evidence of the manager ot the Southern Quee nsland Fruit-growers Society :-W illiam Ellison, Jl!Iwwger of the South ern Queensland F·rait-g rv we rs Society L imited.

6653. Wh a t percentage goes by rail as compared with. bou t per cent. by m il anrllO per c0 nt. by stea mer.

6654. Has that always bee n the position ?- No.

6655. Since wh en bas t he change t aken place ?-Since J anuary, J 919.

6656. \Vhat brought it about unsatisfactory condition in which the fruit arrived on t he so ut.hcrn market "·hen carried by boa t . During the t welve years I ha...-e been a frui t -grower that po it ion has obtained.

6657 . What percentage went by boat prior to the 'rar ?- The to tal qu antity.

It wquld appear, therefore, that either the shipping companies, by bad management '1J?-

There is one branch of this indu ·try, however, which is almost wholly on shipping for -the market.ing of its products, and that is the tomato and ·ucumbe'r export fr om Bowen . The growers in the Bowen district stat e that not only do they receive· in uffi cient service 1 bnt their _producejs handled in such a; manner as to deteriorate a considerable quantity of 1t .

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In 1922 there was exported from Bowen about 136,500 packages of fruit and vegetables, the bulk of which went to Sydnev. There is one boat from Bowen per week. This vessel also carries cargo, and it is stated that the fruit is often placed with hides, tallow, and similar cargo, seriously affects the condition of the fruit. _

It is also claimed that the service is not frequent enough during the fruit season. lVlost of the fruit has to be picked in a green state, so that it will stand a week's journey. With one week between shipments a great deal of :fruit becomes over-ripe and is wasted. The following is an extract from the evidence in connexion with this matter :- •

J. T . Moore, .Fcwmcr, Secretary of th e Bowen Local Producers Association. 7642. . . . . . . . . I estimate that from 30 to 40 per cent. of the value of Bowen produce has been lost

to growers during the last few years through inarlecpmte shipping faci lities, and unsympathetic handling of our products.

Your Commissioners took a great deal of evidence bearing out the foregoing statement, and are forced to the conclusion that the coastal steamers are not suitably fitted :for the carriage of :fruit. Fruit requires considerate and careful handling, and on the one hand your Commissioners find the railways giving every care and facility to the transport of produce, improving the industry and obtaining the gratitude of the fruit-growers, while on the other hand it

was found that in the Bowen district, where the growers were, at the time your Commis­ sioners took evidence there, dependent on the shipping for the marketing of their produce, the ordinary requirements of the industry are not fully met by the shipping companies, with the result that produce is wasted, industry suffers, and the producer is severely handicapped. .

Your Commissioners consider that the North Queensland fruit trade should be catered for by vessels specially equipped for the carriage o£ fruit, as, it is stated, is done in other parts of ' the world, notably from Fiji to Europe, and in the fruit trade from the West Indies.

( ()) TIMBER.

· One of the chief complaints which your Commissioners had placed before them in connexion with the Queensland timber industry, was in regard to the waste of soft woods suitable for box and case making. The timber most used for this purpose is the tops of hoop and bunya pines, which are not suitable for building. ·

Before the war nearly all the soft timber used for box and case making came from the Pacific coast of North America and from Scandinavia. During the war, when foreign supplies could not be obtained, there was a fair demand for the Queensland soft woods. Since the war, with fairly normal oversea shipping conditions, this demand has greatly decreased, and once again the greater part of our soft wood requirements comes from foreign countries.

It is stated that the reason why Queensland box-making timber is not required outside Queensland is that the foreign timber is much cheaper, in spite of the Customs duty placed upon it. The costs of production alone, without including freights, place the Queensland soft-wood timber industry in the position that it costs 20s. per 100 super. feet to produce case-making material,

while similar timber can he loaded at Mel bourne from North America or Scandinavia at 17s. per 100 super feet. That is to say, even if the timber could be sent from Queensland to Melbomne free of freight charges, the foreign timber would still he 3s. per 100 feet cheaper. Your Commissioners therefore cannot see that theN a vigation Act wholly affects the position. It certainly is a factor. But the main reason why Australia cannot compete with foreign soft woods

is on account of the higher production costs in Australia. When this was pointed out to the representative of the timber industry, a higher protective duty was suggested as a remedy, which would ultimately be paid for by the fruit-growers who require the fruit cases; but as the question of Protection hardly comes within the scope of. this inquiry, Your Commissioners do not feel disposed to make further comment.

Another complaint in connexion with the effect of the Navigation Act on the timber placed before your Commissioners at Townsville. Evidence was given that while the timber

freight from Cairns to Brisbane was 6s. per 100 super . feet, the freight from Mourilyan to.Brisbane (a shorter distance on the same route) was 16s. 4d. ; from Townsville to Sydney the rate IS 7s. 3d. , and from Mourilyan to Sydney (a shorter distance on the same route) 17s. 7d. The reason given for this remarkable difference in freights was that the demands made by the waterside workers at Mourilyan are so great that extra freight has to be charged. waterside workers are taken from Jnnisfail (12 miles from Mourilyan) to Mourilyan by spe_Cial train when required, and are returned home by similar means, their day starting from the t1me they board the train at Innisfail, and ceasing when they return to lnnisfail.

_ . The of the higher freight is the industry at Innisfail and .lVlourilya?- is

dymg because It cannot compete with the Cmrns m1lls, which have a much cheaper timber freight rate to southern markets.

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The following is an extract from the evidence c· l t he manager of the J apoon Saw-mil1s Limited, Townsville, which operates at Innisfail :-W . L. Ohaprna,n, Saw-miller and Timber M erchant, T ownnville. 7179. Have you any records of the quantities of timber in those ports the past twelve mo nths, although

we had 500,000 super. fee t to offer, all we had carried by the coastal steamers was 110,000 super. feet. . A fLuth er 50,000 feet vvas lifted by John Burke Limited, 160,000 in all, whereas we could have shi pped 500,000 feet or more.

71 80 . What. have you done with the surplus is stacked in t he yards. Although runn in g a large Raw-m illin g business at Innisfail, where we recently expended £30,000 in the erection of th e mill, we have to go to Cairns to buy ou r supplies, while we are paying interest on the timber lying in our yards.

Your Commissioners find that the great disparity in timber freights to the disadvantage of Iru1isfail and Mourilyan, has practically killed the industry in that district. The reason given by the representatives of the shipping companies as to the high freights from Mourilyan are not satisfactory. There is no doubt that the handling charges at Mourilyan are heavier than at Cairns, but your Commissioners are of opinion that the extra cost of handling at Mourilyan does

not warrant the enormous penalty in t imber freight rates from that port. ·What, then, is the · reason for the enormously high freights on timber from Mourilyan ?

It vvas su ggested in evidence that the Adelaide Steamship Company, which has vessels ou the North QueenslaJ;J.d coast, has financial interests in the Cairns Timber Company, and assists that company by cheap freights, while it penalizes a rival company operating at Innisfail by high freights. ·

Your Commissioners, therefore, obtained the lists of shareholders of the Adelaide Steamship Company, and of the Cairns Timber Company, and after perusing such lists, are of the opinion that the Adelaide Steamship Company has financial interests in the Cairns Timber Company, and, as a natural result, preferential treatment appears to be given to timber cargo from the port of Cairns.

It would appear that the Navigation Act made the J apoon Timber Company dependent upon the vessels of the Steamship Owners' Federation, and, as a matter of ordinary business, the Federation proc.eedecl to obtain an advantage over its business rivals by imposing high freights on their output.

(d) THE MEAT INDUSTRY.

The chief grounds of complaint made by the meat industry against the Navigation Act are (a) that there is insufficient space on the interstate boats fur requirements, and (b) the permit system is not expeditious enough to secure business .

During the past two years the demand in Southern States for Queensland frozen meat has been very great. This demand varies in its intensity, and at times the interstate vessels can deal with requirements; but, on the other hand, on several occasions, owing to serious meat shortage in New South Wales and Victoria, the demand for Queensland meat has been so great that the insulated space on the interstate vessels has been totally inadequate.

To meet these abnormal demands" permits" ha ve been issued by the Deputy Director of Navigation, Queensland, to enable overseas vessels, which are not " licensed " under theN a vigation Act, to carry meat to Sydney and Melbourne .

Although to some extent the of these has the requirements ?f the

industry, it is that the N.av1gatwn Act c?nst1tutes a of trade. The ev1clence

of the representatiVe of the Meat Council puts the obJectwn clearly as follows :-L. W. Davies, Representati ve of the AustraUan 1vleat Couucil. 8305 . Jn what way does your co un cil consider that the Navigation Act affects the ?- -At present

Jt is a hindrance t o the interstate trade in froz en tncat in so far as we are not allowed t o slup r efn ger2.tcd cargo by vessels unless a permit is obt2.ined, and you cannot get a permit unless there is no pace available in t he inter­

st.a te boats. The space by the interstate boats is not suffici ent fo r t he t rade, and you do not kno w whct1le r you can get the permit until the last minute. Therefore, you cannot do any forward business .. So far as Qu ec nsl[l,nd 15 co ncerned, c.ll t he permits ar e given in Brisbane , and in .Tunc you cannot n1akc a sale for delivery w Au gust exce pt. subJ ect to fr eJght.

Last winter we could have done a lot more busin ess onlv we could not guarantee deli very . Several we were short uf beef, >vhereas if we could have made forw ard we co uld, have had it coming in all t he t unc.

8306. yo u .not have informed th e Controller of hipping that the quant ity of m eatY u had order_ed could not have been slllpped by th e mterstate boats, and could you not then have made arrange ments fonvaid ;vlt other vessels ?-You co uld not get a permit forward. I t is not pra cticable that way. You do not you

.L an get the space for torward delivery, and ;ve do not know untj) t he la.st rni np t e whether we can ge t a permit forward .

8

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8307. You 00n t.end that the ins nlil- ted space on the interstate boat' was inadequate for t he trade last season fr om Qu eensland t o southern ports ?- Mos t inadequate.

s ::l08. And it was not possibl e to get forwa rd perm its ?--Jt depends how far fo rward. Certain ly 1wt a monr,h ur six weeks ahead.

8309. Thereby you not able to do t he trade you would otherwise ha,ve done ?- W c lost a lot o.f trade.

8310. How 1imch do you estimat e ?-Personall y, I could ha ve sold anything from 1,000 t o 2,000 bodies of bed if. I ha

big movement of sundries all th e time, and that is just as difficult as frozen b ee f. .

It is beyond all doubt that the interst at e shipping services cannot deal with the carriage of meat t o Southern States during periods of shortage. The demand for Queensland meat in New SouthWales and Victoria grows larger each winter, and the Queensland meat industry is trying to build up its trade.

It has been stated that no permit to allow overseas vessel'S to carry meat from Quef'lnslaml to southern ports has ever been refused, and, t herefore, the meat industry has no ground for complaint. But it must be remembered that to cope with the demand, and to obtain orders, the cattle have fir st to be purchased and bro11ght overland. This has to be done months ahead of the time for shipping, and the question then arises whether, if the cattle are slaughtered in Queensland, will be available, because in order to deliver chilled meat; the insulated space in which to place the carcasses must be available at once. The followin g evidence by the representative of the Australian lVIeat Council places t he position clearly :-

'

8345. You mu st see the diffic ulty in allo wing them to compet,e wit h t he interst at e ships when they do not comply with t he Ac t ?- Of course, I merely advocate t.hat the Ac t be waived so far as frozen rneat and sundries are concerned, because the conditions are so exce ption al. It is economically unsound to buy cattle in Queensland and bring them overland when they could be treated in Brisbane and the chilled beef be disposed of in this market (Sydney) . We can not make arrangements ahead un til we know we are going to get a permit , and we cannot get that until the last minute. ·

Your Commissioners are of the opinion that the machineryforthegranting of permits should · be made more easil;T workable. That the space on interstate steamers is inadequate is admitted by all parties concerned, viz., the interstate shipping companies, the meat industry, and the Navigation Department. Therefore, the Act clearly contemplates that under these circumstances permits should be granted to oversea vessels to carry cargo. It should then be the function of the Act to provide every facility to enable permits to be obtained at a reasonable time in advance of requiring the space, and any machinery that delays the granting of a permit under these conditions is a restraint on trade.

PART IV.- SOUTH AUSTRALIA.

(a) TIMBE R ..

The evidence tendered t o your Commissioners in South Australia indicated that the gri evan ce against the Navigation Act is not so great as in the more dist ant parts of the Common­ wealth. South Australia has one main interstate port (Port Adelaide), and in consequence enjoys interst ate and oversea service t o a reasonable extent ..

· The chief complaint, however, was made by t he timber industry. As South Australia is not a timber producing state to any appreciable extent, she requires to import a great proportion of her requirements. It was st ated that the prin cipal hard-wood timbers are obtained from Western Australia and Tasmania, and that in recent years considerable difficulty has been experienced in fulfillin g orders. For example, one witness stat ed :-

1'. H. Robin, T imber Jlll erchant, Adelaide.

5350. Do yo u experience any di ffic ulty in ge tting the shipments of timber you order from Tasmania and Western Australia ?- We i 1ave had great diffi culty in connexion with sl1ipment s fr om both places.

5351. For what reason ?- Onl y very small vessels engage in the Tasmanian trade, and it is omet imes diflicul t for t hem to obtain t he necessary freight to enable t hem t o ship .

5352. Does that condition of a ffairs always obtain ?- No, but the posit ion is more acute now t han formerly. F ewer sailin g vessels are engage d in t he trade now t han in 1914, because t here have been several v.rrecks a nd no replacements. We were interested in a vessel called the Wi ld Wave, and in 1914 she was carrying timber for ns at 3s. 6d. per 100 super . fee t". She was wrecked Qrnc few mont hs ngo 0 11 the north-w(l t coast of Tasmania .

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. 5353. What has been your experience wit h ·w estern Australian orders ?- We have generally managed to get shipments along as we required them, but this year, right up t ill July, t here was an acut e shortage , and we had grea t difficulty in supplying our orders . When we could not get our supplies along we got int o t ouch wi th 'One of t he millers who has bee n supplying the Glo be Timber Mills with all t heir jarrah fo r the last eightee n years . On 1st August I telegraphed, " vVhen can yo u complete all our jarrah orders ? urgently needed. " On 3rd August I got the fo llowi ng reply :-" Your telegram first; using every endeavour secure pJl possible tonnage . In order assist position suggest

you endeavour secure additional tonnage." That was the first t ime we had been asked t o get tonnage on this side . Shippers have always got t onnage on that side.

The foregoing statemen t should be n oted , particularly that p ortion to the efrect t hat t he small but useful ships, sailing and steam, h:we now practically ceased t o run, which in itself means a less regular and suitable service fo r such a trade as the t imber industry . ·

I ,

(b) S .PENOER ' s GuLE AND EYRE' s PENINSU LA SHIPPING SERVICES.

The Spencer 's Gulf and Eyre's :Peninsula trade is ser ved by vessels of the Adelaide SteamshiJJ Company. 'I'he vessels in this trade aT? not "licensert " under the Navigat ion Act, as the se rvice is purely intra-st ate.

The Adelaide Company has a monopoly of the business , having a bsor bed t he

Coast Steamship Company, which in 191 4 provided a service in compet ition with them. This competition by the Coast Steamship Company ceased at the end of 1914. At t hat time, owing to competition , the freight on general cargo was as low as 5s. ; in 1915, the rate rose to 9s. ; in 1916, to lOs. ; in 1919, to 14s. ; in 1923, to 16s.

It is claimed that this rise in freight s is due to the absence ot Gompetit iou. It is also claimed that freights are excessive in with even the interst at e freight s. F or example, the rate on general cargo from Adelaide to Melbourne is 20s. per t on; t o Sydney. 25s. ; t o Fremantle, 30s. ; while t he following are tlie South Australian intra-state freights to Port Adelaide :-

Mileage .

150 166 184 198

297

Port Lincoln Tumby Bay Arno Bay Cowell

P ort Augusta ...

16s. per ton 18s . per ton 20s. per ton 20s. per ton

20s. per ton

Your Commissioners are of t he opinion that this case of t he Spencer's Gulf and Eyre's Peninsula intra-state service provides a striking example of how the Shipping Combine allots various services to different companies and gives each company a complet e monopoly over its own section.

The Navigation Act has had the effect of giving t he interstate companies a monopoly o£ the interstate and coastal trade . The Steamship Owners' Federation is thereby able to allo t the Spencer's Gulf and Eyre's Peninsula t rade t o the Adelaide Steamship Company . With no competit ion, this company runs what services it pleases, charges what freights and passenger

rates it likes, and claims that it is the sole judge of what is a fair and reasonable ser vice for the trade.. These fa cts are admitted by the company, as the follovving evidence shows :-

J. E . M orphea, Secretary, Adelaide Slewnship Company, Adelaide.

5799 . As members of the Steamship F ederation would your company feel at liberty to. trade 1•;it.h yo ur ho w, when, and where you liked ?- As I have mentioned there is an arrangement by which tonnage is allocated. The arrange ment was made in Melbourne for t he purpose of preventing overlapping, and so increasing tbc c.onvcnicnce of the coast al servi ce .

5800. Then the coastal service is allotted by the Federation ?-That is no t the correct way to put the position. A certain amount of tonnage is wanted in South Australia, and a cert.

5820 . Is it not a fact that t he Associated Steamship Companies are now practically able t o dictate whttt ser vice shall be given to a place ?- Yes, and I thiu k they ought to be able to do so . Th ev arc best ahl

Although it is st at ed in the foregoing evidence t h a+ the As:>ociatecl are the b st

judges of what t h e trade requires; your Commissioner are of opinion that thejudgment of thif' shipping company is such that, by its indifferent service and excessive freight s, 1ti 1as redu ced thl' producers and public generally of the Eyre's P enin ula and Spencer's Gulf district· to a st ate of resentment agn,inst it and dissati fact ion with the service provided .

.lO

PART V.- TASlVIANIA.

(a) THE DECLINE OF SHIPPING SERVICES TO HOBART AND THE EFFECT ON­

(i) The Tourist Traffic . (ii) The Timber Industry. (iii) The Fruit Industry. (iv) Trading generally.

Tasmania is in an entirely different position from any of the other States, in that it is solely dependent on sea-carriage for cargo and passenger communication with the mainland, and it is out of the route of the ordinary coastal shipping. To understand the position in Tasmania, it is fir st necessary to grasp the fact that it is not only isolated from the other States, but it is divided into four sections, each of which is economically isolated from the others. Although a very small State, the climate and the quality of the soil vary considerably, with the result that there are four separate sections, each with different branches of primary production. Th·e four sections are the V\Test Coast, the North-vves t Coast, the North and North-east, and the South.

The West Coast is a vast mining field at present suffering a depression, but with a great past and a hopeful promise for the future. Its only port is Strahan. The North-west Coast produces chiefly oats, peas, potatoes, timber, and fat stock, and its interstate ports are Stanley, Burnie, Devonport, and Ulverstone. ·

The North and North-east produces chiefly wool, grain, hay, and fruit, and is served almost solely by the port of Launceston. The chief primary products of the South are fruit and timber, for which the chief interstate port is Hobart.

E ach section has a different shipping service, and the result is that each of them has not sufficient produce to_ export to maintain a large service . These ports can be served more regularly and efficiently by small vessels, which can be filled each trip. · Your Commissioners found that of the Tasmanian Ports Strahan has no service, the North­ west Coast ports of Stanley, Devenport, Burnie, and Ulverstone have a good service, which was brought about as explained in section (b) of Part V. of this Report. Launceston has a direct cargo and passenger service with Melbourne, while Hobart's one regular interstate service is with Sydney.

Before the war Hobart had an excellent direct weekly service with Melbourne, provided by large vessels of about 6,000 tons, which did the round trip-New Zealand, Melbourne and Hobart, and then Melbourne, Hobart and New Zealand. This was a very regular passenger and cargo service. There was also a regular passenger and cargo service from Hobart to Melbourne, via Strahan, which provided direct communication to enable Hobart to do business with the mining districts of the ·west Coa st. There 'iv'as also a weekly passenger and cargo service between Hobart and Sydney, the run being New Zealand-Sydney- Hobart, and Hobart-Sydney-New Zealand.

There was also a direct fortnightly service from England to Hobart provided by ve ssels of the New Zealand Shipping Company and the Shaw Savill and Albion Steamship Company. These vessels ran fortnightly, bringing cargo and ·passengers from London to Hobart in 43 days, which made Hobart the transhipping port for a great number of passengers for the other States. These vessels brought hundreds of passengers, inc1uding numbers of immigrants for New Zealand, all of whom spent one or two clays at Hobart.

As a result of this cessation of shipping services, your Commissioners found not an outcry by one section of the trading community, but a general feeling of revolt against· what the people of Hobart consider is legislation which threatens their economic welfare, causes them to suffer in manv ways, and hampers them in their natural competition with the other States.

The question now arises as to why the interstate and oversea services of Hobart have been curtailed, and whether such curtailment is due to the operation of the Navigation Act. In regard to t he P. and 0 . vessels, there was considerable evidence placed before your Commissioners tha t the Navigation Act preventBd them from calling, unless under contract to lift large cargoes of fruit. On this point attention is directed to tJ1 e following evidence :-

S·i·r Henry Jo nes, Merchant, F ruit Shippu , and lJ!Iamifacturer. lu HJ2l , when 1 visited Sydn ey, the m u.nager of t he P eninsular and Ori ental Line informed me that he had no int e11 t ion of senJing hi s st ea mers to Tasmania in 1922, giving as hi s rea.s mt t bn.t th e Navigation Act prohibited the fro m ca rrying passengers. H e said thnt if his st eamers did not ca rry passengers, t hey could not afford to go to Tasmania for fruit, when lo ads could be picked up easily in Melbour ne, Ad elaide, an cllfrcmantle. That was rather a blow to us :;s in that year there wa s a ooo d market in E1' glancl for our frnit. Through the action of the P eninsular and Orienta l Comp 11.ny I co nsider that we lost 300,000 cases of apples, worth 8s . per case on the Hobart Wharf. I co uld say 600.001 ;. ca.ses, but have tried to li e con servative. Th e shortage of tonnage in that year was very acute. We had a very goorl ,;rop, and, 11.s we co uld not ship it to En gland, the Sydney market was glutted, and the apples dropped to the ground .

They were offered for jam-makin&{ purposes at as low as l s. per bushel. ·we then wrote to t he P enin sular and Oriental

·--r .-··

-103·3

11

Company, asking what would be the difference in cost involved by sending the steamers here as against Melbourne. iv.!r: Sparks, who was over at the time, suggested that the Commonwealth might pay £1,000 per ship if we found the difference. I wrote to the agent on the 5th January, 1922 , offering £250 towards the ship. There were three boats listed t he dates being 16th March, 3rd April, and 1st lVIay, and those were the vessels for which we offered £250 each. However:

we failed. After consideration, the Commonwealth Government no doubt thought it was unreasonable to pay £1 ,000 of the taxpayers' money towards sending a boat t hat could be filled elsewhere. In 1923, we met with the same fate . The Peninsular and Oriental Company would not send any boats to Tasmania for similar reasons; bu t r. t the e nd of the season, when they could not obtain freight in Adelaide, Melbourne, and Fremantle, they sent a boat for 64,000 cases.

. The next question to be considered is whether the Navigation Act prevented the continuance of the services between Hobart and New Zealand via Sydney and Melbourne. There was consider­ able evidence placed before your Commissioners that the Navigation Act was responsible, and it appears evident that there is little doubt on this point. The Melbourne-New Zealand and Sydney­

New Zealand services still continue--why is Hobart omitted? The weight of evidence is that Hobart is omitted because the fact of calling at Hobart would constitute "coastal trading," and the vessels calling, in order to carry cargo or passengers, would have to " license " under the Navigation Act, and incur all the conditions and expenses attendant thereto.

The same applies to the discontinuance of the Hobart-Strahan-Melbourne service. To continue that service would mean that the vessel would have to be " licensed ". and so the service has ceased. ,

Now the question arises as to what has been the effect on Tasmania of the cessa t1on of these services. The various effects are dealt with separately hereunder, as follow: -(i) The Tourist Traffic. (ii) The Timber industry.

(iii) The Fruit industry. (iv) Trading generally.

(i) Tourist Trciffic.

Tasmania is a favorite summer tourist resort for Australia. It specially caters for tourists to a greater extent than most of the other States. The value of the tourist traffic is considerable. By means of propaganda and advertising, the number of tourists who visit Tasmania is still main­ tained, but it is claimed that the fact. that the mail boats are no longer permitted to carry passengers interstate prevents a great number of wealthy class .tourists from the other States going to Tasmania. .

These tourists came by what was known as the "apple trip." They could travel during the apple season by mail steamer between say Sydney or Brisbane- Melbourne- Hobart, and return by another maiJ These vessels began to build up a separate branch of the tourist traffic. It is claimed that most of those people do not now visit Tasmania, because they desired.

comfortable travelling which, it is stated, is denied to them by the present facilities, consisting of comparatively small coastal vessels, with frequently crowded passenger accommodation, and the Launceston-Hobart railway. According to figure s placed before Your Commissioners, 500 people visited Ta.smania by means of the" apple trip" in 1913, and in 1914 this number increased to 1,000 . It is claimed that the number of wealthy tourists was increased, and that this branch of the tra ffi c was being bnilt up, when the war stopped it, and the Navigation Act prevented its revival.

As against this argument, evidence was furnished by the representatives of the interstate t;hipping companies that the service provided by them is ample, and for more than half of the

year their vessels from Sydney to Hobart, and Melbourne to Launceston have a great percentage of empty passenger accommodation. This is proved amply, but evidence was also brought forward that during the tourist season these vessels are ahNays full, and are crowded to a g;reat extent­ that intending tourist s are offered second class accommodation and "shake clowns'' on paymenL of first class fares, with the result t hat many people who will travel in comfort or not at all , Jl() longer visit Tasmania. The following is an example of t he evidence on this matter :-

E. 1'. Emmett, ex-Director of the 1'asmania t! Gocernm.enl T ourist B ureau. 10939. You opened with a statement that, I think, ought to be enlarged upon. say, .. The tourist .traffi c to Tasmania is restricted because of the fact that the only really comfortable steamers whiCh ever co me from mamland ports to Hobart are not allowed to carry interstate passengers." In your opinion there is no comfort on t hose boats. Is there no comfort on the ?- I mean in comparison with the Osterley and the Ormonde.

10940. Are those the on ly boats th at yo n ca)l get comfort on ?- Th e smaller boats fill up to such an cxtcnL that they l1 ave to use shake-clowns. 10941 . Has that occurred very often ?- lt occurred ou t wo out of the four tri]JS. 10942. You say, "The berthing accommodation is over applied for, and people M e wrucd a ll' ay. " Can you give us any further particulars about that. Have you figures with regard to people bemg turned ?- I have a telegram from my Sydney manager, dated Novemb er, 1921, n.s foll ows :- " Not eve n a ·hake-down c1tL er sex saloon

now available December twenty-first boat."

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10943'. Do you kno"-· if t.hat condition continued over a series of voya o·es ?- 'L'h e congestion applies particularly t.o that boat every year. " .

10944. What ·was the m,me of that ship ?- I t hi nk it was the R ivaiHa. I ha ve it telegram of the same date from my Brisbane manager, saying, "·w ant of shipping accommodation seriously affecting tourist traffic. Twenty :;hut out, Sydney, 21st, and Melbourne, 23rcl .December, will probably cut 'l.'asmania out."

1091\i. Did that diffwult y occur in 1922 ?- Yes, I had a wire ela ted the 14th November, stating, " R iverina, 20th December, has only a few shake-dow ns left. Absolut ely nothing for ladies. Have request from Brisbane four passengers. Ca nnot supply ."

Your Commissioners are of the opinion, in regard to the tourist traffic :-(a) That the tourist traffic to Tasmania has suffered by reas on of the operation of the coastal trading sections of the Navigation Aqt; and (b) That the shipping facilities to Tasmania for passengers during the months

of each year are inadequate for tourist traffic . ·

(ii) The Timber Industry.

The Tasmanian timbel' industry must necessarily be at a disadvantage in the mainland timber market on account of the geographical position of Tasmania necessitating additional fre ightage to such markets, and the fact that only a small proportion of the output is absorbed locally, with the result that the industry is dependent on the interstate and overseas markets. But it is claimed by the timber industry that this disadvantage is aggravated by the operation

of the Navigation Act, which ha" caused freights to be higher, and brought about a less regul ar and less adequate service .

. In regard to the handieap imposed on the industry by high fre ights, the .following table 1s quoted to Rhow the freights from Tasmania to interstate ports as compared with American , Baltic, and Canadian freights to t l1e same ports :- ·

Launceston Hobart Devon port Stanley Burnie Stanley Canadian P orts American Ports Baltic P ort s Burnie Burnie Canadian Ports

American Ports

Kome of Port. To-

I

}M c lboomc Melbourne Melbourne Melboum e Melbourne Port Adelaide Port Adelaide Port Adelaide Port Adelaide

I,ength of Timber .

20 feets

40 feets . .

Up to 60 fe ets Up to 60 feets Up to 30 feets 30 feets . .

40 feets . .

Up to 30 fe ets Up to 60 fccts

Freight· per 100 Super Feet.

. . J 5s. 3d. to 5s. 9d.

7s.

6s. to 6s. 3d. 7s. 6d. 3s. 3d. 9s.

lls. 3s. 3d. 7s.

It would appear to your Commissioners that the Tasmanian timber industry is handicapped in its operations on the mainland markets by reason of these comparatively high fre ights. The Tasmanian industry does compete successfully in Victoria, but its profits must be considerably lower than those of the Victorian saw-millers. The industry also has to compete with foreign

timbers, cheaply produced and carried to Australia at a low freight.

The industry asks for assistance in the form of cheaper freights or higher protective duty on foreign timber. Your Commissioners, seeing that the question of protection is outside the scope of this inquiry, do not care to express an opinion on the advisability of higher duty on foreign timber, and are of opinion that a reduction in freight is not probable in the nearfuture, but your Commissioners consider that the timber industry has a right to expect better facilities fo r distributing its output.

Evidence was placed before yom Commissioner s that since the Navigation Act came into for ce the timber trade of Tasmania with New Zeala d has practically been lost. A good timber market for Tasmanian timber existed there. The lack of shipping facilities killed the market, and the only export to New Zealand is by an occasional vessel. The same evidence was brought

forward in regard to Adelaide . There is a big market at Adelaide for Tasmanian timber, as South } \..ustralia has practically no timber production and relies on vVestern Australia, and formerly Tasmania, for its supply. Evidence was placed before your Commissioners that contracts could. not he obtained in South Australi a because shipping facilities were not reliable.

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. . . Tlie following evjdence given by a timber merchant at Hobart illustrates the m whiCh the industry stands on account of its lack of facilities for shipping:-A. E . Willing, Timber .Merchant, Hobart . . 11265. Will you tell the Commission in which way your business is affected ?- In pre-war t imes we could alway:;

up ply our customers promptly, but as soon as the Navigation Act came into force, when we took orders from Victoria, Jew Zeahmd, and Sydney, and put our timber on the wharf, it has bee n left behind, and there is no redress . I received w? telegrams this week turning down orders, and saying that the timber was no good unless it was shipped on the 1r1day's boat. I told Mr. Hooper, manager for Holyman and Sons, that the,timber must go on Friday (yesterday ),

nd he replied, " It is no good; we are leaving another full load on the wharf. " I said, "That is fiv e times that has appened in three months." Yi!e have to send documents, and they are returned because the timber has not arrived. 11267. How frequently has this occurred ?-During the last twelve months. 11268. How often ?- About four or five times.

11269. Have you actually lost orders because you could not get tlw timber away by ships t hat were here?­ y cs. I could not get the shipping facilities in the time. 11270. Could you get more frequent orders if you had more frequent shipping ?-Certainly. 11271. Are you unable to take orders because you are unable to ship ?-Yes. We cannot take orders because we cannot get the space.

. 11272. You said that when you get an order you have to cancel it because you cannot deliver t o time ?- We w1ll not accq'lt a time limit, as we have to wait until we can get the space. . . 11273: Have you any complaint to make ·with regard to t he freights ?- We are badly situat ed wit h regard to Jetties on the t imber area. It cost s us 2s. per 100 feet to move t he timber , and the fr eight t o Melbourne averages 6s. per 100 Ecet, so it co sts m e 8s. per 100 fee t to get the timber t o Melbourne, and it costs me 17s. 6d . ou an aYerage t o

produce 100 feet, after which it has to be branded. The price from an y mill in Southern Tasmania t o t he Hobart wharf is 2s . per 100 feet. I am only in a small wa y of buRiness, as I have not m uch ca pi tal to charter boats for myself. I r ould not get a. quote to take timber to New Zealand at any price. ,

11274-. Do you do any business with New Zealand now ?- No ; I cannot get space. 11 275 . Have you ever done business with New Zealand years ago; but it is cut ri ght out now.

11276. What do you consider has cut it out ?-The freights to New Zealand have b een as hi gh as l2s. per 100 feet, and a t one time the freights were only 5s. 11277. What boats take your timber to New Zealand ?- We can only get it away ' vhen the Union Stearnship Company is inclined to send a boat. 'rhe boats come when the company likes. .

11278. Does that suit your in taking orders ?-No; we cannot take an order, because we cannot get a time for delivery. ·

11 279. Would you have to send t he timber to New Zealand on "spec. " ?--I t might take three mon ths t o get t here, and the order might have to be supplied hom elsewhere. I used to se nd a lot of shafts, split posts, and palings . I had a. n inquiry the other day about t]lem, and I wrote back t hat the market was so bou ntiful in Victoria and th e freight to New Zealand was so high that the timber would be such

have to wait until Victoria got tired of taking our timber. 11 283 . Do you ship by any other boats than those of Holyman and Sons ?- No. No frei ghts are o±Ieriug excepL by the boats of the Union Steamship Company, Hudd.art Parker Limited, and Holyman and So ns, unlrss a merchant ran fill a boat himself, and I am not in a position to charter a boat myself. ·

11284. Do you ship all your stuff on Holyman and Sons' boats ?- I should like t he Commission to go and Sf'e t.he congestion opposite my yard. The La.mnah leaves a t 11 o'clock to-day, and there is more t han a fullloacl on t he wharf now.

The foregoing evidence deals with the declining trade with New Zealand, and your Commissioners have also been furnished ·with evidence, supported by documents, showing that the same position obtains in regard to South Australia. One· timber merchant in Hobart placed documentary evidence before the Commission

showing that he was unable to carry out a contract for the delivery of 10,000 "cro ss-arms " for t he Postmaster-General's Department in South Australia. The Department threatened to enforce the penalty clauses of the contract for late delivery. The contractor obtained an extension of t ime until a vessel called. A vessel eventually did call for timber, and picked up 600 pieces out

of the 10,000. This was a totally inadequate quantity, and the contractor asked t he shipping company for sufficient space on the next ship, hut only a small portion of t he space required was obtained. On the 24th April last the greater portion of the timber required by the contract was still on the Hobart wharf, and while it was awaiting shipment the contractor was being charge d storage by the Hobart Marine Board on 74,300 feet of timber.

Your Commissioners are of the opinion that these shipping conditions are not only a restraint on trade, hut make business impossible to the saw-miller, and are totally un atisfa ctory to the persons requiring the timber.

(iii) The Fruit I ndustry.

The representatives of the fruit industry state in their evidence that is sufficient tonnage visiting Hobart to lift the fruit for the English markets, the class of sh1p whiCh. come to Hobart for fruit is not as suitable as the mail steamers. It i asserted that before t he r a VIgatton Act

14

came into force, these mail boats would visit Hobart for as little as 7,000 It is also definitely stated by Sir Henry Jones· and others that the reason why these vessels do not continue their practice of calling at Hobart for fruit is that before the Navigg,tion Act operated, the passengers carried from Sydney to Hobart paid the running costs of the ship between those ports. Now

that the N·avigation Act precludes these vessels fron1 carrying passengers between interstate ports, it does not pay to run to Hobart for anything but a full load of fruit. It was stated by representatives of the fruit industry that the reason why the produce is carried more successfully by the n1ail steamers is that they arrive in London on a given date, and this regular arrival enables definite contracts for sales to be n1ade , which cannot be entertained

when the fruit is carried by general cargo vessels, very few of which have fixed dates for arrival and departure at Hobart or approximate arrival in London. In addition, another advantage is · that sn1all and regular shipments by the mail stean1ers keep stable the London n1arkets, and enable good prices to be realized, aoting as a " set-off " to lower prices when the big shipments

arrive later. One witness giving evidence as a stated the following :-

J. R. Johnston, P res·ident of the Hoba'rt Chamber of Co mmerce. 9311 . Has your amount of tonnage diminished because of the Navigation Act 1- 0ur commodities are sent by other boats. I admit the adequacy as far as tonnage is concerned, but the boats are-not equally good. As a fruit-grower, I shipped on one occasion by the Boonah, which wa s almost three months reaching London. If fruit is shipped by t he mail boats, they arrive to t he day.

Your Com1nissioners are of opinion that by reason of theN avigation Act these mail steamers no longer go to Hobart for fruit, and that while there is ample .tonnage for the present to take Tasmanian fruit to England, th.e coastal trading provisions of the Act have taken away one of the quickest and best facilities which the growers of South Tasmania had for placing their produce on the overseas market.

(iv) Trading Generally.

Much evidence was placed before your Commissioners to the effect that not only have the coastal trade provisions of the Act seriously affected particular classes of trade, but that trade generally has received considerable set-backs. · To a State like Tas1nania, wholly dependent on sea carriage for the transportation of its

exports and imports, every ship is a factor in the prosperity of the State, and every ship which is prev.ented fron1 visiting a port means a certain amount of trade lost and the loss of a certain amount of money to the State. ·

It is clain1ed that mariy avenues of trade have been blocked as a result of the Navigation Act, and that the pre-war trade routes have changed and Hobart is no longer a stopping place on the new routes. ·

For exarnple, a regular trade route was from Hobart to Adelaide, and then vVestern Aus­ tralia; at the present time these vessels (which are all oversea vessels) onthat route are allowed to carry neither passengers nor cargo between interstate ports. That this affects trade and prevents 'rasmsJnia exporting to South Australia and Western Australia is stated in the following evidence:--

Sir H enry Jones, M erchant, .Fntit Shipper, and Ma.mifacttt1'eT . 10168. We think that there should be concessi.ons under the Navigation Act. There are no direct boats from Hobart t o Western Australia or Adelaide. If we could send 100 tons of cargo direct t o West ern Australia it would be a areat convenience. \¥ e could do that before t he war. The three overseas boats v;rhich are coming to .Hobart this we

0 ek for wool wi ll proceed to Western Australia, and if we co uld send 100 tons of cargo by those ships it would help Hs . The same complaint regarding the cessation of trade with South Australia and vVestern

Australia was put forward by a representative of the Cha1nber of Manufactures, as follows:-E. H. Thompson, Director of H . J ones and Co ., Hob art. 10714. As reaards manufacturing business and that with vvhich we are particularly acquainted, the Navigation Act h8,s operated to d irect disa dvantage inasmuch as it was a great convenience when the overseas steamers were loading here to be enabled (b efore the Act came into for ce ) to make direct shipments of our goods from Hobart to South Australia and \;\[estern Australia. There is very seldom an opportunity of making direct shipments to these States now. The interstate companies do not provide a service from to South Australia and ':Yestern Th e

fact of it having been practicable to sh1p products by these d1r ect fast overseas steamers (w1thout the obJeCtiOnable de lays and knocking about to which goods are subj ect d during transhipping) was a very big factor in working up our trade with Western Australia in particular , and this has steadily falleu off until it is now only about half what it was when direct shipments were possible, the falling off bein g largely attributable to the unsatisfactory means of delivery. ·

10715. You say t hat previously yo u had an opportunity of direct trade with Adelaide and P erth, which is no t now possible. Do yo·u contend that if it were possible, you wo uld be assisted in developing it ?-Yes, I am certain of that. A :few days ago there was a buyer in Adelaide for a quantity of our pulp. He required direct shipment. We have looked everywhere, and cannot get an opportunity for shipment. We may have to wait a month or two, and then the pulp will be valueless.

15

Your Commissioners have already pointed out that the weekly service between Hobart and New Zealand has ceased, with the result that the timber export from Tasmania to New Zealand is practically negligible. Evidence of this· was put fonvard that. the lack of shippino· facilities had killed the trade. Not only is this the complaint of Tasmania, but the fact is in New

Zealand, and on thjs 1natter the following is an extract from the Bluff Harbor Boar_ d's Report for 1922--23 :-" The imports in Tasmanian timber which now c01pe from Hobart, via Melbourne and to Canterbury, Otago, and Southland have suffered so much from increased cost and uncertainty of shipment that this trade is practically

extinguished ." -

Other exports are similarly prevented from going to New Zealand, and the following extract frmn the evidence of a representative of the Hobart Chan1ber of Manufactures is typical of the general complaint placed before your Commissioners in Tas1nania :-" There was an increasing trade between here 2.nd New Zealand, particularly in timber, jam, and dessert fruits; our trade with New Zealand is now practically nil. As t ranshipment is now necessary in Sydney, involving extra handling and expense, this trade is no longer practicable. There is now. no direct regular service to New Zealand, and the trade has been lost. If we, or other shippers, desire now to make direct shipments to Western Australia, North

Queensland ports, or New Zealand, it would be-necessary to charter special boats, which in turn would no doubt have to come down here in ballast."

· On the question of the lack of shipping facilities to maintain trade -vvith New Zealand, the following is an extract from the evidence given in Hobart:- ·

C. E. W ebster, R epresenting the Hobart Chamber of M anujctctu1'es . During this year it occurred that New Zeahmd could take our chaff and oats, but the very he avy additional cost of freight to and transhipment at Sydney practically debarred Tasm::mia from the opportunity.

* * * * * * * * * *

There is an intermittent servic e direct from here to New Zealand. It is sometimes six weeks or three months, but is availed of very little, because the boats will not book. freight u ntil they are alongside the wharf here . There is no hope of our selling to New Zealand if we cannot guarantee to deliver by a certain boat, and have to v.-;ait until the next one. If that position were understood better, it would be seen why trade is so small between here and New Zealand.

Not only does it appear to your Commissioners that Tasmania has lost a great deal of export trade wit h the other States and with New Zealand by reason of the Navigation Act, but evidence is also given that even some of the internal trade of the State has been diverted thereby. As pointed out before, tbe Navigation Act caused the cessation of the service from Hobart to Melbourne via Strahan, the only port serving the n1ining fields of the Vvest coast. The result is that there is no shipping between Hobart and Strahan. The natural consequence is that practically all requiren1ents fron1. the West coast of Tasmania are brought from. Melbourne through Burnie, with the result that this rich portion of Tasn1ania is practically compelled to trade with Victoria, and no trade is carried on with Hobart.

The evidence placed before your Commissioners has shown that the effect of the Act has been to crush small trading vessels in the interstate trade. In con1parison with larger vessels their working expenses are not ll!-uch lower; but their earning- capacity is considerably lower . In I-Iobart this fact was clearly shown in the evidence of a master-mariner, who owned and sailed his own sailing vessel of 80 tons between Southern Tasn1anian ports and the mainland. For years this n1an has sailed similar ·vessels between Tasmania and Victoria ; the sea has been his home all his life, and with four good n1en with him he has worked his vessels and was contented with the small profits his ship earned. The Navigation Act came into force, and in addition to expenditure on

improvements to his ship, the law ordered hin1 to carry a passed mate, at an extra cost of £16 a month and keep, say £250 a year in all. That £250 represents to this trader practically the amount of his present annual running loss . The expense cripples him. In the first place it. is hard to get the services of a passed n1ate for an SO-ton sailing ship. - The only class of Inan he can get is one who is beyond the useful age. But even if he were n1ore qualified than the captain hin1self, it is claimed that he is not necessary-for the running of this sn1all vessel, to assist a m.an who for 40 has taken s1nall sailing vessels between Hobart and aln1ost every other interstate port in Australia.

In the opinion of your Commissioners these small vessels are a necessity. They are able to go to outports, where bigger steamers will not go, for fr eight. While a big steamer the requirements of the big centres, the small steamer lifts small amounts of produce and u1ts the requirements of the small primary producers along our coast line. In a young coun+ry should be catered for, and the question arises whether a young country can be developed vVl ' h b1g ships which only go where a big ship can be run profitably .

From the evidence placed before your Comn1issioners, it does appear that . mall vessels ar essential to the development of the districts served by the outports of Ta. man1a, ar;td that Navigation Act has so increased the running cost of hese small ve. sels 111 propo!twn to then· earning capacity, that they are being forced out of the trade to he de-nment of th

development of the State.

" ·-·.

16

(b) LAUNCESTON AND THE NoRTH-WEsT CoAST

. A remarkable feature of the enquiry in regard to Tasmania is the fact t_ hat while Hobart; IS a storm-centre of discontent, I .. aunceston and the North-Vlest Coast norts of Burnir,

Devonport, Stanley, and Ulverstone have little or no con1plaint against the l.Navigation AcL. . \Vith regard to Launceston, there has been considerable rivalry between that city and Hobart for J!lany years. When the N-avigation Act brought about the cessation of the l\1elbourne-Hobart all the passenger traffic from Melbourne to Tasmanja then entered Tas1nania through

Launceston, which ·was to the advantage of that port and to the detri1nent of Hobart . . '! Commissioners found content1nent with shipping services, to that of Launce;toni prevarhng on the North-vVest Coast, and son1e interesting facts in regard to the ports serving that part of Tasmania were brought out in evidence. ·

About the 1niddle of 1919, when there had been a good season on the North-West Coast., and a good market on the mainland, the shipping facilities at the ports of Devonport, Burnie, and Stapley were so inadequate that the producers vrere in despair of placing their produce on the mmnland market. The position becaine worse, hundreds of tons of produce were being wasted because of no vessels to take it away, till·the people of the North-vVest Coast, finding that no help was likely to con1e from t he shipping companies or the Commonwealth Governm:ent, demanded that the State Governn1ent should do something. Public men who were opposed to any form of State enterprise, den1andecl a shipping service fron1 the State, rather than see this fm tile part of

'fasn1ania languish. The result was that in May, 1920, the State Parliament passed an Act authorizing the Governn1ent to purchase or build vessels. In June, 1920, the G9vernment bought the s.s. (1,739 tons gross register) fron1 the Melbourne Steamship Con1pany, and at the end of 1921 the s.s. Poolta (1,675 tons gross register) was purchased. ·

I1n:mediately the s.s. J11elbourne began to trade on the North-vVest Coast, the interstate cor.npanies entered into keen con1petition there. Th e chief n1a:rke t for theN orth-West Coast produce is Sydney, and the bulk of the trade by the State boats has been between the North-West Coast ports South vVaJes. The ipterstate companies at once sent vessels trading fron1 Newcastle to l\1elbourne across to Tasn1ania to lift produce, and the date of their sailings from the Tasmanian

ports synchronized 'lvith the sailing of the · State vessels. In other words, the interstate companies were out to crush the State ships, and ·while previously they had been unable to provide n1ore than an occasional ship for the N'orth-West Coast trade, as soon as the State bought one of their vessels and started to 1neet the needs of the producers, the interstate companies could find several vessels to run in keen cmnpetition with it.

The result has been that since the beginning of the State service, the North-\V:est Coast ports have had a service which probably no other simihn· part of Australia enjoys . The number of vessels visiting these ports has increased greatly. The amount of cargo lifted sh ows a ren1arkable increase, while Ulverstone, which three years ago was not visited by vessels of any kind, suddenly rose to the status of an interstate port. As an exa1nple of the increase in shipping, evidence was

obtained that in 1919 the total inward gross tonnage for the port of Burnie was 239,053, in 1920, six: 1nonths after_ the State vessel started, the total tonnage was 458,529, in 1921, it rose to 532,231, in 1922, to 799,738, and in 1923, to 878,228 . The result of this cornpetit,jon has been (a) to jJJcrease shipping faciljties; and (u) to increase

production. · .

Your Comn1issioners were particularly impresf-ed by the manner in which the increased . shipping facilities in the North-West Coast of Tasmania have increased production. Wherever your Connnissioners have found in sufficient shipping facilities, it bas been maintained by the shipp]ng ccmp.anies that the trade does not warrant a better servjce, that they are the sole judges as to w}w,t service :is sufficient, and that te increase such services wjlJ not increase production and build up trade. Tl'e position of the Nm:th-V{e,·t Con st oJ Tasmania is a refutation of these conten­ tions, i'nd in the of your Com1nis ·ioners shows that. an . irregular and inadequate is to the prin1ary and secondary indu ·tries of Australia.

In this case, the shipping companie., in tryin g to cru -·h the State vessels, gave good shipping services, '\ivhich they bad previou ly ·denied to TasJnania. The trade at once increases. The exports from each port on the N?rth-\Vest Coast show a. A new port

into existence. Greater productiOn take. place . On thiS pmnt the evidence of the manager oJ the­ State Shippin&r Service is a. foJlow :-¥Villiam Robinson, Geneml.Manager of the 1'asmcmian Gove'!'nment Shipping Department.

12213. By the Chainnan.--Do yo u mean to infer that, having a regulal' service, the people in the district provid cl t he -products ?-Yes. There has been a, ubstantial in reasc in the produce on the coast. ·

12214. You "Ontend -that it is because the settlers have been sure of the service undoubt dly. It has not been so much the .servi ce provideci. by the • tate, bu that wh ich has foJlow din t he wa ke of t h State vessels.

11

. . . 12215. You think that a ple.ntiful service incr ease productio n ?-Undoubtedly. I£ you v.rer6

to VISit Stanley, you would be provided with evidence on that pomt . . A good deal of the land \Vent out of production because the produce could not be sent away, but since our vessels have been running a regular wce h:ly service the produc­ tion has very considerably increased.

PART VI.-WESTERN A1TSTRALIA. (a) PRIMARY PRODUO'!JON.

The weight of the evidence taken by your Commissioners in \V estern Australia strongly emphasized and stressed the fact that the farther the primary producer is from the areat industrial and thickly-populated centres, the greater are his disadvantages in the mat ter o{'transport, and that this position has been accentuated by the operation of the Nav]gation Act. - -

The storm centres of unrest and irritation against the effect of the Act are undoubt edly from the more remote parts, such as Western Australia] Nort h Queensland, Tasrnania, N e-vv Guinea and Papua. These States and territories, dependent on sea transport for the carriage of t heir produce and their necessities} must always be at some disadvantage when compared with other Stat es which are amply catered' for by railway and sea carriagPo

The evidence of the Managing Director of \Vestralian Farmers Limited, show·s t he positio n very clearly. In reply to a question as to whether his firm imported certain require1i1ents in the shape of machinery from other States, he answered in the affirmative, and further stated when asked:--

B. L. M urray, J V!anaging Dirrecto 'J· of Westm lian F armers Limited . 859. How do you find that the charges , including freights, compare wit h Victoria ?-vVe fin d that the farmer in this State is very much at a disadvantage compared with the farmer in Victoria. V/ hereas the overseas freights from London, Liverpool, .and New York are the sa me to Victoria as t o -w estern Australia, t he fr eights from Victoria t o Western Australia are very heavy.

The result is that if we import from Newcast le the local article Illade by the Newcastle Steel Works or the Broken Hill Company, we pay from Newcastle to Fremantle 42s. 6d. per ton. · The farmers in New South Wales can purchase that article in Newcastle at the same rate as we can, less 42s. 6d. per ton. On the other hand, if we import from London, although the boat go es past Fremantle, the farmer in New South Wales can import it at exactly the same rate of freight

as we can. The rate current to-day is 38s. from London or New York. -

860. Would that same condition apply as far as machinery is concerned ?-Just t he same. 861. Have you seen the report of the Tariff Bo ard, in which they make reference t o the Navigation Act ?-No. 862. They said in their report- -

Many bitter complaints have been made to the Tariff Board that the working of the Navigation Act is acting detrimentally at present to the best interests of Australian industries, both primary and secondary. It was stressed, whilst the Government professes t o do all in its power to encourage decentralization and the peopling of our distant parts, yet it indorses the p olicy of the Navigation Act, which, more than any other legislation, discop.rages the set tler on our coasts far removed from industrial centres .

It was also urged that the oversea merchants are assist ed in their trade against our own producers by the fact that our present method of administering our shipping laws places heavy freights on our own products, whilst oversea goods are carried for much lower freights. The Board found that this discontent -existed in all Stat es, but that the application was most keenly felt in Western Australia and Queensland. Not only is the-freight on Australian goo ds shipped to t ho se States high, but the heavy freight in return places t he producers at a serious disadvant ag2 when endeavouring to compete with imported goods shipped to the other States . You say that the Tariff were correct in that assumption ?-I do .

On the price of fertilizer in \Vestern Australia, his evidence is as follows :--884. Have you on occasions t o import fertilizers to this State ?-Yes. 885 . Have you compared the cost of fertilizer here with its cost in the other States ?- Not imported fcrtihz;er . I have compared many times t he cost of t he Australian manufactured fert ilizer.

886. In coimexion with ·the Australian manufactured fertilizer, is there a difference itl price in Victorin and Western Australia ?-Yes ; there is a di ffe rence in Sout h Australia also . It would be 7s. per ton greater in \Vestern Australia than in Australia, which, with t he enormous turnover, makes a very considerable difference.

The difficulty of building up a trade with Java is also stressed :-- · 888. Do you know if ·w-estern Australia is endeavouring to open up markets \Yith J ava and the Far East ?-I do. I have had one of our own staff in J ava for some considerable time. 889. Is it a fact that the American people are endeavouring to nurse that t rade ?-Yes .

890. What products have we to ship from ·w estern Australia ?- My company ships to Java such pro duce as potatoes, onions, and mostl:y .fruit-:-apples , and oranges, and so metimes pears. . - . . . \ ' .

891. In your competitlOn with Amen ca IS 1t necessary that yo u should have equal fre1ght faC1 ht1es 1-Certamly, if we can get them. vVe have to compet e in t he same market, and get t he sa me price.

The fact that there is no cornpetition in existence in regard to jnterstate shipping fre ights is also brought forward:-902. In your negotiations for the purchase of material on behalf of yo ur , have yo u_ obtained any direct knowledge that if it were not fo r the Navigation Act yo u might possibly get the wu: at a 1 s

cost ?- We are quoted a price for wire on board a ship hat is availa le and is permitted to 1t. r\o er

what line you ge t a quotation, t he quotation is exactly the same, and you naturally led beli ve hat 1 arrt vel at by combination. The boats that are permitted to carry it have a defirute agr ement a. to the rat e of freight. F.l5346.-3

18

\106. You have not direct evidence that the Navigation Act has been detrimental t o Western Au s-tralia ?-· I am giving evidence t hat the rat es of fr eight charged by boats run under t he Navigation Act, for a short journey, are more than those charged by boats not governed by the Navigation Act for three times the distance. ·

The same vvitness also shows how Western Australia is at a disadvantao-e beca us e in that Rtate there is no great local market :-· o ·

974. . ·. . . . . . . . That local market was an extraordinary valuable factor to the producers. In

Western Australia we cannot earn pence if we grow stuff for the local market, and if our cost of production will not permit us t o sell at a profit overseas we will have no chance to live . .

976. Practically all yo ur business is do ne overseas no ; we do a considerable interstate business . We have, unfortuna tely, to buy an enormous amount of stuff in the eastern States, and that is where our cost of production is raised.

" . The fact benefit to t he producer, while it forces him to pay

ror It, and penahzes h1m m h1s competitiOn with the producers of other countries, is also brought forward by the same witness:-1016. Would yo u expect the Australian ship-owners, paying very high rates of wages, to compete against - 'l'hat question hit s the vital principle. If certain co nditions have to be observed in Australia under the Navigation Act , it would be perfectly unfair to give an advantage to some one who has not to comply with th.ose conditio ns. You could not expect it. It has the effect of penalizing the producing community of this State in regard to something from which they derive no advantage .

1017. If you were called upon by the laws of your co untry to pay a certain running co st on the material which you purchase or the labour which you employ, you could not possibly compete wit h someboqy who can carry on at lower rates not. · Unfortunat ely, the wheat-grower in Au stralia is, by those Acts of whi ch you have spoken, forced to do what you tell me it is not right that he should do. H e has to sell his goods in competition wi t h people who are not similarly forced.

Further evidence as to the higher cost in Western Australia of the requisites for production was furnished by a representative of the Primary Producers' Association of "\Vestern Australia, who quoted the following examples :-Walter S utcliffe, General Secretaty, Primary Pmduce1·s Association of Weste m Australia.

An agricult ural machine offered for sale in Meibourne a t .£105, costs the Westerr. Australian farmer £1 21, or a handicap of £16 in t his case on t he Western Australian farmer. Further, as showing the high interstate shipping freights, it may be mentioned that fencing wire, which can be imported from England or New York at 38s. per t on, cost s 42s. 6d. per ton to bring from Newcastle to Fremantle.

That interst ate freights are excessive is stated by Mr. S. McKay, Works Manager of the firm of H. V. McKay Limited (Sunshine Harvester Works). This firm do es a great amount of shipping, and the freights of their manufactured articles are nearly all borne by the primary producer:-

" Would you regard the coastwise freights as exorbitant ?-Yes; we feel that they are exorbitant. The cost of conveying our goods from one port to another is certainly very excessive. To bring coke from Queensland to Melbourne costs 33s. per ton." " Would that be coke produced in Queensland ?- Yes ; coke from the Brisbane Gasworks. On smelting coke from New South Wales the freight is about 22s. dead weight, which we regard as very excessive." r

This witness also stated:- -" We do not like the idea of charging more for machinery in Western Australia than we charge in Victoria, but we are compelled -to do so on account of the extra cost of getting the machinery over there." The Mining of Western Australia also makes the following assertion :-

The O'enera] effect of the protective policy of the Federal Government, functioning through the Customs in the fust place, : nd the Arbitration Courts in t he second pl.ace, has so the t.hat

t here is, for all practical }mrposes, no base metal exrstmg requmng the serviC:s ot mterstate sluppwg. Experience has also proved to those .engaged m this. that cost of smeltmg m the eastern States,

based, as it must be, upon a cost of hvmg whiCh reflec ts the, mcrdence of through Cust.oms H ouse, makes t he shipment of ores to smelters in New South Wales and South Australia an unremunerative .busmess . . The Minin O' Association has, therefore, for other reasons, been able t o take a detached VIew of t he operatron of t he naviD"ation la:s of the Commonwealth but nevertheless feels t hat if its own particular industry had not been killed and seveml years ago, it would been Navigation Ac t as another nail in t he co ffi n of what

should be a very flourishing and important primary mdustry 111 Western Anstraha.

(b) 'rHE TIMBER INDUSTRY.

The chief complaints against the shipping services in relation to the Western Australian interstate timber trade are :-1. High freights on timber. 2. Irregular service and insufficient space.

3. Monopoly of interstate shipping companies.

104 I J

19

. 1. High Freights on Timber.-The £oUowirtg table shows the rise m timber freight from Fremantle to Adelaide for the past 15 years :-Date. Preight Rate.

'21st August, 1909 16s. per load of 50 cubic feet

3rd June, -1914 · 2ls. per load of 50 cubic feet

18th Septeniber, 1918 29s. std. per load of 50 cubic feet

6th October, 1919 32s. lOd. per load of 50 cubic feet

29th April, 1920 39s. 5d. per load of 50 cubic feet

lOth April, 1922 ?Is. 6d. per load of 50 cubic feet

5th April, 1923 35s. 5d. per 1oad of 50 cubic feet

It is contended by representatives of the timber industry that these freights lire adding so much to the cost of timber sent to the eastern States that timber produced in these States is so much cheaper; demand for Western Austtalian timber is not so great. For

example, the following is taken from the evidence of the Manager of the State saw-mills:-D. G. Humphries, Gene1·al Manager, State Saw-milis; Westem Austraiia. . 47. What effect have high freights on timber from t.his to the eastern States in competition with timber from other ?-;-'!:hey effect the price in the other States, and naturally we at e not selling the quantity which we woUld sell if the freight rate was lower. ·

S5. Do you attribute the rise to the NaVigation Act .?-I do . 86. Do you the reduction in the output of the mills has been due to the high freight ?-When we were agitating for the reduction in 1922, overseas steamers could be chartered at a cheaper rate than we were paying interstate companies. Many' mills were closed down because they could not get orders at a payable price.

. 89. ln your opinion the Navigation Act is interfering with the development of the saw-milling indtistry 1-It ismterferiiig with our trade. We could. do more business in the East if we could get a lower freight; which would enable us to quote a lower priGe. '

It is also contended by the timber industry that these high freights remain

high owing to the effect of the Navigatioh Act; for example, the manager of the State saw-mills further states :-'

Yes. 101. Another statement you make is that you are being ruined owing to the operation of the Navigation Act? 102. You say the Act had the effect of increasing freights on the coast 1-Yes. 103. Has not the action of the increased freights ?- If we had not had the Navigation Act at this

particular time we could have chartered steamers overseas at very much lower freights, got rid of our t>ccumulation, satisfied our custortiers, and kept our trade together . We were not able·to do tha,t. 141. Will you expiaih to the Commission in what way the Navigation Act has increased fr eights and prices on the coast ?-Perhaps when I said it increased freights I was nclt exactly correct. It keeps freights at a higher level than they are obtainable outside.

2. Irregular se'tvice and insufficient space.-It was asserted that the shipping of timber to eastern States has been often held up so long that the saw-millers have been unable to fulfil c.on­ tracts; that not only are there insufficient vessels calling for timber, but when they do call the allotment to each company is small compared with the amount of timber waiting to be shipped.

The following is extracted from the evidence of the manager of the State saw-mills:-' Has theie been any period when you have a lot of timber for which you have orders and it was laid up in. this State 1-Yes, especially at this particular period about whi ch I was writing (June, 1923) . There have. been other P.enods, but I cannot recollect the dates. In 1920, two years after the conclusion of the war, there were of

timber which we could not shift for many months. In some cases the orders were cancelled and Imported. t1mbers were purchased in their stead. ·

50. Would that be a considerable quantity ?_:_There were big quantities at that particular time. Everybody was in the same boat. Mo st of the timber companies had contracts, but could not get their timber away on account of the shortage of shipping space. 51. CoUld you tell t he Cori:lmission how frequently you were unable to fulfil orders ?- At that particular time the shortage of timber extended over some months. In the particular instance to which I refer, we a steamer in May for Adelaide and Melbourne, and t he opportunity aflorded us was in August, by the Ashridge.

109. There was a period when yo u could not get your cargo shifted ?-Yes . 110. That was about last May or June ?-Yes. We made no shipment from May to August. 111. Was that owing to the refusal of the shipping co·mpanies to carry your freights or owing to the Act?:­ I pleaded for space on the Woolgar and Junee, and was informed that I could not get the space as It had been allotted.

112. The Woolgar left in May ?-I was refused space in the Woolgar in July and in the J unee in June, . . i13. Who .refused you ?-We rang up secretary to the interstate companies and were told. that in. those vessels was allotted. ·

114. Did you apply for accommodation in May ?-In May we loaded a lot of tim,b er· o.O: a vessel ca.lled the Iron Monarch. 115. You had plenty of accommodation 1-No, not plenty. F.10346.-4

20

This .evidence is borne out by that of the manager of Millars' Timber Company, who states the following :-N . 1'emperley, M anager of llfillar-s' Timber and Trading Compa.ny, Pertlz. 225 . You have not the space which you had befor e t he Navigation Act operated ?- Prior to 1914, the space was adequate for our requirements.

You did not have stocks of timber held up unduly, as you have to-day ?- We were never in the position

we are m t o-day; we never had such an accumulation. •

227. How do you anticipate disposing of the di ffe rence between that which you have to ship and that which the companies are prepared to take ?-I suppose we shall have t o pay more money, and get special steamers to take it.

3. Monopoly of the Interstate Shipping Companies.-With regard to the complaint that the shipping companies have a monopoly of timber space from Western Australia to the eastern States,. the position was revealed very clearly in the light of the following circumstances. It was found by the timber industry that it could not continue to pay the high freights to the eastern States, and mills were beginning to close. The timber industry made representations to the shipping companies that a reduction of 20 per cent. was necessary. The shipping com­ panies offered a reduction of 10 per cent. and refused to reduce any lower. The timber industry representatives then communicated with Messrs. Scott Fell and Company of Sydney, who are outside the Shipping Federation, and who agreed to carry timber from Western Australia to the eastern States at a 20 per cent. reduction on existing freights. As soon as the Shipping Federation heard of this, they decreased their freight by 20 per cent., and this was satisfactory to the timber industry. Scott Fell and Company did not come into the trade, and when it was evident that that fum was not going to compete, the Shipping Federation raised the timber freights by 10 per cent. The timber industry again opened negotiations with Messrs. Scott Fell and Company, and an arrangement was being made for that firm to carry timber at the 20 per cent. reduction in freight, when the Federated Shipping Companies threatened the sawmilling companies with practically a" boycott" if they Scott Fell and Company's steamers. It is stated that negotiations again fell through oi1 account of the coal strike.

Dealing with the same matter, the manager of the State Saw-mills gave the following evidence :-182. You were threatened with certain dire consequences . Have you any correspondence dealing with that matter ?- No. ·

183. Have you any objection to giving us the name of t he person who informed you of what would happen to you ?- No, I have not. It was Mr. J. Downer. I think he is the manager of the Adelaide Steamship Company in Western Australia. 184. What did he say to you ?- He told me that I was flirting with Scott Fell and Company, and that the interstate companies were in a much better position than Scott Fell and Company t o lift the timber ; that I had to

recollect that if I was left by Scott F ell and Company I might find that the interstate ste::omers were booked up, and would have considerable trouble in getting my timber away. 185. Do yo u think that that was bluff, or was he in a position to give effect to it ?-I believe at that particular time he would have done it if he could. We could not get fr eight in the Junee and the Woolgar afterwards.

186. You t hink that that was a fulfilment of his threat ?- It appeared to me to be so.

The Honorable W. Scott Fell in his evidence also bears out the above statements :-William Scott Fell, S hip-owner, Shipping Agent, and Coal Exporter, Sydney. 12569. I pres ume that you are aware of the fact that certain evidence was given in Western Australia as to the State Timber Mills having approached you with regard t o timber freights ?- I have heard about that evidence.

12570. Do you remember being approached by the State Timber Mills in Western Australia in that connexion ' - Yes, and I have carried timber for them. As a matter of fact, I am carrying some timber for them within the next few days. . 12571. Were yo u able to reduce freights below t he rates charged by the steamers of the Federation ?- I think that I charged a little less. ·

12572. Arc you a member of the Federation ?- No. 12573. You are on your own ?- Yes. 1257 4. When you reduced the freight rates for the State Timber Mills in Western Australia did the steamers of the Federation also reduce the freight rates ?- I believe that they did do so ; that is the little method they have of trying to kill opposition.

The truth of the foregoing circumstances is also borne out by the general manager of Millars' Timber and 'Trading Company, whose evidence reads as follows:-209. You have intimated in a letter that yo u wrote t o me as Chairman of t his Commission on the 20th inst., t hat yo u desire to place before the Commission some information regarding the shortage of 11teamer space t o .t he eastern States . Will you now communicate that information to t he Commission ?-The chief point I want to put before the Commission is this- t he principal complaint that we have regarding t he operation of the Navigation Act as it affects the ti mber industry generally, and Millars' trade in particular, is that we are entirely in the hands of the shipping companies; that is to say, if there is a fluctuation in trade which demands more space t han t hey can prov1de we have no alternative- we cannot go t o any ot her quarter to secure shipping space . At present we have a very large accumulation of timber in Western Australia which requires to be shipped to the eastern Stat es , and the regular stea mers of the coastal companies cannot lift our immediate requirements. We are really in the position that we have to sit clown and wait until they can do so.

- .

1 04Jf3

21

. . Your Commissioriers find that the interstate export timber industry of Western Australia IS affected by the operation of the coastal trading provisions of the Navio·ation Act, and that the position, so far as rates and service are concerned, has shown little since the vVar

and control period. Freights on timber were in 1923 70 per cent. than those paid in 1914. by giving a virtual monopoly to "licensed" ships, places the Shipping Federation in a

1mder A.ct to retain control" conditions, high rates of Jreight, and limited service,

while your CommissiOners feel that rn order to develop industry, the tendency should be to return as far as possible to pre-war conditions. Only very feeble competition is brought to bear upon the Shipping Federation, which practically controls the shipping of Australia.

(c) THE RESTRICTED SHIPPING FACILITIES OP ALBANY.

- The port of Albany is the naturar geographical zone which should serve an area with a population of about 20,000 people.

Before the Great War there was regular weekly service by interstate vessels (in addition to the regular vVhite Star Liners and casual steamers), which carried passengers and cargo to the eastern States. During the w:1r this service was curtailed, and after the war, of getting the same service as before, or a service anything approaching it, Albany received a three-weekly

service. At present the monthly service consists of the J{atoomba, which carries passengers and cargo, and one irregular cargo vessel. The evidence shows dearly that the cargo service is by no means a regular service, and that during the last two years as much as 35 days, and sometimes 66 days, have elapsed between the calling of interstate steamers. This service is the only practical

means by which cargo can be brought from the eastern States.

The people of Albany contend that this service is totally inadequate for their requirements. The Shipping Companies state that there is not sufficient trade to warrant a more frequent service.

The fact remains that before the war, when the interstate companies had compe­ tition, one boat, carrying passengers and cargo, arrived at Albany from the eastern States on Tuesday of each week and proceeded to Fremantle, and returned each Sunday en route to the eastern States, picking up passengers only at Albany. In addition, another vessel arrived at Albany

on the way to Fremantle from eastern States towards the end of each week, carrying passengers and cargo, and returned via Albany with cargo and passengers during the following week

Now that the competition is eliminated by reason of the restrictions imposed by the Navi­ gation Act, it would appear that the interstate companies are taking advantage of the fact that they have a monopoly, and have ignored the requirements of the port of Albany to such an extent that the trade of that port has declined . . Probably the trade of Albany at present doe s not warrant

a more frequent ser vice than it receives when regarded from the point of view of immediate profit, but it is contended by the people of Albany that the deplorable decline in trade at that port has been brought about by the interstate companies refusing to provide an adequate and regular serv.ice immediately after the Government control ceased, with the result that the t rade has been largely diverted to Fremai1tle.

An irregular service is entirely unsatisfac.tory for any port. In the case of Albany a fair trade was done by the merchants there with Katanning, Wagin, and other inland tovvns, because Albany is their natural port and direct market. But owing to the irregular service to Albany, the business people in these places can no longer depend on Albany for supplies, and the consequence

is that the greater portion of their business is now done with Fremantle, at greater cost to them on account of extra railage. Another example of the effect of an irregular service is inst anced by wit nesses iu giving evidence concerning wire netting, barbed wire, and ordinary wire. The Australian supply comes from Newcastle. The follovving is an extract from the evidence of a Customs and shipping agent

of Albany:-F. L. Wi ZZ.iams, P1·esident of the AUJany Chaml:Je1· of Commerce .

4034. Do yo u say that yo u are not able to get sufficient quant ities of wjre ?-The slllpping fac,ili ties arc no t aU t hat they might be. W e have had no boat leaving Nev;rcastle for just on three months, consequently have not been able to get our supplies. The business has gone through Fremantle, where the merchants can dra>· the1r supplies \1 -eeldy fr om Newcastle, Sydn ey, or oversea ports. They are sending the wire down to our back door as far as Barker.

On e man wrote to the paper asking why he could not get supplies of fencing material thro ugh Albany: The reason I S t hat Fremantle can land goo ds very frequent ly, while the man in Albany can la.nd them only at long mtervals. Tho Frernantle man, therefor e, can sell more cheaply . 'I'he trade bein g in Fremantle, the purchasing

power of tho se men such t hat t hey can command bctt.er pnces and terms from the manufactm er. 'L he wholesale merch cmt in Albany is bein g placed outside the realm in which he should be able to do business.

l

fol1owing .ftom .the evidettce of t:ha same wituess shows that tha exp·ort of primary

products 1s also handicapped:-4053, Do oi the tarmers have to send their produce by ra!l t o Fremantie to catch the Eastern States boat bec_ ause Of lack of sb:ipping here 1-Tliis year one shipment 9£' £fttit Adelaide had to be railed f:tdm Mount· Barker pick_ up 1Mat thefe, bMause the sailirig :ftom Albany did ndt fit in With the seller's contract ih regard

to the delivery of the frmt. 4054 .. Wli.ivt would be ihe difference lJetwe@ n the riilil height and watet Mrriage ?-I understand it is abouu 7!d. per case higher by mil. 4.055. And a very great to send the fruit by happens be is almost

a calannty. The shipment to which I refer was made two months ago. If it had to be made to-day I think they would sooner cancel the contract than take the risk of shipping the fruit out of cool stores a distance of 340 miles in a truck, allowing it to lie in Fremantle a couple of days before being put on board. ·

. 4056. Then the fruit-growing industry is suffering beeause of the lack of shipping from this port ?-This year It has suffered to some extent. ·

. 4057. I£ the cofitinues t6 inatease its output, and tlie shipping facilities do not improve,

the mdustry will be still further hampered ?-Particularly if we can obtain a in the eastern This year

there has been a big market, but we have not been able to get the boats which would enable us to avail ourselves of that market.

A further disudvantage which the infrequent and irregular setVices entails t·o the Albany merchatit is that in ordering supplies it is rtece§saty to estimti!te what a month's requirements of goods will be, and to order accordingly. _ lie cannot continue to supply his

cl.lstonit3ts until the next bbat arrives, and if he he may lose money owing to a

drop in, price of some cotnpiodity. In any case, he w_ ottld be to finance greater stocks than he would if he had a regular and frequent service. The folloWing from the evidence taken at Albany is a case in point L. S. BarneU, Business Manager, Albany.

4177; . • , ; : : ; ; Hl was ilmiiouttced in tlie press that a drop was po takt3 place in sugar as from the

.15th. Our Stipplies would been shipped on 13th. That meant that we would have liad a month's supply of .. tlte higher priced sugar. We had to take it. If we cannot supply sugar to the people in the country we might as well go out of busin€lss. 4118. Did not that actually happen when the other ch:ange in sugar took place did. Unfortunately we had. to pay £180 excess on a consignment of sugar as the result of the rise taking place when it did. .

· After having heard the evidehce tendered by the people o£ the district, your Oomntissidners are of the opinion . that it shows how an infteqtient and irregular transport service will retar'd .the district.

For many years prior to _ phe appears to enjoyed a regular and efficient

service -at least o_ n0e a yveek. _ This in itself useful employment :wJthin the town of Albany, as well as serving . . it is stated that the population of

the district has increased by per cent. si:.:ce 1911, due largely iq the land policy o£ Western Australia, as well as large ones, are anxious to despatch their produce

to markets when they have been prepared. But from the evidence given it is clear that little than the making o_ f the steamship service pay has actuated t:tJ_e shipping companies in supplying the service which Albany now . ., · . . . .

It should be stated that the Trans-Australian Railway has taken a portion of the passenger traffic from this, as well as from other ports, of Australia. ·

It is clear, however, to yo:tir Oonunissioriets, that unless a sufficiently regular and frequent . servi.de is given, it willoe very difficult for this fertile distti6t, which pgssesses an ex0ellent harbour, to ·

· . Steps should be titken tc> this decline; particularly 'tis a _ representative of the Interstate Shipping Companies tha-n they (the compa:tlies) the arbiters as to what should be an adequate and efficient service for any port. ·

Further, as Albany is 300 rp.iles distant from the Trans-Australian Railw:ay, it con­ stitutes a great hardshtp for district of Albany, to to the

States, to be debarred from by other _thail boats 1icensed under the AGt. The

extra journey entailed from Albany to Perth adds considerably to the cost, as well as the of the journey, and in view of the pecu:q.ar geographical position of 4Jbany, which places it on the route of oversea steatfiets, and leaves it over 300 miles from the Railway, it

m.ust be patent that the coastal provisions of the Act are a serious disadvantage to the whole of the Albany district. ·

(d) Tii:E RESTRICTED SHiPPING FACiliiTIES OF G:EJRALDTON.

Your Ootnmission, during its sitting at Geraldton (Western Australia); had evid.enoe placed heft?re it the tra_ qe o£ port httd serious retrogression. This :vas partly attributed to the £act that the Murchison gold fields, which requiteq. conSiderable machinery and stores had, during recent years, greatly declined. lt was :further shown that harbour dues charged at

. .

thli pp?fi oonstitu~d {;l, ~rwid~=ribl~ b.8-Jndfoap ()fl ~hl.pping a,~ a.ga.i~t ra.ilw~y mcilities, g,nd that as . 1;li f'efillJli, ;r;rrq(3h Qf the. tmd~ thait was pr~~ini~ly ooP-dllGt~d between .Frem,ant~ and Geraldtgn, now

I

P~@ij~~ ?ve:e the Midl~nd_ Rl}il~yC9mp1my'~ !in!' tp l'11rth, th~fll ~in_ g v~ry littledifier~nc~ bet -w~~n th\l f1eigb1;jJ cluu;ged, whil& t1)t! ha,nd.ling C!l!!tli 9n th11 rflilW/l/Y 11r11 mui:;h letl.'l, T~is i~ ~ot th~ onl;y. ~tA~ce t~at 7ou.r Commissiotie:s have been ,informed that whe~e rail~ way servrne 1s m compet1t1on With shippmg, owing to the mereased height rates and the 1+regn7'

~i:nty

Frank Green, Merchant, Gerald-ton.

3.2-f,fi, Y.-011- bv:e no ~9n:tplaint ~g~in.~t th~ F~d(}rttl ;N°l!l,vigll-tim+ Mt i y~~ 4P p.ot think i.t is 4amperin, you 1-h ha~ Jlamp@ ~ -@Q. ll~ thi~ fflii:~ m t}uttth~ ho&ttj CQJile hl?:rn a.nq l};i:gg iio ®f80., Very ~ft!;}ll wlu~n.l p.p.v~ cargo from ~Lwe i~ arriw~ h~I~: -'fp;~ qpcµmemts ~r;rlye in Frein~ntle t~roug_h the bank apg ;rou have to take them up or payinterest. I have waited as long as six weeks or two months for the goods to arrive m Geraldton; although there have been two or three ships which have called in, they have not been .allowed to bring th~t Cl!fgP,

To give so.me idea of the falling -oft o.f the port ~ Q~1;~ldtQ1}1 ~ following ~viden.o~ b.y a. Stevedore, Forwarding, Customs and Commission ·Agent, is given :- -- · · ·

· 3075. : · • • . . . . In 1911 th~ ~ttge~ fur t.hf} me~ q,i th~ j~tty w@re lj. 9sl, :per h-0m? ijFJi:cyarytime. !d:~ Witg~~ fo:r t4at t.w~lye. mw:rth.1;1; to t4~ l~µi.p~ :rs, ~IJ1Cl@t~d t,o !4i~4:tL fo 1~21 the rate w~~ ~s; 9q. pBr how, ap.d I paid a total of £1,819 in wages. In 1922 I p~iil. £.ta~7 rm th~ ~Piwe mt~. '.J;he ~hips which p,rrivf)d ip, 1913 n1-1mbered. 198, and in 1922 the number had dropped to 72. Up to the present date this yes,r {4th October) 57 ships have arrived.

· The exemption which ippli~~ ttl ce.r.tfJ!in boats 9n tb..~ Nm~th-w~t of W~st~rn Australia does not apply between the ports of Fremantle and Geraldton.

Your Commissioners are of th~ opinion that the Navigation Act, which increased freights aud broµgh~ itbQut i:rregu.lfl!rity 9£ ~ervtc~~ g~ve the :railways. an Qpportunity _ to &ecure the bulk of the trade, with the result that the port has declined. If the Act dia not apply to Q-eraldton, there is litt~e doubt that the "permit" boats would go there to try and secure ·what business there is offm-ing, and to build up gr~ater t~ade, in tha same wa·y in which th~y h~ve bllUt '1-P trnde at the ports north ·of Gerald ton, where they are allowed " permits." ,,

. '

(e) "PERMIT~" G~A.N'r~P TO C~It+AJ:~ VE$S.EµS T~ADING QN THE NoRTH-·Wm~T Cc;>AST o:u WES!:JDRN AV~4Ml4,

The question Qf the" perm.jts" gr~nted under Section 286 of the Navigation Act to certain vessels trading between Fremantle ~itd Shigapore ha~ been mi~ed ~o often durinO' the cour.se of · this inq-qiry, that Your Comw.iasiop.er& consider it nec~$t1,ry to deal s~pS,raitely with th~ question.

Th~ v~~~]$ to whi9h p~rmitf3 h&ve been gr:i!inted are a$ follow.s · =-:-~.s. Gascoyne, 3,850 tons gross ; s.s. Gargan, 2,886 tons gross ; s.s, M ind,erO.(), 2,720 to~ gr.013s ; and s.s, Charon, 2,681 tons.

The servic~ between Fremantle, ·the North-western Ports of Australia, and Sin.g~pore was established in the year 1883 by the West ·Australian Ste:imship. Gornp~P.Y, with & f,teamer of 700 tons gross register. In 1886 the West Australian Steam N&vigation Company was form.ed, and built'the s.s. Australind, 1,000 tons gross register. This vessel was, at that time, one of the largest and most up-t6,,date boats. on the 1\.~st~alia, :P. ~o~~t. Othel' v~~els came in,to the trade,

and the number has gradually ine?ea~~d u.n.t:il the p:resen.t s~rvice C

fort ll~d.land, Broome, s1nd Perby 9i the West-Australian co~st, and Java ports. Th~se ~t¢amerS, fowe good passenger acco:r.pmodation1 and ca:rry monthly an average of 980 ton,s pf c11rgo for disch_arge at vario11$ :North-west po:r;ts. On the ~outhern voyage th_ ey carry during the year about 9,000 bullock~ and 20,000 ~h~ep for butchering for the metropolitan mark~t.

In addition, from Der~r to Singapore each voyii,ge; they lift f!om 150 t? 200 bullocks and about l,500 sh~e:p for the Smgapore market. They also earry regular. oems1gnments of sandalwood, fl.our, frtut, chaff, oats, hay~ potatoes, aind beer, &G., to Java and Singapore, and pea~l-ahell, wool, and ore for tranahipma.nt to Europ.ei1JJ. J;>9J1i~. . 1 "fd~fl 111 _

The p~rsonriel of these ships consists of whi~ oommand,er~, officers, and pursers, with coloUJ!ed crews. · ·

These four vessels trade betw~n thel North .. wesoom~ports of Australia by virtue of a " permit " granted under Section 286 of1the :N a-riga.tion Aet. ·

24

In 1911, the State Government of Western Australia established a service on the North-west coast, to carry cargo and passengers, as well as live stock. This service consists of two boats, the Kangaroo, 2,700 tons nett, oil driven, and the s.s. Bambra, 1,844 tons nett. The Kangaroo has 300 tons of insulated space, and trades, in addition to the North-west ports, with Java and Singapore. The Bambra trades from Fremantle to Darwin, but it is the general opinion, and also the opinion of the State Shipping Service, that she is most unsuitable for that trade.

The State Service is run at a considerable direct loss, but it is admitted even by the manager of Dalgety and Company, agents for the '' permit " ships, that the Kangaroo is necessary for the Java and Singapore trade.

During the 40 years since the establishment of the service by the private companies, these vessels carrying coloured crews have given a regular and for the most part efficient service on the North-west Coast, and have, at the same time, developed a very necessary reciprocal trade with Java and Singapore.

The evidence of those persons most vitally interested in the development of the north-west of Australia was unanimous in the opinion that it would be disastrous to take away the" permits" from these boats. ·

If these " permits " were terminated, it is very doubtful whether the boats would continue to trade with the north-west ports, and from the evidence it seems fairly certain that this line would trade, if at all, direct from Fremantle to Java and Singapore. ·

The manager of the State Shipping Service, who views the matter dispassionately in spite of the fact that these "permit" vessels are his competitors, stated:-S. S. Glyde, Manager of the State Shipping Service of Western Australia. 856. Would you suggest cutting out the permits from those ships 1-0nly assuming that others will come in and put ships on the coast. Looked at from t he point of view of the State, you cannot cut out the permits until somebody else is ready to take up the job.

The president of the Pastoralists' Association of Western Australia, in his evidence, states :- '

The opinion of the pastora.lists concerning the operations of the Navigation Act is that it is 20 years before its time. We hold that a young cotmtry, sm all in population and small in trade, should be allowed all the freedom possible to develop. We claim that the people should be given every facility to move from one State to another, every facility to move their goods or produce in the quickest and cheapest manner, to help us to develop our resources.

To inflict the Navigation Act on our north-west coast would be such a hardship that settlers would seriously wonder what they had done to deserve it. The early days of the settlers in the north were hard enough and difficult enough, and now that facilities are being provided we do not want to see them abolished by the infliction of the Navigation Act.

Even to-day, shipping companies hardly know wh ere they are, as I understand that the exemption granted can be rescinded by six months' notice. If the Government would say definitely that our coast would be exempt for ten years and then the matter be reconsidered, it is quite likely we would have faster and better boats on our coast. Western Australia has such a long coast-line, and the Navigation Act would be a greater handicap upon us than upon any other State. If the Navigation Act is enforced on our coast, the ships which are now exempt would immediately leave us.

The State-owned boats are reported to have lost £78,000 on last year's operations. A private company could not afford this, and would necessarily have to cease running or vastly increase their charges, to the great detriment of the people they are now serving and those who contemplate assisting in the development of our northern areas.

Mr. R. H. Underwood, a member of the State Parliament of V..T estern Australia, represent­ ing a North-western Division, appearing before the Commissioners to express the views of all the Members of the State Parliament from North-west constituencies, stated the following during his evidence :-

2714. You are of the opinion that if the now gTanted were removed it would affect detrimentally the development of the north-west ?- Yes. Th e statement of Mr. Glycle, Man ager, Stat.e Shipping Service, that, lw could do that work with two ships is, in my opinion, inconec t . There is too much work for two ships. 2718. If the other boats were cut out, there would be no development of the trade with J ava ?-The Singapore boats would then trade with Fremantle direct to Singapore, and all the products from the north-west coast would have to be brought south to Fremantle, necessitating additional handling charges.

The Whim Creek Progress League made the following statement :-If the Navigation Act be applied to this coast, it seems certain that unless other steps are also taken the ships now serving this coast and trading with Singapore will cease running. That this would be a disastrous thing for the north-west is certain, and, presumably, not denied. The progress of settlement in the north has been extremely slow at all times. It has been entirely stagnant or retrogressive for years. If the main means of communication and of trading with the outside world are to be removed the result is obvious.

To apply the Act here, therefore, would not create work for white seamen. It would destroy employment for white men on land, and would injure everyone having interests here and ruin some. It would not only prevent expansion of enterprise, but would destroy part of the established industries. Mining in particular, already bmdened by costly transport, would be set back still fmther.

25

When the application for permits for these "black" vessels was made, such application received the- support of the Government of Western Australia, and· the Interstate Shipping Companies stated that they raised no objection to the permits being granted.

The only objections now raised to the permits being continued are from the industrial organizations. The secretary of the Fremantle District Council of the Australian Labour Party stated the following in his evidence as one of the chief grounds of objection :-2168. . . . . . . . . 'vVe view the position in t his way-that while the boat s manned by white labour

were trailing on that coast, the provisioning, the victualling, the supplying of coal, and all that kind of thing was done in this State, and provided quite a large amount of employment, with the result that a great deal of money circulated in the State. The exempted boats, generally speaking, obtain all their supplies outside t he State, thus minimizing opportunities for employment and trading gen erally, which would be creat ed by boat s manned by white labour.

The same witness also stated:-2340. You wo uld. like to see men working in those mines The exempted boats get their supplies of coal from Singapore.

Your Commissioners are satisfied that neither of these statements are true, and that the coaling and victualling of the " tpermit " ships is done for the greater part and as far as possible in Western Australia . . .;; Your Com:tp.issioners, after Closely examining the position in the North-West of Western

Australia, taking into consideration its semi-developed condition, and its long coast-line and its vast areas, are of the opinion that the " permits " under Section 286 of the Navigation Act should be continued indefinitely, so long as the coastal trading provisions of the Act remain law. The development of this portion of Australia has always been a di..fficult problem, and any

derangement of its coastal service, in view of the fact that it has no railway service, would undoubtedly have the effect of retarding its development. The present service is so arranged that it develops not only the North-West Coast, but creates a very. helpful reciprocal trade with Java, Singapore, and the Dutch East Indies, which trade is highly essential to the development

of Western Australia.

{j) THE EFFECT OF THE NAVIGATION AcT ON THE WHALING INDUSTRY. Your Commissioners investigated the case of the North-West Australian Whaling Company, and found therein ground for complaint against high freights, and the effect of the application of the Navigation Act to this industry.

The North-West Australian 'Vhaling Company is a new Company; purely Australian, which operates between Carnarvon and Onslow. The supply of whales is ample at seasons of the year, and the Company is said to be capable of supplying at least the whole of the Australian demand for whale oil.

In 1916, three Norwegian Companies began operations on the ·western Australian coast. They v..ithdrew owing to War conditions and this Australian company was formed, which, in view of the withdrawal · of the previous companies, needed every possible assistance. Owing to high freights on interstate vessels, the company decided to send their 1922 output to England, and chartered a sailing ship to bring out empty drums for the oil, and take them back full to England. The residue of the whales after extracting the oil was converted into fertilizer,

amounting to about 280 tons. When the sailing ship arrived at the whaling station, it was found that she required about 400 tons as ballast in addition to the cargo and oil. The company asked permission to ship this fertilizer as far as Fremantle or Bun bury, it there, and take timber from there to England with the balance of the available space. This request was refused, as it

meant that taking fertilizer as ballast would amount to" trading on the coast." The vessel, there-fore , loaded with 400 tons of sand as ballast. ·

Your Commissioners have no hesitation in pointing out that in this case the effect of the Navigation Act on a striving and deserving industry was pernicious, and the administration of the Act was too stringent; it had a serious effect upon the development of this particular industry. With regard to the effect of high freights on this industry, the follov..ing evidence was given hy the Manager for the Company :-

4616. Did you find t hat an excessive charge was made to can y that fertilizer down all depends on what you call an excessive charge. I had to pay £1 a ton, wh ich is reasonable from an Australian point of view havin g regard t o the fact that the ship-owners have to pay abnorm al rates of wages and overtime; and if they use t heir seamen as stevedores, as they do on t his coast north of certain ports, not on ly do they pay them the seamen's wages, but they have to pay t hem lumpers' wages , even if they work within the eight hours. That happens at ports like Point Cloat es, where there are no lumpers. All that reacts on the freight . I will give you an illustmtion of t hat. I have just sent the

Kurnalpi up to the whaling station with a number of empty oil casks . She has to bring back a consignment of 150 tons, plus as many oil casks as she can get fill ed within a certain period. She cannot stay t here very long owing t o the wages they have to pay their men. I am paying her 3s. for each cask she carries up . I pay the Harbor Trust l s. on each cask.

26

I pay t!os. per when I puuch!}se them. Six caskfl go t o t he ton. '1;'h;:tt mean& tbt it is co;;ting 8s. a ton : When I send l!P 011 the i>JllP t hfly cht;trge J.ne IJ1e:tsu:rement rl),tes. I cn,p send the oil direct fr om tq Eugland ett fl. less rate t hat from Point Clo!J.tes to Fremantle, TheJ:! I have tp corppete in the open market. You will understand therefore that we are working under a very considerable handicap. May I use one more illustration. When I chartered t4e sailing &hip 13pe haq qlJite a nmpber pf empW oil r:lrJlllJ.S in which to ta]f:e the oil to Englfl, f!¢1.. S)le 4ad couple of wh!pj1 fl!Ie lan(!.ed . T)lere v:as l)O Jipw_ q,rcl_ freight to pay on those_. I broiJ.ght them to

Fremantle. Then I mqurred where I cpuld best dispp se of thJ.s oiL I fo und that the freight to J;ondon or Liverpool was £4 per ton dead weight, and fr om Fremantle to Melbourne it was 45s. per t on measurement. I want to impress upon you that t4is wa,s q, most favorable opportunity for me to ship, because the drums were up_ th_ere and I h a,d npthing tP pay to convey t]fem, it paid my compFtny better to send that oiJ to Grel!,t Bntam than to-l\fe ll;>ourne .

PART VII.-THE SHIPPING COMPANIES OF AUSTRALIA. (a) THEIR RELATIONSHIP TO THE OvERSEAS CoMBINE.

Your Corpmissioners have already made the bare statement in Part I. of this. Eeport, that t)J_e :prirr:ary_ob_jective of the Navigation Act.was to up an Au,stralian,

Act has falled rp_Its purpose, and. the Austr.alasmn Owners practically

part and parcel of the great English Shippmg Combme. Some explanatiOn, of this statement IS necessary.

It is well known that almost the whole of the overseas shipping of England is in the hands of the shipping combine known as the H Inchcape Group," of which the head is Lord Inchcape. There is :rio secret about this fact, and it is not for one moment asserted that there is anything sinister in this combine. In fact, the compip_e is openly defended in the U:p_ited Kingdom, for it is thi!'l s!J_ippi:p_g lll-Qru;>poly w11ste, and jgsteaq QX r;rne EP-glish corp_pl}ny fighting

they Gombi:Qed tQ with for!'lign rhis, it is ol&imed, is the pl}triotic

of the lllchoape Co:r;nl:J:ip,e, With the motives, in ori!l'\r not tQ waflte sl)_ips a:p_q money in

with Austr!l;liap_ the English cey:rp_bine ha1i! a.nq

contrplli:p_g interests ip fl.lmost GPP1Pllil1Y· lhus. we :£i,nd that the

A.U.S.N. Company is a subsidiary company of the British India S.N. 09:WP!tJ1Y, over which Lord Inchcape has control. The Mcllwraith, McEacharn Line is also an English company, the majority of the shares peing held iri England. El-i+ns, Philp, l}nd Company are a,n Inchcape company. The Union Steamship Company is also controlled by Lord Inchcape 1 and this company, with Huddart Parker and Company, control the Tasmanian Steamships Pty. Ltd., while the Huddart Parker Company has a large interest in the Melbemrp_e Steamship Company. The firm of W. Holyman and Sons Ltd. (Ship-owners) is also controlled by the Union Steamship Oow.pany, aP-d l!-qddart Fl'trker and Company. The firm of McDonald, Ramjlton, aP-9- Co. is ()Wned by British interests, and the largest shareholders have large interests i:n Bnrus, Philp,

Oo . 3tnd the P. ap_d 0 , Compan-y, both Inchcape Companies.

This brings us to the position that seeing that our Navigation Act has failed to build up :}n 1\.ustrfl,lii'Ln Memantile Ma,rine, we are saddling the whole of Australia with the of the Act, which only bene:fits a coi)lpa:ratively few s€)a,:r:n.,en, a n:wnbe:r of whoP1 have beep

attracted to the Au.str:;tlian cQastal ships on account of the higher wa·ges., Therefore, in the opini()n of Your Commissioners, the only pFa,ctical use which the. Act has, is t o pr13vent foreign shipping oo:p1petition i:n Australia:p_ and, in view of this faot, Y91Jr Oowmissioners suggest that the Government should enter into negotiatiop_a wit4 British Government with a view t0 evolving by mutual agreement an Empire :Navigatioll.

Act, Such Act to contain sirnil l:l-r conditions (manning, wages, wireless, &c.) to preserve the shipping of to the mercarttile marine of the British Empire.

(b) RELATIONSHIP TO ONE ANOTHER.

In the preceding section Your Commissioners have shown that the Australian Steamship Owners' Federt:tti<:>n is, in effect, a branch of the English Combine. The Australian Navigation Act p:rotectfi this paFt of the Combine from foreign competition. It has a monopoly o£ Alllilt:rali!'l-n vVhat, the:p, is the scope of t his monopoly 1

Y ou:r Qo\TinJ-is£icmers htwe found considerable difficulty in finding out what is the extent of the operations of the shipping companies of Australia. Soon after Your Commissioners begart their inquiry it became evident thart the shipping companies had ather interests, apart from shipping. Ju some cases they a.re in-terlinked with each other, and also have bonds of relationship in other industries. The extent of these relationships and co-partnerships has been very difficult to

determine. Your Commissione-rs, therefore, have had to resort to official records of lists of shareholders, which in a number of cases are incomplete and also are misleading. For example, a trustee agency or a bank: mayl be large parcel of shares in a company. There

is nothing to show for whom these shares are held."' Other " dummies " are used, consisting of officials. of companies_ and relatives of directors.

. ,1

SQm.~ fM~~' however; did come m light, of whw}l th~ fQllQ~ Sira. ~~mp~§ ~.,.,,,. -

, .- ··4 --iO .

.(1) The Ad~laide Steamship Company holds about h~l{ t~ §P.~f~§ Qf th~ Ab~rmam­ . Leaham Collieries Ltd., and about 35 per cent. of the North Bulli Colliery Ltd. (2) Howard Smith Limited, which originally had coal and shipping interests, separated its interests, and g~ ve its shipping b1anch the ~ title of the Australian

Steamship~ ,Pty. Ltd. This Company, in addition, holds controlling ·interests in Caledonia;n Collieries Ltd., Invincible Collieries Lt~. 1 Austr11lian Sugar Company Ltd., Commonwealth Steel Prodl!<;its Ltg., aml Brisbane Wharves ~td._ In th~ir latest b~lan~e-sheet this com}}an7 shows that the amount mvested in other compames 1s £2,430,000. (3) Several large shareholders in the North Coast Steam N~vigation Qompany are also

large holders in Burns, Philp, and Company. · ·

(4) :Bums, Philp, and Company have controlling interests in the Solomon Islands Development Company Ltd., Burns, Philp (Sou.th Sea) Clompa.ny Ltd., Choiseul Plantations Ltd., Shortland IslandsPlantations Limited. (5) Hµddart Parkflr Limited are large shareholder~ in tM ~Q~J1l'l~in"L~a.h1:1,m Collieries ·

:Ltd., and also in ~ebburn Ltd. (09Ui~ry), ~Ad ~l&P Jwld$ Sf? per cent. of the stock of tht1 l\jetropolitan Coal Coy. Ltd. ~ ·

(6) Mcllwraith, McEacharn Ltd. holds 45 per cent. of Bellambi Coal Company Limited.

There are nUllletQus oth~r e4a,mples of the interweaving of ~hippuig interests with other inte~ests, and all t~ese ex~mples point !o the fact that the shippii;i.g c9mpanjes of A@tralia have a ~1p of the key 111dustnefi of Australia. · ·

As the great meat Trust of the United States built up its busine~s by its interlinking with railroad interests, so the fortunes of the prinoipal shipping companies of Australia (a branch of the overseas shipping oombine) are bound up in those of the greatest of Aust1.1alian industries, and thus it beoomes patent that a comparatively few persons, p:1ostly r-esid~nt outside Australia and

with la1.1ge English a.nd foreign financial interests, constitute an em,rmoua Trust which, to a large extent1 controls the economic destinies of Australia. The fartb.er Yo-qr CQlllII).i~siq:qer·s hav13· investig~ted thiti . phase Qf th~ qu.~stion the · more apparent the Trust becomes, and the Australian branch of the Trust i.s of such formidable

pr<;rr.ortions th11t You~ ~om,m~sioners _consi~er the matter of suffi.Gient im:por~nce to warrant the Government exammmg the matter ID all 'its aspects. ·

PART VIII.-THE EFFECT OF HIGH FREIGHTS ON PRIMARY AND SECONDARY . PRODUCTION GENERALLY.

. Bir :Mark SMldon, giying evidence as 'Pr~!li4e-nt gf tP..e ,A.s~Qfti.~~~g. ~fflhirs of Commerce of .A.ustrali~; st/lite~ $he effeot brqadiy of the .;\gt on pro4~ti.Qn to b~ ~~ fQlwwfj ;-:-::-~llel8. . . . ; . . . . 1 The effect of t he Act has µnq.oub teg.ly been 0 di:miµill!i the fa cilities for

communicatieR and distribution between t he States, and at the pteseut juncture, at any ra1;e, this is very detrimental to the interesw of the prodlli.ler s. There hll,S been a curtailment of the fo.i:ili tie~ ·t.h~ .e¥.i&i~d i!l thE! past.

aw~. P P .ygu 4ihmlr tl}11,t fj, r~@Wil', ~ffic~Ht, !HI- ?'. fyeqi.wn~ smp:piµg ~~nic~ a)."Qli.JJ.d: tlJ.!l .CQ~f!t pf Al!§t..rl.Llia would P .~µd t9.w~9-j! t4.e q~yel9.wu . e~t ~! tai,~ <;p~fltr;y ~-:NQt~g woyM d() ~ O~jl !:1l t}!~t difection. It seerµs ~xtraorcl.ipary that one can ~et ~oeds more c4eap\Y fr~m -New Yorlf tp Western Au~tralia than fropi. Sy~ney to West!)rµ Austraija.

With 1egaPd to the ~:ffect of the Navigation Act on pFima1.1y and secandaey pl1odu.ot i<:}Ji, yQ 'Ul Pommis&io:q.ers1 after having weighed th~ evidenc~ and co:qsider~d ~he p9sition as it stands, recqgnize that in order to keep up''.Au!'!tra'lfan st~ndards ~ living, l,"!eamen,' as well as woi:kers on the land, are entit1ed to the Austfj:!,}jan stan4~:rq. , and i,n t he f!& m.e manner the shipping companies whose ships are licensed under the Navigation Act , being obliged ~ provide t his high standa,~d

of liv~i1 9:i;~ ~lltitl~d_ W qh~ ge} ares anq. freights commensurate with the adde.d .gt>§t to t hem, ID order t~ -t4H J!:1.8iY rnP.- ~ & profit. This is axioP?,at ical., l}u.t wl;l.e-p. .~P. ~tA:i~m.pt ~ w"de t o place the priµi;:i,r-y !@

the sp.ape of 4igp.a:p fy~jghtst t4e primary producer, after p3:ymg them, IS unabl~ to. pass them o:q: The bUfden; the.r{}for~, mgst rest u.p~m ~ should~rs while t hey are able to bear 1t.

It will be helpful to compare the world movement,!:! in ~hipplll_ g ra,W!i"I smce th~ Waf with those of !.Australia. '

28

· The following table, prepared from the monthly records of The Compendium, shows examples of the movement of oversea freight rates during 1921, 1922, and part of 1923, and discloses a general downward tendency in such rates :- 1

MEAN FREIGHT RATES FOR 1921, 1922 AND 1923.

1921. 1922. 1923 (to July).

Coal Freights- 8. d. 8. d. 8. d.

Cardiff to River Pia te 18 0 15 6 16 0

Cardiff to Alexandria 20 10 14 6 12 6

Cardiff to St. Vincent 12 7 11 0 10 7

Cardiff to Gibralter 11 3 9 3 9 0

Tyne to Genoa 17 4 12 9 11 6

Tyne to Bordeaux 9 6 8 1 6 11

Tyne to London : . 6 9 5 5 5 3

American Coal Freights- $ $ $

N o_ rthern Range to Continent 5 3

Virginia to West Italy 5.37 4.25 3.32

Ore Freights- 8. d. 8. d. 8. d.

Bilbao to Tyne 10 41 2 6 101 2 8 0

Freights to United Kingdom from-Bombay 35 0 22 3 28 9

Java (Sugar) 51 6 32 6 35 0

Alexandria 16 3 10 9 11 0

River Plate 38 3 28 0 23 3

Montreal (Grain, per qr.) 5 3 3 10 3 8

Danube (Grain) .. 28 4 19 3 19 3

Australia (Grain) 64 0 43 9 37 t)

Nitrate Ports 47 6 34 10 32 6

Sundsvall 87 6 55 0 44 0

Time Charters-General Trade 6 9 4 6 4 0

T_ he following table shows the increase in freights on general cargo on the Australian coast from 1913 to 1922 :- · ·

General Cargo-Melbourne- Sydney and vice versa lVIelbourne-Adelaide and vice versa Melbourne-Fremantle and vice versa Sydney-Adelaide and vice versa Sydney.-Fremantle and vice versa .. Adelaide-Fremantle and vice versa ..

1913. 1920-21. 1922.

8. d. 8. d. 8. d.

12 6 20 0 . 20 0

12 6 20 0 20 0

25 0 25 0 35 0

17 6 - 17 6 25 0

30 0 . . 30 0 40 0

22 6 . . 22 6 30 0

· From these two tables it will be seen that, while the tendency is for freights in other parts of the world to drop, on the Australian coast there is no such tendency. In other parts of the world, notably England and America, the cost of labour, cost of production, &c., have shown reductions since the War. In Australia there has been no such decrease ; there has been an increase.

The rise in freights has been brought about by the increases in expenditure due to increased wages, increased cost of coal, victualling, and overhead expenses, &c. In regard to these expenditures, the average increases from 1913 to 1922 are as follow:-Labour Increase of 63 per cent. ·

Deck and Stewards' Stores Increase of 161 per cent. ·

Engineer's Stores Increase of 99 per cent.

Victualling Increase of 83 per cent.

Wages Increase of 123 per cent.

Coal Increase of 155 per cent.

The above percentage increases do not include those directly brought about by the Navigation Act, namely (1) cost of alterations to vessels to comply with the provisions of the Act; (2) cost of wireless services ; and (3) cost of extra manning.

29

The following is a comparative statement showing the increased percentage of earnings and costs or certain vessels in the interstate trade, as compared with 1913, for the years 1920- 21 and 1922 respectively, under :--· - ..

Per Gro ss Ton Employe d. I Running Days. Ne t Earnings and Expen ses.

Year. Percentage Increase on 1913. Percentage Increase on 1913. Percentage Increase on 1913.

Earnings. Expenses. Earnings. Expenses . Earnings . Expenses .

% % % % % %

1920-21 . . . . .. 95.58 93.82 117.00 115.15 52.78 51.56

1922 . . .. . .

I

83 . 27 90 .88 103 . 57 112.2 76.36 83.82

From the foregoing, no matter which way we analyze the figures, it is clear that the margin between the percentage increase of earnings and expenditure in 1920-21 bas entirely disappeared in 1922. It may therefore be equitably deducted therefrom that under trade conditions in 1922 · fares and freights have not been unduly increased. In fact, the percentage increase of earnings has not marched pari passu with the percentage increase of costs.

From these figures, and from other information extracted from the books of the shipping companies, which, being treated as confidential, are not quoted in this Report, it is evident that the profits made by the vessels of the interstate shipping companies, cannot be regarded as excessive. It appears that generally the companies do not levy exorbitant charges for the services rendered in the light of the expenses incurred, but such charges are at such a height that they place the shipper of goods at a considerable disadvantage in paying for the maintainance of this high standard

of conditions and wages. The Navigation Act is not wholly responsible for this enormous increase in expense; other economic factors, including the Arbitration Court and the Customs Tariff, are not less powerful factors. All these factors keep freights at a high level. They may not be too high wben placed beside the expenses of the shipping companies, but your Commissioners have no hesitation in stating that they are too high for the primary and secondary producers, especially to those who are competing in ·the open markets of the world.

PART IX.-THE PERMIT SYSTEM.

There is a general complaint in Australia that the permit system, under section 286 of the Navigation Act, is not sufficiently adaptable to meet .the requirements of the travelling public. This section is as follows :-286 .-(1.) Where it can be shown to the satisfaction of the Minister, in regard to the coasting trade with any port or any ports in the Commonwealth or in t4e Territories under the authority of the Commonwealth-

(a) that no licensed ship is available for the service ; or (b ) that the service as carried out by a licensed ship or ships is inadequate to the needs of such port or ports, ·

and the Minister is satisfied that it is desirable in the public interest that unlicensed ships be allowed to engage in that trade, he may grant permits to unlicensed British ships to do so, either unconditionally or subj ect to such conditions as he thinks fit to impose. •

(2.) The carriage, by the ship named in any such permit, of passengers or cargo to or from any port, or between any ports, specified in the permit shall not be deemed engaging in the coasting trade. (3.) A permit issued under this section may be for a single voyage only, or may be a continuing permit. (4. ) A continuing permit may be cancelled by the Minister upon not le_ ss than six months' notice t o the master, owner, or agent of the ship of his intention to cancel it.

(5.) The Minister shall, within fourteen days of the granting of any permit under this section , or the notice of intention to cancel any sueh permit, notify in the Gazette the issue of the permit, or the givin g of the notice, as the case may be, with particulars thereof. ·

The disability applies chiefly to the passenger traffic, and in -the case of cargo, tbe ehief complaint is dealt with under the heading of "Queensland Meat Industry." ·

With regard to passengers, the oversea companies will not bother about applying for permits. By obtaining permits they pick up only the leavings of the inter-state vessels, and run the risk of serious industrial trouble. An example of this phase of the position recently came before the Commission, during a strike by the seamen engaged on the s.s. Katoomba, trading between Sydney and Fremantle. Owing to this "hold-up " of the inte.rstate vessel a number of intending passengers from the port of Albany to Eastern States attempted to obtain

a permit to travel by the White Star liner Suevic due at Albany on the 15th May last. Th e Director of Navigation was interviewed, and stated that he would, under the circumstances, recommend that a permit be granted to the 8uevic to lift passengers from Alb any, if Dalgety & Co. , the agents for the White Star line, applied in the usual manner. Dalgety &: Co. were approached,

rJ.lhey declined to apply for a permit, and st ated that their reason was Ill of the

experience of other oversea eompanies, whieh had met with industrial trouble by carrymg coastal passengers.

. · It is fairly elear, that seGtion of the Act ·nBt achieved object. Its

- obJect was to enable use to be made of oversea vessels when an interstate vessel is nDt available The object has been defeated by t wo factors, nar11ely :- - - ·-· ... ··

(a) _ the indifference QJ companies to casual passenger traffic between

ports; .and ·' ·

(b) the attitude of the Saamen's UniQn and other industrial organis.ations. Your Commissioners are therefore of tb-e opinien tha-t if the coastal trading provisions of the Act not in \vith our final recommendation, some alteration of the

Act is req11ired to enable the travelling public to make use of oversefl, passenger accommodation the pircul!l:stanc.es a11d it is acco:r¢lingly recpmmended that provision be made

1n the Act to mal::e it mandatory o:p_ the interst,ate shipping companies to ,allot a, berth upplf .flpplicatiolf, and jf canl).ot dQ ,so to issue the applj9ant with a certificate to that effect. On production of such certificate to the Navigation Departm.ent, the ·applicant shall be issued with a! tra b:y any other :passen.ger vessel, not n?eessarily " licensed " under the

Act, w1th1n a g1ven .renod frq:rp. the of issue of the permit.

PART AND HARBOUR PUES.

While the question of por-t and, harbour dues is hardly within the scope .o£ this inquiry, it is tb-Ftt as they cop.stitute. a serious a9-ditional running· cost to shipping, and have a large on freight rate.s, some to the matter is necessary and desirable . .

In regard to light dues, since the Com,mo;awealth took over the CQ;:tstallights of Amtralia, there has been an enormous in charges. Some o£ this increase 'doubtless d11e to

t}le Commonwealth but all the blame does not lie with the

for all State.s, with the of Western Australia and Tasmania, are still charging the

same light dues, although the 00mmonwealth Government has taken over all coastaJ lights and levies a heavy charge in respect of light§. . .-

Port and harbour dn.es i11 E!lll the St!1tes have increased enormously. The Council of t'P.e Cha,mher Qf S4ipping of Great l?:ritain in August, 1923, and passed resolutions requesting the discontinuance

constituted a serious" obstacle to the = development of AustFalian t:rflde. That -this contention is correct was borne out by evidence placed before this Commission. A speGifie was quoted· at Newcastle (New So.p_th of fL ship of l,70Q tons, loading about 2,800 tons dead - fQr t.he coa.st of 'following . the charges and costs inQyrred at

-· . -

jn out, at per tQn . . · . . . . .

for l:lt in the (l,t £7 per

Pilotage in and out, at 4d per ton . . · ·

fo.r jn lw,;rbour; £3 per shift

Commonwealth Government Line dues, at 9d. per ton (dues .to be months) r

State pf: New· South Wales harhcm.r and light at 4d. Tonnage dues · ·

Comm-onwealth GQvernment InGome Tax of r • • • •

9£ 800 9£ ballast, at 6s. 6d, ton , .

Harbour and Works Department's charges 011- ton of 2,800 tons of coal, at I s. 3d. ton

For mooring bvoy for four days, at £3 per day ..

Boatman . .. - ' .

l s. ga. ancl per cen.t . frcigh.t comwiss.ion

with diff.ere:pce on l s. 2d. and freight . ,

, • ! • • • • •

(carefully arrftngf}d t lowest prices) . .

Total freight on 2,800 tons, at 15s. 6d. £2,100

£ (J..

170 0 0

35 0 0

28 16 0

l5 0 0

()3 0

28 16 0

30 0 0 -

40 0 0

20 0 0

0 0

20 0 0

175 0 0

12 0 0

5 0 0

- ·----

903 0 0

275 o o·

l,J78 0 0

300 0 0

300 0 0

Balance of freight to cover expenses at the discharging port 322 Q 0

£2,100 2,100 0 0 .

. I t will be seen that there was little left to cover expenses at the port of- discharge, and nothing to cover insuranoe and tunning expenses; . ·

The following is also a statement of port charges in connexion with the s.s. City of Exeter a vessel of 9;450 tons gross and 6;000 tons net regis-ter:-STATEMENT oF PoRT dHARGES.

Based o:h a 72 ... hour in each port by s.s. Oity of Eweter. -· ·-

- :Brisbane. SydneY: l\felfioiirne;

I Fremantle. ... - ·-- .,_, ___ "" ....... _.. '·' ' ··' . " .- . . ---· _, .... -· ... -- ··-· · ' ..... .. ., ... .

£ s. d ·' £ s. d. £ s. d. £ s. (1, £ s. d,

Light -Dues .. .. .. 44 18 1 44 18 1 44 i8 1 44 18 0 44 is 0

Tonnage Dues .. . . .. 40 0 0 99 15 8 . 149 13 6 104 15 5 1,_. ot charged at

(Est.) Fremantle

.. .. . . 40 0 0 50 0 0 112 8 10 40 16 0 36 8 0

Quayage .. .. 81 7 6 81 17 6 !)7 17 6 82 4 3 140 11 11

Shed Rent

(Port DU&)

.. .. . . .. 12 0 0 .. .

Towage .. .. . . 41 0 0 10 0 0 25 0 0 33 0 0 41 5 0

·-··-

253 i5 7 292 ii 3 441 17 11 305 13 8 265 2 11

'- ' ... . . .. . . .. - , . ... .. .. ... " .. , ..... ,. ' . ·â€¢-. ··- . ......... . , __ . ..... ........

tight Dues- Payable at first port. Have been divided equally between each port. . At Fremantle.-' Tonnage dues and quayage" were discontinued several years ago atid a charge kb.t>wn as ''Pert Dues ' ' levied in place there'd

These high :port and light oharges to some extent t9 the Cli:fficuity of efl;ecting ,a reduction in freight. Whe:te the aotual expenses of the port the raised from shippi:qg,_ no

objection can be taken to the port oharges; hut where B9ards earn revenue their

needs, they are revenue-producing agencies, anQ. constitue a burden on shipping. For example, in 1923 the Harbour Board is stated in eyidence_ to have paid

Revenue of Western Australia its surplus of £47,000; while ip_ the same year the Melbourne Harbour Trust paid into the State Treasury the sun1 of _ _ . _ _ . _

While in England, the Prime Minister of the Commonwealth that he would endeavour to arrange that in future the charge made by the ports should be sufficient to meet expenses, and that they would no longer be used to swell consolidated revenue. It does appear to your Co:tnhlissioners an ttnwise policy which permits Government revenues to be hicreased at the expense of export trade so vital to Australia's progress. The balance

of trade is already against Australia. The longer this artificial restraint upon trade oontihues, the more difficult will it be to maintain our markets.

SUMl\'IARY OF PRINCIPAL CONCLUSIONS. PttRPOSE OF NAVIGATION AdT.

The Navigation Act has failed in its putpose, hame1y; td estabHsh an Austraiian Mercantile Marine. NEw SouTH WALES AND VIcTORIA. The states of New South Wales and Victoria have no complaints against the Act, which

are not common to all states. The outlying parts of the Commonwealth are more severely affected than the centtes ot New South Wales Victoria.

QUEENSLAND.

. L TJie statement of the Tariff Board '' that much of the benefit conceded by the Tariff is lost through addi-tional ·in freight on Australian goods " proved correct ; and examples in Queensland are the cement industry and the maize .:.growing industry. 2. In connexion with the Queensland fruit industry, the only way that the operation of

the Navigation Act could be to the unsat isfactory handling and ?arriage of fruit ,

is that in the absence of the competitive element in this trade no attempt IS made by the shipping c-ompanies to handle the products on modern scientific lines. .

3. The monopoly of the interstate shipping is responsible, to a large extent, for the dechne of the timber industry in the Innisfail district. .

4. In regard to the

that the Act has restricted the interstate trade, and the pernnt system, under sectwn 286 of the Act, has not been sufficiently workable to enable the meat industry to take practical advantage of it.

32

TASMANIA.

. 1. Act is responsible for the cessation of several important oversea and

Interstate sh1pp1ng services to llo bart. 2. The cessation of such-services has militated against the building up of the tourist traffic of Tasmania, and that state has suffered thereby. . 3. The Tasmanian timber industry has been severely handicapped through the restriction of shipping services with South Tasmania, and considerable trade, particularly with New Zealand and South Australia, has been lost thereby.

4. Since the Act came into operation, the mail steamers will not visit Hobart except under contract to lift large cargoes of fruit. This has affected Tasmania in two ways, firstly, by depriving the fruit industry of a regular and satisfactory shipping service to the English market, and secondly, by hindering a wealthy class of tourist visiting that state.

WESTERN AusTRALIA.

1. The Act, by helping to keep freights on a high level, has seriously affected primary production in Western Austndia, and has made trade relations with the Eastern states in primary and secondary productions almost impossible. By high freights, all importations from other states are made n1ore costly, and thereby trade with the rest of Australia becomes difficult.

2. The timber industry of Western Australia is suffering at the hands of the shipping monopoly of the interstate trade, made possible by the coastal trading provisions of the Navigation Act, which has resulted in high timber freight and insufficient cargo space for timber from Western Australia.

3. The prosperity of Albany has been prejudicially affected by the operation of the Act, and the district of Albany at present has insufficient passenger and cargo shipping service. 4. The port of Geraldton has declined by reason of the fact that since the Navigation Act can1e into operation the irregularity and infrequency of shipping services to that port prevented

the merchants of that place obtaining their merchandise promptly on through bills of lading. 5. That the "permits" granted to certain vessels trading in the north-west coast of Austiralia are essential to the development of the north-west of Australia, and if these permits were discontinued, the growth of settlement there would be retarded.

6. The Navigation Act was to a considerable extent responsible for the failure of an attempt to develop the whaling industry in Western Australia. · . .

THE SHIPPING CoMPANIEs Ol!, ·AusTRALIA.

1. The Interstate Shipping Companies of Australia are to a great extent owned and controlled by British oversea shipping companies. 2. The Interstate Shipping Companies have large interests in the key industries of

FREIGHTS GENERALLY.

1. Freights generally on the Australian coast are abnormally high when compared with oversea freights, but from these high freights the shipping com.panies are not Jnaking exorbitant profits in view of the enormous increases in expenses. 2. Such freights are too high for the pri1nary and secondary producers, especially to those who have to compete in the open markets of the world. -

GENERAL Co:rviPLAINT oF INPREQUENCY AND oP PAssENGE:R

SERVICES.

There being fewer passenger ships regu]arly engaged on the Australian coast now than in 1914, the facilities of travelling by oversea ve:ssels having been taken away, and the population of Australia having materially increased during the ten years fro1n 1914 to 1924, it is obvious that the above con1plaint has real foundation in fact.

THR '' PERMIT " SYSTEM.

The " Permit " systen1 under section 286 of the Act has failed in its purpose, nan1ely, to provide that passengers and cargo may be carried between interstate ports when an interstate vessel is not available.

PoRT AND DuEs .

The port and harbour dues of Australia are excessive, constitute a serious restraint on trade, and add to the difficulty of effecting reductions in freight.

33

RECOMMENDATION ..

o s- s

The only recommendation which your Commissioners desire to make is one which will remove . n1ost of the grounds for con1plaint made before your Con1mjssioners, and such recommendation is that Part VI. (The Coastal Trade) of the Act be repealed.

Your Commissioners have the honour to be, Your Excellency's obedient 8-ervants,

JNO. HY. ALFRED CHARLES SEABROOI{.

Melbourne, 7th August, 1924.

:-·1' _-<'

-- :r·o

REPORT BY THR.EE COMMISSIONERS

(F. ANSTEY, M.P., SENATOR C. S. lVIcHUGH, AND G. E. YATES, _ M.PJ

To His Excelkncy the Governor-General of the Cornmonw(;alth of Australia.

YoUR. ExcELLENCY,

Your Con1missioners were authorized to inquire into and report as to what bad been the effect of the operation of the Navigation Act on the trade, industry and development of Australia; in other words,-whether the Act had injuriously affected the pri1nary and secondary · industries of Australia, or had in any way retarded the industrial development of Australia.

The scope of the inquiry included all Commonwealth territories. In presenting this report we have followed the order indicated by the following .

Part 1.-The attack on the Navigation Act by the Tariff Board. Part 2.-The three States of New South Wales, Victoria, and South Australia. Part 3.-Queensland. Part 4.-Western Australia-

( a) The Port of Albany. (b) Geraldton and the Murchison. (c) The North-West Ports. (d) Western Australia in general. Part 5.-The Timber Industry-

( a) Coastal freights and market prices. Part 6.- The Meat Industry. Part 7.-Tasmania-. (a) Fruit exports.

(b) Tasmanian Tourist Traffic. Part 8.-'--The economic and financial position of Tasmania, compared with that of Western Australia. Part 9.-Freights­

(a) Java. (b) New Guinea. (c) Europe. (d) Outward freight rates to United Kingdom, &c.

(e) reStatement that high freight rates nullify the Tariff. (f) Coastal rates-South America. (g) Coastal rates-South Africa. (h) United States-New York to Galveston and New Orleans.

(i) Pacific Slope-United States. (j) Black-manned and white-manned vessels. ( k) South Africa and New Zealand. (Z) Freights-Summary.

Part 10.-The remedy proposed by the Tariff Board. Part 11.-Queensland fruit. Part 12.-Eyre's Peninsula-South Australia. Part 13.-Cargo accommodation.

Part 14.-Passenger Accommodation-( a) The Adelaide-Port Lincoln service. (b) Summary-Passenger Accommodatjon. Part 15.-Administration. ·Summary of Conclusions.

Recommendation.

F.l5346.-5

36

PART I.- THE ATTACK ON THE NAVIGATION ACT BY TH.E TARIFF BOARD. The subject matter of the Commission was originally entrusted to a Select Committee of the House of Representatives. That Committee was appointed to investigate statements made against the Navigation Act- staten1ents set forth and endorsed by the Tariff Board in its Annual :Report dated 29th June, 1923.

One of the witnesses before the Select Committee was Mr. H. McK. Oakley, Chairman of the Tariff Board, Comptroller-General of Custon1s, and head of the Department controlling Navigation. Mr. Oakley placed a memorandum before the Con1mittee and gave evidence in support of _the staten1ents made in the Tariff Board's Report. 'These additional statements also

became subjects for investigationby the Commission. The sun1mary of the statements in the Tariff Board's Report, the memorandum, and other evidence placed before the Select Committee by Mr. Oakley in his triple capacity of Con1ptroller­ General of Customs, official head of the Navigation Department, and chairman of the Tariff Board, is as follows :-

In regard to freights-1. The Navigation Act "places heavy freights on our own products." (Tariff Board Report.) ·

2. The Navigation Act nullifies the benefits conferred by the Tariff. (Tariff Board Report.) · 3. The N-avigation Act deprives manufacturers " of the full share of the markets to which they are entitled." (Tariff Board Report.)

4. The Navigation Act has raised coastal rates out of all proportion to freights from overseas. (lVIen1o. by Chairman of Tariff Board.) 5. The Navigation Act operates especially against Western Australia and Queensland­ " places the producers at a disadvantage when endeavouring to compete with

imported goods ship.ped to other States." (Tariff Board Report.)

A part from freights-1. The Navigation Act apart fron1 freights has a disastrous effect. (Men1o. by Chairman of Tariff Board.) 2. The Navigation Act retards the settlement of our distant parts. (Tariff Board

Report.)

3. The Navigation Act injures the settlement of Australia. (lVlemo. by Chairman of Tariff Board.) 4. The Navigation Act imposes hardships on the struggling settlements far removed from the cities. (Memo. by Chairman of Tariff Board.) 5. The Navigation Act "more than any other legislation discourages the settler far

removed from industrial centres." (Tariff Board Report.) 6. The Navigation Act favours capital cities and centralization. (Tariff Board Report.) 7. The Navigation Act restricts shipping. (Tariff Board Report.) 8. The Navigation Act places Tasmania at a serious disadvantage. (Tariff Board

Report.)

9. The Navigation Act has robbed Albany and Geraldton of their" former splendour " . Restriction of shipping, caused by the Act, has had disastrous effects on Geraldton and Albany. (l\!Iemo. by Chairman of Tariff Board.) 10. The Navigation Act brought about the Shipping Con1bine. (Evidence of Chairman

of Tariff Board given before Select Con1mittee.) 11. Discontent exists in all States against the Navigation Act. Board Report.) Finally the n1e1nbers of the Tariff Board reported that the Board " has no hesitation in reporting that the Navigation Act is working very detrimentally against the best interests of the primary and secondary producers ". · .

A men1ber of the Tariff Board informed the Commission that the Board had not made " full and exhaustive inquiries " because the Board was " not concerned with the Navigation Act" (Question 13734). He accepted the statement that there was not sufficient trade at Albany to justify a more frequent servi ce (Question 13778). l-Ie knew nothing about Geraldton

(Question 13779), but endorsed everything alleged as to the_ disastrous effect of the Navigation Act on those ports. He did not know whether certain st aten1ents were true or not (Question 13850) , but he endorsed them (Question 13852). He did so without evidenc-e (Question 13858), because "he knew who had prepared those statements." The officer who prepared · them -vvas Mr. Cocks. " He was sure of it " (Question 13860). 1\tir. Cocks was called. . He had no knowledge of how or by whom the statements in question had been prepared. ·

37 1'·0

PART 2.-THE THREE S!fATES OF NEvV SOUTH WALES, VICTORIA, AND SOUTH AUSTRALIA. .. .....

No witness came forward in these States to substantiate any of the statements made in the Tariff Board indictment. There was no evidence that either primary or secondary industries had been injuriously affected by the Act. There was no evidence that the develop­ ment of those States has been in any way retarded by the Act.

The three States of New South Wales, Victoria, and South Australia contain of population, turn out three-fourths of its primary secondary products, and

between their ports are interchanged four-fifths of Australia's interstate cargoes. The Navigation Act came into operation on 1st July, 1921. For two years prior to that date and for two years subsequent to that date the outward interstate cargoes were as follows:-INTERSTATE ExPORTs.

New South Wales, Victoria, and South Australia . Queensland, Western Australia, and Tasmania

Total interstate exports

lst July, 1919, to 30th June, 1921. Tuns.

7,754,000 1,651,000

9,405,000

lst July, 1921, to 30th June, 1923. Tons.

8,625,000 2,046,000

10,671,000

The records (see Appendix 1) also demonstrate that the three States of New South Wales, Victoria, and South Australia possessed prior to the war over four-fifths of the total interstate export trade of Australia. There has been no additional centralization in those States since the Navigation Act came into operation.

PART 3.-QUEENSLAND.

It was alleged by the Tariff Board that the Navigation Act operates especially against Queensland. There is no evidence that the productive processes o·f Queensland have been injured, or her development retarded, or the transport of her products to other States diminished. The percentage increase of her population since the Census of April, 1921, is greater than any other State of Australia. Her exports . to other States have increased. There is no sign of decay, injury, or " disastrous effects " resulting from the Act.

The following are the ·exports from Queensland to other States for two · years prior to the Navigation Act and two years following the commencement of the Act :-Queensland Interstate

1st July, 1921, to 30th June, 1923 1st July, 1919, to 30th June, 1921

Increase

Exports. Tons.

854,000 669,000

185,000 (See Appendix 1)

Queensland cases quoted as evidence against the Act are dealt with under their respective headings-Timber, Cement, &c. It is enough to say here that the Timber Protective Association of Qv.eensland has no plaint against the Act. Its representative did not support the statements of Mr. Oakley. He said " if the freight on the Australian coast were practically nothing it would not give us sufficient protection." (Question 6579).

The cement question is at least fourteen years old. The majority of the other plaints existed before the Navigation Act came into existence.

PART 4.-WESTERN AUSTRALIA.

It was alleged that the Navigation Act operates especially against Western Australia, injures its primary and secondary industries, retards its development, and has affected the ports of Albany and Geraldton with disastrous results.

(a) THE PoRT oF ALBANY.

In all parts of the world there are languishing ports. Between those ports are flourishing, prosperous ports. Between Albany and Geraldton there is the port of Bunbury. The Secretary of the Bunbury Marine Board, giving evidence, said :-" Great future in front of this place. . great future in wheat and coal, even if timber declines. . I cannot suggest any way In

which Navigation Act could be amended to the benefit of this port" (Questions 3617-8, 3620-1).

38

. Bunbury is as much under the Navigation Act as th.e languishing ports._on either side of it, but the Tariff Board did not mention its existence.

Albany is a down-grade port. It is alleged -this is due t0 the Navigati?n Act. But Albany was on the decline not only prior to the Act but prior to the war. The dechne of Albany arises from a variety of causes anterior to the Act, and if the Act were abolished the causes would remain. .

Albany is the finest natural harbour in Western Australia, and for many was a ·prominent port of call for the great ocean liners. They made it their first and last coahng port within Australia. The ·Government' of Western Australia spent large sums upon harbour improvements at Fremantle. The ocean liners gradually made Fremantle, instea.d of Albany,

their first and last port of call. The Government had provided a new outlet and Inlet, and the Albany channel, so far as oversea passengers and cargo were concerned, began to dry up.

With the ocean liners went the collier fleet from Newcastle. They followed trade. Thousands of tons of coal required for the bunkering of oversea steamers, previously discharged at Albany, were carried to Fremantle. ],or Albany there were fewer ships, work, and a diminishing volume of circulating cash.

Western Australia developed its own collieries. These turn out 450,000 tons of coal per annum. They supply railway requirements, and the colliers from Newcastle carrying coal into Albany for that portion of the railway system were no longer required. This meant a further decline of Albany trade and shipping.

The Government of \Vestern Australia spent large sums improving the port o£ Bunbury. It ran lateral lines into that port from the Albany-Perth main trunk railway. These lines tapped districts previously exporting products and receiving requirements through Albany. Thousands of tons of primary product s found an outlet via Bunbury, and Bunbury progressed. Albany

correspondingly declined. Its local coasting inside the State trade has declined 70 per cent. That decline was continuous for years prior to the Act, and it is a trade outside the Act.

Western Australia made a den1and for an East-West railway and got it. To date it has carried 170,000 passengers, who without it would have had to travel by sea. Interstate passengers who previously landed at Albany, or went there to pick up the East-bound Steamers dwindled to insignificant numbers. There was less money spent in Albany, less trade and more decline­ fewer steamers called.

The development of the ports of Fren1cantle and Bunbury- the expansion of lateral lines from the n1ain trunk line into Bunbury-the tapping of zones previously feeding Albany- the coal supplied by rail from Western Australian mines instead of by sea from Newcastle-the East-West railway diminishing the number of sea-going passengers- these are the basic causes of the decline

of Albany, not the Navigation Act.

It is a remarkable fact that the decline of Albany's shipping, going on before the war, and accelerated during the war, reached its 1owest ebb in 1920, and is recovering to some extent under the Act which is alleged to be killing The records show outward shipping as follows :-Year. Overseas. Interstate. Coastal. Total. Tonnil ge.

- - - - - - - - --- - ------ ---- --------·

1920 .. . . . . 18 81 47 146 461 ,903

1923 . . . . . . 29 84 81 194 741,p78

- ------

Increase . . .. 11 3 34 48 279,675

I

Passenger vessels in and out of Albany have been reduced owing to the of

passengers drawn off by the East-West railway. It is admitted (Question 4092) that "cargo boats have been put in their place." These increased cargo facilities have not revived Albany trade. There is a continuous decline in the supply of exportable cargo from Albany for anywhere­ overseas, interstate or coastal. Imports show a similar decline. This goes on while other ports

under the same Act are flourishing. · The causes are outside and anterior to the Act. Albany witnesses made the statements :-

1. Interstate sea carriage of passengers seriously affected by the East-West railway . (Question 4093). Had there been no Trans-Australian Railway, Albany would be in a better position (Question 4466). 2. District has become more self:-contained, therefore importing less (Questions 4014,

4464).

\: ..

106" 1

39

3. Oversea ships call at Albany for cargo but cargo not offering (Question 4263). 4. Very little cargo for either overseas or interstate (Question 4278). Only sn1all amount of cargo offering (Question 3819). Coastal trade between Albany and other Westralian ports fallen off (Question 843). Presume railways carry

1nore and coastal boats less (Question 4272). Wagin nearer to Albany and a cheaper freight to Albany than Fremantle, but W agin merchants prefer to buy in Fremantle (Question 3952). Not the sa1ne dmnand for coal from the States (Question 3950). .

Katanning is 116 n1iles from Albany. Those two places and the country between then1 have a population of about 8,000. During 1923, all the cargo and passengers the port of Albany had to offer for Eastern States averaged monthly 170 tons of cargo and 20 passengers, and inward cargo and passengers were in similar proportions. A passenger steamer calls every fortnight

going West, and returning East, picking up an average of ten passengers, there is also a cargo service of at least one ship per two. It is admitted that the available

is ample, but asserted that the service is not sufficiently frequent. The shipowners say the serv1ce is as frequent as the trade warrants, and cannot be more frequent without heavy financial loss. It was stated in evidence that if "black" boats were excluded from participating in the North-West trade, the principal inducen1ent for the maintenance of the Fremantle- J a va­ Singapore service would be gone. In a similar manner if the Navigation Act were suspended to permit oversea boats to carry cargo and passengers in and out of Albany, there would be no inducement and no law to compel the interstate boats to go into Albany to pick up the leavings of the Oversea ·companies, so the ultimate shipping services of Alb any might be worse without the Navigation Act than at present. _

. A similar contrast between the ports of and Albany lies in theN orthern Queensland ports of Cairns and Townsville. Cairns is flourishing while Townsville is languishing. The cause is' not in the Navigation Act but in econon1ic transformations. The Townsville Daily Bulletin (17th November, 1923) explains the position:-

1. 30,000 tons of coke that yearly \vent to Townsville by sea for the Cloncurry Copper . :Mines no longer go because the mines have closed down. 2. Coal-using industries in Townsville dependant upon Cloncurry work have had to restrict operations ; they use less coal. Charters. Tower ceased as a gold

producer and as a Townsville feeder. 3. Queensland has developed its own coal-fields, at Bowen. The railway has been extended to Townsville and all the coal for Northern and Western Queensland goes by rail instead of by sea- there are 100,000 fewer tons for steamers to

carry into Townsville by sea and so much less to pass over its wharfs. The Daily Bulletin further says :- " The outlook is so depressing that the Harhour Board cannot be optimistic concerning future rapid expansion of trade." These changes in the fortunes of ports brought about by the rise of new trade routes (railways) carrying trade along new channels, by decrease of exportable products on account of the decay of an industry, by drought, or by diversion to other ports, or by production within a State of what was previously imported from without- these are the factors that paralyse a port, leave ships

without cargoes, and compel ship-owners to re-adjust their shipping to the new conditions. These re-adjustments, causing inconvenience to a few, are an imperative necessity. They have their foundation in the economic circumstance- not in an Act of P arliament. The business of the port of Albany declined years before the Navigation Act from cau ses already described. There is no evidence of any injury inflicted upon the productions of Albany

and adjacent territory by reason of the Act. · .

Geraldton is

Navigation Act.

(b) GERALDTON AND THE MuRCHISON. another Western Australian port alleged to be injured as a result of the

Geraldton was the port of the Murchison gold-fields. The Government ran a railway from Geraldton to the gold centres. Coal, coke, food, plant and appliances for the fields went through Geraldton. Colliers brought coal and coke from Newcastle. Regular interstate liners 1nade Geraldton their Westralian terminal. Lands in the vicinity of Geraldton were put under wheat.

Wheat for overseas found its way jnto Geraldton, and was taken away in vessels that brought machinery for mines, or rails for extending lines. The Midland Railway Company fed the port, and when all these agencies were in full swing, Geraldton reached its flourishing apex. · Then the tide turned. The gold-fields declined. Mines closed down, demands for coal and

coke diminished. The Murchison gradually reverted to the squatter, fewer men were employed, less products and fewer people were in transit.

40

Then the interstate passenger boats ceased to call-Geraldton ceased to be a terminal port. Then the Westralian collieries developed. Coal for the railways and gasworks of Geraldton came by rail. The colliers from Newcastle that at one time had carried 40,000 tons of coal per annum into Geraldton lost their occupation-they disappeared from the port.

Then the Government extended the State Railway·northward from Wongan Hills, tapped the Geraldton-Murchison line at Mullewa and drew off traffic previously going through Geraldton. It paid the Murchison people to use the direct rail. There was at

and re-loading into .ships (Question 1087). There was no handling from the tune wool, hides or live stock left the Murchison, until arrival at Fremantle (Question 3104). . The development of the State railway from Wongan Hills I;J.Ot only. intercepted ship traffic-it intercepted all Midland Railway Con:tp any traffic to and from all terntory east of Mullewa.

The lVIidland Railway Cmnpany made a determined bid for all available traffic in inter­ mediate territory. It cut Tates. It captured all light weight cargo from Perth and Fre1nantle into Geraldton, and aU back loading of wool, hides, skins, &c. (Question 3406). It the stean:er nothing ; the regular boat service ceased. The position is summed up in the following question and the answer :-

"3:H4. Frank Green, Merchant, (}era ldton .

By Senator Elliott.-You mean that the port was killed bdore t.he Navigation Act, came into operatio11 Answer.-Yes."

The position as regards Geraldton is-( a) The oversea mail and passenger steamers did not at any time call at Geraldton. (b) The interstate passenger service ceased to make Gerald ton its terminal port years before the Act operated. (c) Nobody in Geraldton supported the statement of the Tariff Board that the

Navigation Act had deprived Geraldton of its "forn1er :splendour." (d) There was no evidence that the Navigation Act had diininished the facilities , injured the productions, or in any way retarded the development of Geraldton.

(c) THE NoRTH--w·EsT PoRTS.

The 1,800 miles o.£ Westralian coastline from Geraldton to Wyndham is open to four black-manned ships for whom Dalgety and Co. act as agents. The terminals of these "black " boats are Singapore and Fremantle. They serve the North-West coast as far as Derby (1,300 miles).

In addition to the "black" boats there are two State-owned steamers. These touch not onlJ the ports visited by the " black " boats but serve places on the coast that the " black " boats only visit when the available cargo is large· enough to be profitable. The State boats therefore render a special service. They are also considered as instruments in the keeping down of passenger and general cargo rates (Questions 671-3, 811, 14206). The State boats are therefore

maintained, not only by the public sentiment favorable to State enterprise, but by those who, while opposed to State enterprise " on principle," cling to it it suits their economic

interests (Questions 2697, 2709, 2728). From Fremantle to Geraldton is 218 miles. It is another 200 miles to Gladstone. ]..,rorn Gladstone to Hedland is 600 miles. 600 miles by 200 miles inland covers 120,000 square miles-four and one-half times the size of Tasmania, one and one-half times the size of Victoria--­ an area equal to Great Britain. This territory carries 90,000 cattle, 2,000,000 sheep, 1,800 men and 500 women- 2,300 adult persons.

Hedland to Derby is 500 miles. Derby is the port of West The West

Kimberley leases cover an area larger than Tasmania, and carry 150,000 sheep and 350,000 cattle, 300 men, and 50 women-350 adult persons. l\1idway between Hedland and Derbv is the pearl fishing port of Broome, with an adult population of 350 men and 170 women.

There is no part of Australia with population so small and available cargo so meagre, so amply supplied with sea service as the north-west coast of Western Australia. Yet, with a " black '' sea service untouched by Australian Acts of Parliament, a service '\Vhere the owners· are pern1itted to employ the cheapest and most docile labour procurable-a service supplemented by a State­

owned service to serve -places and-purposes that the " black " boats ignore-with all these faCilities the North-west coast does not progress. On the contrary, it retrogresses. The only railway in the North-west-Hedland to Marble Bar-has ceased regular service. It now only runs "when inducements offer." There is no development in any direction; exports and imports diminish, population recedes. ·

I

------------------,--------------------------------~--------------------------------,-11

TINOB

w E S T E R N

RA L I A

DitJHT

'NORTHERN TERRITORY.

There are 300,000 cattle in Victoria River Section·

u ,. 200,000

" "

60,000 "

in Barkly Table-lands

in all other parts.

WESTERN AUSTRALIA.

Total population 350,000

Adult population 188,873

Number of cattle 940,000

,, sheep 6,660,000

DISTRIBUTION.

ADULT POPI.UTION. SH&P. CAmH.

South-west 16o,600 3,960,000 160,000

Kalgoorlie 161132 20,000

Murchison 2,609 200,000 70,000

North-west 2J32 2,300,000 90,000

Broome 522

West Kirr~rley 360 200,000 360,000

East Kimberley 318 .. 240,000

188,873 . . 6,660,000 . . 940,000

Many of the Northan rims cover territory in the I Northern T erritorg and JV estern Australia. Country within 300 miks of Wymlham on t~ Northern Territory! $/.de CO.TTY 300,000 cc,ttle. and an adult population of ·

300. In the Emt Kimberley there are 44 women: iii · West Kimberley 54, in the North-west 502.

Alice Springs-cattle, .72,000, population, 12.

I

~~~~~~~~~~~~~~~~~-~-·~~ . ~~-~:c ~m~-~ .~~~=~ -.~~~~~~~~=====dl Dvo,,ne.~ n_,..., .• 'C,,ri,-i,,<.s Pt#·.L..-,f.s .&>8~ Brcuu,h,J4J1,.JIJ!!N.

1063

41

The principal products of the North-West are sheep and cattle. At one time the market · was in the South. The South is now producing more of its own beef and mutton (Questions 734, 2728, 2730 , 2733). The South, has become more self- contained. It requires less from the North, and the North must find new outlets for its products. For reasons dealt with elsewhere, it is

not finding markets adequate for its needs- it withers. The sheep and cattle runs of the North are not being extended ; flo cks and herds do not increase-they are decreasing. Improvements are not being made on the runs-less money is spent on developmental work (Question 5174). There is reduced volume of work, declining population (Question 5175) , and reduced imports of all the essentials of life and industry (Question 4551).

One thousand three hundred miles of Australian coast-line- from Geraldton to Derby­ a longer distance than from Melbourne to Brisbane- furnish proof that the .mere augmentation of transport facilities cannot manufacture markets or multiply products. Out of Australia's North-West, the Tariff Board could draw no samples of economic expansion flowing from a cheap black-manned service, free from the operations of the Navigation Act. It, therefore, made no reference to the North-West, quoted no freights, and drew no comparisons.

(d) WESTERN A usTRALIA IN GENERAL.

The land surface of Western Australia is as large as Argentina. Argentina carries seven times as many sheep, thirty times as many cattle, forty times as many pigs and horses. The Buenos Ayres province of Argentina is one-eighth the size of Western Australia, and carries three times more live stock than Western Australia.

·The little European State of Jugo-Slavia is one-tenth the size of Western Australia. It carries four times the amount of live stock- more sheep, more horses, more cattle and more pigs. Greece is one-twentieth the size of Western Australia, yet it carries niore live stock. The exported products of Western Australia in 1923 were 74,000 tons below 1913 (512,000 tons compared with 586,000 tons).

The exportable surplus has decreased, while the annual charges upon old debts and new borrowings have enormously increased . . The average annual exports from Western Australia to Eastern States are 100,000 tons; the average annual imports from other States are 350,000 tons. Vessels going loaded to Western Australia return three-parts empty. This one-way traffic has to carry the cost of empty returns.

Interstate exports from Western Australia are 90 per .cent. timber. Interstate imports into Western Australia are 40 to 50 per cent. coal. This coal is for the bunkering of oversea vessels. Western Australian coal is alleged to be unsuitable for bunkering, owing to its liability to spontaneous combustion.

It is alleged that Western Australia is compelled by high duties to buy in the Eastern States and pay heavy coastal freightage. There is no duty on coal, .African, J apanese or English, but \Vestern Australia does not import it. Other factors than freights and tariffs, and the Navigation Act , are in active operation.

\Y'estern Australia imports from the Eastern States other products than far in excess of her exports to other States. She imports, for instance, butter, cheese, potatoes, jams, confec­ b onery, boots, and tobacco. The alleged high freights do not prevent the importation of these articles, although said to prevent the exportation o.f Western Australian products to Eastern States. The explanation has, therefore, to be found in other factors than freights and Act.

The exported products of Western Au stralia to interstate and oversea ports during two years prior to the Navigation Act, and two years after it came into operation were as follows :-

1st July, 1919, to 31st June, 1921 1st July, 1921 , to 30th June, 1923

Decrease

Ovetseas.

937,000 89 6,000

41,000 tons

Tu Other States.

185,000 tons 210,000

Increase 25 ,000 tons (See Appendix 1.)

The decline · of exports was in the oversea trade. To this the Navigation Act does not apply . The recovery was in the trade alleged to be injuriously aff ected by the Act- t he interstate trade. The problems confronting Western Australia do not arise fr om the Navigation Act, and

al'e not solv ab le by its cancellation or amendment .

4.2

PART 5.-THE TIMBER INDUSTRY.

. The Tari:ff Board dra\vs attention to the fact that '"' Timber is a primary industry of vital jmportance to the Commonwealth"; it alleges that "coastal freights place the local producer at a serious disadvantage," and the cause is to be found in the Navigation Act. In 1914 Western Australia exported overseas 157,000,000 super. feet of timber ; in 1921, 85,000,000 super.; in 1923, 59 ,000,000 super. Navigation Act does not apply t o this oversea trade. The timber millers are free to engage the cheapest charters the world can provide.

It' is alleged that the Navigation Act· has raised timber freights and business. The interstate timber trade is below pre-war level, but it has not dechned Since the Navigation Act came into existence. It has improved. The oversea trade is 40 per cent. below pre-war level. It is not affected by the Act. It continues to decline.

(a) CoASTAL FREIGHTS AND 1\'lARKET PRICES. During 1919 the price of Jarrah in the Adelaide selling yards ranged (according to size) from 27s. 6d. to 42s. 6d per 100 feet super.-average 35s. per 100 feet super. Freight from Western Australia to Adelaide was 5s. 5d. per 100 feet super.

On 29th April, 1920, the Commonwealth Government, on the recoinmendation of the Shipping Board, empowered the Shipping Companies to raise their timber rates (Western Australia to· Adelaide) to 6s. Sd. per 100 feet super. A few months later the minimui?- and maximum price of J arrah in the Adelaide selling yards was raised to 50s. and 67 s. (according to size)-average 58s. per 100 super._:_an increase of 23s. per 100 super. on 1919 prices. ·

In 1922 the Timber millers wanted reduced rates and threatened to secure freightage from a shipping outside the Shipping Federation. On lOth April, 1922, the ship-owners reduced -the rates by Is. 6d. per 100 super., to 5s. 2d. per 100 super.-3d. per 100 .super. below 1919 rates-but the timber millers did not reduce the. price of timber (Question 310).

On the 5th April, 1923, the Shipping Companies refused to carry at 5s. 2d. on the ground that the rate had proved unprofitable. They raised t_heir rates to 5s. lOd. The Timber Com­ panies re-adjusted their prices--increased the price on so:me sizes-reduced on others. The net result was that the minimum and maximum prices in the Adelaide selling yards were 4ls. and 69s. 6d. respectively-average 55s. 3d. per 100 super. This was 22s. 3d. per 100 super. over 1919 prices, whereas freights had only increased 5d. per 100 super. over 1919 rates, and were actually lOd. per 100 super-. below 1920 rates (6s. Sd. ). In terms of tonnage ( 480 super. feet to ton) ·the relationship of freight rates to prices in 1919 and 1923 is as under :__:_

1919 1923

Timber freight per ton Western Australia to Adelaide.

£1 6 4

£1 8 4

Increase in Timber freights .... per ton 2s.

Price in Adelaide Selling Yard.

£7 18 6

£13 5 3

Increase in price of Timber per ton £5 6 9

(See Appendix 2.)

. Interstate rates on timber are actually a smaller percentage of the selling of timber than before the War-they are than they were when the Act carne into operation (1st July, 1921). It is alleged the Navigation Act prevents the Timber Companies from chartering outside vessels at cheaper · rates. The Timber Companies, however, did not charter outsiae steamers prior to the Act.

The Timber millers did not reduce timber prices when the Shipping Companies in 1922 reduced rates. There is no evidence that the Timber millers would reduce prices to the public if they had the cheapest shipping in the world . . It was alleged by one witness that "imported timber supplanted our timber from 1920 onwards"-" Business going past us"-" Our Adelaide and Melbourne business being ruined" (Questions 96, 101, 152). The witness had no facts-only general opinions. The representatives of the Tin1ber Milling Companies gave no endorsement to his statements. The following is extracted from the evidence of the local Managing Director of t)le Karrj Timber Company (W.A.) :-

3724. ·would you say that Australia is seriously handicapped by reason of the importation of timbers from America 1- I do not know that it is affecting the position to-day. 3725. You are not afraid of the competition from America ?-Not to-day; there has been quite a revival in trade here.

1065

4S

. A representative of the Adelaide selling yards gave evidence that he imported from overseas and from other States. In 1914, the freight rate upon A1nerican Oregon was 2s. 9d. per 100 super.-now the rate is 6s. 8d. Further evidence by this witness is as follows:-5341. Then the American increase is equivalent to the interstate increase ?- It is a bigge r increase.

5342. Then the question of freights has no effect on the competitive aspect of foreign and local timbers ?­ I should say no, so far as this State is concerned. 5343. The local -freight rates have not of themselves induced foreign trade ?-I should say not.

The output of Australian sawmills, apart from timber for fuel and mining purposes, was 610,167,000 --super feet in 1922, and 617,343,000 super feet in 1923. Records for the Common­ wealth have only been tabulated during recent years and comparison with 1913 is therefore not possible. The quantity and value of imported timbers is as under:-

Year. Quantity Super Feet.

1912-13 450 millions

1922-23 . . . . 365 "

1923-24 (First 10 months) 375

Import Values .

£

2,771,000 4,051,000 4,573,000

Import Value per 100 F eet Super.

s. d.

12 2

22 6

24 5

It will be noted tha;t import values have jumped 100 per cent. and that as compared with pre-war figures 75,000,000 super feet less imported timber costs £1,800,000 more money. It was stated by the Chairman of the Tariff Board that timber from Noumea (New Caledonia) was carried to Sydney for 2s. 3d. to 2s. 6d. per 100 super feet (lOs. 10d. to 12s. per ton). The fact that loading and unloading costs had to be paid by the consignee was not

mentioned. General rates between Sydney and Noun1ea, 1,058 miles, are 42s. per ton, against 30s. between Fremantle and Adelaide, 1,350 miles. 1

It was in Tasmania that high freightage and shortage of shipping had pushed Tasmanian timber out of the South Australian market. The representative of Adelaide timber merchants said:-" We are using more Tasmanian timher than in 1919 " (Questions 5415, 5552), "and have never been in a position when we could not get supplies" (Question 5357).

The largest timber mills in Tasmania and Western Australia are owned by the same oversea interests. The mills of the Huon Timber Company of Tasmania, and the mills of Millars' Ti1nber Company of Western Australia are in reality one company owned by the same people, directed bythesame n1inds. Tasmanian interests were not acquired to develop production against the production of the Western Australian end of the company. It was done to control Tasmanian

timber areas and regulate output. The _ output of the Tasmanian section of the united company · has been reduced from 27,000,000 super. feet to 9,000,000. An apparent loss is created, but what is publicly dropped out of the window at the Tasmanian end is quietly picked up with a bonus in the better market for the output of the Western Australian end. ·The main factor in Tasmania's

timber industry is the control of its principal sources of supply· and its mills by outside timber interests. The Investor's ·Digest (1st January, 1924) reports that Millars' Timber Company controls the I-Iuon Timber Company ; that it has £300,000 invested in subsidiary con1panies ; that it . holds softwood supplies to the extent of £215,000, and that while the oversea trade has fallen

off, " Australian local trade has been well maintained." Not only does Millars' Timber Company control the Huon Timber Company, but it holds a large interest in the Queensland Company known as the Pines and Hardwoods of Australia Limited. In this Queensland Company John Sharp and Sons Pty. Ltd., one of the largest timber companies in also has a substantial interest. Thus two of the biggest timber companies in the Commonwealth have mutual interests.

The Tariff Board asserted that coastal rates were a crushing impost on. Queensland timber. The freight on timber from Brisbane to Melbourne is 5s. 3d. per 100 super. Fro:rh Cairns to Brisbane or through to Melbourne the freight js 8s. per 100 super. Queensland timber interests said the Navigation Act inflicted no injury on their jndustry (Questions 6596- 7). They

did not ship timber to Southern States. There was an ample market in Queensland for all log timber (Question 6610). The only surplus they had was on "tops " (Question 6609) useful for making butter boxes. The Canadians landed" Top stuff" in Melbourne for 17s. per 100 super. The Queenslanders had to get in Queensland a basic price of 20s. per 100 super. This basic price would be plus costs

to the ship's side. No reduction of local freights could counterbalance Canadian dumping. The Queensland Timber Protective League did not agree with the Tariff Board statements. The grievance of its members was against the Tariff-not the Navigation Act. .

44

The Tariff Board quoted timber rates to Australia, but omitted to quote rates on Au_ stralian timbers carried overseas. Oversea ships charge 100 per cent. more to take Australian timber oversea than they do to bring foreign timber inwards. A surcharge is levied on the Australian export to make up for the cheaper carried import. The explanation is made that

timber is heavier than oversea timber. This explanation is not made when deahng w1th Australian coastal rates. The disparity between ovei·sea timber rates to Australia and-local coastal rates for a given distance is alleged to be due to the Navigation Act. -The disparity has always existed. It has

not increased, and so far as American tin1ber rates to Australia are concerned, has actually diminished. The Navigation Act has not injured or retarded the development of the timber industry . Timber production, since the Act, has not diminished- it has increased. Timber freights are not higher than when the Act first operated-they are lower. The Navigation Act has not placed

the timber industry at a " serious " or any sort of disadvantage with oversea Timber.*

PART 6.-THE MEAT INDUSTRY.

Meat production is a primary industry of vital importance to the Commonwealth. In connexion with this industry there was no statement to bear out the assertion of the Chairman of the Tariff Board, that "the coastal freights place the local producer- at a serious disadvantage. " There was no evidence tendered •that it had been in any way affected or injured, or its development retarded by the Navigation Act, but facts in connexion with the industry were placed before the Commission.

There are two great Meat Works in Northern Australia- V estey' s at Darwin, and the State Meat Works at Wyndham (W.A.). Vestey's works operated during the 1917, 1918, and 1919 seasons, and then closed down. Vestey's own or control the output of fourteen stations covering 45,000 square n1iles ,

carrying 267,000 head of cattle, of which 146,000 are in East Kimberley, and 121,000 in the Northern Territory. Vestey' s send their cattle to the State Meat Works. The State Meat Works at Wyndham cost £827,000 to construct; It commenced operations in 1919, and its record IS as follows :-

1919-treated 9,000 cattle. 1920-treated 18,000 cattle. 1921-market slumped, Works closed. 1922-treated 22,500 cattle.

1923- treated 30,400 cattle.

•

Working Loss since 1919 .. Accumulated Interest

Total Loss to date

£

£213,000 245,000

£458,000

The Manager of the Meat Works stated:-" Almost the whole of the Wyndham losses. arose from a drop in values of canned meats, which fell from £5 5s. per case in 1919 to 18s. per case in 1920-after heavy storage and other costs had been incurred through lessened rate of consumption.''

In 1921 oversea n1eat prices slumped so badly that the Wyndham Works were closed. In the Western Australian Government decided to resume operations. - Over £100,000 was to cattle-owners. The result for the year was a loss (interest- and working expenses) of £88,000 - £3 18s. per head of cattle treated.

. In was paid to cattle-owners (£4 lOs. per head of cattle). £72,000 was

paid away 1n freights (ltd. per pound- £10 lOs. per ton) , £56,000 was paid in wages, and the loss was £2 2s. per head of cattle treated. If there had been no labour costs., a heavy · loss would still remain. Labour costs are augmented by many factors. First of all there is the seasonal -character of the industry. The

Manager of the Meat Works stated:- " From September the condition of stock is unsuitable. Heavy rains start in November or December, and last March. The boggy state of the lower country, the flooded of rivers and creeks, the excessive heat, preclude the working or tra velhng of stoclc dunng those months."

.· * The of the in a letter to th.e Huon Timber Company Limited, stated:- " Thinking that you might be we are

herewtth wage table wl11ch glVe? the wages now m effect upon t lw Pacific Coast. In the so uth, in both the hardwood and soutl1ern pine producin"

ectwns, common on the average IS from Sl.75 to $2.00 a day. In Michigan, Minnesota, and Wisconsin , common labour is getting around$2.25 ct::y? but wood.s labour IS back upon a pre-war bas1s, largely due to the fact that in the large cities there is at present more or less idleness. Consequently, m en are willing to go mto tl1e woods and WGrk fH around $30.00 a month and their board and lodging." (Question 14095 .)

1067

Secondly, outside the :Meat Works there is no work in the country. _Aboriginals are preferred on the stations to white men. The adult white population is 40 per cent. below that of 1914. As a result the Meat Works must draw its workmen from Perth, 2,000 miles away, and take them back ail of the season.

The cattle of East Kimberley and of the Northern Territory, within a 300-mile radius of the Wyndham Meat Works, total 500,000. The cattle runs are not half stocked. The annual average supply cattle available for the Meat Works is 35,000 head. This supply is equal to the Meat Works' present working capacity. The cattle necessary to make a ton of beef a.re four, five or six, according to condition. Condition is therefore. not only a fa ctor on the selling market. It is an important factor in 'the economic working of slaughter yards and freezers.

I

Mr. Frank Houlder, a· director of Houlder Bros. and Co. Shipping Company, and of the Bergl Australian Meat Co. of Bovven; stated (Argus, 12th April, 1923): _u In Argentina, fattening paddocks are maintained in close proximity to the killing yards.''

Few cattle go from \Vest Kimberley· to Wyndham. West Kimberley cattle are reared on soft country, and to reach Wyndham have to pass over rough, stony, mountainous country, constituting the watershed dividing the Fitzroy and Ord Rivers. The main outlet for West Kimberley cattle is as live stock southward to Perth, aided by sales of some 4,000 or 5,000 head per annum in Java. ·

The State Meat Works at Wyndham were laid out with the idea of supplying the Metropolitan market with chilled beef. The "lay-out" was aone by officers of the Public Works Department. Twelve insulated cars were built to carry chilled beef from the works to the ship's si·4e at Wyndham. But no thought was given to the shipping aspect-to cool storage in the metropolis, or the commercial prospects of a chilled beef trade in the South.

Frequent steam service with suitable refrigerator space was necessary-it did not exist. Il it did exist it could not be efficiently utilized, because the Perth-Fremantle population is not sufficient to provide a market large enough to keep going a frequent ste3"mer service requisite to ship the Wyndhan1 output. Finallyl if the two factors had existed they could only have operated by invading the only market for small growers in the South and interfering with the market for cattle supplied from Derby. Wyndham could not, therefore, be utilized for its original purpose. It had to find a frozen meat market overseas, and it had to pay higher meat freights than those charged from Eastern States to overseas markets.

The condition of . the cattle industry in the north-west portion of Australia is affected largely by the,situation in Queensland. .

The export meat trade of Queensland is dominated by massed capital controlling cattle stations, meat works, refrigerator space on steamers, and cold storage at ports of discharge. The meat works of Queensland are not isolated outposts like Wyndhan1. Construction is less costly and labour more easily available. Labour in Queensland is local. It passes from one seasonal occupation to another. It has not, as at Wyndham, to be carried 2,000 1niles to and from the occupation.

The Oversea Shipping Combine controls all oversea .steamer refrigerator space (Question 396-7). It decides in London how much· shall be allocated to any particular country, and when it shall be diverted from one country to another (Question 400).

The section of the Oversea Shipping Combine working Australia has large refrigerator space on a majority of its steamers. To guarantee frozen cargo it controls Queensland Meat· \Vorks. To guarantee supplies to meat works it controls the output of scores of pastoral properties. To guarantee an outlet and in many places, as in the Far East, to control the market, it controls cold storage-at discharging ports (Questions 442, 507, 508, 509, 513-4, 517).

The section of the Oversea Shipping Combine known as " The Inchcape Group " controls the Philippine Cold Stores and the Singapore Cold Storage Co. It controls refrigerated space to Singapore, Manila, China, and the East generally. The Manila Army Contracts for frozen meat are held by the allied meat works of Queensland, and the share of each is allocated fro1n London (Question 400). The products of the State Meat Works at \Vyndham cannot get into the cool stores of that combine. Wyndham has been able to secure the service of the Comnlon­ wealth " B " boats- Boonah, Barambah, Boorara, Booral, and Bakara. They carry I\jmberley produ·ets to Europe. They are suitable for the Wyndham service, having derricks suitable for continuous loading (Statement by :Manager of Wyndham Meat The charge is £2 7s. per ton more than fro1n Queensland. If these boats are sold Wyndha1n will have to close

down (Question 457). Should this occur it would bring further disaster to the north--west of Western Australia, but the Navigation Act would not be responsible:

46

The meat ra'tes to Singapore are double the rates to Europe-three the d_ istance. The surcharge on meat for Europe from the State Meat Works at Wyndham IS 25 per cent. on rates from the Eastern States (Statement by Manager of Wyndham Meat Works). The meat freights (31st December, 1923) from Eastern States to Europe, 75 per cent. above pre-war rates. Australia's Arbitration and Navigation Laws are not factors In these matters .

•

PART 7.-TASMANIA.

It was alleged that Tas1nania had "been placed at a serious disadvantage, ' : its developn1ent retarded, its industries injured, and its tourist (li1ninished by the

Navigation Act. There was no evidence against the Act from Burnie, Devonport, or Launceston. The allegations of disastrous results were confined to Hobart. It was asserted that the export trade of Tasmania has been seriously injured by reason of the Navigation Act. The cargo shipped out of Tasmania is as follows (see Appendix I.):,----

Pre-War-1913 Since War { 1919- 20 1920-21

Since Navigation Act J1921- 22 L1922- 23

Overseas, Tons.

47,000 25,000 43,000 85,900

86,000

Interstate. Tons.

251,000 379,000 418,000 480,000

501,000

Tasmanian expor:ts measured in actual tonnage are double the 1913 record. In the two years after the Navigation Act Tasmania's exports were 287,000 tons 1nore than d:uring the two years before the Act.

The following are extracts from Harbour reports of Tasmania:-Hobart-The reports and evidence of the Hobart Marine Board show" rapid expansion in the exports and shipping of Hobart." ·

Launceston-Launceston Examiner describes the shipping of the Tan1ar as having "taken a remarkable leap." Burnie-The Marine Board of Burnie declares its shipping business in 1923 to be ''a record.'' Devonport-,-The shipping of Devonport is described in official reports and press as

" still on the up grade."

(a) FRUIT ExPORTS.

It was asserted that the oversea fruit export of Tasmania has been seriously injured by reason of the Navigation Act. The Tasmanian fruit exports overseas are as follows:-

Pre-War Record-1914 . {1920 Since War 1921 Since Navigation Act

FRUIT ExPORT OvERSEAS.

{ 1922 1923

95.2, 000 cases . 450,000 " 586,000 " 1,352,000 " 1,562,000 "

lVIore oversea boats went into Hobart during 1923 to carry away fruit than ever went into it before in a single year. It is complained that there were only half the number o.f fast 1nail boats now going into their capital port. That fact applies to every capital port in Australia, the mail service is 50 per ·cent. bel

Line boats calhng Into Hobart carry away more fruit than the mail boats carried, and give a quicker dispatch. The mail boats lose two days going up the Gulf of Taranto to deliver mails. There is an interstate market for Tasmanian fruit equal to the 1923 oversea cases.

It is stated that Tasmanian fruit-growers obtain no more for a case of fruit in 1924 than. in 1914. . ·

Henry Jones, largest fruit manufacturer of fruit products in

Australia, told the Comm1sswn that the Navigation Act operated most adversely on the fruit­ grower," but he would not say it had operated adversely on his company, although it dealt in

47 1069

fruit and came into direct contact with interstate and oversea shipping. Whatever may: be the fate of the growers of fruit, the handlers of their products are not suffering. Last year the firm of H. Jones & Co. divided £100,000, reserved £35,000, and passed out 50,000 shares at par, worth 43s. on the market-equivalent to an additional gift of £57,.500.

The Investor's Digest of 1st January, 1924, reports that "some of the subsidiary companies of Henry Jones Lin1ited have accumulated so much in liquid assets that they can lend considerable . sums to the parent company, which presumably have been re-invested in other subsidiary concerns or investments."

The rates on fruit and the products of fruit between interstate ports on ships under the Commonwealth Navigation Act and the Arbitration Laws are 30 per cent. above pre-war rates. On oversea ships not affected by these laws the rates on fruit and the products of fruit are 60 to I 250 per cent. above pre-war rates.

(b) TAsMANIAN TouRIST TRAFFIC.

It is alleged that the Navigation Act has seriously injured and diminished the tourist traffic of Tasmania. The records are as follows:-

-

I

PASSENGERS FR0M MAINLAND TO TASMANIA.

tNote.-Each .year ends 30th June.]

Pre-war.

I

Pre-Navigation Act.

Hn3. 1914. 1920. 1921.

Since Navigation Act.

1922. 1923;

Melbourne to LauncestoJ). 0 0 • 0 23,300 22,890 18,660 20,238 25,635 24,213

Melbourne to Burnie 0. 0 0 0. 7,364 6,848 6,611 6,148

30,664 29,738 25,271 26,386

Sydney to Hobart (via interstate boats) ... 6,220 6,443 7,064 6,306

Sydney to Hobart (via oversea boats) .. 624 953 · 185 146

Melbourne to Hobart .. . . . . 1,954 1,947 144 24

39,462 39,081 ' 32,664 32,862

' ; 1.1 >

* In Commonwealth Liners.

MAINLAND PASSENGERS INTO TASMANIA DURING Two YEARS.

Prior to the War (1913 and 1914) Prior to the Act (1920 and 1921) Since the Act (1922 and 1923)

78,543 65,526 83,272

9,083 10,851

34,718 35,064

6,513 6,784

72* 106*

. . 15

41,303 41,969

When the Act into existence, Tasmania's total inward passengers for a two-year period were 13,000 below the two years pre-war level; during the two years since the Act the inward passenger lists have increased by 18,000, and are now 5,000 above the two years pre-war figures. The Hobart Chamber of Commerce in its last annual report, referring to the tourist traffic, says:-

. " Last season provided a record . . Business people of the city

who deal direct with the tourist traffic report a record business. Port Arthur is a good index, and the guides employed there to show visitors over the ruins dealt with larger numbers than ever before."

The officer in charge of the Tasmanian Government Tourist Bureau in Brisbane, reporting to his Government, says-" You will see there has considerable increase of busjness compared with the previous year."

The position is summarized as follows :-:-(a) The Navigation Act came into operation on 1st July, 1921. (b) Befor e the War only 2 per cent. of those who went to Tasmania travelled on oversea boats.

48

(c) After the War and before the Navigation Act came into existence, fewer than 1 per cent. travelled by oversea boats. At no time did the oversea carry more than a few of the thousands tra veiling annually to and from Australia. When there were not Navigation restrictions, when people could travel by any boat, 98 per cent. of those who visited Tasmania travelled on steamers manned by Australian citizens. _ (d) Since the Act, travelling facilities have been ample. · The Hobart. Chamber of

Commerce was asked by the Prime Minister to furnish evidence to the contrary -it did not do so. The Director of Navigation admitted to the Select Committee- " Not only are licensed vessels trading to Hobart capable of carrying the passengers and cargo offering, but there · is almost always a . large percentage of vacant space." (Question 14.) . .

(e) Not only is accommodation in the main ample, but under the Act travellers to Tasmania have increased by many thousands. ·

The year 1923 was Tasmania's record year in­ ( a) Tourist traffic, (b) Export overseas, .

(c) Exports to other States.

The Navigation Act has not destroyed, diminished, or injured the tourist traffic into Tasmania, but, on the contrary, this traffic has grown to record proportions. It has not inflicted injury upon Tasmanian industries, or in any way retarded the development of-that State.

PART 8. - THE E CONOMIC AND FINANCIAL POSITION OF TASMANIA, COMPARED WITH THAT OF WESTERN AUSTRALIA. ·

Tasmania had an era of active metalliferous development. To aid development, to extend roads and rails and to build schools, Tas1nania borrowed and invested millions.

So long as the mines lived the loans were easy. were borne in part by the men

engaged in the mineral industry. Those men, in addition, provided a home market for the primary products of 'Tasmania, stimulated commerce, and widened the avenue of other occupations.

But the mining fields in many districts have ceased to operate. The metalliferous output of the remainder has diminished. Commerce and occupations, population and public revenue in the mineral areas have withered; but the State debts ren1ain. They have had to be renewed at higher rates of interest. This increased annual burden has to be carried by other industries.

This to a large extent is the history of all States, but in several States the mines were in the area of good soil and rainfall. Agriculture, horticulture, dairying, in some cases factories, have taken active life on worked-out mineral belts. The State is none the poorer-in many cases it is richer.

The principal Tasmanian mineral belts are in rough and almost inaccessible mountain country. Where mining has ceased the district has the appearance of an area suddenly evacuated. Schools and public buildings have no longer utility. They are deserted. One-time flourishing commercial establishments fall slowly into ruins.

The m.ineral history of Western Australia is similar to that of Tasmania. The 1nineral areas of Western Australia are in arid belts instead of rough mountains, but agriculture, horticulture, and dairying can no more develop in one area than in the other. Coolgardie and other places are illustrations of the legacy of non-productive debt that a dead mineral area bequeaths t? a State the character of the territory does not permit of agriculture rising upon the ru1ns of the dead Industry. · ·

The relative positions of Tasmania and Western Australia may be seen in the following tables (Quarterly Summary of Commonwealth Statistics, March, 1924)-

Population State Debts Debts per head Exportable surplus per head Overseas and Interstate Cargoes

Tasmania.

219,000 £22' 000 ;000 £100 53 cwts.

587.,000 tons

Western Australia.

350,000 £58,000,000 £167 30 cwts.

512,000 tons.

Western Australia has a larger indebtedness per head, and a smaller exportable surplus. Eighty per cent. of its exports have to find an oversea market; while 80 per cent. of exports are sold in the higher-priced Australian market. ·

I

I

I

···· ....... .

NoRTH CoAST

1'HE SouTH

EAST CoAST

WEsT CoAsT

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TASMANIA.

Total Population 2t9Jl00

116,000 Adult ,

Principal Products-Root Crops, Fodder, and Dairy Produce.

tl/

Timber, Fru1t. and the Metallic output of the Risdon Zinc

\Vorks..

Mutton and \Vooi. Metals.

Notc .... -There are 52,000- qr}trlt perwm in the Northern Dividcm of Tasnt'11lia, and alx:mt the .$(lJTle in I!Ot.elh. There are 6,00CJ adults in the pmtoral emt, and a MYn{lar nu.mbe · in

rnineral The trade of the norih is alJTWjf exclusively confi,n.ed to markets.

trade of the wulh is ir4 the main with' Sydney cmd oversro:s ma rkets.

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49

1071

. The railways of Tasmania are more expensive per n1ile to maintain than those of Western Australia, but with a sixty per cent. additional population "T estern Australia has to n1aintain 500 per cent. additional mileag.e. 1,000 of .the of Australia has

provide for the upkeep of miles of railway, against three . The costs per mile

are lower in Western Australia, but the cost per head of population Is 1nuch higher.

Annual upkeep · of railways (per head) (working expenses) .. Annual interest and other debt charges (per head) All other expenditure (per head)

Annual expenses per head

Tasmania.

£ s. d.

2 7 0

4 2 6

4 16 5

£11 5 11

Western Aust ralia.

£ s. d.

7 0 0

7 8 0

7 15 2

£22 3 2

The additional " other expenditure " in Western Australia arises from the spread of schools and other public services over vast areas.

The way in which expenditure is ·endeavoured to be met is as follows of Statistics, March, 1924) :-

Railway freights and fares per head of population .. From other sources per head of population Land sales, rents, Commonwealth grants

and subsidies per head of population State Taxation

Annual income per head

Annual Deficit per head of population

Total expenditure per head

Tasmania.

£ s. d.

2 11 10 2 0 2

2 0 0

3 6 7

9 18 7

1 7 4

£11 5 11

(Quarterly Summary

West ern Australia .

£ s. d.

9 0 0

6 8 4

2 14 9

2 16 6

£20 19 7

1 3 7

£22 3 2

- -----

Western Australia raises £7 8s. per head more than Tasmania by extra railway charges. Both States are in a bad position financially from causes operating long prior to the Navigation Act. Mr. L. F. Giblin, the Government Statistician of Tasmania, told the Commission that if the Navigation Act were amended to suit the Hobart complainants "it will not solve t he

difficulty of Tasmania's financial position, nor will it sensibly touch it."

PART 9. - FREIGHTS.

It is alleged by the Tariff Board that the Navigation Act has raised coastal freights out of all proportion to deep-sea freights, has put beavy freights on our own products, placed our producers at a disadvantage, nullified the Tariff and deprived our manufacturers of their full share of the local market. ·

There has been no increase in Australian coastal rates during the three years the Navigation Act has been in operation.

As to the staten1ent that Australian coastal rates are " out of all proportion " to deep -sea rates-1. (a.) " Out of all proportion " is meaningless unless compared with so1nething similar . A motor wagon on a good level road can carry more goods a longer

distance; with less wear and tear, and. at lower rates than it could on a rough , mountainous, or boggy track. The test is not a tape measure, but similar conditions. . . (b) The determining factors in sea freights apart from wages and combines are

whetYer a port is tidal, daylight or " anytime " port. What 'are t he p ort char ges and the number paid in a month How many ports have to be entered t o pick up full loadings, and how many before cargo can be discharged What are the ch ances of getting outward cargo t o replace discharged cargo ? What

are the facilities fo r loading and unloading I s t he work alongside a wharf with mechanical appliances, or in an open roadstead with

50

2. On the Australian coast there is a general rate between specified ports. SDme concessions exist, but so far as the general trading public are concern-ed rates, even when expressed in relation to feet, cases, or casks, work out per measured ton at the general rate. Taking Sydney as a central port, the freight rates within a radius of 628 miles (including Hobart, Melbourne, and Brisbane) are from 18s. to 20s. per ton. To Adelaide (1,069 miles) 22s. 6d. per ton. Adelaide to Brisbane (1,579 miles) 33s. 9d. per ton. These rates cover nine-tenths of Australia's interstate cargoes. Outside the above areas the rate from Sydney to Townsville and Fremantle is 40s. per ton, to Cairns 50s. per ton. - 3. (a) Deep-sea rates to Australia vary from 22s. 9d. to 147s. per ton.

(b) Deep-sea rates on Australian products for the United Kingdom markets rise from the wheat rate of 35s. per ton to £15 3s. 4d. per ton. (c) Eastern products are brought to Australia at varying rates down to 25s. per ton. (d) Rates on Australian products for Eastern markets are 50 to 200 per cent.

above rates on inward Eastern products. Refrigerated Australian products for Eastern markets are £14 to £18 13s. 4d. per ton. 4. (a) When the Tariff Board quoted oversea rates, it referred to lowest rates only. (b) The Tariff Board compared average Australian rates with, not the average, but

the lowest oversea rates. (c) The Tariff Board compared rates on Australian runs involving transhipment with runs that did not involve transhipment. (d) The Tariff Board compared Australian rates from open roadsteads, necessitating

loading by lighters, with rates on runs between ports in which such disabilities do not exist. ·

(e) The Tariff Board compared rates on Australian runs involving calls and delays a:t· intermediate ports with rates on straight runs from one port to another. (j) The· Tariff Board compared rates on Australian runs involving compliance with White Australian conditions with runs supplied with cheap black labour. (g) The Tariff Board compared rates for distances and ignored every other factor.

(a) JAVA.

The Tariff Board quoted sugar rates, Java to Melbourne (4,400 miles), at 25s. per ton, as against the sugar rates of Townsville to Melbourne (1,900 miles), 27s., and Mackay to Melbourne (1,700 miles), 39s. 6d. .

The ships bringing foreign sugar in at 25s. per ton do not take Australian products out at that rate. HigheP rates on exports pay for lower rates on imports. The average general rate from Brisbane to Java (3,400 miles) is 50s. per ton. The general cargo rate quoted in the shipping list of 14th May, 1924, is 75s. per ton. Th.e lowest rate is 35s. per ton. The Managing Director of the Royal Dutch Packet Steam Navigation Company told the Public Works Committee that 35s. per ton was a losing rate, but it was done to give Australian flour a chance against American flour (Darwin Wharf Facilities Inquiry, para. 217 of evidence). Those boats are manned by low-paid coloured labour; 35s. per ton is a losing rate. To give Javahese sugar a chance against Australian sugar, they quote 25s. per ton. It is this lOs. per ton below losing rate the Tariff Board quotes to prove that White Australian rates are· exorbitant.

On the 26th April, 1923, prior to the Tariff Board's repor.t, Mr. J. G. Thompson, Chairman of the Export Committee of the Associated Chambers of Commerce, presented to Mr. Austin Chapman, Minister for Customs, a schedule of rates imposed on Australian products seeking oversea markets. On that schedule was the following item :-

1914.

27s. 6d.

Fodder Rates to Java. 1923.

65s.

The Chairman of the Tariff Board in his capacity as Comptroller of Customs was present when the schedule was presented. With the schedule the Tariff Board was conversant when it drafted its report, yet it quoted a rate 30 per cent. below losing rate-50 per cent. below the Dutch Packet Company average rate-60 per cent. below fodder rates-actually 10 per cent.

below pre-War black labour rates, and presented this as a standard by which Australian shipping · rates ought to be measured. It will be noted that on Australian products to Java there is a 37s. 6d. per ton increase, from 27s. 6d. to 65s. (140 per cent.). This increase is more than the total freight (25s. per ton) upon the inward " dump " rate.

1073

51

Australian wheat to Singapore in 1914 was 15s. per ton. When Mr. Thompson reported to the Minister for Customs (April, 1923) it was 85s. per ton. To South Africa case goods are 80s., as compared with 25s. pre-War rate, and 40s. per ton England to India, but from Australia to India (similar distance) 80s. per ton- -double the rate. The Board selects a " dumping " rate, and presents it as an average rate.

(b) NEW GUINEA.

The memorandum presented by the Chairman of the Tariff Board to the Select . Committee referred to the freight rates from New Guinea to Sydney, and said-: - " Crushing freight charges hamper the trade of the Mandated Territories." The principal New Guinea export is copra.

The freight from Rabaul to Sydney is 50s. per ton as against 20s. pre-War. The 20s : pre-War rate was the German rate. The pre-War rate of Burns, Philp and Company from the r.apuan portion of New Guinea was 35s. per ton. Prior to the Tariff Board's Report, Mr. L. F. East, an officer of the Navigation Department, had been sent to New Guinea. On his return he presented his report (Appendix 3). From that report the Board extracted its Sydney-New Guinea .·rate schedule. Upon that schedule the Board based its denunciation of local shipping rates. .

What the Board omitted from Mr. East's report is here inserted. Through freights in 1922 from Mandated New Guinea and Papua to Europe, £11 per ton (par. 14). Pre-war through rates, £2 13s. 6d.-increase £8 6s. 6d . .The increase in the Mandated New Guinea to Sydney section is 30s., less than one-fifth

of the total increase of £8 6s. 6d. Over 80 per cent. of the increased charges are outside the scope of the Navigation Act.

Mandated Territories to Sydney Oversea charges .. Sydney transhipment charges

Total charges

l're-Via.r. (per ton).

£ s. d.

1 0 0

1 13 6

. . (Included in above)

2 13 6

.Present Ha.tes. (per ton).

£ s. d.

2 10 0

6 1 0

2 9 0

11 0 0

Mr. East stated in his report that if the planter sold his copra in Sydney then:-" Cost from port of shipment to buyers in Sydney, £5 16s. 9d. per ton. " .

Fifty shilli1igs . was freight, so an additional 133 per cent. (£3 6s. 9d.) was levied on the product after it left the ship. As copra is bought at the shipside, somebody raked off in one swoop more than the total freight charges from New Guinea. If the planter decided to send his copra to Europe then (par. 21) :-

Freight from New Guinea to Sydney Sydney Shore Charges to Europe

European Shore Charges ..

£ s. d.

2 10 0

2 9 0

4 0 0

4 7 0

Cost from port of shipment inN ew Guinea to buyers in Europe. . 13 6 0

The £11 previously mentioned is " through" rate. The £13 6s. includes charges right up to commission on sale to buyers. Eighty per cent. of the above charges are outside the scope of the Navigation Act ; 60 per cent. are oversea charges. These oversea charges are 300 per cent. above pre-War rates.

The Sydney transhipment charges , were £2 9s . per ton. The Managing Director of the · Dutch Royal Packet Company told the Public \\T orks Committee that waterside labour in Sydney cost his Company an average of 5s. per ton (Darwin Wharf Facilities Inquiry, para. 218 of evidence) . Mr. East (para. · 33) stated that the Sydney port charges and handling costs were 20s. per ton. Somebody put on another 29s. per ton and made transhipment charges £2 9s. per ton. .

The New Guinea problem and the relationship with Burns, Philp and Company and the application of the Navigation Act thereto will be dealt with elsewhere. It is enough to say here that if the rates on the ew Guinea to Sydney service be " crushing," they are tender mercy compared with the increased charges on the oversea section.

To the crushing charges imposed on ew Guinea products after they reached Sydney and they left Sydney for Europe, the Tariff Board made no reference . It appropriated from Mr.

East's report the portion dealing with Australian shipping charges, and suppressed the balance. F.l5346.-6

52

(c)

Cement.-The Tariff Board cited Portland cement carried from the United K1ngdorri to Australia for 22s. 9d. per ton against 35s. per ton from Melbourne to Fremantle. Oversea general cargo rate from the. United I(irigdom is 100s. per Boiler cement, Keen's cement, and cement for fireproof floonngs pay 75s. plus 10 cent. pnmage-82s. per ton. Oxides pay 50s. plus 10 per cent. per ton. When It comes to Portland cement,

the product is carried for 75 per cent. below geri'eral cargo rates and 72 per cent. below rates charged on other cements. Oversea cement cannot· undercut Australian cement at the point of ·production. When local cement has to reach a port vis:lted by oversea vessels the protective advantage £1 per ton is lost. Queensland furnishes an illustration. Oversea cement cannot compete In Southern ·Queensland, but oversea vessels can place their" dump" rate cement in North Queensland ports

cheaper than Southern Queensland can land its· cement. It costs the South Queensland cement works in railage, cartage, and wharfage 20s. per ton to carry cernent from the works to the wharf. The Tariff advantage is lost before Australian ceinent can get to sea. If oversea .Portland cen1ent had to pay the same freight from overseas as other oversea cements or anything near general cargo rates, it could not get into any port in Australia.

Years before the Navigation Act, and before the War, when maritime wages were 50 per cent. below their present level, there were complaints of high coastal freights. Tbe question whether the chicken or the egg came first was not more threadbare than whether Portland cement sailed in on oversea cut rates or on high local coastal rates.

· In January, 1914, Mr. Northcote, . then Chairman of the Federated Shipowners' Association, deplored high wages because they meant high running costs; high ru:n_niri.g costs necessitated high freights, and high freights crippled diminished trade, and ruined the shipowners. Mr. Northcote went on to say:--

" Take such a commodity as cement. I-Iigh freigl:].ts limit the distribution of Australian cement along the Australian coastline, and they enable cement to be delivered at each of the ports where. local ships are in competition with oversea steamers." (The Trust Movement in Australia, by H. L. Wilkinson.) The Tariff Board discovered this ancient history and presented it as a recent event produced by the then two years' old Navigation Act.

The increases in freight rates imposed by the oversea shipping companies upon the majority of Australian oversea exports are more per ton than the 22s. 9d: "dump" rate at which the same companies bring in oversea cement. ·

Iron and Steel.-The Tariff Board quoted the freight on steel rails froiri Great Britajn to Frerilantle (11,000 miles) at 40s. per ton, in some cases 30s. per ton, against 42s. 6d: per ton from Newcastle to Fremantle (2,200 miles), but the Deputy Chairman of the Steamship Owners' Federation stated jn evidence : --·" The C01nmission should know that the Broken_ Ifill Proprietary, who are the -shippers of the rails, are quoted 30s. by the companjes." Mr. Oakley was asked if he had any documentary evidence that the Broken }Jill Proprietary paid 42s. 6d. per. ton on steel rails from Newcast.Ieto Western Australia. The following is extracted fron1 the :-

Answer.-Yes; particulars on actual invoices . ,

Question.-Where are Answer.- Do you wish me to produce I will produce them.

Mr. Oakley was not able to produce them. He referred the officer of the Commission to the Broken Hill Proprietary. The officer waited upon the Broken I-Iill Proprietary. He was allowed to inspect the invoices. They had no reference to steel rails. explanation is in the fact the Broken Hill Proprietary carried its own rails in its own vessels. · The _ 30s. quote was· an ··effort by the Shipowners' Federation to obtain a share of the business. It was not successfuJ, therefore recent invoices for steel rails at 42s. 6d. or any other rate' cannot exist.

• , The Oversea Shipping companies have 30 different rates on products of iron and steeL There are half a dozen rates on ·rails according to length and size, varying from 30s. to 75s. per ton. There are 26 iron and steel products upon which the freight rates to Australia ·.are from 75s. to 145s. per ton, 35 from 50s. to 74s. per ton, 10 at 40s., 4 at 30s. The Board in every case quoted the lowest rate.

Australian iron and steel producers made no protest agains.t the Navigation Act,. and no affirmation that it was injuring thejr interests. Mr. S. l\'IcKay, of the Sunshine Harvester Co., told the Commission that bright steel shafting is manufactured in Victoria, and bright steel shafting is carried from Europe to Victoria for 40s. per ton. Forty shillings per ton is not the average j1npott rate either upon steel products or general cargo; it is essentially a "cut rate." · The lowest pre-war ra

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rates, 30s., 25s., 22s. 9d. per ton for double the distance as "out of all proportion JJ-as proof that the Connnonwealth Navigatwn Act IS an Iruqmty working with " disastrous effect. JJ General.--lVIaximum freights are determined by consideration of what specified products can carry. Minin1um freights over a long period are determined by rates of wages, port and harbour charges, light dues, price of coal, &c. But between these two extremes, freights are varied by concessional rates for the furtherance of some econmnic objective. · Deep-sea rates to Australia vary within the same class of exports. Variation depends on many factors. One is what section within a class is in Australia, and to what extent the Combine is

financially interwoven in the products of that section. On such section the rate will be 50 to 75 per cent. below the· class rate. Another factor is the extent to which United Kingdom produc­ tions have-to weet the competition of other countries. News print in competition with Canadian and Swedish pays 55s. per ton ; all other papers, including wall paper, lOOs. per ton. _

. The deep-sea shipping companies partly reimburse themselves for unprofitable "dumping JJ rates by rates above the average upon other imports into Australia. The other of the reimbursement comes from higher charges on Australian products l;>ound for oversea markets. The rates charged in excess of pre-war rates on the n1ajority of Australian oversea exports are greater than the increases on the majority of imports. The increased rates over pre-war rates levied by the Oversea companies upon the majority of Australian exports are more per ton than the ·total rate charged to bring _ into the oversea products mentioned by the Tariff Board.

(d) OUTWARD FREIGHT RATES TO 1JNITE_D KINGDOM, ETC. The following are the freights to the United Kingdom on some of Australia's chief exports:- .

Leather-£7 13s. per ton. -Same rate charged to South Africa-half the ·European distance. - . -

Skins (other than -sheep skins)-lid. per lb.; £15 3s. 4d. per ton.-For United States, Ports-kd. per lb. additional (23s. 4d. per ton). Wool (greasy)-l!d. per lb._; £1113s. 4d. per ton. Wool (if scoured)-l!d. per lb.; £14 per ton. Sheep per lb. ; £8 3s. per ton.

Hides---id. per lb. ; £5 lls. per tori. Fruit i:q. reduced from 4s. 6d. to 4s. per case· as compared with 2s. 6d.

p}e-war. 4s. is 60 per cent. on pre-war, and nearly 200 per cent. on·rate·s charged for the carriage of fruit from South Africa to Europe. _ -_ -

Fruit in pulp-Sir Hen:ry Jones stated:-" 70s. per ton as against 30s. pre-war.JJ This is a 130 per cent. increase on the pre-war rate. _ -

Jam in tins and canned fruits.-70s. per as against 20s. to 30s .. pre-war rate. - The higher rate of 30s. was mail boat charges. ;_ .

Zinc dross.--:-£7 per ton. - ., ! •

Whale oil.-£4 lOs. per ton (Western Australia to United Kingdom). Binder twine.-£6 2s. 6d. per .

Timher.-12s. 6d. per 100 super. ·-feet, lls. to South Afriqa ; 100 per cent. higher than. upon oversea timber brought into Australia. : - -

Meat.-ld. per lb.; £9 6s. 8d. per ton-75 per cent. on pre-war rate. To Java and Singapore (one-third European distance) rates vary from £14 to £18 13s. 4d. per ton. From Townsville to -Manila (2,900 miles), £14' per ton . . per lb.; £10 lOs. per ton. For Japan, £15 15s. -

Geriera1 Cargo.-70s. per ton to Europe, 85s. to Singapore; 80f?. to South Africa, .80s. per ton on Australian products for India ; 40s. per ton on Indian products for • Australia. ·

Australian. · Agricultural Machinery-for Argentine (including £8 per ton, .pre-war, £3; 166 per cent. increase. The 33s. per ton mentioned on the . prevwus page was for direct shipment, not now obtainable. Freight rates on Australian products for Eastern· markets are 100 to 500 per cent . . above alt_ hough the majority of ships engaged in the traffic are manned by cheap coloured

labour. · - ·

· -_ . . ·:Fteigh(rates to .Europe on Australian products: apart from wheat, 60 to 250 per cent. above pre-war rates.

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Freight rates on the Australian coast under Arbitration awards and the Navigation Act are 30 per cent. above pre-war rates. Mr .. B. L. Murray, Managing Director of Western Australian Farmers' Limited, told the Commission (Question 874) :- " Homeward freight for wheat is the only thing I know down to pre.-war rates." Another witness stated that " Freights from home have been reduced much inore than from this ~nd-except on wheat.''

_ (e) RE STATEMENT THAT HIGH FREIGHT RATES NULLIFY THE TARIFF.

It is equally true that low freight rates nullify the Tariff. . I. High Rates nullify the Tariff.-When by rail, or road, or ship, it costs the producer as much to send his product from A to B as it does to bring the competitive product from overseas to B the Tariff is nullified. This fact a pp lies to every class of transport . by land or sea to all coasts and countries. This fact operates in a country where the Navigation Ac~ does not exist and operated in Australia prior to the Act. The Act cannot be held responsible for

world-wide and pre-existing facts. Finally, Australian coastal {reight mtes have not risen since the operation of the Act. 2. Low Freight Rates nullify the Tariff.--When the Oversea Shipping companies bring into Australia a number of oversea products at rates so far below the average rate as to constitute to the importer a refund of the amount paid in duty the Tariff is nullified. This " deprives our manufacturers of the-full share of the market to which they are entitled." Australian Arbitration and Navigation laws are not responsible for this nullification. s

3. High outward oversea rates on Australian products- " out of all proportion" to low inward rates-" place heavy freights on our ovvn products," "place our producers at a disadvantage" in oversea markets and nullify any Tariff preference that may be given by oversea countries. For this nullification ·the Australian Arbitration and Navigation laws cannot be held responsible.

(!) COASTAL RATES.-SOUTH AMERICA . .

General cargo rates along the Pacific· coast of South America are 50 to 100 per cent. higher than along the Australian coast for similar distances, for example-Valparaiso to Callao (1,302 miles), 45s. Adelaide to Fremantle (1,378 miles), 30s. per ton.

Between Valparaiso and Callao are the ports of Antifagasta and Iquique. From Valparaiso or Callao to either of those intermediate ports, the rates per ton are 100 per cent. above Australian rates for similar distances. .

The Atlantic side of South America furnishes the following similar illustration:-Buenos Ayres to Bahia Blanca (510 miles), 32s. per ton. ·

Melbourne to Sydney (564 miles), 18s. per ton. The inter,.republican ports of Buenos Ayres and Rio Janeiro are on the route of the great ocean liners to Genoa, Hamburg, London, and New York. They are open to the competition (if any exists) of the maritime world. Comparative rates are~

Buenos Ayres to Rio Janeiro (1,135 miles), 25s. per ton. Sydney to Adelaide (1,076 miles), 22s. 6d. per ton.

(g) COASTAL RATES.-SOUTH AFRlCA.

Coastal rates on the South African coast furnish further comparisons :-· General cargo~ ,

Capetown to Durban (817 miles), 30s. Adelaide to Sydney (1,076 miles), 22s. 6d. Timber rates- ·

Capetown to Durban (817 miles), 4s. 2d. per 100 super. feet, 5s. 9d. _ if over 30 lineal feet. Bunbury (W.A.) to Adelaide (1,250 miles), 5s. 10d. per 100 super.'feet. With the exception of maize (the principal food of the black races) all classes of goods transported along the South African coast are on a higher scale than Australian.

So far as South African ports are concerned, and so far as the inter-republican ports . of South America are concerned, shippers are legally free to secure the cheapest charters, unde:r any flag, any colour, any: wages, any conditions. -

Arbitration and Navigation laws do not compel the producers of those teITitories to pay freight rates "out of all proportion " to the territories where those laws do operate and " .out of alt proportion" to· the cement and Java sugar rates quoted by the Tariff Board. There are operating factors in the world not less potent than legislation.

1077

(h) UNITED STATEs.-NEw YoRK TO GALVESTON AND NEw ORLEANS .

Freight rates between Atlantic ports of the United States are based on Oar Load (O.L.) consj gnments, with a 40 per cent. supercharge on consignments less than a Oar Load. Oar Loads mean railway truck loads varying according to ports, and cargoes from 10 to 18 tons. The O.L. rates vary from 23s. 6d. to 77s. 6d. per ton. Rates on consignments less than O.L. vary from 36s. to 106s. Where the super rate is given in the documents supplied to the Oo1nmission, it . is in the following table :-

(h) UNITED STATEs- NEw YoRK TO-NEw ORLEANS. GALVESTON.

s. d. s. d. s. d. s. cl .

Cheese, C.L . . . 56 0 per ton . Less than C.L. 106 0

Canned Goods, C.L .. . 36 3 48 6 C.L. 44 0 per ton. Less than C.L. 59 3

Soap, C.L. . . 32 3 45 3

"

36 0

" "

49 6

Hardware, C.L. 58 9 59 3

Woodware , C.L. .. 48 6

"

67 3 per ton. L,ess than C.L. 76 6

Glassware , C.L. .. 40 6 44 0 , ;

76 6

Stoneware, C.L . .. 50 0 . . . . 50 0

Sugar and Syrup, C.L . . . 27 6 per ton . LLess than C.L. 40 6

Structural Steel, C.L. . . 29 9 . .

"

33 9

Pig Lead, C.L. . . 23 3 per ton . Less than C.L. 40 6

Hides in bales, C .L. .. 33 8 50 6

Flour, C.L . .. . . 27 6

" 'J 36 0

Onions and Potatoes, C.L . . . 48 6 49 6

Agricultural Implements, C.L . .

'' 44 0 per ton. Less than C.L. 57 0 Rice, C.L. .. . . " 76 6 Paper for Wrapping, C.L. . . 25 9 per ton . Less than C.L . 59 3 " 41 6 Paper Articles " 57 0 " 37 9 per ton. Less than C.L. 57 0 Printed Matter .. . . 88 9 Packing H ouse Products, C.L . 40 6 Wool, C.L. . . 77 6 " 77 6 per ton . Less than C.L. 106 0 Bags, C.L .. . .. 32 9 " 36 0 " 59 3 Average Rate--Car Load, 40s. Less than Car Load, 57s. Car Load, 49s. Less than Car Load, 68s. In addition to foregoing rates- Lumber between New York and Galveston, for not less than Oar Load, of 30,000 lb ., is 51! cents percental, i. e., 48s. per ton, or lOs. per 100 super feet. The following is the comparison with comparable distances on the Australian coast:-United States.-Atlantic Coast Rates . New York to New Orleans, 1,700 miles-Oar Load rates average , , , Less than Oar Load average New ·York to Galveston, 1,893 miles-Oar Load rates average , , , Less t han Oar Load average Australian Coast Rates. Fremantle t o Melbourne, 1,858 miles-General rate , Sydney, 2,422 mile$-General rate .. The follo wing gives-( a) Sea-going wages per month on the Australian coast ; 40s. per ton 57s. , 49s. 68s. ,, " 35s. per ton 40s. ,, (b) Average steam-boat wages in the United States coastal trade, as recorded by the United States Commissioner of Navigation; and (c ) Wages paid on the steamers of the United States Shipping Board. (a) (b) (c) Australia. United United A,verage. Shipping Board. £ s. d. £ s. d. £ S, d. Ordinary Seaman 12 5 0 9 5 0 9 15 0 Able Seaman .. 16 0 0 10 5 0 12 17 0 Boatswain 17 0 0 13 7 0 15 8 0 Fireman 18 0 0 11 6 0 13 17 0 Carpenter 19 9 5 14 8 0 16 8 0

(i) PACIFIC SLOPE.-UNITED STATES.

From San Francisco to Portland (Oregon) is 640 miles. The Sydney-Hobart run is 628 miles. On the Pacific side of the United States, as on the Atlantic side, there is no general cargo rate. The items supplied were few. Butter rates were given at 50s. per ton. If supplied in not less than Car Load consignments it was carried for 46s. 3d: per ton. A ton; of butter is carried from Sydney to Hobart for 24s. per ton- one half the Pacific slope rate. T1mber Jrom .Portla.nd to San Francisco is 5s. 7td. per 100 super. feet, of 20 lineal feet, equal to £1 7s. per ton. T1mber from Hobiut to Sydney (628 miles) is 5s. 3d. per 100 super. of 20 lineal feet. Grain is 14s. per ton; flour 17 s. ; meat (car load) 4 7 s., less than car load, 60s.

On the Pacific slopethe deck hands load and unload cargoes. The ship-owners are saved the cost of waterside labour. For this additional work the seamen, the section of the crew engaged in shifting cargo, a:re p'aid a special rate, bringing their monthly wages to £16 98. per rnan. On the Pacific, as on the Atlantic seaboard of the United States, coastal costs are lower and frei ght.s higher than in Australia.

(j) BLACK-MANNED AND \iVHITE-1\fANNED VESSELS. White-marmed ships under Australia's Navigation Act carry . cargo from Fremantle to Sydney, 2,400 miles, for 40s. per ton. The black-manned boats charge 60s. from Fremantle to Derby (1,617 miles) and 70s. from Brisbane to Darwin (2,000 miles).

White-manned ships under Australia's Navigation Act carry aargo 1;350 miles from Fremantle to Adelaide at 30s. per ton. Black-manned boats on the Western Australian coast charge 50s. for a 200 miles shorter journey (Fremantle· to Hedland): The "black " boats wanted a 25 per cent. increase to make it 56s. per ton. . They wanted '£8 for a 500 miles deck passage .. They had to cut the £8 down by one-half and stop where they were on cargo. The State boats refused to increase rates.

The following are comparisons between passenger fares on "black '.' and " white " manned ships:- . . . . : . · . .

First-class passage, ;Fremantle to Carnarvon-Black-manned, 576 miles, £5 lOs. , , Sydney to Hobart-White-manned, 628 miles, £4 16s.

, , Fremantle to Port Hedland-Black-manned, 1,139 miles, £11. , , Fremantle to Adelaide,-White-manned, 1,350 miles, £10. It is not to be understood that vessels on the North-West coast of Australia (even when with cheap black labour) could profitably carry cargo at East coast rates. The conditions

are dissimilar. The tidal character of the North-,Vest ports, loading facilities, scarcity of cargoes, cost of

(k) Sou'rH AFRICA AND NEw l ZEALAND.

It was stated by the Tariff Board that maize from South Africa to Sydney was carried for the rate charged from Maryborough to Sydney. The Board quoted

22s. 6d. per ton as the rate from South Africa ; , hat was one-fourth the rate on Australian products to Sotith Africa.' · At the present time (June, 1924) the general cargo rate to South Africa is 70s. per is small Its have to be tran.shipJ?ed, entailing double

handlmg charges. The Tan:ff Board d1d not mentwn these factors. ' · · , -·

The Director of the Queensland Producers' Association told the Commission that the maize rate from Cairns (728 miles beyond Maryborough) to Sydney was 11id. per.bushel, and 1s. O!d. to Melbourne, compared with 1s. 2d. per bushel from South Africa to Sydney or Melbourne. The importation or exportation of maize depends solely on the success or fajlure of the Australian crop. If there is a local shortage) prices rise, and South African maize comes m. If there is a. local surplus, it;· finds a market in· the Pacific Islands or New Zealand.

* * * * * * * *

It was stated that it costs more to ship butter .from Queensland to -.than New Zealand to Melbourne. The rates are :- . . . . . ..

·-

New Zealand -to Sydney, 1,230 miles-37s. 6d. per ton. Brisbane to Melbourne, 1,033 miles-27s. per ton. . . . ' . . . ...

• Since the above went to press (14th July, 1924) the "black " boats on the coast of Western Australia have iiicreased fares by 15 per cent., awl increased cargo rates by 7t per cent.

from

1079

The Brisbane-Melbourne. run is the cheaper. · The Board quotes :-Cairns· ··to Sydney, 1,400 miles-50s. per ton. The New Zealand- Sydney run is direct. The CaiTns- Sydney run is not merely longer in distance. It is longer in time and costs, owing to intervening ports. The difference in rate per lb. is fractional. The Brisbane-Sydney rate of 20s. does not keep New Zealand butter (37 s. 6d. freight rate) off the Sydney market.

(l) F:REIGHTS- SUMMARY.

There was a 30 per cent. increase in Australian coastal rates between the outbreak of war (August, 1914) and the advent of the Navigation Act (1st July, 1921). Coastal rates have not risen since the Act, therefore the Act has not placed heavy freights on our products.

The increased freight rates imposed by the Oversea Companies upon the majority of Australian products for Europe, Asia, Africa, and America are far in excess of the above-mentioned 30 per cent. Therefore coastal rates are not more "out of proportion" to deep-sea rates than in 1914-they are less.

The Navigation Act has not "placed our producers at a disadvantage." The increase in oversea rates beyond pre-War on the majority of Australian exports places our producers at a disadvantage in oversea markets, and nullifies the value of any preference given by oversea governments. · ·

The Navigation Act has not" deprived our manufacturers of the full share of the market" and nullified the Tariff. That has been accomplished by " dump " rates.on certain inward cargoes. The abolition of the Act would not provide a remedy. Australian coastal rates are not in excess of rates charged between ports of territories geographical circumstances are in any way akin to our own. Australian coastal ra:tes are

below the rates on the coasts of the United States, South America, and South Africa, although ships on such coasts have the.advantage of lower nmning costs so far as wages are concerned. That mere distance is not the sole factor in the comparison of freight rates is seen from th e following :-

Adelaide to Fremantle, 1,353 miles-30s. per ton. Sydney to Townsville, 1,248 miles-40s. per ton.

The reason why lOs. more per ton is charged for the shorter journey is because there are other factors ,than distance. · The time factqr is as important as that of distance. The shorter distance, Sydney to · Townsville, occupies 50 to 100 per cent. more time than the Adelaide­ Fremantle run. There are two services to Townsville. One occupies eight days, and the other six· days. The longer distance (Adelaide to Fremantle) occupies only four days. The Sydney­ Townsville run is delayed by intervening ports. One (Port Mackay) is an open roadstead. Loading and unloading is done by lighters. This work is affected by ·weather conditions. Handling

charges are heavier in Northern Queensland ports than in the South. The Tariff Board ignored every other factor outside of mileage. .

Coastal rates are everywhere on a higher scale than on the deep-sea routes. In coastal traffic there are, within a given mileage, more ports to be entered, therefore multiplied port and handling charges. Nowhere in the world are sea rates determined by the mere measuring of distances. c

Cheap labour for the shipowners is no guarantee of cheap service for the public.

PART 10.-THE REMEDY PROPOSED BY THE TARIFF BOARD. To counteract the alleged" disastrous effects of the Navigation Act," the Chairman of the Tariff Board proposed to grant a subsidy to all ship-owners, the subsidy to-( a) Cover interest on cost of alterations forced by the Navigation Act; and

(b) Cover extra wages brought about by the Navigation Act.

The alleged benefits of the proposed subsidy were-1. To be of great advantage to secondary and primary producers ; and 2. To reduce uneillployment greatly.

lVIr. Larkin (Manager of the Comrnom.vealth Shipping Line) told the Navigation Act Select Co mmittee (Question 286) that if the Act were abolished and British and Japanese vessels ran on the coast the difference in freight would probably be 1s. per ton; it might be 2s. , but not more. Oversea ships on the coast would have to pay the same for harbour and light dues, wharfage, stores, and coal. A representative of the ship -owners told the Commission (Question 5926)­ " I do not say we would be able to carry cargo cheaper if the Act had not been passed."

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58

The .Director of Navigation supplied the following comparison :-S.S . .!Eon (interstate vessel). S.S. Elswick Park (oversea vessel). Carrying capacity (cargo and bunkers), Carrying capacity (cargo and bunkers) 6,255 tons. 7,300 tons.

Gross tonnage, 3,768. Gross tonnage, 4,188.

Net tonnage, 2,007. Net tonnage, 2,57.8. .

Wages (less captain), £687 16s. Wages (less captain), £343 lOs.

If Australian seamen's wages were reduced by one half, or if the ship-owners were subsidized t o the equivalent of one half the wages, it would no-:; affect cargo rates by more than Is. 6d. per ton.

PART !I.- QUEENSLAND FRUIT.

The fruit industry of Queensland has found an improved of transport .. Louvre railway waggons go into the fruit districts- the fruit is loaded practically from the trees Into t he trucks-one change at the New South Wales border, and thence direct into the Sydney market. Ships are cheaper, but rails are quicker and more punctual, and the fruit arrives in a better.

condition and secures a higher price. It arrives oftener, in smaller quantities, and secures a better regulated market. The fruit industry is not injured either as a result of .sea freight rates or of the Navigation Act.

PART 12.-EYRE'S PENINS-ULA-:-SOUTH AlJSTRALIA.

This is a service within a State. It is outside Federal jurisdiction, but it illustrates how railway expansion and changes in harbour facilities advance one form of sea transport and injure another. Before the War all oversea products fron1 Eyre's Peninsula were transhipped at Port Adelaide. Since 1914, Thevenard has been opened up as a deep-sea port. Last ·year 650,000 bags of wheat went directly overseas. Products from Port Lincoln are also mainly for overseas (Question 5708). A railway system into deep-sea peninsula ports has been developed (Question 6172). By these methods freights to, and transhipn1ent costs at Port Adelaide have been saved to the Peninsula producers.

This economic transition has changed the character of the Adelaide to Peninsula traffic. Outward freight from the Peninsula has disappeared into deep-sea ships. The Adelaide to Peninsula steamers obtain very little back It has b'ecome a one-way traffic. The " one-way"

cargo has to pay for " other-way " empties.

The steamers are carrying to the Peninsula 51,000 more tons per year than pre-War, but are short of 57,000 tons of back loading. This lop-sided traffic cannot be conducted as economically as when it was an even in and out cargo. There exists a more frequent service to cope with actually less cargo. The pre-War rate was lOs .' per ton. The average Australian rise in rates is 30 per cent.

(3s. per ton). The Adelaide-Peninsula run is 16s. One of the principal witnesses admitted 14s. would be a fair rate. Ship-owners say they cannot run under 16s. Apart from the sHip-owners' plea, the fact remains that so far as Peninsula oversea products are concerned, producers have no longer to pay freight to Port Adelaide with transhipment charges added. This means a saving of at least 20s. per ton. In any case, the traffic is under State laws, and the Commonwealth Navigation Act does not and cannot affect it.

The Patrick Compa-ny went into this trade and cut rates down by 10 per cent., and the local company cut its rates similarly. Apparently the Patrick Company could not afford to go 1 1 lower, or even to carry on at that rate ; it preferred to take its steamer off the trade. ·

PART 13.- CARGO ACCOMMODATION.

· It is alleged that the Coastal Shipping Combine, taking advantage of its rnonopoly, restricts the supply of shipping, fails to lift all the· cargo offering, and as a result the trading community suffers from inability to reach interstate markets or from inability to fulfil contracts.

There were no complaints from New South \Vales, Victoria or South Australia. The Western Australian case is referred to under " Timber. " . '

Mr. L. W. Davies, Manager for F. J. Walker Ltd. (Meat Exporters), told the Commission that the space in the interstate boats for the conveyance of frozen meat from Queensland to States is n_ot sufficient for the requirements of the trade. The ship-owners replied

that It was only dunng 1923 when there was an abnormal demand for chilled meat in Victoria

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and New South · Wales, that they were unable to cope with the requinnnents of the industry. In addition to the interstate boats there are the" Bay " steamers of the Co1n1nonwealth Shipping Board. The Chairman of the Board reported as follows :-. u The ' Bay ' steamers of this Line cater regularly for the carriage of frozen

cargo coastwise when required. On each trip leaving Brisbane they have unlimited space available, and could carry many tin1es 1nore than the quantities offered for shipment." If the lVlinister is satisfied that the interstate vessels, in conjunction with·the C( Bay" Liners, are not sufficient for the coastal trade, or that they are so conducted as to injure in any way the coastal expansion of the frozen-meat trade or to prevent in any way the making of forward

contracts necessary to expansion, he may protect the public interest by granting pern1its to oversea vessels willing to supply " adequate " service, and he may base his opinion of "public interest" on any grounds he thinks fit. There is no evidence of a permit for coastal meat trans­ port by oversea ·vessels having been refused. All . the evidence is to the contrary. Every application was granted with promptitude. The of the 1neat industry was asked if it were not possible to get forward permits and he answered:- " It depends how far ahead. Certainly not a month or six weeks ahead" (Question 8308) . . He had no evidence that he co.uld not. He had not been refused. He was. asked:-" I-Iave you ever failed to get a pern1it 'vhen sought?" and he answered-" No." All evidence is to the same effect. No pern1it for either immediate or forward delivery has been refused. _

Taking into consideration the statement of the Chairrnan of the C01nmonwealth Shipping Board, it appears that, for some reason unknown, F. J. Walker Limited did not wish to supply freights for the Commonwealth Liners, but were an..xious to be able to ship in the vesselR of oversea companies having proprietary interests in Queensland l\Ieat \Vorks ..

Some timber merchants in South Tasmania have occasionally found it difficult to get space, while the electrolytic zinc works at Risdon secured the space required. \Vhether this be preference or son1ething having its origin in the desire of the Tin1ber Con1bine to restrict Tasn1anian tilnber output is uncertain; it has certainly no with the Navigation Act. It could happen just as easily if the Act did not exist.

Insufficient space for tin1ber from Tasn1ania is unusual. The c01nplaint in Hobart can1e from one timber merchant only, who admitted that he was a con1paratively sn1all shipper. On the 19th May, 1924, a statement was made in the Hobart JJ!Iercury by a correspondent that large quantities of timber were stacked at Hobart waiting for ships. The Mercury made inquiries: interviewed the timber merchants, and came to the conclusion that "in the opinion of those

most vitally concerned, the ntunber of cargo vessels trading between Hobart and the n1ainland ports, with the possible exception of S"outh Australian ports, was sufficient for all requirements. " One timber n1erchant stated :-" We are very large exporters of tin1ber . perfectly satisfied ·with the services provided to 1VIelbourne and Sydney, and think the Adelaide service also sufficient for requirements." Another timber merchant indorsed this view. He further stated that there was a shortage a few months previously when the wool sales were in progress; but the position had since righted itself. If tip.1ber 'vas required on the n1ainlancl, vessels -would soon be found to take· it away.

The charge .of insufficient space finalizes into no case in three States, one in \Vest ern Australia, one in Queensland and two plaints from one port in Tasn1ania. There is in Australia ample cargo-carriers for all the cargoes to be lifted. On 99 per cent. of the trips the ships can lift all the cargo offering. The 1 per cent., when cargo is left behind, is not a higher percentage than in other forn1s of transport, and not higher than in the sea services of countries where a Navigation Act such as ours does not exist.

Mr. Larkin told the press that there was such den1and for space .in Con1monwealth stean1ers that they were con1ing out loaded to the hatches. It is evident that what could not get under the hatches stayed behind. That is so in every service with or without a Navigation Act. A stea1ner is not a concertina; it cannot be stretched out or shortened like a freight train.

Efficiency demands economy in space. Space economy in ships enlarges the risk of inability to meet rush demands. Interstate ships on a majority of trips are running with surplus space, and complaints are few.

PART 14.- PASSENGER AOCOMlVIODATION. The Navigation Department declares that it is inundated with complaints of insufficient passenger accommodation arising fron1 the rigidity of the Act and the cruel section prohibiting black-manned and other oversea vessels participating in Australian coastal passenger traffic.

From the three States of New South VVales, Victoria and South Australia there were no complaints. Passenger traffic and accommodation between Tasmania and the maihland ha been dealt with under " Tasmania." ·

F.l5346.-7

60

· · ·of Queensland it was asserted by the Director of Many people. have

tried to book berths from Brisbane to Sydney and have been told the boats are full." During the t hree years' operation of the Navigation Act the "many people " in Brisbane who could not secure berths to Sydney on interstate vessels totalled 41. For their accommodation permits were issued as under:- -

Date.

15th August, 1922 16th August, 1922 9th Septe1nber, 1922 I2th August, 1923

Ship .

Euripides 1vlarella Ormuz Montoro

Interstate Passengers . .

5

4

24 8

Only on one occasion since September, 1922, has an interstat e vessel failed to provide an1ple accom1nodation between Brisbane and Sydney. On the coast from Brisbane to Cairns, three passenger stean1ers during the year made 70 trips. On two trips north and two trips south the first class accommodation was filled to capacity. The maximum passengers (all classes) carried on one trip was 377. .The n1inimum

(all classes) carried on one trip was 29. On this latter occasion 93 per cent. of passenger accom1nodation was vacant. The total carrying capacity on ·these three ships was 17,800, and. the passengers carried numbered 10,300- the average vacant berths amounted to 40 per cent: The extension of railway services along the Queensland coast has already affected seagoing traffic . When the railway r eaches Cairns it will be still more affected , and seagoing passenger service wilt probably be reduced to the proportio ns of reduced custom.

* * * · * * * * * *

In Western Australia there is a transition in the character of interstate passenger traffic brought about by the construction of the East-West railway, cmnpleted in 1917. No sooner was the Transcontinental Railway finished than 50 per cent. of the people travelling east and west went by rail. In 1920, the year before the Navigation Act came into force, the nun1ber travelling by rail was 23,000, by interstate stea1ners 15,000, by oversea boats fewer than 3,000. The percentage travelling by oversea boats, even when there .- were no restrictions, was relatively small out of the totaJ travelling. For the vast majority of Australians the Transcontinental rail and the interstate stean1ers were adequate and good enough seryice.

The complainants for whon1 an Australian land and sea service are not good enough are few in number. To accon1modate these few, an alteration of the law is asked for. National laws cannot be subordinated to the convenience of a few, otherwise national law cannot exist.

In 1923, the Transcontinental Railway carried 33,000, and the interstate vessels 18,000. The number carried now by interstate vessels is one-half of the number carried before the construction of the railway. All railways entering a seaport have a similar effect upon sea-borne traffic. There is no complaint from Western Australia that passenger accommodation is insufficient. There was a complaint fron1 one port.(Albany) that the service was not sufficiently frequent. One of the witnesses appointed to represent Albany brushed this passen,ger question aside as " a minor 1na tter."

* * * * * * * * * * I In 1920, the oversea boats carried 19,550 interstate passengers. Of that number 16,000 · were carried between Adelaide, Melbourne, Sydney and Brisbane. It is alleged that the inability to travel along the coast in oversea vessels has stopped thousands of people from travelling. Interstate passenger traffic has increased by scores of thousands. The interstate

steamers in 1923 carried 125,000-29,000 more than in 1920, with ample berth capacity for other thousands. ·

For t hose holiday and "1ush " .periods when all means of transport are crowded, the Act provides that permits may be issued for oversea vessels to carry interstate passengers, if the interstate vessels are inadequate. The Director of Navigation stated that the Australian Steamship Owners' Federation has undertaken to advise the local Deputy Director of Navigation whenever the on a local ship is fully booked, and the Federation has been advised by the

Minister that if the interstate vessels shut out passengers in .the class in which they desire to travel, permits "'vill be issued to oversea ships to carry such passengers. (Question 13,499.)

(a) THE ADELAIDE-PORT LINCOLN SERVICE. This is a service within a State. It does not come within Federal jurisdiction . . Therefore it. could not be quotea by the Tariff Board, Customs or Navigation officials as a . c11se agai:qst the Act. It was, however, a subject mentioned in Parliament, placed before· ·the CQmm.issiQP.. . Adelaide, and, as it illustrates an essential point, is given a place in this Report. · c: :r ,-

61

There are two passenger steamers on the Adelaide-Port Lincoln service, thB and Pa1·inga, with a berth capacity of 120 each . On the 23 rd December, 1922, ?he Pctnnga left Adelaide for Port Lincoln ,v}th fifteen excess passengers, but the vVandctna, 'vhwh preceded and followed her, had 33 per cent. of her accon1modation mnpty.

In 1\farch, 1923, the T¥ andana firen1en tied her up. The Quorna, with only half the · VVandana passenger capacity, to be put on in her place. The vV(:tndana could have carried all passengers offering. The Quorna could not. The excess passengers had t o make the best of the situation and get across on deck. The circumstances were not norn1al.

On the lOth April, 1923, the Wandana carried seventeen exeess passengers ; the boat that preceded and follo wed her · carried an excess of empty berths. On the 8th September, the Vv andana., on the Port Lincoln to Adelaide trip, carried 29 excess passengers, but the boat that preceded her on the sixth h;1d 79 en1pty berths.

On the 27th Septenlber, the rush was backward (Adelaide to Port Lincoln). The TVandana had seventeen e:xcess passengers. The Paringa, which preceded and followed, was below her capacity. These boats during the year made 200 trips, carried 12,695 passengers, were on the average only hat£ loaded, and, apart from the Quor-na relief case, only on four occasions were the boats loaded to full capacity. These affected 2_ per cent. of the trips and fewer than 2 per of travellers across the Gulf.

(b) SuMMARY.-PAssENGER AccoMoDATION.

" Full inside " is an occasional sign on every form of public service in all parts of the world. · Late applicants in tiine of rush are always liable to be left or be badly accommodated. It is a probability in train or t.ram transport. It is a probability in sea transport in all countries. Taking the Australian coastal service generally, t he totality of thousands of trips lTLade during the

the percentage 0f full loading and the percentage of rn jocted or excess passengers is not

one in a thousand. . ·

That this inconvenienced percentage should feel annoyed is natural, understandable, and excusable. But when a world-wide occasional factor in transport service by land and sea is laid against the door of a local Act by officials responsible for its 'adn1inistration it becon1es a reflection upon their senses, or an in1putation upon their motives. ·

The Director of Navigation asserts that he is paralyzed in his adn1inistration of the Act by fears of Higli Court injunctions, by inadequate definitions, and by the alleged fact that under the Act he has " no discretionary povYers .JJ 1'he Director, explaining the position in Queensland, Inade the following statement:- ­

"In the case of n1eat, it was a case of satisfying the Deputy Director, of telling him they 'vere unable to book ship space on the coastal boats, and the permit was issued. n (Question 13939.) . There is no fear here of High Court injunctions. No doubts about the meaning of adequate or Inadequate, no need of Crown Law advice, no groping through official channels to the Minister, no hesitation, no refusals, no delay, no annoyance. In the case of meat, the Department Inoved much promptitude as if the meat companies were issuing their own permits. The

o.bhgations of the Departn1ent to the travelling public are fewer than its obligations to owners C?f dead n1eat. Its. powers are not less, but its manufactured official procedure is

different. The application for a permit to carry passengers is submitted by the Department to the Federated Ship-owners. If they approve, the permit is issued. If the Federation does not approve, the.Department develops fears of High Court injunctions and doubts about'' adequate." The Deputy 1s barred from action. I-Ie cannot, as with dead n1eat, issue a permit if satisfied coastal boat accommodation is not available. The Deputy n1ust refer to the Director. The Director 1nust not act. lie 1nust submit it to "My Chief." "My Chief" is the Con1ptroller-General of

Custmns. The Comptroller-General Inay decid . lie 1nay not . He may " if he deems it necessary " submit to the Minister. vVhoever decides, whatever the decision, the waiting public are delayed and annoyed. They are told it i the Act. It is not the Act. It is the

adininistra tion. On the 15th and 16th August and 9th Septen1ber, 1922, permits were j sued, on the Ship­ owners' Federation approval, to the Euripides, Marella, ncl Orrnuz. A few day later the ;Federation objected to a permit for the Orsova . It aid the T!f!yree1na was" aclequate.n

'rhe. Department upheld the obje.ction. vVhether upheld .or rejected it was a.n

administrative decision. The law -the Administrator "clisc:retionary power n to decid either way. Two years later the Director quote this ca e as evidence agam t the A ·t.

62

the 26th November, 1923 (fourteen months after -the Wyreema- Orsova -case),

2l1oeralci applied for a permit to pick up interstate passengers for Hobart. The Nav1gatwn Department submitted the case, as usual, to the Ship-owners' Federation. It objected. It said licensed steamers running under contract with the Federal Government between Melbourne and Tasmania were adequate for all passenger traffic. The Director of Navigation told the Comptroller­ General it would be extremely difficult to justify refusal. permit issued on the 29th November. The Moeralci sailed on the 4th December. Very few applicants for a passage responded to the Moeraki advertisements.

In this case neither technicalities, definitions, nor fears of High Court injunctions stood in the way. "Public interest" was paramount, and "discretionary powers" were ample. The Director admitted the interstate passenger service to Tasmania was ample, that there were more berths than passengers, but he wanted the Navigation Act restrictions lifted from the vessels of the P. and 0. and other oversea companies. The restrictions on oversea companies, according to the Director, "adversely affect" the volume of interstate traffic. There is another side to this picture. Local white-manned ships have been driven off the North--West coast of Western Australia by "black" boats' competition. The Director does not think traffic is adversely affected in this case, If people cannot travel" white," they can travel "black." There is here a difference in outlook. The Director explains that the "white" ships were driven off "in the

ordinary way of business." The law did not step in to make them withdraw. Apparently, if the law restricts the operations of "black" or other overseas boats on our coasts it "adversely affects " the nation's traffic. If " black" boats drive off " white " boats, that is " business." There is a whaling station on the North--West coast manned by white: men. A vessel brought out supplies from Europe. It had to go to Bunbury to secure a cargo of timber for Europe. It eould not put to sea without ballast. On the beach at the whaling station were hundreds of tons of whale refuse, magnificent fertilizers for southern fields. The captain wished to take this aboard as ballast. The Navigation Department refused permission. The captain was compelled to ·carry a load of useless sand. The law does not define" ballast." The circumstances were unusual. The whaling station was an isolated outpost. It was not a regular port of call. It was an endeavour to develop a new industry in a lone part of the Continent. Whale refuse is not a recognized Australian cargo. Here was scope for discretion, judgment in the " public interest." The Department decided· for sand. The Department had "discretionary power." It exercised it. Then its officials assail the Act as a detriment to outpost industry. In other instances the Department, considering the rigid application of the law might be injurious, or against the public interest, have exercised discretionary power and not enforced

the Act. The pearlers of the North-West coast employ Javanese labour from the island of Kopang. This labour was brought from Kopang by the pearling schooners and carried back to that place on termination of engagement. This traffic was prohibited to the schooners on the ground that they did not comply with the requirements of the Navigation Act. Neither did the black-manned steamers, but they were permitted to carry on the traffic. They at once made a demand for £8 per head deck passage to or from Kopang, a distance from Broome of 500 miles. This £8 per

head for a deck passage was more than a man would have to pay for a first class passage for a longer distance on a white-manned steamer. It was attempted robbery. The were told it

was the law. It was not. It was officialism working to discredit the law. If a "pig "passage for a human being is within the law on the "black "-manned steamers, it is equally within the law for the North--West schooners. ·

The "black" boats on the Western Australian coast wanted permits to carry cargo and passengers between Fremantle and Geraldton. The 1\felbourne Steamship Company had the cargo steamer K urnr:lpi on that run. The Federation objected to a permit for cargo, but, as its vessel was not carrymg passengers, it had no objection to a "black" permit for passengers. Merchants ·

of Geraldton expressed the opinion that the permit should cover cargo. The Director reported _had a railway, and, if the Kurnalpi was not adequate, the surplus cargo could go by

rml. In add1t10n to the K urnalpi there were two State-owned vessels carrying passengers as well as cargo. The railway was there for excess passengers as for excess cargo. The Director in this case forgot the railway. The two State-owned vessels were declared" inadequate" for passengers. A permit was given to the " black " boats to compete with the State-owned ships for passengers, but not against the K urnalpi for cargo.

In November, 1923, Mr. Airey, the Deputy Director of Navigation in Western Australia,. notified the central office in Melbourne that the "black" boats were acting in contravention of the law, and asked for instructions. He was instructed (lOth November, 1923) to take·no action, not even to raise the question, and if any person did raise it, he, Mr. Airey, was to tell the " black" companies what steps to take to cover the illegal operations of their vessels. There was here no statement that " we must apply the law as we find it";· the Department had, in this case, amp.e discretionary power, and exercised it. ·

:

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63

The cases cited exhibit the fact that the Commonwealth Navigation Act not only supplies protection to those registered under the Act, but supplies adequate machinery for the immediate prevention of any abuse of that protection. It gives priority to ships licensed under the Act. If they will not furnish sufficient accommodation for cargo and passengers, then other ships may, and the permission can, as in the case of meat, be coincident with the necessity. The flexibility of the administrative clauses is equal to every emergency, and the only difficulties are those created by the administrators.

The Director of Navigation appeared before the Commission and made nine distinct allegations against the Commonwealth Shipping Line. His statements were reproduced in the public press. The General Manager of the Commonwealth Line wrote to the Director. He informed the Director that, if correctly reported, his statements were " a tissue of misrepresenta­ tions." The Director neither affirmed nor denied. He replied that he paid no attention to statements in the press. He suggested that the General Manager obtain a transcript of the evidence. On that date, the evidence and the statements in the press were identical. ·whatever applied to one was applicable to the other, and the declaration that his statements were " a tissue of misrepresentations " so far remains unanswered. After the Director informed the General Manager of the Commonwealth Line that he took no notice of newspaper reports, he wrote to the Commission a'nd asked leave to amend his evidence in connexion with the Commonwealth Line.

The Navigation Act covers hundreds o£ ships, millions of capital, of tons of moving trade, and scores of thousands of lives. It needs to be administered by a man in sympathy with its public purpose, in direct contact with the Minister, and under no official necessity to speak through a funnel. or by permission of some other official. The Navigation Department is under a uentletnan designated a "Director,, who reports to or" recommends " to the Comptroller of Customs, who tmdorses or rejects or recommends the recommendation to the Minister.

The Director represents the Act as a hidebound instrument without flexibility. The Act makes the Minister sole judge of " adequate " service. When he deems it " desirable in the pu'blic interest" he may issue permits " unconditionally or subject to such conditions as he thinks fit," and on the 12th July, 1922, the Crown Law Department reminded the Navigation Department that the Minister was the judge of " public interest " and was free to base his opinions upon whatever grounds he thought fit. There can be no wider grant of discretionary power.

The Comptroller of Customs and his subordinate, the Director of Navigation, have divided a congenial task. The Comptroller assails the Act from the freight side, the Director assails it from the passenger side. .

The Comptroller represents the Act as responsible for facts existing prior to the Act, as responsible for facts existing on ships outside the Act, and represents ten-year old facts as having their origin sinc·e and from the Act. The Director of Navigation asserts, and properly asserts, that his duty is to tell the truth, but his assertions are in direct conflict with the discovered facts. Asked to support his opinions with evidence, he admitted he had" neither facts nor figures." He regarded his opinions as ample substitute for evidence, and told the Commission that" no proof is necessary."

It must be clearly understood that the' cases cited are not mentioned in order to question the validity of administrative actions. Where discretionary power is exercised, diversity of opinion will exist. The eases are cited to show the wide discretionary powers exercised when desired. Finally and above all, they are qited, in conjunction with the general evidence, to exhibit the viewpoint towards one of the fundamental laws of the Commonwealth of those entrusted ·with its administration. In view of the evidence your Commissioners are driven to the conclusion that it would be folly for Parliament to expect the satisfactory administration of the Navigation law from officials who regard it as a national disaster.

A draft copy of this report was forwarded to each of the above-mentioned ofilcials, with an intimation that it was not desired to do any officer of the Public Service an injustice, and that arrangements would be made to give them an opportunity of rebutting any statement contained in the proposed report. No rebuttal was offered.

SUMMARY OF CONCLUSIONS.

The investigation has so far revealed nothing against the Navigation Act, ?nt it _has provided information of much VlJ..lue in connexion ·with the structure of the Mercantile Manne, and the various controls over the primary industries of Australia. These are touchedupon where neeess.ary in this Report, and will be dealt 'vith fully in a later report.

From the facts placed before Y ou;r CoiUIDissiop. as the followin o- conclusions are drawn:-GENERAL CoMPLAINTS A GAINST THE A c T. 1. The Navigation Act has not retarded the trade, industry, or development of a,n,y of the States of the Commonwealth. ,2 .. The statements made by the Tariff Board in its Annual Rep?rt of June,

.in relation to the effect of the Navigation Act on industry and productiOn, .are erroneous, and were made w:ithout inquiry into the facts.

64

WESTERN Aus'l'RALIA.

3. The decline of the ports of Albany and G:eraldton is not due to Act,

as alleged ; such ports began t o decline n1any years before tne operation of the Act . 4. A1though the Navigation Act do es not apply to certain n. black "-J?-1anne.d trading on the }J orth- Coast of vVestern Austraha, there IS no

development, nor increase in production and po1Julation in that portion of Australia. 5. The decline of exports from Western Australia is in the overseas trade, to whieh the Navigation Act does not apply. The increase is in t he interstate trade,

to 1vhich the Act does apply .

TASMANIA.

6. Oon1plaint s frmn Tasrnania against the Navigation Act are confined to lfobar t . 7. The interstate exports frmn Tasmania have increased ·since the operation of the Navigation Act, and are double the pre-war exports of 1913 . · g, The Act has not adversely a:ffected the fruit export trade of Tas1nania. There

is a1nple cargo t onnage to lift the fr_uit crop, and while the interstate freights on fruit and fruit products have increased over pre-war. rates by about 30 p er · cent., the oversea freights (which the Act cannot affect) on the san1e produets, ar e from 60 to 250 per cent. above pre-war rates. D. The Navigation Act has not aff ected the tourist traffic. to Tasmania. Before the

war, less than 2 per cent. of the people visiting Tasmania travelled by oversea stean1ers. The nu1nber of tourists from other States to Tasmania has increased since the Navigation Act beca1ne operative. 10. present unsatisfactory financial position of Tasmania has not been brought

about by Common1vealth legislation, nor has t he :financial position been affected by the Navigation Act. The causes were operating many years b efore the Navigation Act.

rfiMBER INDUSTRY.

11. The timber industry has not been adversely affected by the Navigation. Act, as alleged. The interstate t i1nber trade is increasing. Ti1nber freights on the Australian coast are now lower than before the Navigation

Act ca1ne into operation. 13 . Interstate ti1nber freights are responsible for a very small proportion of the increased price of Australian ti1nber

15.

16 .

17.

18.

FREIGHTS.

Between August, 1914, and the con1mencen1ent of the Navigation Act on 1st 1921.:_ was a 30 per cent. increase in Australian coastal freights.

S1nce the Nav1gat1on Act there have been no increases.

The over pre-war freight rate3 charged by the Oversea Shipping

Con1pan1es . on Australian produce exported to all ports in the world, is far in excess of the Australian coastal increase of 30 per cent. .

The Navigation Act has not, as alleged, deprived our n1anufactures of the fu"ll share of the 1nark et, and nullified the benefits afforded by the Tari·ff. This has b een done, in isolated cases such as that of cement, by means of

" rat es on inward cargoes. The abolition of the Navigation Act 1vould not prov1de a remedy . Australian rates ar e n ot in excess of rates between ports of countries whose geographical cu cun1stances are in any way like our own. Australian coastal

rates are below t h ose on t he coast of the United States, South America, and South Afr ica, alt hough ships on such coasts h8Ne the advantage of lower running costs o far as wages are concerned. Coastal rates a!e everywhere on a higher scale than on the deep -sea routes. In

traffic t here are n1ore ports to be entered, therefore 1nore port and

handhng charges. Now h er in, the world are freight rates detennined by the mere Ineasurjng of

1087

65

ARGo Acco:Ml\10DATION.

19. There are fe1· con1plaints in ..._ustralia in r egard to cargo a-ccommodation. There is a1nple tonnage on the Australian coast. Interstate vessels on a majority of trips are running with a large proportion of mnpty cargo space.

pASSENGER A CC OMM ODATION .

20. There are fe·w complaints in Australia concerning insuffic ient passenger accmn1nodation, and those fe w complaints ar e confined to (( rush " and holiday periods when all forn1s of transport are crowded. For the great er part of the year passenger vessels on the Australian coast carry a large p ercentage of empt:y· berths.

ADMINISTRATION.

21. The Navigation Act protects the Iviercantile Marine complying with Australis)n conditions. It anns the Minister -vvith an1ple power to protect Australian industry and the people of Australia against any abuse by the shipowners of the protection to shipping. The administration is n1ade the sole judge of the public interest; it can interpret ((adequate service, " and the :Minister can b ase his

opinion upon any grounds he thinks fi t . There can be no wider grant of discretionary power than this under any Act, and complaints, so far as they have any justification, have their foundat ion not in the Act, but in the administration of it . by high officials who apparently have litt le syn1p athy with i)G. _ · - -

22. The officials ·referred to are the present Comptroller-General of Custon1s and the present Director of Navigation. ·

RECOMM:ENDATION.

'fhe only recommendation your Commissioners have to make at present is that the Act be maintained as it stands., that the official administration be changed, and that the officer responsible for the administration be placed directly under a Minister.

7th 1924.

•

FRANK ANSTEY, G. E. YATES, C. S. lVIcHUGH.

I I

66

APPENDIX 1.

PARTICULARS OF CARGOES, 1913, 191 4-15, 1919-20 '1'0 1922- 23 .

(PREPARED BY THE CoMMONWEALTH STATISTICIAN.)

Discharged- Interstate, 1.'onn age. Va rgo Shipped- Interstate, Tonnage.

State.

--___"":_ LMHL.. "''-"' /--"":':":.._/ "''· "· "''-''· "'' · "''·"·. I ;""_:"':c.I-""':'::.L'.'"·":

tons tons tons I tons t.ons tons tons tons tons tons l tons tons

N.s:w. 955,3 51 933,664 1,172,445 1,326,294 1,246,304 999,886 3,167,658 2,949,917 2,388,021 2,811,376 3,260,737 2,966,49 Vic. . . 1,535,627 1,653,029 1,356,210 1,758,929 2,077,233 2,034,667 608,067 563,951 624,571 609,623 537,372 592,442 652,255 512,864 490,601 433,159 420,315 483,604 447,115 463,181 307,394 361,818 438,840 415,27!)

B.A. 1,112,3 06 964,791 728,909 861,794 1,067,601 1,017,343 405,056 443,006 612,767 706,711 720,267 547,889

W.A. 425,830 415,975

1

252,857 326. ,032 312,381 <145,755 167,615 124,038 101,131 83,880 95,632 113,614

L'as. 314,339 270,530 262,746 28] ,521 316,026 396,859 250,807 319,970 378,637 418,288 480,418 501,178

N.T... 9,808 12,347 10,400 5,301 3,744 3,713 1,007 2,380 3,388 1,982 450 608

Aust. 5,047,325 /4,866,443 4,415,909 4,993,678 ,5,533,716 5,137,501-

N.S.W. Vic .. .

Q'land.

W.A. Tas. N.T ...

Aust. I

C:1rgo Discha.rged-0\·ct-scn, Tonnage.

1,627,683 /1,049,184 11,441,645 1,885, 153 1,043,582 1,478,815 3,571,710 1,258,607 1,148,338 673,994 1,075,380 848,260 1,323,258 785,441 309 ,872 270,763 573.639 370,027

340;840 258,051 46,318 23,198 1,231 ll,854

4,415,660 3,709,91

Year.

1913 1914-15 1919-20 1920--21 1921-22 1922-23

ll7,G02 154,286 127,485 266,482 247,115

251,546 339,857 246,820 417,908 984,624 135,463 166,519 136,062 207,916 418,073 9,918 23,243 16,6:31 24, 151 47.006

G91 285 1,137 265 ·1;015

-----· 2,238,298 3,201,215 2,419,977 ,3,718,795 6,054,984 • Particulars for 1914 not available.

Value of Cargo Discharged-Oversea Tonnage.

79,750,000 64,432,000 98,974,000 163,802,000 103,066,000 131 '758,000

APPENDIX 2.

Cargo Tonnage.

I

2,255,382 1,960,137 3,377,843 2,662,784 351,460 1,192,047 899,230 1,299,029 240,743 144,970 260,019 237,964 251,942 1,194,158 871,223 1,031,772 216,177 463,446 473,748 498,608

40,256 24,826 42,839 85,954

353 5,362 231 63

3,356,313 4,984,946 5,925,13315,816,174

Value of Cargo Shipped-Oversea Tonnage.

78,572,000 60,593,000 149,834,000 132,159,000 127,847,000 117,870,000

1,843,605 635,753 160,750 939,301 397,820

86,114 853

4,064,196

R-ETAIL PRICES OF WESTER-N AUSTRALIAN TilVIBER. (KARRI AND JARRAH) AT YEARLY INTERVALS FROM JUNE, 1914, TO JULY, 1923.

[18 to 25 feet./ 1914.

s. cl.

3 X 2 .. 20 0

4 X 2 .. 20 0

4 X 3 .. 22 6

.t! X 4 .. 22 6

5 X 3 .. 22 6

6 X 1} .. 211 0

6 X 2 .. 24 0

G X 3 .. 24 0

5 X 5 . . 26 0

9 x It .. 26 0

9 X 2

9 X 3

6 X 6

9 X 6

9 X 9

.. 26 0

. . 27 0

. . 27 6

. . 27 6

.. 30 0

Pam:ng Block8-3 X 5 X 7

3x5x8

USUAL TRADE SIZES AT PER 100 SUPERFICIAL FEE'!.'.

1915. 1910. 1917. I 1918. 1919. 1920.

--------- ---- -----

s. tl. 8. d. 8 . d. 8.

I cl. 8. d. 8. d. 20 0 23 0 23 0 26 0 27 6 46 0 20 0 23 0 23 0 26 0 27 6 46 0 22 6 26 0 26 0 28 0 29 0 47 0 22 6 26 0 26 0 29 0 30 0 47 0 22 6 26 0 26 0 29 0 30 0 47 0 24 0 27 6 27 G 31 6 33 0 50 0 24 0 27 6 27 6 31 6 33 0 50 0 24 0 27 6 27 6 31 0 33 0 50 0 26 0 29 Q 29 0 33 6 35 0 52 0 26 0 30 0 30 0 33 6 35 0 53 0 26 0 30 0 30 0 33 6 35 0 53 0 27 0 30 0 30 0 33 6 35 0 53 0 27 6 30 0 30 0 34 0 36 0 53 0 27 6 31 0 31 0 36 0 37 6 56 0 30 0 35 0 35 0 40 0 42 6 61 0 I I 3 x 5 x 9 Formerly £11 per 1,000 blocks, now about £12. 1921.

I 1922. 192 3.

I

8. d. 8. cl. 8. d.

50 0 50 0 41 0

50 0 50 0 41 0

51 0 51 0 46 0

51 0 51 0 50 0

51 0 51 0 48 6

55 0 55 0 50 0

55 0 55 0 48 6

55 0 55 0 48 6

57 0 57 0 60 0

58 0 58 0 59 0

58 0 58 0 59 0

58 0 58 0 61 6

58 0 58 0 60 0

60 0 60 0 65 6

67 0 67 0 69 6

•

Average value about 30s. pe1: 100 superficial Jeet. Tenders arc generally called for blocks, hen ce no fixed rates.

•

1089

67

APPENDIX 3.

D;PORT BY THE ASSISTANT DIRECTOR 0.1!' NAVIGATION ON THE EFFECT 01!' THE APPLICATION OF THE NAVIGATION AcT TO THE TERRITORIES OF PAPUA AND NEW GUINEA.

Comruon\\·ealth Navigation Service, Melbourne, 18th September, 1922.

NAVIGATIO)[ ACT-EFl!'ECT ON TRADE OF P APUA AND NEWi GUINEA. 1l1e Comptroller-General, Department of Trade and Customs. I have to submit herewith, for favour of submission to the :llinister, a report on the effect of the application of the

asting trade provisions of the Navigation Act to the t rade ?_f the Terdtories of Papua and New Guinea, with recommemla­

lions. 2. The report is ba se d on information ohtainecl as the r esul t nf made by me in Sydney, Brisbane, Port

Moresby, Samarai and Rabaul. As will be seen from tho report, conflicting !interests are involved in this question, and the solution suggested, na,mely, the continua-nce of t he appli­ cation of the coa;sting trade provisions of the Navigation Act to the carriage o.f ·passengers and cargo between the Territories and Australian ·ports, with an extension of the present service

by Burns Philp boats between Sydney and the Territories, to Melbourne on the one hand and Singapore on the other, under additional subsidy from the Commonwealth Government, whilst proba;bly not entirely satisfactory from t he ·fiew-point of either interest, is designed to .serve as far as possible the well­

being of both, and is, it is suggested, the best available when considered from a national stand-point.

LEWIS F. EAST, Assistant Director.

J8th September, 1922.

SIR,

Commonwealth Navigation Service, Melbourne, 18t h September, 1922.

I have to report that, in accordance with your I have visited the ports of ·Sydney and Brisbane and the Terri­ tories ·of Papua and New Guinea, and JJ.ave made personal investigation as to the effect of the Navigation Act on the trade and :prosperity of those Territories, and as to the desira­ bility or otherwise of exempting that trade from the operation of the Act. ·

I beg to submit herewith a r eport as to the r esults of my inquiries, together with a .recommendation in the matter. I am, Sir,

Your obedient se rvant, LEWIS F. EAST, Ass.istant Director of Navigation.

The Hon. A. S. Rodgers, Minister for Trade and Gustoms, Melbourne.

NAVIGATION ACT-COASTING THADE PROVISIONS. APPLICATION TO TRADE. OE' PAPUA Al'< D NEW GUINEA.

I. Coasting '1'1·a cle PTovisions of Nav·ignt·ion is neces­ sary to a proper realization of the position of the Territories of P apua and New Guinea, as regards shipping communica­ t ion with Austra lia and the r es t of the world, that a short

refer ence should be made to the ·provis ions of the Navigation .·\ ct as thev affec t the se a-borne trade of the Territor.ies . 2. Under' the provisions of section 288 of the Navigation Act, no ship (whether British or foreign) may " engage in the c;oas ting trade !' unless licensed to do so.

3. Section 7 defin es engagement ti n the coasting trade. A regard's ·either of the Territories, a would be engaging

i n the coastil)g tra.9.c if she carried car-go Qr passengers-( a) to 'Or Australia;

(b) .between one Territory and another; or (c) between places in either Territory. ·

4. No Restrict·ion 0111 T·rade tv-it h Count·1·ies other t han A ttB · tralia.-It is important to observe, however, that the Naviga· tion Act imposes no restriction whatever on clirect oversea trade wi t h countries other than Au t rn.lia. A ny ship, British or foreign, can free ly ca rry goods and !le t 11·een any

port of entry in either Terntory and any other po r t outside Australia and the Territories. 'frade with the world at l arge is open to the shipping of a ll nations, but traffic wi t hin t he 'l'erritor.ies and to and from Australia is subject t q the restric­

tion that it bo co nduct ed in . l1i ps li cen eel under t he

Navigation Act

5. Conditions of Lic(mces to Engage in Coas t·ing T•·acl e.­ Ships licensed to enga,ge in the coasting trade are r equired by the Navigation Act-to carry a certificated master and accord­

ing to the scale set out in Schedule I. (section

14);

(b ) to carry a crew a,ccordi ng t o the scale set out i n

Schedule II. or as p-rescribed by r egulation after r eference to a Manning Committee (section 43 ) ; ( c) to provide accommodation fo r offi ce r - and crew as laid down iu sections 135 and 136 . The prescriber!

requirements include special lavatory, sanitary, mcs&ing and hospital accommodation for t he usc of the crew; and

(d) to pay wages at the rates ruling in Australia. 6. T.he obligations of the ship-owner under each of these headings, it m ay be mentioned, are considerably heavier than under the m.erchant shi pping laws of Great Br.itain, H olland, or J a pan, which three countries own practically the whole of the shipping operating in the South-west P acific and main­

taining communication between Australia and the East. . Requirements (c) and (d), as to accommodation and wages, are particularly onerous. 7. Colotwed C1 ·ews.-With the single exce ption of the sub­

sidized vessels of the Burns Philp Line, all ships engaged in the trade between Australia and the East ca,rry coloured crews. As the amount of trade offering between the Terri­ tories and Australia is Telatively small, ;it would not pay the owners to make the extensive structural alterations in these

ships necessary to provide the prescribed bathrooms, m ess­ rooms, &c., fo r the 1Jrews, and to pay Australian ratos of wages mer ely to qualify for a licence to pa rticipate in that trade. 8. Up to a short time .before the enforcement of the coa,s ting trade provisions of the Navigation Act (1st July, 1921), Burns Philp & Co. also employed coloured labour on their P acific Island vessels. Shortly before the date mentionecl, the co iTJr pany discharged the coloured crews, a,nd filled their places wit h

A'ustralian seamen, Teceiving, I understand, a substantia l in­ crease in their mail subsidy on account of the extra expense invo lved in running the vessels. The Company's s.s. Monto!'o and JJfaHUa, running in the . Melbourne-Java,-S ingapore trade, and for which it r eceives no subsidy, still em ploy coloured

seamen . These vesseh are no t li censed, and ·co nsequent ly can­ not carry cargo or pa·ssengers between Australian ports. 9. Burns Philp & Co. hold Mono poly of 'J'enitory 'l'mde.­ By reason oi their owning the only license d steamers trad ing to the Territories, Burns Philp & Co. enjoy a sole monopoly of the trade between those parts a nd Australia, and be tween the

two Territories . 1.0. P1·esen t S e·rv·ice and Subsidi es .- The Company's presenl se r vice is as follows:-( 1) Sydney-Papua-New Gninea Sen;ice.-TII'o vessels,

.the s.s. Mars-ina (a,bout 1,750 tons gross) and s.s. Jlforinda (about 1,5 00 tons gross), leaving Sydney at intervals of a;bout three weeks, and calling at Brisbane (and eve ry second boat at Cairns),

then ce to Port Moresby, Samurai, and Rabaul. Call s are a J.so made, as required, at Yule I sland, Bootless Inlet, Milne Bay, and Misima-small out­ Iior ts iu Papu:i.. Mai l subsidy, £16,000 per

a nnum.

( Sydney-Solomons-R ab

Rabaul, r eturning by the same r oute. Mail sub­ sidy, £8 ,000 per annum. ( 3 ) Sydney-Rabaul F!ervice. - One vessel, the s.s.

M atm·am (about 3,300 tons gross), leaving Syd­ ney about every fi ve weeks, proceedi ng direct t o Rabaul, thence t o K aewieng and :M:a.dang (a ll in New Guinea), wit h r ight to call at other appr oved

;ports in that Territory. Subsidy, £8 ,000 per

anmun.

F or t hese t hree se rvi ces to t he 'l'erritorics, Burns Phil p &

Co . are to receiv e, under the current" mail contract, a subsidy of £32,000 p er annum. The agreement has a currency of three years, from l st August, 1922, to 31st July, 1925 . The amount paid for the same se r vices during the previous t velvc

( 1st August, 1921 , to 30th July, l !J22) was £30,500, an in crease ttncl !lr the new contract of £J. ,500 per rt nmlm.

68

.11. Pn-uar Sen;·ices.- Beforc the wa r, P a pua and the then German Protectorate of New Guinea enjoyed r egular steam­ sh ip communi<>ation with the Ettst, a nd also to Aust ralia, by vessels of the Norddeutscher Lloyd and Royal P acket Lines, i n addition (i n t he case- of Papua) to t he subs idized service of Burns Philp & Co.

12 . From German New G uinea there wer e sailings, at

Protectorate, au d. s ixteen yea r s since it was taken over as a Territory of the Commonwealth, a co nsideration of these facts gives rise to d ou bt s a s t o w heth er the Territory will ev er

doYelo p in to a commercial success and become se.Jf•su ppor ting . It is evident that, if SUCh a n objoctiYe is to be attained, jt

wi ll 1e only by t he fos tering and en·couragement in every poil ­ sibl e w:ty of the pla11 ting wit!J a view t o secu;·i ng

subst a ntia I increa se in tile productron of copra-the 'l'erntory s principal exportable p r oduct .

r egular int enals, for the followin g places :-( C£) Australia ( Brisuaue a nd Sydney)

(b) Manila, Hong Kong, and Japan- four->Yeekly, . (r ) Amuoini1., Macassar, Ba.tavia, antl Singapore, call mg n t Eitape, Pot da mhafen , Mada ng, Finchhafen, ' Vitu, Kaewieng, and Rabaul (all in New Guinea),

both inward s and outwards-six-mon t hly. 13. Freights and Fa.res.-,The fo llowing t able, compiled from va.rious sou rces, shows the freights and fares between the prin­ cipal port in each Territory and Australia at three period1 s.,

viz., immediately be f0re the war, September , 1921, and at present:-Bctween Sydney and-)j,REIGHl 'S, I'E& ToN.

-- -------------

l'ort Moresby. Rabaul.

-

1014. 1. 9 . 21. 1. 9 . 22. 1914. 1.9. 21. 1. 9. 22.

---- - - - - - -

£ 8 . d. £ s. d. £ s. d.£ 8- d. £ 8 . d. £ 8 . d.

Copra ..

Other Goods

1 1fi 03 0

:I: 5 01 0 03 0

1 15 03 0 0 0 1 5 013 0

(a) Per s.s. ll!lataram, direc t Rabaul to Sydney. (b) Per other vessels, t>id Papua or Solomons.

F ARES (SALOON).

P or t MJre;by, Robllll.

- ------

0 (a) 2 10

(b) 3 0

0 3 0

1014. 1.9.21. 1.0.22. 1014. 1.9.21. 1.0 .22.

0

0

0

£ 8 . d. £ 8. d_ £ 8. d. £ 8 . d_ £ 8. d. £ 8. d.

12 0 0 15 12 0 15 0 0 .. 16 16 0

I

18 0 0

1'1. Before the war, planters in Germa n New Guinea could ship copra t o Europe at a through freight rate of 53s . 6d.

(55 marks) p er ton, includ ing transhipment c.h a rges a t Sydney, Singapore, Hong Kong, as the. ·CRse might be. At t he time of my visit (July, 1922), I was given figures which showed that , on recent shipments, the through freight Port Moresby to London, via .Sydney, was in the n eighbourh ood of £11. The cost between R q,baul and Lonc1on would h ave bee n the sa n1e. .

15 . Can the Te1Tit01;ies Can·y Present F1'eights ?-It is n eces­ sary to examine the efl'ect of the heavy incr ease in freight

eharges on t he commer cial well-being of the Territorie & . In t his c01mexion consideTation need 'be given to one indus try only-that of co pra prod uction. Dming th e financial year ] 920-21, the latest .for which I Jmv.e complete returns, the total expor ts of the two Territories represen tee! a value of .£ 846,700. Of this, copra accounted. for no less than £709,600,

or 84 per cent . Copra is the s t aple prod uct of both Territories a nd of all adjacent islands, and is t h e brusis of calculation for a ll questions of transpor t a.ncl s.hipping . The commercial we.Il-

JS successfulLy developed, .both 'l'erritories will soon become

self-su pporting, a nd t he Com mon wealth will be of a ll

financial obligation s in r egar d to their administration. If on the other h and , plantat ions are a.bandoned a nd the eollapses, of which ther e is at present a real dan o·er, thei1

the wl)o le cost of a dministration will fall u pon the of the taxpayers of the Commonwea.lth. 16. l'o8it·ion of Copra I nd·ust?-y-Papua..-The co pra indust r v of the Territories is at the present time in an extr emely pre­ carious .posit ion. In Papua, consid erably over £1 ,000,000 has

been invested in cocon ut plantat ions. Not a single compauv hR s ev er pa id a dividend. H alf of tl1cm are in Ji quidatioi;.

T his state of is reflect ed in the trade r etu rns· of the

Territory. For t he eleven finan cial 1910-ll. t o 1920-22

in clu siYe, t he figures '"ere-Imports E x ports

:Excess of imports over expor ls

£3,014,887 1,684,872

£1,005,015

I i. 1 n no single yen,r h ave the exports balanced the imports. 3t!P inz that it i's now 38 years sin ce P apua be<;am e a Br itish

IS. Cop rct production l) f

copra for export i'S to a n even .g rea.ter extent the

of the rece ntly acquired Territor y .of N ew Gttinea. For the year 1920 -21 , that a rticle r eprew nted no less tha n !15 per

con t . of the exports ( £641,045 out of a total value, for all

goods, of £673,992 ). The pro

Ag-ri culture and the Govermnen t Secretary .being al,so present. At :Sa.marai, a sp ecial of the Cha mber of Comm erce

"-as convened to discuss matters with me. I am satisfied

from t he facts b<"fore JlHl, and from informat ion su bse­

quently obluinecl, that the ·prese11 t st agnation a11d precarious position of the ·planting indust ry i's due to two

causes-·(a) Low p·rice s for CO]J'm, !tnd (b) high freights. 20. Unprofitcwle Plantations.-I was a ft'ordecL a n oppor ­ tunity, while in Pa.pu a , of examin ing the cost-sheets f or 192 1 of sev en fairly la rge coconnt plantations. The average yield of copra (6i cwt. to the acre) indicated that these p lantations had r each ed the stage of a.bout t hree-quarter m a ximum bear­

ing, the . a verage y{eld of arerus of fully matured trees be ing about 8 to 10 cwt_ per acr e. It is probably well within the

m a r k to say t hat the aver age of plan tations, in both Terri­ tor ies, is not further advanced t han this. In pre-war times, plantations w it h a yield of nea rl y 7 cwt. per acre would l1avc been , not only self-su pporting, but return ing a fair m argin o f

profit. I nstead of tlns, every ton of .copm produced and

exported was so ld at a loss.

2L Of the total quantity shipped , roughly four-sevenths wer e sold in Sydney, and three -se venths in E tuopean markets. T he followi ng i·s a summary of the res nlts: -SuMMARY-SYDNE Y SALES.

(Per ton of Copra sold. ) P er cent. £ s. d. · of cost.

(a) Cultivation and upkeep of harvested areas (approx imately 3 acres to

ton), h a rvesting a nd preparation of . copra, depreciation of pla nt, &c. . . 14 0 1 (10

(b) Costs from plantation to port of ship-ment in Papua . . 3 12 6 15

( o) Costs from port of shipment · to

(a )

( b)

(c)

(d)

buyers in Sydney 5 16 9 2fi

Total costs 'Selling .price, Sydney

Net loss per ton

.. £23 9 4

20 13 1

£2 16 3

SU.i11MARY-0VJJ;RSEA SALES . (Per ton of Copra sold. )

100

Per ce nt.

£ s. d. of co-st.

Cultivation a nd upkeep, harvesting a!ld preP'ara tion of copra, deprecia-tion of plant, &c. . . 14 0 1

Costs from plantation to port of ship-ment in Papua . . . . __ 3 19 4

Costs from port of shipment to over-w a steamers in Sydney (including stora.ge and h a ndling ) 4H 0

Costs from Sydney to buyers in

Europe 8 7 0

Total costa Selling price, E urope £31 5 0

28 12 11

Net Jo ss per ton £2 12 6

45

13

l 42

f

100

_ 22.,The. above figur<:s _re late to c?pra from plantations m S1m1lar figures m regard to shipments

from New Gumea were not ava ilable, but as conditions a re very m.uch tho same · in both 'J' erritoTies (except in <> a s to cost of lJ:'tt l."·e hthour, wages being lower in New a nd

t he rre1gh t to Sydney was at the time the same froin Rabaul >1 S P aJJUan ports, it may be t aken that the n et r esults of

sa l.e.s JU t he Sydney European .markets · of copra from New Gum ea would ·be, WJthm a, few sh1llings per ton, the sn,me as

in Lhe ·cases quoleu. I W

23 . It is clear t!Jat this sLate of all';tirs cann ot long con·

ii nue. l'Jan ters arc carrying on in the h ope that con ditious wi ll improve. TJuiess they do, it is sllfe to predict that within yery few years tl1e i ndustry w ill be abandoned, all n e11·

pla nting di ·continued, and exist ing pla ntations a llowed to rerer t to jungle. Copm-P?·iccs.- _:.,s mentioned iu paragraph 10, the pre­

se nt un satisfactory position of co mmercial enterprise in the Territori es is clu e chiefly t o twO> causes--,(a) the low price of copra, and (b) high fr eights. The fi rst of these causes-low

prices--n o Governmen t or Parliament can r emo'le or in a ny way a ffect. E u rope is t he natural m a rket for, and t he con­

sum er of, the vulk of t he world's production of copra. In

1012, for · example, t he world's supply of export ed copra

totalled, roughly, 600,000 tons (of t his, the whole of the

Pacifi c I sland, contributed but 65,000 ton s) . Of the total m en­ tioned, Europe (Ge rmany, France, and the Netherlands) abso rbed no less than 500,000 t ons, or 83 per cen t. of the

whole. The Australian consum.ption is relatively n egligible. In 1916·17, according to the report of the Inter-State Com­ miss ion on South Pacific Trade, su ch did n ot exceed 10 ,000 tons a year. From the figures as to impo1·ts a nd exports given in t he Commonwealt h trade return s, it appears tha t for the year 19 20-21 the Australian consumption of copra ( 8,200

tons) was even less than four years ago. There i s no esca.pe from t he fact that, a s in the case of our own great staple

prod ucts-wheat, wool, and hutter-rthe price of copra is deter­ mined in the markets of Europe, a nd n othing t hat can be

done her e can in any way affect the situation. 24A. The great bulk of the copra p roduce d in the Territories is sold either locally (Burns Philp & Co. are the principal

bnyers ) or in Sydney . The following t ables give the average prices of copra in RRbaul, Port Moresby, a nd Sydney over a per iod of year s:........, •

Price f.o b. Rabaul (average for year). ----------------1

£ 8 . d.

1907 16 1 0

1908 12 4 0

1909 12 I 3 0

1910 I 6 I 3 0

1911 17 14 0

19 I2 I 8 0 0

1913 21 I 2 0

1914 1915 10 2 0

1916 25 0 0

1917 2I I 0

I018 IS 3 0

1919 I5 I 0

1920 32 4 0

1921 27 0 0

1922 18 6 0

Price f.o.b . Port Price, Sydney (J auua.ry).

(average fo r year).

£ 8 . cl. £ 8 . d.

1915-16 16 9 8 1907 22 7 6

1916-17 19 10 I I908 I5 5 0

I917-I 8 2I 7 9 I909 17 2 6

I 918-I 9 20 IO 0 I 910 2I 10 0

I 919- 20 30 8 0 1911 21 0 0

I 920-21 22 I9 8 1912 21 I 5 0

1913 24 IO 0

1914 26 5 0

I915 20 7 6

1916 23 0 0

1917 25 0 0

I918 26 0 0

19I9 27 0 0

I920 36 5 0

192I 26 0 0

1922 1D 0 0

25. R ela,t,ive P IVI'Chasing Powers of .il{oney.- In comparing Lhe prices r ealized fo r copra in 1914 and prev iou s years wit h those obtained for years subsequent to that date, co n sicleratio11 mu s t be given to t he greatly decreased ·purchrusi ng po:wer of Lhe sovereign during t h e IRte r years. Costs of Rll the planter's

requirements-stor es, plant , implements, food and tobaccq for the n a Liv e labomers-in fact, ever ything he uses, as also freights on both his impor tations and h is exports, have in­ creased g reatly. According t o the ligures of t h e Common­

wealth Statistician, 20 s. 1914 was equa L in purcha ing

power to 31s. 3d . in 1920. This was in the Commonwealth, hut, no doubt, the pos ition in t he Territor ies wa.s practic::dly t he same. The apparently hi gh price of £3 G 5s. per ton

realized in Sydney in January, 1920, was therefore r eally eq uivalent, on a pre-war stand ard, Lo £23 4s. on ly; the £20 of l 92 1 to £16 12-s . 9d., a.nd t h B £19' of 1!}2·2 to £12 · 3s. As

f urther illustrating this f a,l l in the value of money, it may

be mentioned that a witness before the Inter -State Commis­ sion, in the course of its inqu iry reO'ar

nt £20 a. ton in R:vdney the grower wou lcl clear a profit of

f lO a ton. Wil1en this is com pnred '" ith t he resu lts tabul atcrl in pnragraph 2 l auO\' C. showing ·how ales of copra at

£20 l 3s. l il. ptlr ton in Sydney in a net Jo s to the

planter of £2 16 . 3d . per ton, it w ill be realized how money

1·alues l1avc depreciated ancl condition s altered. 26. Ea1'ly Impl'Oiiement vn P1·ice of Copm Unlikely.-.A;; show n in !.he tables contained in paragraph 24A , the price of hns, in the past, been suhject to cons id erable fluctuation.

1091

69

and some people in the Territories fin e! gr ou nd for hope oi improvement in t.l1e fact t hat n ot infrequ ently periods of low prices are by increa eel demand and substant ia l

Tises. 27 . B n t niter discussing the m atter with a Htuuuer of people \\ ·i th a know!()(lg·e of the subject, I lWl incli ned to the ooinion t hat the pre- ent depression is likel,v to co ntinue for some time, possibly fo r year s. As mentioned in paragr a.ph 24, Continenta l Eur ope provided, 'in pre-war da.ys, the mark..et fo r · over 80

per cent. of the world's prod uc tion of copra.. The principal u sc t o wl1ich it wa.s put was in the manufactur e of margarine. the chief by-proclu ct-oil-eak e---

for consu mption there. The economic collapse of these t wo countries, t he dim inished purch asing power of other adjacent areas, with t he very r emote possibility of any ea rly impron­ ment in their financial positions, render the prospect of anv subsbntia l incr ea se in the price of co pra within the next

year or so very unlik ely indee d . 28 . Ccm Freight Costs be Rcduced?-Seciug, then, nothing can be done to..relieYe t h e planter as regard-s either 1 he low prices he receives for h is co pra or the equally im­

portan t matter of the diminish ed . purchasing power of the · money he does r·eceive, it remains 'W consider whether any a ssistan ce can be given in co nnexion with the rermtiniug prin · cipal cau se of hi s financial distr ess, viz., high freight costs.

29. I nflation of JJ'reight Co sts by R estri cti.on of Tmde to Sydney.- At the present time, fre'ght costs f or t he exports .from the T erriton es , as well a s for the importation of a ll

goods other than those of Australian orig in, are artificially inflated by reason of the fact that, as shipping communica­ tion with t he outside world is, for all practical purposes,

r estricted io the Burns Philp Line, which connects with Au"­ tralian ports only, all exports must 1be sent t o Sydney for

transhipment, and a ll imports from oversea co untries must be brought first to Sydney for transfer to the Burns Philp

steamer s. 30. This imposes, both as r esp ects imports and expor ts, a heavy extra charge u pon the people of the Territories.

Steamers from J apan, H ong K ong and Singapore pass their por ts, as su ch vessels ar e not licensed to engage in t he

co:tsting trade, a.nd so cannot carry pa;ssengers or cargo be­ tween the Ten ·jtories a nd Australia, it would n ot at present pay them to call, involving delay a nd t h e expense of h arbor dues and other charges, for the comparatively sm all quant ities of ca rgo offering from or to oversea ports d irect.

31. Dista,nces--Di1·ect and via Sydney.- -Th e following two comparison s indicate the ex t ent to which trade is diveDtecl from natural in order to bring it through Sydney:-

Export s (Copra, rubber, &c.).­ }'l,abaul to London , via Sydney Habaul to London, via Singapore 13,325 mile.> .

12,000 miles.

Extr a distance, via Sydney 1,325 miles.

Imports (Rice, sacks, &c. ) .-Sin gapore to Rabaul, via Sydney 6,740 miles.

Si ngapore to R abaul, via New Gu inea por,t s ·3, 720 mile,; .

Extra distance, via Syd ney 3,020 m iles .

32. Freight s betu;een Terr-it ories (tnd A ustmlia R elatively High.- But this disparity in di stances, striking t hough it is, does not indicate the full extent of the d isadvantage u nder which t he p eop le of the Territori es labour, as t he extra fre ight

for the carriage between the T erritories a nd Syd ney is on a co nsi derably higher scale t han for the other portion of the voyage, bei ng often, o

n a. hasis, t hree or four times

as much . :J3. Comparison of Local wul F'1 ·eights.- Thus W e

haY c, under the mde of rates now in operation , a freight of :lOs. per t ou on copra., Rabau l to Sydney d irect, a. d istance of 1,83 0 miles, equal to 0.32 of a. penny per t on per mile, while

for .t he balance of the voyage, Sydney to London, t>iil; Suez, d istance of 11 ,490 miles, the r ate i s, I am informed, 80s. a

ton , equal to 0.08 of a. pen ny per ton mile, or one-fourth of

the loca 1 rate. In addition to t h i ·, the port and handling

d:nrges in Sydney amount to, rougl dy, a n other 20s. per to11 , " 0 titat t he charges from po r t of shipment to port of destina ­ tion come to about £ 7 lOs. per ton. It wa.s r epr esen ted to me l'lta t if t he trade of t he T er ritori es wer e exempted fr om

coasting trade of the Navigation Act, and

n ow trad ing between Austr a lia and t he were

permitted to call en 1·onte a nd participate i11 the 'l'erritory ­ .-\u strali an trade, copra co uld b e shipped on through bill of · lading from the Te rr.itories to v-ia Singapore, nt under

£5 per ton. Thi represents !t sal'ing of t£2 l Os. a ton as

70

against the cheapes t service at present obtainable via Sydney. The P apuan P.Janters' Association claims tha.t a direct saving of at least £3 lO s. per ton could· be effect'ed. 'I1Jis, I t hink, is somew hat over the mark. But, allowing that even £2 per ton coulcl be saved, which would certainly ·be the case if

open competition were allo,recl, this would, on the basis of the 'luantity of copra exported during the year 19 20-2 1, amount to u srwing to the of tho 'l'en·itory of £56, 000 JIC1' ammm

·-·.a considcra.blc sum to a struggling industry.

and trader•s assured me that they wei'e prepared to go a long way to. secure the trade to Britisl1 ships, but that the present state' of affairs was ruining them, and put altogether t oo g r eat a strain upon t heir loyalty to t he principle of Australian pre· fc rence. The genera l fe eling among commercial men was that Austra lia was t reating them most ungenerou sly. A speaker at one meetin"' I attended, a man Australia n bo.rn and hreLI, put it 'S t r ong ly, and the evidently concurred, the

Territories " ·o uld be better oft' in many w>tys under the d1 rect control of Great Britain than as Dependencies of the Common· wealth.

:H. R-ice-Hxt·ra Cost of l nd·i1·ect l mporta.tion.-One of the principal imports adver sely affected by the restriction on direct importation from i:ihe country of iproduction is rice, W"hich i-s very .largely u sed as one of the foods prescribed by

law to be supplied to ind entured native labourer s. All rice imported is, a t present, brought from Singapore to Sydney by the regular traders between those ports, and subsequently taken to the T erritories in Burns Philp's .vessels.

42. Ea1'ly Relief lmp6"mt·ive.--:.Tt is to my mind imperative t hat some early relief be gTa.nted. to the settlers in bot h T erri­ tories. The welfare of the pla nting industry, which

Ry nonymou s \\'ith the welfare of t he Territories themse lves, r eq uires it. Another weighty r ewson is that the dissati.sfactiou of the people .of the Mandated Tcnitory, themselves British and mostly Austra lians, with the action of t he Co mm on­ wca.Jth in enfmcing t he application of the Navigation Act to the Territory, and so diverting its import and export trade from natural economic channels a nd forcing it to flow, by roundabout and costly routes via Sydney, cannot long r emain a question of purely local concern, but will, unless something is done, inevitably find a.n echo at Genent. The only m atter for considemtion, it is submitted, is how this J·elief ca.u Le given with least injury to Australian shipping and mei· ­

cantile interests.

:35. Ther e is evidence that, in addition to the extra charge

on the .consum er of the h andling chargoo in Sydney and the freight from that port to the Territory, tl1e middleman in Sydney levies a heavy toll u.s the rice passes through his hands. "From the officia l trade returns it is that the dressed

rice imported into New South Wales in the year 1920-21 was valued at 22s. 5d. per cental. The same rice, when expor ted to Papua and Kew Guinea, was declared a;s being of a value f.o.b Sydney of 42s. lld. The freight from Sydney to Port

Moresby, Samarai, or Rabaul equals another 2s. Sd. per

centa.l. The r ice, therefore, eost the importer s in the Terri­ torie-s, without landing charges there, 23 s. 2d. a centa.l extra­ more t han double its original value in Sydney. It is claimed that with direct communication· with the East rice could be hnclecl in the Territories for the same freight as to Sydney. Assuming that this is correct (which i.s probable, as the dis­ tance Singapore to the Territories i s less than the distance Singapore to Sydney), then the additional cost represent ed, fo r the yea r mentioned ( 1920-21), a di1-ec t loss to the im ­ porters in the Terr-itories of £29,250.

36. The Fee ling in the r estrictions .imposed

on their 'Shipping communi cations by the application of the coast ing t r ade provisions of the Navigation A ct i s a very sore grievance in hoth Territories. With the sole exception of per ­ sons directly or indirectly dependent on Burns Philp & Co.

for their means of livelihood, it may, I think, be said that

every man in the Territories is whole-h eartedly in fRvour of the t otal exemption of their tra de from the r estrictions of the Act. I was s urprised at the feeling, and oftentimes hitter­ ne ss, displayed on the subject. Strong r esentment is every­ where expressed at the action of the Commonwealth in

crippling the Territ ories for the purpose, so it is expresseJ , of putting money in the pockets of Sydney ship-ownel"s and merehants. 37. B urns l'hilp & Co. Unpop·ula'r. - I fou nd also that Burns

Philp & Co . ar e very unpopular indeed, not only with the

com mercial folk, but wi t h all sections of the white people of the Tenitories. It -is a.lJ eged, and I am inclined to believe with some truth, that the company, having an a.ssured mono­ poly of t he trade, a re calmly indiffer ent to the convenien ce and comfort of their clients and of the general public, an d have displayed, on occasions, a petty meanness which results in much irritation.

38. D emand fo1' Exemption f-rom Act.- 'l'he demand of the f!Ubli c for exemption f.rom the Navigation _>\ct is supported by t he Lieutenant-Governor and E xecutive Council of Papua, a nd by the Administrator of New Guinea. General J ohnston,

a former Administrator, also strongly advocated this. 39 . Arguments in R eb·u.Ual of Attaclv.-I found it impossible to offer any 'conv in cing defen ce cJ the present policy of bring­ ing the trade with the Territories under the coasting trade provisions of the Act. I took every opportunity, ho:vever, of

pointing out that the g reat increMe in .freights and fares since pre-war times was not due solely -to the operation of the Navigation Ac t, :but that s h ipping cost s and operating charges hac! increasecl g r eatly, and that , as a co nsequence, freights ancl fares .had everywhere gone up. The charges from Aus­ tralia t o Eur op e, I mentioned a s a n example, had nearly

ifoubled. 40. I a lso pointed out that t he present trade between t he Territorie£; a nd Australi a .''all barely to keep the

Burns P h1lp stNtmers runnmg, a nd that t he Immediate result of throwin g it open to the competition of oversell- lines would be either that Burns Philp & Co. wou ld have to drop out,

so imperilling r e.g-ular passenger co nmnmica.tion with the Com · nwnweRlth, or that t he Commom1·ealth s u !Js i·:ly wo uld . have t o be n ' ry gr eatly i nc rerused.

4.1. I P.loo put it t hat a s a m.atLer of patriot ism the p eople of the Territories should be prepared to put up with a cer­ amount of to retain trade far as possible

1 n the hands of Bnt1shers, r ather than have 1t, ve ry possibly, monopol ized by Japanese a.nd Dutchm en. I"ead ing planters

43. Quest-ion of 'l'otal Ememption.-One means of af[orcl iug r elief (the method used to secure sea comnmnica.tion with the other Dependencies of the Commonwealth, Korfolk I sland and Northern Territory, and the particubr method for

which the Territories are clamouring) would be by Order in Counci l, under the second proviso to section 7 of the Naviga­ tion Act, to the of passengers or cai'go

between the I erntones and Australia, or between places i11 the Territories, shall not be deemed engaging in the coasting trade. This would at a stroke secure the double objective

aimed (a) a ,s ubstantial reduction in freights and_ f a r es

to A'Ustralia.n a nd other ports, and (b) direct connexion with the East, and a more direct and much cheaper rate, via Singa­ pore, for the export of copra. to European markets.

44. New Se1·vices uncwr t rade connexions

there is reason to believe, wiiuld immediately be given, along two rot!tes, .by the Royal Dutch P acket Line. 'l'l1is company would, Ill the fLr st place, restore the callings a t Port Moresby and Samara.i of their Me1bourne-SinO'Rpore steamers, and also extend i t.s present S ingapore-Dutch"' New Guinea service t o make r egular calls a t Ra.baul ani! other p01·ts in the l\Ian­ dated Territory. Several Japanese lines would also, no doubt, r evert to their practice of some few years ago, of m aking calls route :between J apan and Australia. This would intro­

duce the element of competition a nd .brinrr a bout a n - imme­ d iate and substantial reduction in freights fares, not only to over seR partt, but also between the Territories and trali a..

45. Objections to E xempt·io1i.-But there are several stron <> objections to this very desirable course. The

between Austraha and t he Territories i s, as men­

Ill paragraph 40, barely sufficient to keep i.h e Burns

.running . In the present state of publ ic feeli ng

the tones, I feel sure that, even if. qw fre.ights a nd

ia1es fo1 all lmes. were the same, a substantial p.mtwn of the be g1ven to the new lines callin"', r endering the

of the. Burns service im

0 possible, except

cons1derably mcreascd subsidy from the Commonwealth

(,-9 \'e_rnmen_t. A 'second and equally weighty objection is that t be m.cursion of foreig n steam-ship lines, with the necessary of agencies at each port, would undoubtedly

i end to encourage the development of trade rela t ions between .local and in foreign parts, not only

m r to such Imes as n ee, s acks, and kerose ne which Aus­

trai.Ia cannot s upply, but also, through the Dutch a.ncl

Japanese houses, as regards those manufactured articles such as appar el, boots, implements, graceries, &c., which ca11 , a nd does, supply to her own people, and which repre­ at .present rough ly one-half of the total imports of t he

I ernt?nes. There are, of course, certain lines of fo odstuffs 111 wh1 ch could continue to hold her own a"'Rinst

(t.ll competitors? and which she at present exports con­

SJderable qi_IantJty, and largely in foreign ships, to Java and the East, VJ z., fl our, tinned bu t t er and mea ts, condensed milk, a.nd &c. The establis hment of direct com­

murucatJon w1th Smgu.pore a nd Japan would, under a ny cir­ end anger Au stralia's trade with the Terri'torics

m aud articles, and the danger in this

would be largely m c1:eased if that direct communi­

were .by means of fore1gn-owned shipping. It is an

tt:'

earned by a mvader or by peaceful merchantmen.

country s hips. can collect the copra of the Terri­

tOI Jes and carry 1t to 1ts natur11-l market by the chea-pest

routes can largely control the trade of their. r e·

quirements, provided, of course, prmCJpal t ermmal

port in the itinerary of t hose ships 1s w1thm her own b orders . 46. Qtwstion of "Permits."-lt was suggestecl t o. me wh ile in t he Territories that the main considerations of dHect _com· munication with Singapore and the East, and fre1ghto

and fares .could bo t h .be secured, w.hile at the same t1me exclud· ing the foreigner, by granting, under sectipn 286, t o British sh ips to engage in the trade between Austra.ha and the Territories, ws has lb een done in tlle case of the north-west

ports of Western Australia, and a lso Thursday I sl and.

47 . " Permits " cannot be Gnmted.--This cannot be done f or two reaso ns. In the first place, permits can be granted only 11 here one or other of t wo conditions obtain. It must be

shown, in r espect of the particular par t of the cowst in g t rade fo r which permits are desired (in this case the trade b_etween

I

the Territories a nd Australia 1, either that-- (a) no hcensed ship is ava ilable for the serv1ce, or (b) that the service as

carried out by a licensed ship or sh ips is inadequate to the

the needs of t he port or ports. Licensed ships a re

and are engaged in the service, and as s_ufficlellt m

tonnage capacity to take the ca.r.go oflenng, 1t be

con cl uded that, in the meamng of the Act, the serviCe they provide is " adequate."

48. Q11es tion of Trea,tment of B1·it·is h Ships iJ1

New Guinea.-A second .reason- if further reason were neces· sa ry-why pe·rmits cannot be granted in respect of the trade with New Guinea is that tile granting of ·preferenti<':l treatment to British ships in r egard to trade with the won!d

in evitably' call for th protests to the League of 1\atwns m reo-ard to what would be considered a breach of the spirit, if not the letter, of the Mandate. Ships of ·any co untry, it may be pointed out, may obtain licences t o engage in the coast ing trade on complia nce with t he prescribed conditiom, which

are the same for all ships, British or foreign. There is no

preference in r egar.d to such. But permits to engage in that t rade without compliance with t h ose provisions can be granted to British ships only.

49. Suggested.-The only satisfactory sohdion of

the difficulty that 1 oa,n suggest is the 1lresent ser·

vice of Bm·ns Philp steamers fr om Aust·mlia to Papua and New Guinea be extended to termina,te, on the 011tw a1·d voyage, at Singapo1·e; and (h) that, oonditi.onal on such exte·nsion, the applicatw n of the coasting tmde provisions of the N a,v·igation Act to the trade between Austmlia and the Territ01·ies be con·

tinued. 50. This, it is true, would not give the Tcnitories all they ask for. But it would remedy t heir ma in grievan ce by­

(a) providing direct communication w ith Singapore, so effect· ing 'c on siderable sa.¥i ngs on rice, sacks, ker osene, and other essenti a l import s; and ('b.) securing substantia.! reduction in the freight and other charges in connexion with the transport

of t heir copra to European markets. The scheme would give n o r elief in llllspect of freight s and fares to and from Aus­

tralia, but this is, as it afi'ects t he welfare of the Territ ories, a matter of minor importance.

5 1. S cheme R eserves Austra,lian·'l'en·ito?·ia.l Tm·de fo?' T Jioenserl Ships.-The scheme suggested r eserves the carry· ing trade between Au stralia and t he Territories to the only licensed steamers-the Burns Philp Line. This reser vation

would serve a double purpose. It would secure t o t he line

t he carriage of all A u stralia n ex ports t o the Territories,

which would still be considerable, and will, no d oubt, be au increasing quantity, a nd of the fairly ubstantial export trad e of the Territories to Australia still .remaining, t ogether with the whole of the passenger traffic each way. T h e second ar y,

but equally important, r esult would be that, as they could not 1 pa rtici pate in the Au stralian-Territorial t r ade, it would still be unprotita.ble for the passing J apanese steamers t o call for the purely oversea trade to be clone, so obviating a ny

danger of a war of rates between them a nd Burns, Philp for that oversea ca rgo imperilling the of th e Au stralian

service.

52. Di1·ec t Connexion w ith Silllgapore Essential.-Unless Bums Philp & Co. ot· some othet· Austmlian /.ine provide this di1·ect oonnexion tvith 8inga,p01·e or some other por·t on tho di1·eot 1"0ut e bettveen the East and Eti1"01Je, the t1·anspot·tatign of the 7'mde of the Ter1"itories wU. l m Mt sm·ely slip away [1 ·orn and f?"Otn A.ustraJict, rpa ss int o tlt e hand .. s of

fo?·eignet·s. G3 . Danger of Ove1·soa, Connexions.-As

a lready pointed out (paragr aph 4), ther e is nothing in the Navigfttion AIC t t o prevent foreign s h ill6 engaging in the carry­ in.g- of passen!rcrs a nd cargo to a nd from the Territories, pro· vided only su ch carriage is not from or to an Australi a n p ort.

A J apanese or Dutch steamer could, for in iance, visit in turn each port in both Territor ies, dropping foreign cargo and tak· ing in copra for a n over sea port, the only r estrict io n being

1093

71

t hat slt e: "co ul d not cany passengers or cai·go between iu the Territories. The advantages of · shipment by a d 1rcct r ou te as compared with the cir.cu itous route pia Sydney are substantial and obvious. Burns Ph1lp & Co., 1t m ay be _men· tioned, are quite alive to this, and_ have . themselves sh1p ped quite a number of car15oes by foretgn sh1ps cl],rect f r om the oolomons to San F ranCl SCIJ. Other slupments have been made from time to t ime s ince then (at the time of my arriva l at

R rub aul, in J uly last, a Jarge foreign-owned sailing vessel was in por t loading copra for over seas), and the Dutch

Pack et Compa.ny h a s now intimated that it is con templating the extension of the itinerary of its line of steam er s now

r egularly running bet ween Singapore a nd New Gumea

t o include a lso reg ular monthly calls a t Raba.nl and other

poris in the Territory. In a l etter on the subject,

t he co mpany explains that it h ad been appro:tch_ed by trader s in 'fe;-ritory with a r equest f or the exten s1on of one of

the company's Java s ervices to their ports " _in order thn!; t hey may obtain r ice shipments nt. a

much cheaper r ate than viii Australm, sh1p cargo

copra, &c. , much mor e cheaply and qmckly to Europ e vw

Macassar or J ava." G4. Tempontry HindYanoes to Direct Shipments Overseas.­ There are sever al reasons why the m ethod of direct shipment of 'to E urope by oversea ships has n o_t been more

availed of . These are-(a) The expr opnated plantatwns lll New Guinea produ ce the greater part of the whole copra crop of the Territor ies. The handling of this is controlled by t he l];xp ropriation a Government body, \vhich, presumably

for · o-ood a nd sufficient reason s, consigns the copra to Sy dney by Burns Philp's steamers for r eahz_ation on thu.t ( b) Many sm{l.U g rowers a re not suffi()]en tly str o·ng to cons i rm their copra to over sea m arkets a n d wait several months for 1·eturns so sell their produce for cash to Burns

Philp's agents a t the port _their plantations; tuHI

( c ) the copra produced by t ile temammg ·planters, who afford to await r eturns from realizv.tions in oversea markets, 1s not, as a general rule, sufficient · in amount to a full

cargo for a vi siting ship. There has also been the.

cannot be ship ped wet), and for a cargo w r the sh1p on 1ts

incoming voyage. 55. The whole of these impediments to direct shipment arc, h owever , of a more or less temp orary charact-er, and may be expected to shortly disappear. 'l:be ex·propriated. pla ntations a rc in process of sale to publ JC, a nd unde r p_ nvate

ship the copra produced wJ!I, no d ou bt, be sh1pped by t,te

cheapest r ou t0s to the m:;rkets offering the best r etur_n s, irrespective of anv questiOn of preference to Au stnvl! a n sh1p· ping. As r egards" (b) 3:nd ( c ) , as pl_antations a nd the

trees mature and com e m to f ull bearmg, the quantity of copra produ ced from outside control of the Expro·

priation Board will Le cons1derably m creased and co·operatJ_ on between g rower s will enn.ble full car goes to be more r ea cb ly acc umulated. If the Dutch boats regular monthly can s,

a s contemplated, even the necessity for getting a ful! cargo will be obviated, as they will take any pa.r ce ls otfenng, ll o matter how small. 56. There are, ther efore, good grounds for ant icipa ting that,

unless something is done in the meantime to provide a se r· 1·ice by Australian ships direct from the Territories to Singn· p or e, the time i rapidly appronching when a substantial pro· p or tion, if not the bulk, of the copra produced in P a.p ua and New Guinea will ·be transported direct t o oversea market s in

for eign- owned lines, wit h the r esu ltant innow of good s from oversea ports direct, and, ve ry poss ilb·ly, the ousting of Aus· tra lia n from the trade.

57 . G1·ounds fo1· of 7'ra.de. - It i s high ly

cl es ir11ble , n ot on ly on commercial grounds, but a ls o for

nationa l reason s, that the trade of t he Territories shall he carried in Australia n ships. T h is a spect of the m att er was

empha.sizcrl hy the Royal Commi ssion on late German New Guinea, which in its repor t stressed the necessity for taining "those intima t e t r a de relations which are desua;blc in ord er that the Territor y may not become a n isolated com­ munity, looking to the ou t side world as t he market for both

its goods and its suppli es, and so dr ift ou t 1Jf touch with the Au& traiian people." 51'!. Present ilfelb ott1' ne·Singa1JOrc Sen;icc 1nigltt be Diverted. - Bums Philp & Co ., it may be p ointed out, already run a

mon t hl.Y rvi·ce wit h the steamer s Ma1·ellct (7,50 0 tons) und .iii ontot·o ( 5,000 tons) between Melbourne a n d S in gapore, vui

Torres Strait, calling at Sydney, Queensland ports, T hursday Island, Darwin, a nd, it is under stood, A rnboina., :i\:Lacassar, and Batavia, each way. T hey r eceive no subsidy for t his ser· 1·icc. The two vessels mentioned," if diver ted to call at tho Territories, could, w.ith the llataram, give a r egula r month ly servi ce f r om Australia t o Singapore vic?, the Territories, s tart·

ing from Melbourne, t be Austra li an t er minal port of pre­ sent Burn Philp service to Sin gapore, instead of, as 1s t he

case of all the present Territory services, from Sydney. T ho following is the s uggest ed itinerary:-Melbourne. Witu.

Sydney. l\1adang .

Brisbane. :Port .Moresby. _tl.,mboina..

Samarai. :Macassar.

:Ra,baul. BataVJia..

Kaewieng. , .Singapore.

• Depth of water permitting.

5!J. T he .lfctrellct and M ontot·o carry coloured crews, and a rc not at present lice n sed to engage in the coasting trade. It

\Yould he neces s:lry for them to be brought into complian ce with N a.vi gation Act r equirements before they could par ­ t icipat e in the Austmlian-Territorics portion of the trade or in any subsidy. The Mm·sinct and M.01·inda, it may b e tion ed in passing, were net built for passenger work in tropJC cll

la tit udes, and would be quite unsuitable for u se in the su g­ g·estecl extension from Madang to Singapore, the route ly ing for the who le of the distance within a fe w degrees of the

Equator. 60. I ncreased Subsidy Pro bably N ecessa1·y .-As in

p aragr aph 10 above, B urns Philp & Co. are now r ece1vmg

from the Commonwealth Government a subsidy of £32,000 m r espect of the present services to P a pua and New Guinea d irect. 1t is very .probable (though this i s a matter I have

n ot s o fa r discu ssed with a ny one) that for the extension

of t he service, as su gge-s ted, to Melbourne, on the one hand, and t o Singapore, on the ot her, they would ask for SO?Te

addit ional allowa nce from the Commonwealth. ln additwn t o the annua l increase of 17 ,300 miles in total d ista.n ce run, the subst it ution for t he .MM·sina and Jlfor·inda of larger vessels wo u ld in vo lve incr eased expenditure in h a rbor dues, wages, antl

general running expenses. 61. As a se t·off to th.is, i t m ust be r em emb ered that, provided (hey ca n. be provided wit h r easonably f ull cargoes each w ay, large v essels a.re much m ore economica l t han s mall ones. The chief difficult y in the present connexion would probably be t o

fi nd su 0h quantity of ca rgo f or the T erritories a s would, on its d ischarge t here, leave 'space for the copra , &c., to be con· veyed to Singapore. lt would not do to have the vessels fill ed with thr ough cargo from Au stralia t o S inga.pore.

62. Golou.1·ed Seamen on ull Eastern Lines.-T he vessels of all the half-doze n OT so lilws a t p resent operating between Au st ralia and Singap ore are ( with the single except ion of

those of t he Co mmon wealt h Government L ine ) m anned hy co loured seamen. N o steamers com pl)'ing with Navigation Act r equi rem ents as to a ccommorla ti on, &c., and nu

possibly compete w ith t hese vessels excepting either a t a loss or wit h t h e assist ance of a frt irly s ubsta.nt'ia l s ubsidy. (l3. PTo posed United Sta,tes of America Shipping S u bsidy.­ The American merca11til e m arine occupies, a t the present t ime,

a position closely analogo us t o that of our Australian-owned for eign-going shipping, In both ca.ses t h e m accommo­

dat ion, wage<;, a nd pr ovi sions are in ::cdvancc of those of the Hhip ping of other nations, inclnd i11 g that of Grea t Brit ain . lly r ea son of t he ·eonsee re being run oil' t he seas, and tl1 e ports of

the United St ates of Amer ica are full of idle ships, rust ing

nt t he ir a nclwrs for la ck of profita,b le employ ment. To

remedy t hi;s sta t e of a ffa;irs, lt Bill is a t beiore Con­

g ress which provi des for t he g rant ing of direct subsidies

to " a t least " S30,000,000 p er an n um t o American­

owned a ncl operated m er chant ships of n ot less t han 1,500 t ons gross r egister engaged in the fo reign-g oong t rade. l

into m illions of d ollar s.

72

tl4 . The ba8ic rate is on e-l1a l£ cent. p er gross t on per 100

m iles tmvelled . In the case of st eam-sh ips over 1,500 tons, but less t han 5,000 t on s gross, subsidy is a s on .a tonnage

nf 5 000 t on s. Incr eased r ates a r e pa. id for s lups havlllg . ove1: 15 knots. Appa re11tly , t he only direct ob l!g a t ion on the sll ip·own er is t h a t subsidized ships are r eqmrecl t o ca rry

mail s of t he first, second, and thu· d class fr ee. il .5 . A me1·ican and Commwnwealth S ttbsiclies ComzJ a1'ed.­ C:o mp ared with thi's. p r oposed s ubsidy, those now

p aid t o Burns P h ilp & Co. f or t hell' servwes t o tl;.e T ern·

t ories arc very gen er ou s. F or t h e m ont hly ( s.s.

Jll ataram, 3, 300 t on s gr oss ) Sy dney t o Habaul dtl'ect, then ce to Kaewieng a nd :i\1:t cl ang , t he Common wea-lth pa.ys a n a nnual subs idy of £8,000 ; on the },'m erica.n it w ould

£2,900. F01' t he Pap u an -R aba.ul ser v1c e (s .'s. l , t bO

tons, a nd s.s. 1,500 tons) , t he amount I S ;1; 16,000

pe r a nnum · t he A m erican rate would g ive about £4,800. :

imve not co'mimt ecl what t he s.u b!'_icly for t he Solom ons-Habaul ( s.s. Jlf elnsia, 2,000 t on s ) w ould be under the

scale, but the nro.portioll of su ch t o t he amount a'Ctu ally (£8,000 per a nnum) would p_robs,bl y be about .the. same a s lll the two instances g iven. Th 1s part icu lar serv1ce 1s, pr imarily in tllc int eres t s of t he Solom ons, a nd not of t h e

Territor ies, a n d need not be considered h ere.

G6. Comparison of the subsidies wit h

proposed under the Amen can B1ll is, however, hardly fa 1.r , us the !bulk of the Amer ican 'Sh ip ping t r a des in t he Atla nhq and in E uropean water s, and compet es wit h Yessels m a nned with European, and n ot w ith Asiatic, crews, as is the ca se in ·

tile tracle ·bet ween Au stralia and Singapore.

67 . E xt,.a Cos t at P1'o Rata Inc1'ease.- The subsidy n ow

paid t o Burns Philp & Co. works .out at P obonL 3s. 3d . p er

m ile of the total dist ance t ravelled by t he three shi ps em­

ployed. At t h is rate, t he increasecl am.oun t p!tyable in r e­

spe-ct of the suggested extended service would ( having r eganl to distan ce m1ly) .be £2,811. As mentioned, however , ot h er factm·s----!1\'ag es, &{).-would h ave to be consider ed. If t he n e w servi ce could be secured for a n a uditi on of £5,000 or e ve n

£1 0,000 to the presen t subsidy , t he ex pendit m e would be \Y ell \\'arran ted.

68. A ltemat·i!i c- T ot al Exempt ion of T1' ade with 'Perrit or ics. -Fa iling a n a rrangement with Burns P hilp or some other A us tralian L ine to provide, in r eturn f or a reasonable subsidy, a direct ,serY ice between AustraliR a nd Sing apore vic(, the Territories, there w ill r emain no a ltern at ive but to consider , in t h e interests of the Territ ories, t l10 t otEd exemption of

their t r ade from t he application of the N avigation A ct . E ven the t ota l loss of that trade to the Commonwea lt h, not only in the t m n p or t , but a lso in t he supply, of goods, w ould be,

fr om a monetary point of view a lone, vast ly p refer able to the commercial r u in of the Territories, with the con sequent burden ­ ing of t lte A u st mlian taxpay er w it h t h e cont inued and hea vy f'o st of t h eir ad ministratioiJ.

60 . n ccommendation.- T he whole position in •ega.rd to t he tr

tlt e s ug1 ge5tion s m ade have r ec eived a genera l approval, t o dea l in a ny f u r ther d etail wit h t he ques tion of the incr eas ed

s ubs id y necessa.n. It is ther efor e r ecom mended that at this "- lage," i f t he Minister a grees wit h t lle v iews expressed, the

of tlt e P r ime l\fin ister be obtained to the ge nern 1

p rinciples of t he suggestion s lllade, leav ing the details f or

f urLh er co n sid er at ion and f or n ego t iation with Burn s Philp &, Co .

(Signed ) L EWIS F. EAST,

A-ss ist rlll t Director of Navi ga tion.

18 th S nptelll ber, 1922.

1095

· REPORT BY TWO • OP THE (SENATOH ­

"\IV. L. DUNCAN AND SENATOR H. E. ELLIOTT).

To His Excellency the Right Honorable HENRY WILLIAM, BARoN FoRSTER, a Member of His Majesty's Most Honorable Privy Council, Knight Grand Cross of the 111.ost Distinguished Order of Saint Michael and Saint George, G01:ernor-General arul Commander-in-Chief of the Commonwealth of Australia.

MAY IT PLEASE YouR ExcELLENCY:

We, Commissioners appointed by Royal Letters Patent to inquire into and report upon the effect of the operation of the Navigation Act on trade, industry, and development in Australia and the Territories (iri?luding Mandated Territories) of Australia, have the honour to make our

/ .

report covering the States of New South Wales, Queepsland, Victoria, South Australia, Western Australia, and Tasmania.

This Report is the result of investigations made in each of the States of the

Commonwealth. Circumstances have prevented the Commission from visiting the Territory of Papua, the Mandated Territory of New Guinea and the Northern Territory, but it is intended to visit these Territories in the near future, and it is anticipated that the second Report will deal chiefly with the effect of the application of the Navigation Act to New Guinea and Papua.

In presenting this Report Your Commissioners have followed the order indicated by the following headings :-Part I.-The History of the Navigation Act, and its chief objec.t. Part H.-General Observations.

Part IlL-General Complaints-(!) Lack of sufficient passenger facilities in-- (a) New South Wales. (b) Queensland.

(c) Western A ustra.lia (d) Tasmania. (2) High freights between interstate ports. (3) The " Permit " system and its inadequacy to meet the requirements

of the travelling public. ( 4) The inadequacy and infrequency of cargo shipping services. Part. IV.-Complaints affecting particular States. · (1) Queensland-

(a) The cement industry; (b) Fruit and vegetable export trade; (c) The meat industry. (2) South Australia. (3) Tasmania.- ·

(a) Shipping services to Hobart and the effect upon­ (i) The tourist traffic ; (ii) The timber industry ; and (iii) The fruit industry. (b) Tasmania generally.

(4) West Australia.- The effect of the Act upon­ (a) Primary Production. (b) The timber industry. (c) Albany and its decline. (d) Geraldton and its declin e. (e) The North-West Ports. (f) Effect of the Act upon the whaling industry. Part_ V.-The Shippi_ ng Co)llpanies of relationship to qne a.nother. Part VI.-General conclusions and recommendations.

..

74

PAR.T I.-THE HISTORY 0], TIIE NAVIGATION ACT, AND ITS CHIEF OBJECT.

The Navigation Bill was originally drafted in 1902, under the direction of the Honorable C. C. Kingston, and, on his retirement from the first Con1monwealth Government, 1903, the drafting of this measure was handed over to· the late Sir Harry Wollaston. The Bill n.rst introduced into the Senate in 1904, but was withdrawn, and in .June of that year a Royal Con1m1sswn

was appointed to exan1ine the proposed legislation, and to report. The report of the Con1mission , with the draft Bill, was presented in June, 1906. 190·7 an I1nperial Conference of representatives from the United l(ingdoin, Australia,

and New Zealand was· held in J...Jondon, on the subject of "Merchant Shil?ping Legislation," and the main principles of the Royal Com1nission's draft Bill were considered. Australia was represented on this Conference by the late Sir Wiiiiani. I.yne (J.\.1inister for Trade and Custon1s), l\fr. W. M. Hughes (Chairman of the Royal Con1n1ission), and the late lVIr. Dugald Thon1son (a me1nber of the Royal Commission).

The Conference :--

" That the coastal trade of the Con1monwealth be reserved for sl1ips on the Australian register, i.e., ships conforming to Australian conditions, and licensed to trade on the Australian coast." This resolution was en1bodied in draft BilJ, whicl1 was again introduced into the Senate in September, 1907, but lapsed. It was again introduced in 1908, again in 1910, and in 1911,

and was ultilnately to by both Houses in 1912 . By the time the Act had received the Royal Assent war had broken out, and, at the request of the British Government, the operation of the Act was postponed. The first group of sections-the Coasting Trade, -provisions-came into effect, by Proclamation, on the 1st July, 1921. Shortly after this portion of the Act became operative the owners of a number of interstate ships tested the validity of the application of the n1anning and accommodation provisions of the A.ct to their ships, and the lfigh Court decided that these provisions did not apply to vessels solely engaged in the domestic trade of a State. In consequence of this judgment, the Government decided not to enforce the provisions of the Act then in force on any intrastate ships.

Other portions of the Act came into· operation as shown hereunder:-1st November, 1921 Wireless, and medical inspection of seamen. 1st March, 1922 lVlercantile Marine Officers. lst February, 1923 ·Provisions, n1edicines, effects of deceased seamen, wrecks,

1st l\1arch, 1923 1st October, 1923

and salvage. Collision, boat and fire drills. Exan:iination of masters, n1ates, and engineers ; survey and insl?ection of ships ; load-lines ; life-saving and fire

.adjustment of compasses; and courts of

manne Inquuy.

At the present tin1e only forty-six sections of the Act, out of a total of four hundred and twe_ nty-five sections, remain inoperative ; the majority of these inoperative sections deal with pilots and pilotage. - t

Seeing that the Navigation Bill had so many years of consideration, moulded by expert draftsinen, considered by a Cominission, by an Imperial Shipping Conference, and by Parliament for sev.eral It necessary to look closely into the reasons why the Parlia1nent, after such exhaustive consideration, finally placed the Navigation Act upon the statute-book .

. Y ?ur Con1missioners these reasons, J1ave perused the reports of the Royal CoinmJsswn and of the In1penal Shipping Conference, with t.he result that Your Comn:1issioners find the :nain reason actuated the Parliament in placing the Act upon the statute-book, and which hfted the subJect to a plane of great national importance above the ordinary considerations of party politics, was the desire to build up an Austraiian Mercantile Marine.

To build up an Australian Mercantile lVIarine it was necessary to extend the protectiv€ policy ?f. Australia to To protect the Australian ship-owner from unfair

cOinpetitiOn from subsidized formgn ships or poorly-paid crews fro1n other countries, it was necessary to prevent other competing against him unless such vessels c01nplied with Australian rates of wages, provided the same accommodation for their seamen, and had the san1e 1nanning scale. •

Parliament recognized that, as an island continent, we are largely dependent upon the strength of our merchant service for our existence. The Australian coastal trade was to be reserved for Australian-owned ships, which were to be the source of a supply of skilled and trained Australian s-eamen in of ·even the British Mercantile Marine, duri?g the recent war, helped to man the a1uuhary ertusers, transports, and other adJuncts of the. British Navy.

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PART II.-GENERAL OBSERVATIONS.

Your Commissioners found, while visiting various portions of the Comn1onwealth, that in certain quarters there was unexpected reluctance on the part of interested parties, alleged ·to

be affected by the operation of the Navigation Act, to give evidence tefore tie

This was particularly noticeable at Perth and Bunbury, Western Austraha. It can only be assumed that this reluctance· arose from a feeling that the business interests of t}tese witLesses would be prejudiced in their relationship and dependence on the interstate shipping comra:nies if their grievances, openly expressed through the press and in other ways, were placed in evidence before your Commissioners.

The period in which your Commissioners made their investigation is one that involved more than ordinary difficulty, because conditions were not normal, and the shipping of the Empire had been under government control for some time during and . after the war ; moreover after the war services were necessarily curtailed, freights increased, and in 1921, shortly after the cessation of "control," the Navigation Act became operative. Your Commissioners would further point out that the conditions of ship-ping in Australia, and throughout the rest of the

world, have not yet returned to normal. The shipping industry has been confronted with many difficulties, due to the sudden change from war to peace, with all tbe attendant alteration of conditions, and this fact has made the task of detennining the actual e:fff'ct of the operation of the Act on Australian industry, and· development a very difficult one. The difficulty lay in separating the effects of the war from the effects of the Navigation Act on shipping services and freights, and upon industry and development.

PART IlL--GENERAL COMPLAINTS.

A number of the complaints made were common to all 8tates; these complaints are dealt with separately under this heading, and are as follow:--(1) Lack of sufficient passenger facilities. (2) High freights between interstate ports.

(3) The lack of adaptability of the permit system to meet the requirements of the travelling public. ( 4) Infrequency and inadequacy of cargo shipping services. In some respect these complaints were more general the further removed the complainants were from the big centres of population.

(1) LACK OF SUFFICIENT PASSENGER FACILITIES.

Complaints under the above heading were received in all States, with the exception of South Australia and Victoria. The complaints are shortly as follow :-

(a) ew South Wales.

It was claimed by witnesses that the interstate service was insufficient, and cases had occurred where passengers were unable to obtain berths by vessels (Question 8403) ; that if sufficient facilities were offered by the interstate companies, a greater number of people would avail themselves of those facilities (Questions 8437, 8438) ; that many people desirous

of leaving South Wales during the summer months to take advantage of the cooler climate of Tasmania had to travel by crowded and comparatively small interstate vessels in place of the P. and 0. line and Orient line mail steamers, by which they sometimes travelled before the Navigation Act came into operation.

Against these assertions the interstate shipping c_ o:inpanies produced passenger statistics showing a large proportion of empty passenger accommodation on their. vessels from the port of Sydney, in fact 50 per cent. of the passenger accommodation between Sydney and Tasmania in the year's sailings had been empty. It was claimed that these figures showed that the present service was adequate. It was further claimed that if oversea vessels were allowed. to carry

passengers it would mean an enormous reduction in the revenue of the interstate shipping companies -that in consequence services would haye to be curtailed, and freight and passenger fares increased. In regard to the allegations of overcrowding on interstate steamers, it was stated by the shipping companies' representatives that such overcrowding took place only on exceptional occasions,

such as the Christmas rush of tourists to Tasmania, when all travelling facilities, railways and steamers, are crowded. F .l5346-8

76

(b) Queensland.

In .Queensland it was stated that a great number of people travelled along the Queensland coast by oversea vessels before the Navigation Act operated, and people who used to travel south by the Orient line vessels were no longer able to do so (QuestiOns 6463A, 6499, 6500). .It was further claimed that the passenger vessels on the Queensland coast were not bml t for comfortable travelling (Questions 6502, 6503). It is admitted by the Deputy Director of Navigation for Queenslaiid that the Act has inconvenienced the travelling public (Question

6978), and that the present system of granting permits is inadequate to meet the position. The representatives of the shipping companies submitted a statement showing that for a period of six months before the Act came into operation, the overseas vessels carried 14,716 passengers on the Queensland coast, and that the passage money therefrom amounted to £89,000. It was claimed by the interstate companies that if they were deprived of the protection afforded ' by the Act, they would lose this traffic, which would again revert to the overseas companies, and would not be able to maintain their present services. Voluminous statistics were furnished by the interstate companies showing a large percentage of empty berths on their vessels. These figures, it was claimed, showed that the companies provided more service than was necessary, and more space than the traffic required (Question 7018). It was clear to your Commissioners that as a result of the Northern extension of the railway services the companies have serious competition on the Queensland coast from the Railway Depart:q:t.ent, and that this competition has resulted in lessenerl cargoes and fewer passengers.

(c) Western Australia.

In Western Australia practically the only complaint concerning passenger accommodation was at Albany. At this port the service has been so reduced that at the present time there is practically only a monthly passenger service to eastern States. As Albany is ;300 miles from the Trans-Australian railway, it is undoubtedly a hardship for the people of the Albany district, when desirous of visiting the eastern States, to be debarred by the Navigation Act from travelling on oversea vessels calling at Albany It is claimed. that the extra journey from Albany to Perth adds considerably to the cost and · discomfort of the trip, and that, owing to the peculiar geographical position of L"l relation to the transcontinental railway, the residents should be allowed to take advantage of the facilities offered by oversea vessels. · ·

· On the other hand it was asserted by the representatives of the interstate shipping companies that the people of Albany are not seriously affected by the lack of passenger vessels, and that the majority of people prefer to travel by the Trans-Australian railway. It was pointed out that in June of 1922, at the insistent request of the Albany people, a fortnightly passenger service was inaugurated, which was so poorly supported that the service had to be withdrawn. On the last trip of this passenger service six passengers were landed at Albany, and one embarked at Albany for Fremantle.· On the return voyage eight passengers emb'arked at Albany for

Eastern ports (Question 4281).

(d) Tasmania.

The complaint of Tasmania in regard to passenge r services is not similar to that of tl1e other States as set forth above. The complaint is that the tourist traffic to Tasmania is seriouslv affected by poor travelling facilities. Tliis complaint, as it is peculiar to Tasmania, is deait with in Part IV. (3) of Report.

Speaking generally on passenger facilities, the Director of Navigation stated that 60,000 tons of interstate passenger tonnage has been taken from the Australian coast since 1.914. The Director further that he was of passenger tonnage onthe coast,

and that complamts would commue until some of tms tonnage was replaced by the interstate companies. (Questions 13314, 13359- 61.) In reply to assertions the· represen!.ative of interstate companies admitted that eleven vessels of their fl:et had left the c?ast srnce 1914, but it. was pointed out that only two vessels were d1sposed of after the Nav1gatwn Act became operative; :five were sold in

1915, hvo in 1916, and two in 1919. As against these eleven vessels leaving Australia, five others were brought into the Australian coastal trade. . It was also asserted that the price .of passenger tonn.age since the war had been prohjbitive. 'T'his, however, does not apply to-day. It was also claimed by the companies that there is · no of .passenger that a exists, and that it is only during

ex r,eptwnal rushes that there JS any suggestiOn of overcrowding and insufficient passenger faetlltws. ··

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CONCLUSION.

Your Commissioners a.re of the opinion that whilst the passenger accommodation provided by the interstate companies is adequate to meet all requirements in normal times, periods occur in the year when great difficulty is experienced by many people in obtaining berths. That this is a hardship upon such people cannot be denied, and this hardship is felt not only bv tourists

but by business people and others. It carinot be expected, of course, that the interstate companies will maintain a surplus of shipping in normal times to meet these periodic rushes, but your Commissioners are of the opinion that some more expeditious means than the present " permit " system must be devised to meet the position. The lack of adaptability of this system is dealt with under Part III. (3) of this Report.

(2) HIGH FREIGHTS BETWEEN INTERSTATE PoRTS. Your Commissioners met with complaints of high freights on the Australian coast in all theStates. One of the most serious charges against the effect of the Navigation Act was made by the Tariff Board in its annual report of June, 1923, in which the Board stated that the Act

"places heavy freights on our own products while oversea goods are carried for much lower freights." The Board further stated that the effect of such heavy freights was to nullify the effect of the national policy of protection, and that primary producers and manufacturers were placed at a serious disadvantage thereby.

The Chairman of the Tariff Board placed a memorandum before the Navigation Select Committee, whose work this Commission is continuing, showing examples of how freights on the ' Australian coast are, in many instances, higher than oversea freights from the United Kingdom and other oversea countries.

The following are the further charges made by the Chairman of the Tariff Board against the Navigation Act, in its relation to the raising of coastal freights :-1. Australian coastal freights are out of all proportion to deep-sea freights on goods from oversea countries. .

2. Crushing freight charges hamper the trade of the Mandated Territories of Australia. These charges against the Navigation Act,' coming from such a body as the Tariff Board, whose duties are such as should make the members of the Board thoroughly conversant with every side of the question, and who, being a non-interested party, are ne cessarily dispassionate in their attitude, were regarded by your Commissioners as most serious.

Your Commissioners .therefore closely investigated various examples of cases where branches of primary and secondary production were stated to be adversely aftected by the high freights. These particular cases are dealt with under separate headings in this report. .

In regard to the general complaint of high freights resulting from the Navigation Act, the shipping companies have stated in evidence that since the Navigation Act became operative freights have not been increased, and in some cases, particularly in regard to timber, coal, and agricultural implements, and since ince12ti?n of inquiry, ha actually decreased. Although this statement has not been contradicted, It IS claimed by some witnesses that these freights were abnormally high when the Act came into force, and by reason of the Navigation Act have

practically unchanged. . The of .the shipping companies also assert that coastal freight is necessarily

higher than deep-sea all parts of the world, on of the coastal services entailing

more port dues, longer delays m ports, smaller coastal vessels bemg less profitable, heavier handling charges, &c. It was also claimed that oversea freights have increased more sin ce the war than Australian coastal freights. The shipping companies producE'd evidence to show that coastal rates on the coast of South America are in some cases higher than those on the Australian coast.

The Trade and Customs Department also furnished examp .es of South African coastal freights which were not lower than the Australian rates for similar distances. '

CONCLUSION. ,

Your Commissioners are of the opinion that whilst it is undoubtedly true that freights are considerably higher than in pre-war days, no evidence has been tendered to show that these freights are in any way extortionate by comparison with freights under similar conditions in other countries, or when considered in relation to the high workillg costs or net profits of the interstate shipping companies . Your Commissioners have no doubt that certain Australian industries

are suffering in their develop:nent because ?f freights, but cannot that such freights are due so much to the operatiOns of the NaVlgatwn Act as to other economic factors quite outside and independent of the Navigation . Act. Certainly the Act does · give full scope for and encouragement to the establishment of an Australian shipping combine or agreement between the companies, but an examination of the world's shipping position reveals that such combines operate in other countries, and indeed are world-wide in their ramifications. In view of the

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large holdings by .oversea shipping interests. in the companies, your Com:nissioners cannot see that our position wol}.ld be matenally affected In any way by e-yen the repeal of Navigation Act itself. Doubtless such an action would a certain measure of

and non-British competition, which would react very quickly against the. wages and working conditions of our Australian seamen and against the best interests of Austraha:n as 3: whole, unless some other form of protection were given. The late war re:vealed th.e national Importance of the shipping industry, and we cannot afford fron1 the stand-pmnt of national development to

any actiqn tha.t would tend to increase to any considerable extent _our dependence upon foreign shipping for the marketing overseas of our primary products. .

. (3) THE " PERMIT " SYSTEM .AND ITS INADEQUACY TO MEET THE · OF THE TRAVELLING PUBLIC.

The above is another complaint which is also fairly general. Section 286 of the Navigation Act, on which the permit system rests, is as follows :-286.-(1.) Where it can be shown to the satisfaction of the Minister, in regard to the coasting trade with any :port or between any ports in the Commonwealth or in the Territories under the authority of the Commonwealth-

(a) that no licensed ship is available for the service; or (b) that the service as carried out by a licensed ship or ships is inadequate to the needs of such port or ports, and the Minister is satisfied that it is desirable in the public interest that unlicensed ships be allowed to engage in that trade, he may grant permits to unlicensed British ships to do so, eitherunconditionallyor subject to such conditions ' as he thinks fit to impose.

(2.) The carriage, by the ship u'amed in any such permit, of passengers or cargo to or from any port, or between any ports, specified in the permit shall not be deemed engaging in the coasting trade. . -

· (3.) A permit issued under this section may be for a single voyage only, or may be a continuing permit. (4.) A continuing permit may be cancelled by the Minister upon not less than six months' notice to the master, owner, or agent of the ship of his intention to cancel it. .

(5.) The Minister shall, within fourteen days of the granting of any permit under this section, or the notice of intention to cancel any such · permit, notify in the Gazette the issue of the permit, or the giving of the notice, as the case may be, with particulars thereof. The Director of Navigation stated in evidence-

(a) Except in t1vo isolated cases he had always been advised by the Crown Law Departn1ent that the Minister's powers are limited by the fact that the existing services cannot be proved inadequate. (b) The Minister has first to be satisfied that no licensed ship is available for the service.

The Director has never been able to satisfy the Minister that there is no licensed ship. (c) An application for a. permit cannot be made by a _deputation, but by the owner or agent of the ship requiring to carry the passengers or cargo. (d) The oversea shipping companies have decided that, in future, they will have nothing

to do with permits, which they consider are not worth the trouble thay have to take to obtain one. It seems fairly obvious that the permit system has not been applied very n1uch to cargo nor is it likely to be availed of for cargo to any extent, with the exception of the case of the

Queensland meat industry which, during the past two years, has sent large quantities of frozen meat to southern markets by the refrigerated space on oversea steamers. It is admitted by the shipping companies that during 1923 their refrigerated space was insufficient, and they raised no objection to the oversea vessels lifting Queensland meat for New South 'Vales and Victoria.

Mr. J. M. Paxton, representing the Sydney Chamber of Commerce, and at the same tirne speaking as a representative of oversea shipping companies, stated :-" So far as I can recollect over a period of 30 years, the British oversea companies have never sought to carry cargoes on our coast, and it was with the utmost difficulty that we induced them to carry cargoes during the war period, when it was imperatively necessary to get stuff moved from port to port. In regard to passengers, however, it is a different ·

It was also stated at Albany that oversea vessels never carried interstate cargo in or out of that. port. It may be safely asserted, therefore, that except for the Queensland mf='at industry, which is dealt wjth separar,ely, the main complaint against the permit system is in regard to passenger traffic.

Putting aside the question whether there is sufficient pass.enger accommodatwn on t-he Australian coast or not, i b is apparent from the evidence that the permit system is of little assjstance to the travelljng public. In the first place, the oversea shipping companies will not, as the Direct?r of Navigation stated, .bother about ap'J?lying for a pern1it. By so doing they can only obtain the passengers that the Interstate steamers are unable to carry, and in the second place, by carrying interstate passengers, they run the risk of bringing industrial trouble on

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themselves (Question 13264). That is the oversea shippi:q.g companies' attitude to the permit system. The complaint of the travelling public, whieh is fairly general throughout Australia, was voiced by one witness at Brisbane, as follows:-- -

We were advised by the Deputy Director of Navigation that when the interstate passenger steamers were overbooked, if application were made for a permit to travel on an overseas vessel, it would be granted. This course. has been adopted on one or two occasions, but it is difficult to arrange the matter, since the companies wiJl not tell you until Friday afternoon or Saturday evening whether they can take the passengers. (Question 6496).

Exactly similar complaints were placed before the Commission at Sydney and Hobart.. One Hobart stated---

9223. I am informed that no application for a permit was made. You know that provision is made in the Act to meet such cases as this 1-Yes, but by the time the permit is granted the boat has gone. 9226. . . . . . In the case of the Moemki we did not get that permit until the last minute, and then only twelve passengers travelled by that vessel.

In Brisbane the complaint is stated by the Deputy Director of Navigation co have been made---6966. ·where applications are made for permits, do you make inquiry 1- There has to b e an application in writing that the service by the coastal boats is inadequate. I always confirm that by getting into touch with the

Secretary of the Australian Steamships Federation. ·

6967. By Senator Elliott:-vVe were told that the interstate shipping companies informed passengers only a,t the last moment whether accommodation is available, when it is impossible for them to make arrangements to travel by the next boat 1-Yes, I have heard people say that.

CONCLUSION.

It appears to your Commissioners that this is a genuine comp]aint; due to the rigid nature of the Act. The machinery is there to enable advantage to be taken of oversea vessels, but it is so hard to set in motion that the oversea companies will not bother about it, and when the individual attempts to set it in motion, it moves so slowly that the opportunity to take advantage

of it is in danger of being lost. The Act at present requires that it be shown to the satisfaction of the Minister that the service is inadequate. It would require great courage in administration to declare in advance that a service js inadequate, and it is not to -be wondered at that decision is delayed, except in such cases where the interstate companies admit the fact. Great

dissatisfaction was shown in many places because the Director of Navigation refers in the first instance to the interstate companies, and the inference has been that there is something improper in this, but it is obvious that such reference is often the shortest way of settling the question of inadequacy. If the interstate shipping companies admit the inadequacy nothing more is required,

for the Minister ,will be satisfied on such admission. On the other hand, if they dispute the fact it is necessary to get independent evidence of the inadequacy, and the delay in establishing this inadequacy defeats the purpose of the provision.

RECOMMENDATION.

Your Commissioners are of the opinio_n that, if the " Permit " system is to be retained some amendment is required to make it more speedy in its application. Possibly this can be done by amending Section 286 of the Navigation Act, as follows :-Insert the words" or is likely to prove " immediately before the W?rd " inadequate " in sub-section (1. ). This would allow

the Director of Navigation to exercise an intelligent anticipation of the likelihood of a holiday rush or other sudden demand for space, and make preparations accordingly. To meet exceptional cases, where a British ship is not available, the words" or if no British ship is available then to a non-British ship " might be inserted after the worrls " British ships " in sub-section (1.). Moreover by regulation it could be made possible that the initiative in seeking

a permit should rest with the individual passenger or shipper.

(4) THE INADEQUACY AND INFREQUENCY OF CARGO SHIPPING SERVICES.

Many complaints were made to your Commissioners in regard to · alleged inadequate a11d infrequent cargo shipping services for various ports and industries. These complaints are dealt with separately, but there is a general complaint from the outlying parts of the Commonwealth that the cargo services on the coast of Australia are inadequate.

It is claimed that the Navigation Act has given a virtual monopoly of the coastal trade to the interstate shipping companies, and that these companies,have allocated mfferent se ctors of the coast or branches of the trade to each company, with the result that, in the absence of competition, each company, wjth the object of avoiding loss; ; has reduced its services to a. minimum.

The complainants allege that they, the producers and manufacturers, are the best judges of what shipping services are required, while the shipping companies maintain that they must be the sole arbiters. The complainants further allege that with a better service · they could build

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up a greater trad'e, while the companies assert that the mere increase of shipping services has, up to the present, failed to bring about appreciable increase in or J?assenger traffic . Several instances are quoted where they have, under pressure, increased their serviCes and have-had to withdraw them again to avoid continuous loss.

The Director of Navigation, while deploring the withdrav;ral of passenger . tonnage, commented on the increased cargo tonnage made available by the Interstate ?ompanies.. cargo tonnage figures show a large increase during the past three years. Business men In the larger centres of population state that the cargo services on the coast are ample.

It-seems apparent, therefore, that the cargo facilities of the larger ports, such as Port Adelaide, Melbourne, Sydney, and Brisbane, are_adequate. . . .

It is equally apparent that the people In some outlying portwns of Australia, such as the remoter parts of North Queensland, Tasmania, and Western Australia, have reason for complaint against the somewhat infrequent and inadequate cargo services. _ Mr. V/alter Leitch, a member of the Tariff Board, stated:-

13665.-As a member of the Board, have you found that complaints come from outlying portions of the Commonwealth ?-Yes. 13666. Have there bee.q. complaints about the irregularity and infrequency of shipping ?-Yes. 13667. What induced your Board to refer to this Act in its annual report ?-The number of complaints which

we received from shippers, particularly in Western Australia and Queensland.

Sir Mark Sheldon, giving evidence as President of the Associated Charnbers of Commerce, said:_:_ "It does not seem fair that a State like Tasmania, that is so dependent on water carriage, should lose the facilities it has enjoyed in the past through overseas vessels ceasing to call at Hobart. It is also hard on Western Australia."

(Question 8908.)

The Tariff Board in its annual report of June, 1923, stated that the Navigation Act" more than any other legislation discourages the settler on our coasts far ren1oved from industrial centres." The reason why the coastal cargo services are claimed to be insufficient in the remoter portions of the Commonwealth is not hard to arrive at. Australia's long coastline makes the carriage of small cargoes to and from the distant ports on that coastljne unprofitable. It is a matter of business, and the shipowners cannot be expected to run cargo services which regularly lose monev.

At vthe same time, the producers in the outlying portions of the Commonwealth have a right to ask for proper shipping facilities. Tbey have just as much right to expect adequate shipping service as they have ·a right to a telephone service and educational facilities for their children.

How to meet this position is a conundrum. Subsidized services to these outlying ports have been suggested and such a system is already in operation in the Northern Territory. But there are obvious objections to any very considerable extension of such policy. Under " General Recommendations," however, your Commissioners recommend the adoption of a policy which they believe will not only remove the disabilities under which most of these distant ports of the

Commonwealth labour, but will also meet the of the " seasonal" rushes in the

more populated areas.

PART IV.-OOMPLAINTS AFFECTING PARTICULAR STATES.

( 1) QUEENSJ-'AND.

(a) The Cement Industry .

. The Chairman of the Tariff Board quoted the cement industry as an example which showed that high coastal freights nullify the effect of the protective tariff. He pointed out that the freight rate from London to Australia is 27s. per tori, andshipments have reached Melbourne from Europe as low as 22s. 9d. per ton, while Australian cement pays a freight rate of 45s. per ton fronl Melbourne to Rockhampton, 35s. from Melbourne to Fremantle, and 20s. r·Jrom 'Melbourne to Adelaide. - ""

In Brisbane, the Queensland Cement and Lime Company claimed that the high freight on cement on the Queensland coast is seriously handicapping the operations of the company. This company has £275,000 capital invested. The capacity of its works_ is 54,000 tons of cement per It pays £60,000 per annum in wages. It uses 20,000 tons of coal, and

half a .million bags per annum :vhich are in Queensland. The company has been

operating for seven years. It aims at supplying the whole of Queensland with cement but it does not do beyond that stat: .. With to the position at present is that cement

can be Imp?rted fron; Great to Carrns, Townsville, Rockhampton, and BJ;isbane; at 24s. per ton, wh1le frmght from Bnsbane (where cement works are situated) to Cairns · is 41s., and to ·Townsville 35s. The company has recmved a concession of 6s. per ton .off these rates. In 1914, the freight o·n cement from Brisbane to Townsville was 22s. and to Cairns 308. per ton.

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Last year 11,000 tons of cement were imported into Queensland from overseas; 75 per cent. of this came from Great Britain, and the remainder from Denmark. While the company :finds that it can successfully compete with British and foreign cement in Brisbane, and within a certain radius of its cement works, yet in North Queensland, in spite of the duty on British cem.ent of 20s. per ton, and on foreign cement of 30s. per ton, the Queensland article has to be sold at a loss in order to compete, and in order to sell its cement at Rockhampton, Townsville,­ and Cairns, where the demand is great, the company states that it requires a considerable reduction in freight or an increase in duty on imported cement. The latter remedy would add a duty which is not required in the other states where the Australian-made article is sufficiently protected. It would add an enormous amount to the profits of cement companies in other states) and add to the costs of users of cen1ent throughout the Commonwealth. ·

It is extremely doubtful whether the cement question is a fair example of alleged excessive freights on the _Australian coast in comparison with the freight frmn England on cenwnt. Evidence was placed before your Comm.issioners that the low freight rate on cement frorn England is due to the fact that it comes out as ballast, and can, therefore, be carried cheaply. This fact has already been recognized by the Tariff Board, and a "dumping" duty has been placed

on imported cement under the provisions of the Customs Tariff (Industries Preservation) Act.

CONCLUSION.

Your Commissioners are of the opinimi that the high freights on cement on the Australian coast, by comparison with the " ballast " freight upon imported cement, cannot in any way be said to be due to the operations of the Navigation Act, and no assistance in this connexion can be rendered to the Australian cement producers by means of any amendment of the Navigation

Act. In view of this fact, and also in view of the action taken by the Tariff Board, your Commissioners .cannot make any recommendation.

(b) Fruit and Vegetable Export Trade.

The Queensland fruit and vegetable export trade is of considerable and increasing proportions. About 90 per cent. of this export is carried by special fruit trains, which run to Sydney and Albury, and recently this service was carried to Melbourne. Representatives of the fruit industry claimed that the lack of suitable shipping accomm.odation

is responsible for the inauguration of the fruit-ti·ain traffic. It is also claimed that the lack of cargo space for the interst.ate export of bananas was one reason perhaps for the banana-growing industry declining in North Queenf?land, and increasing in the south, where railway facilities for getting the fruit to market are available. In short, the railways, by offering better facilities,

took the fruit trade from the coastal vessels. As against this argument, there is abundant evidence that the inauguration of the fruit trains from Queensland to New South Wales and Victoria has been most successful, and, no matter what cargo accommodation was offered to the fruit industry, the railways would still be favored by the growers, on account of the 1atter entailing less handling, and providing a quicker

journey for the produce to reach the markets, and a better distribution of the supply. This has been admitted in evidence by the grow-ers themselves. There is one branch of this industry, however, which is almost wholly dependent on shipping for the marketing of its products, and that is the tomato and cucun1ber export from Bowen. The

growers in the Bowen district state that not only do they receive insufficient shipping service, but their produce is handled in such a 111anner as to deteriorate a considerable quantity of it. In 1922 there were exported from Bowen about 136,500 packages of fruit and vegetables, the bulk of which went to Sydney. There is one boat fron1 Bowen per ·week. This vessel also

carries other cargo, and it is stated that the fruit is often placed with hides, tallow, and sirnilar cargo, which seriously affects the condition of the fruit. It is also that the service is not frequent enough during the fruit season. lVIost of the 'fruit has to be pic_ ked in a green state, so that it will stand a week's journey. \Vith one week between shipments a great deal of fruit becomes over-ripe, and is

CONCLUSION.

Your Commissioners, while admitting that there is a certain wastage of fruit by careless handling: are also of the fact that in every branch of fruit export somewhat similar onditions occur. At the present time, experin1ental work is being carried out in England and to.devise means by which all kinds of fruit may he carried by ship witho_ ut deterioration.

The and cucumber industry of Bowen unaol!-btedly suffers loss iJ?. the of produ ce­ to Sydney, but your Commis ioners are not prepared to assert that the Navigation Act .is to

82

blame. The percentage of loss has not been greater since the co:tning into operation of t.he Navigation Act, and it was not suggested that the service was in any way less adequate than pnor to its proclamation. ·

(c) The Meat Industry.

The chief grounds of con1plaint made by the meat industry against the Navigation Act are (a) that there is insufficient space on the interstate boats for requirements, and (b) the pern.tit systen1 is not expeditious enough to enable consignors to secure the business offering. During the past two years the demand in southern states for Queensland chilled meat has been very great. This demand varies considerably, and at times the interstate vessels can deal

with requirmnents; but, on the other hand, on several occasions, owing to serious meat shortage in New .South Wales and Victoria, the demand for Queensland meat has been so great that the insulated space on the interstate vessels has been totally inadequate. · · To meet these abnormal demands " permits " have been- iss.!J.ed by the Deputy Director of Navigation, Queensland, to enable oversea vessels, which are not "licensed" under the Navigation Act, to carry meat to Sydney and

Although to som.e extent the issue of these "permits" has met the requirements of the industry, it is contended that the Navigation Act constitutes a restraint of trade. The evidence of the representative of the Australian Meat Council ·puts the objection clearly, as follows:-L. W. Davies, representative of the Australian ·Meat Council.

8305. In what wa.ydoesyourCouncil considerthattheNavigation Act affects the meat industry ?-At present it is a hindrance to the interstate trade in frozen meat in so far as we are not allowed to ship refrigerated cargo by overseas vessels unless a permit is obtained, and you cannot get a permit unless there is no space available in the interstate boats. The space by the interstate boats is not sufficient for: the trade, and you do not know whether you can get the permit until the last minute. Therefore, you cannot do any forward business. .So far as Queensland is concerned, all the permits are given to Brisbane, and in June you cannot make a sale for delivery in August except subject to freight Last winter we could have done a lot more business only we could not guarantee delivery. Several times we were short of beef, whereas, if we could have made forward arr'"ngements, we could have_ had it coming all the time.

On this question the representatives of the interstate shipping companies produced figures showing that in normal times only a small percentage of their refrigerated space is required, and that it was only during 1923, when there was an abnormal demand for chilled meat in Victoria and New South Wales, that they were unable to cope with the requirements of the industry.

The representative of the meat industry admitted that this abnormal demand for refrigerated space only took place for one or two months in the year, that the meat market is constantly changing, and it is impossible to say, even approximately, what amount of space will be required. In view of this uncertainty, it is clairned by the interstate shipping companies that it is unreasonable to expect them to provide, at very great cost,. refrigerated spaee for an

unknown quantity of meat which may or may not eventuate, particularly in view of the fact that for the greater part of the year only a small percentage of their refrigerated space is taken up. It is admitted that in no _ case has the application for a permit to earry meat from Queensland been refused, and a statement was tabled by the Navigation Department that between

8th May, 1923, and 25th October, 1923, no less than 35 permits were granted, by which about 2,500 tons of meat were conveyed to ·southern ports. · But while this fact is admitted, the meat industry claims that the permit system fails by reason of the fact that sufficient notjce cannot be obtained as to whether space will be available. The evidence of the representative of the meat industry is as follows:-

8306. Could you not have informed the Controller of Shipping that the quantity of meat you had ordered forward could not have been shipped by the interstate boats, and could you not then have made arrangements forward with other vessels ?-You could not get a permit forward. It is not practicable that way. You do not know whether you can get the space for forward delivery, an_d we do not know until the last minute whether we can get a permit forward. .

8307. You contend that the insulated space o.1 the interstate boats was inadequate for the trade available last season from Queensland to southern ports 1-Most inadequate. 8308. And it was not possible to get forward permits ?-It depends how far forward. ·Certainly not a month or six weeks ahead.

8309. Thereby you were not able to do the trade you would otherwise have done 1-We lost a lot of trade. 8310. How much do you estimate ?-Personally, I could have sold anything from 1,000 to 2,000 bodies of beef if I had been able to work on the necessary space. We did make sales of · Queensland beef tc) Melbourne. There is a big movement of sundries all the time, and that is just as difficult as frozen beef.

CONCLUSION.

Your Commissioners are of the opinion that it is a clearly established fact that the meat producers of Queensland have suffered by reason of the operations of the Navjgation Act. Large order.s were lost because of the uncertainty of shipment, and the "permit" system was largely inadequate to meet the position. Not only did the producers suffer, but also the southern consumers, who not only had to pay greatly increased prices, but on many occasions, owing to

1105

short markets, found it impossible to obtain their requirements. This position gave a quickly availed of opportunity toN ew Zealand competitors, and large quantities of beef frmn that Dominion found a ready and profitable market in Sydney and Melbourne. That this is detrin1ental to the interests of the Australian producers cannot be denied. The rigidity of the "coastal" provisions

of the Navigation Act was almost entirely responsible for this position of affairs. But to expect the interstate shipping companies to make provision for a grossly excessive refrigerated space in normal times in order to meet a periodically recurring abnorn1al demand, would be just as unfair as to expect the primary producers to suffer in abnormal times because their space require­ ments were so much greater than normally. Your Commissioners are of the opinion that the solution which they propose in their " General Recommendations" is the only practical way out

of the difficulty.

(2)--SouTH AusTRALIA.

The main complaint in South Australia was in connexion with the Spencer's Gulf and Eyre's Peninsula shipping services, but as these ports are served by intra-state vessels over which the Navigation Act has no jurisdiction, Your Commissioners consider that this matter does not · come within the scope of their inquiry. It is, however, an interesting example of how the interstate shipping combine allots sectors of the Australian coast to the companies comprising the combine.

It is not seriously suggested that the Navigation Act was responsible for the formation of the interstate shipping combine, which existed many years before the Act, and would no doubt remain if the Act were repealed. Neither is it asserted that a shipping combine has a sinister meaning. The time to abuse combines has gone by. They are the result of a natural evolution in all industry. .

Your Commissioners are aware that a Royal Commission has been appointed by the Government of South Australia to inquire into the Gulf and Eyre's Peninsula shipping service, and it is considered that in these circumstances, and seeing that it is really a State matter, a report on the subject by your Commissioners is at this stage inadvisable.

The only complaint from South Australia against the operation of the Navigation Act was in connexion with the timber industry. As South Australia is not a timber producing state to any great extent, it has to import a great proportion of ·its requirements. It was stated that the principal hardwood timbers are obtained from Western Australia and Tasmania, and that in recent years considerable difficulty has been experienced· by timber merchants in fulfilling orders.

It was stated by ·a representative of the industry that he had great difficulty in connexion with shipments from Western Australia and Tasmania. As regards Tasmania the position was also alleged to be particularly unsatisfactory because of insufficient cargo tonnage engaged in the Tasmania-South Australia timber trade.

It was further stated that, during the year 1923, there had been an acute shortage of timber space for timber between Western Australia and South Australia, and the merchants of Adelaide stated they had great difficulty in supplying orders in consequence. Evidence was also given in Hobart of unsatisfactory timber cargo space with Port Adelaide.

It was not suggested by the representative of the Adelaide Timber Merchants that t he question of the ruling freights on timber was the cause of hampering their operations (Questions 5432-3). As against the statement that there was a shortage of timber space from Vv est ern Australia,

it was admitted that this shortage was only temporary, and as a rule all · supplies required from that source could be obtained (Question 5374). It was further admitted by an Adelaide timber merchant that "the timber industry has not been affected by the Navigation Act " (Question 5376).

In regard to Tasmania this witness stateci that the Navigation Act had in no way interfered with the sales of Tasmanian timber in South Australia (Question 5416). He said-" I think we are selling more " (Question 5415).

CONCLUSION.

Your Commissioners are of the opinion that the trade industry and develop1nent of 'outh Australia has not been seriously affected by the operations of t he Navigation Act. Certainly, in the timber industry, some temporary inconvenience has been caused by difficulties of shipment, but there was no evidence to show that this inconvenience wo uld not have arisen had the Navi ation

Act not .been in operation.

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. (3) TASMANIA.

(a) Shipping Services to Hobart.

In regard to complaints from Tasmania, these were limited to Hobart and the west coast port of Strahan. There were none from Launceston, which enjoys a regular passenger and service with Melbourne, and it was admitted that so far as the north-west coast ports of Burnie, Devonport, Ulverstone, and Stanley are concerned, the interstate service is ample. It is asserted

by the manager of the State Steamship Service of Tasn1ania, that this good service to the north-west coast is due to the competition of the shipping companies with the state-owned steamers, but the fact remains that there are no shipping complaints from that part of Tasmania. Tasmania is in an entirely different position from any of the other states, in that it is solely dependent on sea-carriage for cargo and passenger communication with the n1ainland, and it is out o£ the route of ordinary coastal shipping.

As before stated, the " storm-centre·" of complaint is Hobart. The complaint is a bitter one from all sections of the cmnmunity, and has brought about a feeling in Hobart that Common­ wealth legislation threatens the economic welfare of Tasn1ania, causes the state to suffer in various ways, and hampers it in its natural cornpetition with the other states. .

The chief ground for this feeling is the cessation of shipping services that existed prior to the war. Before the war Hobart had an excellent direct weekly service with Melbourne, provided by large vessels of about 6.,000 tons, which did the round trip New Zealand-Melbourne- Hobart: and then Hobart-l\1elbourne-N ew Zealand. This was a very regular passenger and cargo service. There was also a regular passenger and cargo service frmn Hobart to lv1eJbourne, via Strahan, which provided direct communication to enable Hobart to do business with the mining districts of the west coast. There was also a weekly passenger and cargo service between Hobart and Sydney, the run being New Zealand- Sydney-Hobart, and Hobart-Sydney-New Zealand.

There was also a direct fortnightly service from England to Hobart provided by vessels of the New Zealand Shipping Company and the Shaw Savill a1id Albion Steamship Company. These vessels ran fortnightly, bringing cargo and passengers from London to Hobart in 43 days, which made Hobart the transhipping port for a great number of passengers for the other states.

These vessels brought hundreds of passengers, including numbers of immigrants for New Zealand, all of whom spent one or t wo days at Hobart. In addition to these services the mail steamers, 'which visited Hobart between February and 1\'Iay to lift fruit for the English market, carried passengers between interstate ports and Hobart, and built up thereby a profitable section of the Tasmanian tourist business.

It is also asserted by the fruit importers that vessels of the P. and 0. line, which used to call at Hobart to lift small quantities of fruit for London, no longer call because previously the passengers carried between Sydney and Hobart paid the running costs of the vessels and enabled them to visit Hobart. It therefore no longer psJys the P. and 0. vessels to pick up fruit at Hobart unless they go there to lift a substantial cargo.

There is no doubt that these services have ceased, and the reason for the cessation must first be · considered. It was asserted by nearly all the I-Iobart witnesses that the Navigation Act prevented the continuance of the services between Hobart and New Zealand via Sydney and Melbourne. There

was considerable evidence placed before your Commissioners that the Navigation Act was responsible. The Melbourne- New Zealand and Sydney-New Zealand services still continue­ why is Hobart omitted ? It is claimed that Hobart is omitted because the fact of calling at Hobart would constitute " coastal trading," and the vessels calling, in order to carry cargo or passengers, would have to "license" under the Navigation Act and incur all the conditions and expenses attendant thereto. ·

The same argument is applied to the discontinnance of the Hobart- Strahan-:-Melbourne service. To continue that service would mean that the vessel would have to be " licensed," and so the service has ceased. It is alleged by most of the Hobart witnesses that the result of the cessation of these nre-war services has had a serious e:ffect on-

l. (i) The tourist traffic.

(ii) The timber industry. (iii) The fruit industry. (i) THE TOURIST TRAFFIC. Tasmania is a favorite summer tourist resort for Australia. It caters for tourists to a greater extent than most of the other States. The value of the tourist traffic is considerable. By means of propaganda and advertising,- the number of tourists who visit ·Tasmania is still but is is the fa ct that the mail steamers visiting Hobart:

to pick up fruit are no longer to carry passengers by. interstate boats, prevents

a great number of a wealthy class of tounsts from the other States g01ng to Tasmania. ·

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Before the Navigation Act operated there tourists came by what was known as the " apple trip ." They could travel during the apple season by mail steamer between say Sydney or and return by another mail steamer. It is contended that these

vessels began to build up a separate branch of the tourist. traffic. It is claimed that most of people do not now visit Tasmania, .they comfortable which, it.

IS stated, is denied to them by the present faCilities, consiStmg of comparatively s1nall coastal

vessels with frequently crowded accommodation, and the Launceston- Hobart railway. According to statistics placed before ·your. Commissioners, 500 people visited Tasn1ania by means of the " apple trip " in 1913, and in 1914 this number increased to 1,000. It is claimed that the number of wealthy tourists was increasing, and that this branch of the traffic was being built up when the war stopped it, and the Navigation Act prevented its revival.

As against this argument, evidence was furnished by the representatives of the interst ate shipping companies that the service provided by them is ample, and for more than half of the year their vessels from Sydney to Hobart, and Melbourne to Launceston, have a great percentage of empty passenger accommodation. This is proved amply, but evidence was also brought forward that during the tourist season these vessels are always full, and are crowded to a great .

extent-that intending tourists are offered second-class accommodation and "shake downs " on payment of first-class fares, with the result that many people who will travel in comfort or not at all no longer visit Tasmania. In regard to this complaint that the tourist traffic of Tasmania has been vitally affected by the prevention of mail boats fron1 carrying interstate passengers, it is admitted by witnesses and shown by statistics that prior to the Navigation Act the number of tourists arriving at Hobart by mail steamers was insignificant compared with the numbers arriving by interstate vessels. The witnesses claimed that the practice or habit of wealthy people from other states visiting Hobart by mail steamers was in its infancy, and if it had not been for the Navigation Act, the numbers would have been largely increased. This is purely supposition.

Statistics were also produced by the State Government Statistician, showing that the number of tourists visiting Tasmania was back to the pre-war level, and further evidence was given that the tourist season at Hobart for 1924 had every promise of being a record. Figures were placed before your Commissioners showing a large percentage of empty berth accommodation in interstate passenger vessels tb Tasmania, and it was shown that only during holiday rushes were the vessels taxed to full capacity. The Companies admitted this overcrowding in the Christmas rush to Tasmania, but pointed out the obvious fact that all means of transport are crowded at holiday periods, and a ship cannot put on extra berths as a train puts on additional carriages.

CONCLUSION.

In regard to the effect of the Act on the tourist traffic to Tasmania; your Commissioners are of the opinion that whilst Southern Tasmania has undoubtedly been affected by the operations of the Navigation Act, so far as its tourist traffic is concerned, it has not suffered to nearly the extent imagined by the people of Hobart. Nevertheless, Tasmania is dependent to some degree upon the tourist traffic for its prosperity, and anything that militates in any way against the

growth or acceleration of this traffic is detrimental to the state's welfare. The Commonwealth cannot afford to have any considerable portion of the people of any state smarting under what they believe to be an injustice, and something should be done to remove this impression. If the people of Southern Tasmania are so firmly convinced that the few hundred tourists who would come to Hobart each year per medium of the mail boats (if such ships were permitted to carry them) constitute the· bridge of prosperity, then provided too great .a sacrifice of principle is not involved, such a traffic should not be prohibited. Your Commissioners in their "General Recommendations" indicate a means by which this may be done , without any material injury to the Australian Mercantile Marine.

(ii) THE TIMBEH, INDUSTRY.

The representatives of the tirnber industry of South Tasmania laid their case again st the Navigation Act before your Com1n issioners, and this case was divided int.o t wo sections; first , the dernand for cheaper freight ; · and second, the demand for better shipping facilit ies t o pJ ace timber on the markets of the main] and and in New Zealand.

Wi bh regard to the den1and for cheaper freight t o the mainland: the complainants' argument really an1ounted to a demand for higher protective duty. It was admitted that if freights were brought down to pr e-war level, the Tasmanian industry could not successfully cornpete in other st ates with cheap foreign timbers. _

The case for greater protection for the Tasmanian timber industry was put forwar d well, but, as it does not come within the scope of this inquiry t o deal wit h t ariff 1nat t ers no fu rt her comment is necessary.

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With .regard to the complaint concerning the lack of shipping facilities for the timber of South Tasmania, evidence was placed before Your Commissioners that since the Navigation Act came into force the timber trade of Tasmania with New Zealand has practically been lost. A good timber market for Tasmanian timber existed there. The lack of shipping :facilities killed the Inarket, and the only export to New Zealand is by an occasional vessel. The same was brought forward in regard to Adelaide. There is a big market at Adelaide for Tasmanian timber, as South Australia has practically no tirnber production, and relies on Western Australia and Tasmap.ia for its supply. Evidence was placed before Your Coinmissioners that contracts could not be obtained in South Australia because shipping facilities were not reliable.

The evidence on this matter was very strong, and statements were made that the timber trade with New Zealand had ceased to exist, while with South Australia the trade is severely han1pered by irregular and insufficient cargo space. In regard to New Zealand, the representatives of the shipping con1panies asserted that vessels were provided to take timber to New Zealand when sufficient cargo was offering. He further stated that in 1923, 1,114,000 super feet were shipped from liobart to New Zealand. Similar statements were made in regard to cargo tonnage to South Australia--in short, when

a shipment of timber is :ready a boat will call. Your Commissioners are of the opinion that this irregular service is not at all satisfactory, and makes it almost impossible for timber-rnillers to accept "rush" orders, or contracts which specify delivery within a certain specified and reasonable time. · There seems little doubt that for the greater ·part of the year the arrwunt of cargo space for timber from Southern Tasmania is sufficient. The shipping companies produced evidence that vessels calling at Hobart for timber were o-ften unable to obtain a full cargo. But at least two timber merchants of Hobart stated that they could not fulfil contracts in other States because space was not available whenrequired.

It might fairly be contended that it would not be reasonable to expect a vessel to be always ready to pick up timber for one consignor, when there might be no other timber offering, and even . if a full load were offering the voyage might be unprofitable to the ship-owners if no return cargo were available at the port of destination of the timber.

In any case, to abolish the Navigation Act, as is suggested in Tasrnania, would not abolish the grievance. It could not of itself provide a remedy, for these things happen in all countries with or without a Navigation Act. · ·

(iii) THE FRUIT INDUSTRY.

Representatives _ of the fruit industry stated that while there is sufficient tonnage to lift Tasmanian fruit for the English markets, the class of ship which comes to Hobart is not so suitable for the carriage of fruit as the mail steamers which, by reason of the Navigation Act, do not call at Hobart for cargo except under contract to lift a full shipment.

It is asserted that the reason why these vessels do not come to Hobart for as little as 7,000 cases is that prior to the Navigation Act, when they were able to carry passengers to Hobart, the fares of the passengers paid the running costs of the vessel between Sydney and Hobart. It now no longer pays to visit Hobart for anything but a substantial load of fruit.

It was claimed that the reason why the mail steamers gave a · more satisfactory service is that they run to a time-table, and this regular service enables definite contracts for sales to be Inade. In addition, the small and : egular shipments by the mail steamers kept stable the London market, and enabled good prices to be rea.lized, making up for lower prices obtained for the big shipments.

As against these allegations the export figures show that during the year 1923 the an1ount of fruit exported to England· from Tasmania constituted a record. The growers and exporters of fruit admitted that there was ample tonnage. The Com1nonwealth" Bay" Liners give a quicker service to London than ever the mail steamers gave.

CONCLUSION.

Your Commissioners are of the opinion that while is is undoubtedly true that it was a great convenience some to growers to ship small consignments of apples to

England by ma.Il steamers, this was only a. small proportion of the total exports, and could not matenally affect the pos1t10n. The real motive underlying the den1and for the exemption of the mail boats frol?. the Navigation Act, not from a desire to assist the fruit growers but to encourage the VIsits of the wealthy tounst who prefers to travel in all the luxury and ceremony of an ocean liner, rather than in an ordinary interstate boat.

(b) Tasmania Generally.

. . There no complaints ag.ainst the Act from the North-west· ports, enjoy. good

sh1pp1ng Generally case forward by Hobart against the operation

of the Navigation Act was not convinCing. Certainly the port of Hobart, for reasons arising

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out of the War, the Navigation Act, and the cutting of the Panama Canal, lost certain oversea and interstate shipping services, which it previously enjoyed. In those cases where the interstate services have been curtailed it was shown clearly by the shipping con1panies. that the trade did not warrant the continuance of the service. This referred to the Hobart-Melbourne, Hobart­ New Zealand, and Hobart-Strahan-Melbourne services.

A dispassionate witness in Tasmania was the State Government Statistician, whose evidence was interesting. He stated that Tasmania was not seriously suffering by reason of the Navigation Act, and that the outcry against the Act bordered on exaggeration, and was a symptom of a bad disease. He stated that Tasmania was in such a desperate financial plight that the people had to blame something, and in Hobart one of the chief objects of abuse was the Navigation Act.

The Statistician described the reasons for Tasmania's financial condition as follows:-It is a very old story. Tasmania is a rough, mountainous country, and rough, mountainous countries are never naturally rich Take, for example, Scotland and Norway. The rich countries have plains. Tasmania's natural lot was hard work and plain living, and she. realized it to some extent fairly early, and kept expenses down, but the other States of Australia which had more potentialities of easy wealth, with more of the plain country, had not that necessity. It is no use talking about fertile soil when the expenses of production and transport aresohigh as to counter- .

balance that advantage. Tasmania has had to keep its belt buckled tight, though it has felt that it ought to be able to expand, and do what the other States do. \Vhen the possibilities of raising loans came along in the 80's the mineral of Tasmania began to be exploited at the same time. The two things together enabled Tasmania to expand, and if the State could not keep up to the level of the other States it could do much in the way of building railways, roadways, hospitals, and so on. She was enabled to do that on the loan policy, and on her mineral wealth, but loan policies come home to roost and mineral wealth becomes exhausted. Our mineral wealth has been steadily going down all this century, and about 1910 it began to be clear that Tasmania was going to get into a bad position, because the interest

on loans was piling up, and her mineral wealth was becoming less productive. There was a good deal of feeling about it, and, in 1914, we were almost ripe for taking action in the way of putting our finances in a good position. Then came the war, and this problem of drastic retrenchment was postponed because of the war. The war was made an excuse for postponing an unpleasant job. The position all the time was getting really worse. But we had a boom in metal prices

which helped things, and the soldiers' pay and separation allowances also helped, so people thought that things were going well. Then we had the after-the-war boom when everything went swimmingly, and it was only during the last two or three years that we began to realize how bad the position was. vVe had the expense of soldier settlement, which fell to a great extent on the States. The interest on loans got very heavy, and the mineral production fell to about

one-third of what it was at its best. It is not only a Government financial question. It is not a question of the Government putting on taxes and getting money from the people; the people are relatively poor. They have these obligations of the past to carry, and it is almost impossible for them to carry on. That is why we fe el inclined to blame anything we can.

This opinion was supported by statistics. It is quoted because it clears up a great deal of misconception in regard to the question of what is wrong with Tasmania. The causes of Tasmania's troubles are quite obvious to even the casual observer, but they do not come within the scope of this inquiry.

(4) WEsTERN AusTRALIA.

(a) Primary Productfon.

The chief complaint in Western Australia was in connexion with primary production, it being claimed that the Navigation Act was acting detrimentally to the interests of the primary I

It was alleged that the Navigation Act, while maintaining high freights on the primary products exported, also · penalized the imports required for production, such as agricultural implements, fertilizers; &c. Thus, the Western Australian farmer is handicapped in the eastern n1arkets with the primary producer of the eastern states. For example, it was stated that owing

to high freights, fertilizer was 7 s. per ton more in Western Australia than in South Australia, and wire-netting and fencing wire were 42s. 6d. per ton more in Western Australia than iH New South Wales, where wire-netting is manufuctured. (Questions 859, 886.) Not only is this fact stressed in Western Australia, but the handicap to which the states far removed from the large industrial centres are subjected to is admitted by the manufacturers.

The manager of H. V. McKay Ltd., manufacturers of agricultural machinery, pointed out that the freights may not be exorbitant, from the point of view of shipping companies' profits, but they are too high for the man who has to pay the1n. Nobody will deny that the primary producers of Western Australia are handicapped by

having to pay higher freights on the means of production, but it may be argued that the reason for this is the geographical position of the state in relation to the chief manufacturing centre of Australia. Another factor which must have an infl.uence on freights to and from \Vestern Australia i ·

that the imports to that state from the eastern states are more than three times the exports. The result is that is a shortage in back-loading from Western Australia, which con ider bly adds to the cost of sea carriage.

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. CONCLUSION .

. . your Commissioners are of the opinion that Western Australia is undoubtedly at a greater disadvantage than .any other state by reason· of the operation of the Navigation Act. Prior to the opening of the East-West Railway, in 1917, it was dependent entirely upon sea carriage for its communication with the rest of Australia. So far as primary production is concerned this still obtains. All the farn1er or grazier requires comes by sea, and all he exports goes by sea. Anything, therefore, that tends to give hirp_ in any way a restricted shipping service is against his interests. 'rhe effect of the Customs Tariff is to make .him dependent upon the eastern States for almost all his requirements. The Navigation Act limits the carriage of these requirements to ships registered under the act, i.e., the ships of the interstate shipping companies. The carriage of his supplies are subject to their pleasure, their convenience, and their demands. He may consider himself unjustly treated by these companies, but the Navigation Act says that he cannot use any other means of sea carriage. He cannot, as the fruit-grower of Southern Queensland did in a similar emergency, use the railway as an outlet. His geographical position precludes this. It is not to be wondered, therefore, that the primary producer of Western Australia complains ·bitterly of the provisions of the Navigation Act which prevents him from using the 111any oversea

vessels which call at Western Australia en route to the eastern States. That he cannot do so does to an extent impose a brake upon his progress and development. The Commonwealth certainly has the constitutional, but has it the moral right to impose this limitation upon The development of Western Australia, and the settlement of its vast areas, are matters of vital moment to Australia. Are we justified in hindering this process by means of the prohibition clauses of t he Navigation Cannot some means be found whereby, while adequately protecting the

shipping industry, the convenience of using when required the oversea shipping calling at Western Australian ports can be conserved to the Western Australian producer Your Commissioners believe this can be done, as outlined under " General Recommendations."

(b) The Timber Industry.

With regard to the timber industry of Western Australia, complaints were placed before t he Commission in regard to-(i) High timber freights ; and (ii) Irregular cargo service and insufficient space .

. (i) High Timber Freights.-Evidence was produced that the increase in timber freight from Fremantle to Adelaide was from 21s. per load in 1914 to 35s. 5d. per load in April, 1923. It was claimed by representatives of the timber industry that these freights are adding so much to the cost of timber sent to Eastern States that the Western Australian product is hampered in competition with other timbers, Australian and foreign, with the result that the demand is reduced. This is undoubtedly true. . , .

The chief complainants were the manager of the State Saw-mills and the Westralian manager of Millars' Timber and Trading Company. These two witnesses stated that they were dissatisfied with the freight rate charged by the Australasian Steamship Owners Federation, and negotiated with a company outside the Federation to carry timber to Eastern States at a 20 per cent. reduction in freight. As soon as the Federation heard of this, they reduced timber freights by 20 per cent. But the company with whom the timber millers were negotiating did not come into the trade, and the Federation some months later again made an increase in freight rates.. Negotiations were re-opened with the company outside the Federation, and the saw-milling companies were threatened by the Federation with a "boycott" if they entered into an arrangement with this company's st eamers.

These -statements were borne out by other witnesses, and the allegations are not denied. It appear that the Shipping Federation took steps to keep the trade from falling into other hands . It might be fairly contended that their action was one of ordinary business, and it does not appear to have affected the position very much ; but it does show the means adopted by the combine when competition arises.

The manager of the company mentioned, which is outside the Federation, stated that he is at the present time sending vessels t o Western Australia for timber. He was asked whether he reduced freights below those of the Federation. He replied " I think that I charged a little less. "

The Westralian managing director ·of the Karri Timber Company stated that he had no grievance against the Navigation Act or the Shipping Federation. The shipping services were adequate and their freights reasonable. . It is admitted all that since the Navigation Act Lecame operative, timber freights from Western Aust.raha have not Increased; they have been reduced. While this fact is admitted

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it was claimed by the manager of the State Saw-mills that if it were not for the. Navigation Act he could charter tramp stean1ers at a cheap freight rate. He adn1itted that he had never done so prior to the Navigation Act, and no evidence ,was produced that such a course would be practical.

CONCLUSION.

Your Commissioners are of the opinion that while it is a clearly established fact that a substantially increased timber export business could be developed with the Eastern States, given a substantial decrease in freights, together with an augmented service, there is no evidence to show that the freights at present charged by the interstate companies are in any way excessive from the standpoint of resultant profits and from the working costs of maintaining the service. It has not been established that the rate charged by the Patrick Steamship Company is a payable one, and the indications are that it amounts to a temporary "cut" for the purpose pf establishing a connexion. It may be true that tramp steamers could be chartered at substantially lower rates than those prevailing on the interstate boats, but these could only be from overseas as the necessity for bringing such ships into conformity with the provisions of the Navigation Act· practically makes any such action prohibitive. Your Commissioners cannot make . any recommendation for the relief of this industry in particular, but are of the opinion that the proposal , contained in their " General Recommendations ·" will at least ensure that will, in those

circumstances, not be more than a fair rate, and that adequate shipping will at all times be made available as required,

(ii) Irregular Cargo Ser·vice and Space.-Evidence was placed before the

Commission that during 1.923 the am.ount of space for tin1ber from Western Australia to eastern States was insufficient, and there was a large accumulation of timber awaiting shipment. rrhe manager of the State Saw-mills showed that, although he had large stocks of timber waiting to be lifted, he sent none to eastern States between May and August, 1.923.

When this Co1nmission vvas appointed, this complaint was being inv:estigated by the Select and at first sight it seemed to involve a serious charge against the interstate shipping

con1pan1es.

The Commission fully investigated the n1atter and found that the main cornplaint had its origin in the freight dispute mentioned under the preceding heading of "High Timber Freights." n1ajority of the timber millers of Western Australia negotiated with a shipping company outside the Federation to lilt their produce at a 20 per cent. reduction in freight. The Federation reduced rates by 20 per cent. Twelve months later the Federation Iaised timber freights by about 12i per cent. The tirnber 1nillers p,t once re-opened negotiations with the

outside shipping company. 'Vhile negotiations were proceeding, the millers declined to use the Federation ships- hence the accumulation. The matter was put quite frankly by the of l\1illars' Timber and Trading Company, as follows:--Over a period of years the coastal companies have lifted all the requirements of the trade. The present position, I think, is partly due to the coal strike, which resulted in a fewer number of steamers coming from the east to the west. It is also partly due to our own fault, because in April the coastal companies increased the rates of freight on timber to the eastern states by about 12! per cent. We obj ected to that very strongly, and endeavoured

to obtain alternative steamers to take our timber . We were in negotiation with other people and thought that we had made arrangements to ship at a lower rate of freight than that at which the coastal companies were willing to accept our timber. During that period when we were negotiating we refused to ship with the coastal companies. A certain amount of the accumulation is due to that fact. There is also accumulation because of the fact that we have a great many orders for the eastern states which have been booked during the last few months. That has resulted from a reduction in the price of timber, which led to a greater demand being forthcoming.

The Karri Timber Company bad no dispute with the Shipping Federation. The loc al managing director of that company stated that he had no complaints of alleged inadequate space. He had all the space for interstate ports that he required.

CONCLUSION.

Your Commissioners are of the opinion that the conditions in the tin1ber industry in regard to shipping space is a further exemplification of the position as set out under the heading of " Primary Production " . The t in1b er industry of Western Australia is not developing as it should, because of the u prohibition " clauses of the Navigation Act. Some way must be found of adequately protecting the shipping industry in conformity with the declared national policy, without at the same tirne unduly injuring other industries. Your Commissioners are corrfid nt that this can be done if the proposaJ outlined in " General Recommendations" is adopt d.

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(c) The Decline of Albany.

Complaints were brought forward at Albany that the shipping services from that port to eastern States is inadequate. Before the war there was a weekly interstate service between Albany and eastern ports. The regular \Vhite Star liners and casual oversea steamers also called at Albany, and carried passengers to eastern States. _

During the war, and the "control" period, the shipping services of Albany with eastern states were curtailed, and have never been restored to pre-war standard. At present the interstate service consists of one boat per month, which carries passengers and cargo, and one cargo vessel per month. The prevention of oversea steamers carrying passengers to eastern States is

certainly due to the Navigation Act. It is claimed that the reduction in interstate services is also due to the act, which has given a virtual n1onopoly to the interstate companies, with the result that they supply a service totally inadequate to the needs of the district served by the port of Albany. It is asserted that as a result of this decrease in shipping facilities the port has declined. ·

There is no doubt that the construction of the Trans-Australian Railway took away a great deal of passenger carriage from the vessels of the interstate companies, and resulted in some decrease in services. An average of about 30,000 persons per annum travel over the Trans-Australian Railway, and before the construction of the line these 30,000 people would have been forced to travel by steamer_ to and from Western ·

Evidence was placed before the Commission that the following factors have also played a_ p FLrt in the decline of Albany :-1. The of the ports of Fremantle and Bunbury, and the construction

of railway lines to Bunbury from areas previously feeding Albany. , 2. The diversion of most of the overseas liners from Albany to Fremantle, the result being that the colliers from Newcastle go to Fremantle instead of Albany. With regard to the statement by the business community of Albany that the shipping services are inadequate for the requirements of the port, the representative of the interstate companies showed that for some months a fortnightly service was inaugurated on the representations and requests of the people of Albany, but that the results did not warrant its continuance. On the last trip of the fortnightly service six passengers only were carried from the eastern States. With regard to cargo, an average of about 270 tons is brought to Albany each trip, and the average outward cargo is about 170 tons. Increased cargo facilities have never tended to increase the amount of cargo offering, and the interstate shipping companies contend that a more frequent service would mean a serious loss to them.

CONCLUSION.

Your Commissioners are unable to find that Albany's troubles are due to any great extent to the operations of the Navigation Act. This port has not yet re-adjusted itself to the changed conditions brought about by the opening of the Trans-Continental Railway in 1917. That line took away from Albany its interstate importance from a shipping point of view, and it must now remain dependent for its prosperity upon its own surrounding territory. Its imports must be for and its exports from this territory only. In this way, it has been thrust back into the position held by many similar ports in the other States. It at least has the advantage over them of one interstate boat per month. The assertion that the Navigation Act is the responsible factor for the position in which Albany finds itself to-day is not established by the facts. The tendency is for Albany to be relegated to the position of Portland (Victoria) and other similar ports on the Australian coast, and it is useless to endeavour to restore it to the fortunate position, which it

once enjoyed, of being the first and last port of call in Australia for oversea vessels. The growing population and importance of Fremantle, together with its close proximity to the capital of the State, has n1ade it inevitable that it must be the chief port of the State.

(d) The Decline of Geraldton.

The Chairman of the Tariff Board (1\'Ir. Oakley) stated that the Navigation Act had deprived Geraldton of its" forrner spendour." The Con1mission visited Geraldton, and found little evidence to support this staten1ent. It was admitted hy the witnesses of Geraldton that the port declined years before t.he Navigation Act. The reasons for the decline appear to ·

1. The closing of the Mv.rchison Goldfields, for which Geraldton was the port. 2. The extension of the Wongan Hills Railway line resulting in the diversion of all goods to and from the Murchison to that railway line. 3. The low freight rates of the Midland Rajlway Company, in competition with the

Btate railways, resulting in m.ost of the goods between Geraldton and Perth being earried by rail.

1,113

91 .

(e) The North- West Ports of Weste Tn Austtalia.

The service between Fremantle, the north -west ports of \Vestern Aust ralia, and Singapore, was established in 1883. The service built up an irnportant trade, and four vessels are at present engaged on this route. They belong to the Ocean Stearnship CoJYlpany ana the West. Australian Steam Navigation Company. These are overseas con1panies, for which Da.lgety & Co. are the agents. Their vessels carry coloured crews and · white officers. They trade on the Australian

coast by reason of permits granted under section 286 of the Navigation Act. They m_aintain a regular service fron1 Fremantle to Singapore, calling at Gera.ldton, Carnarvon, Onslovv, Port Sampson, Port Hedland, Broome, and Derby.

These stearrters have good passenger accomn10dation, and carry monthly an. average of 980 tons of cargo for discharge at various north-west ports. On the Southern voyage they carry during the year about 9,00() bullocks and 20,000 sheep for butchering for the metropolitan n1arket. In addition, from Derby to Singapore each voyage, they lift from 150 to 200 b:u_llocks and about 1,500 sheep for the Singapore market. They also carry to Singapore regular consignnlent.s of sandalwood, flour, fruit, chaff, oats, hay, potatoes, and beer, &c., to Java and Singapore, and pearl-shell, wool, and ore for transhipn1ent to European poTts.

In 1911, the State Governn1ent of Western Australia established a service on the north­ west roast, to carry cargo and passengers, as wdl as live stock. This service consists of two boats, the oil driven vessel Kangaroo and the-s.s. Bambra. The Kangaroo has 300 tons of insulated space, and trades, in addition to the north-west ports, with Java and Singapore. The Bambra trades from Fremantle to Darwin.

,The State service is run at a considerable direct loss, but it is adrnitted by the manager of Dalgety & Co., agents for the permit ships, that the Kangaroo is necessary for the Java and Singapore trade. During the 40 years since the establishment of the service by the private companies, these vessels, carrying C'oloured crew-s, have given a regular and for the most part efficient service on the north-west coast, and have, at the sarne tin1e, developed a very valuable reciprocal trade

with Java and Singapore. The evidence of those persons most vitally interested in the development of the north-west of Australia was unanimous in the opinion that it would be disastrous to take away the" permits" from these boats. If these "permits" were terminated, it is very doubtful whether the boats

would continue to trade with the north-west ports, and from the evidence it seerns fairly certain that this line would trade, if at all, direct from Fremantle to Java and Singapore.

The Deputy-Chairman of the Steamship 0-vvners' Federation was asked to state whether, if the permits were withdrawn, the interstate companies would ca.ter for tbe trade, and supply a fortnightly service, at the same passenger and freight rates as at present. The reply was as follows:--

Some members of the Interstate Ship-owners Federation previously had steamers running in this trade, but it was found that when the State Government Line entered the trade there was not enough trade offering for the competing lines, and the interstate steamers had, therefore, to be withdrawn. Mr. Glyde, in his evidence, stated that there is a considerable excess of shipping in Western Australia to-day, and that in the year before last there was a d ecrease of 42 per cent. in trade offering as compared with the previous three years. He gave further evidence to the effect that the Singapore and State steamers leave Fremantle with only 300 tons of cargo distributed bet ween eight ports, and

expressed his opinion that the north-west coast could be successfully worked with t wo suitable boats. As regards freights and fares, it was reported in March last that, in consideration of the F ederal Government having increased the subsidy by £1,800 a year, the Western Australian Government had agreed to reduce by 25 per cent. the freights and fares on . the steamer Bambra, which plies bet ween Fremantle and Darwin. The whole question must be lo oked at from the following points of view :-(a) What trade is offering ; (b) how far do es the State Government intend

to cater for it, provided that the permits are withdrawn; and (c) ho w far would the earnings be likely t o cover the outgoings. If it were known .definitely what are the intentions of the Stat e Go vernment, and whether, and to what extent, the Federal Government would be prepared to subsidize interstate st eamers in a similar manner to the subsidy granted to the State steamers, members of the interst at e Federation would be prep ared to give most careful consideration to the question of putting a vessel, or vessels, on this trade. •

From this reply it is fair-ly certain that, unless heavily subsidized, the Interst at e Shipping Federation would not take over this service. It is obviously useless to t ake away permits fr om these vessels unless some other company is ready to supply an equally adequate service. The development of this portion of AustTalia has always been a diffi cult pToblem, and any

derangement of its coastal service, in view of the fact that it has no rail way service, would undoubtedly have the effect of retarding its develop ment. The pr esent service is so arranged that it develops not only the north-west coast, but cr eates a very helpful recip r ocal trade wit h Java, Singapore, and the Dutch East Indies, which trade is highly essential t o the dev elopment

of Western Australia. F.l5346.- 9

92

11 he rnanager of the State Shipping Service, who views the matter dispassionately in spite of the fact that these "permit " vessels are his competitors, stated :--S. S. Glyde, Manager of the State Shipping Service of Western Austmlia.

856. Would you suggest cutting out the permits from. those ships ?- Only assuming that others will come in and put ships on the coast. Looked at from the point of view of the State, you cannot cut out the permits until somebody els e is ready to take up the job.

The president of the Pastoralists' Association of Western Australia, in his evidence, states : _____2_.-The opinion of the pastoralists concerning the operations of the Navigation Act is that it is 20 years before its time. We hold that a young country, small in population and small in trade, should be allowed ·all the freedom possible to develop. -

We claim that the people should be given every facility to move from one State to another, every facility to move their goods or produce in the quickest and cheapest manner, to help us to-develop our resources. -To inflict the Navigation Act on our north-west coast would be such a hardship that settle-rs would seriously voronder what they had done to deserve it.

The early days of the settlers in the north were hard enough and difficult enough, and now that facilities are being provided we do not want to see them abolished by the infliction of the Navigation Act. Even to-day, shipping companies hardly know where they are, as I understand that the exemption granted can be rescinded by six months' notice. If the Government would say definitely that our coast would be exempt for ten years and then the matter be reconsidered, it is quite likely we would have faster and better boats on our coast.

\¥estern Australia has such a long coast-line, and the Navigation Act would be a greater handicap upon us than upon any other State. If the Navigation Act is enforced on our coast, the ships which are now exempt would immediately leave us. - '

The State-owned boats are reported to have lost £78,000 on l-ast year's operations. A private company could not afford this, and would necessarily have to cease running or vastly increase their charges, to the great detriment of the people they are now serving and those who contemplate assisting in the development of our northern areas.

Mr. H. H. Underwood, a n1ember of the State Parliament of Western Australia, represent­ ing North-western Division, appearing before the Commissioners to express the views of all the lVlembers of the State Parliament representing North-west constituencies, stated the following during his evidence :-

2714. You are of the opinion that if the exemption now granted were removed it would affect detrimentally the development of the north-wes t ?-Yes. 'J;'he statement of Mr . Glyde, Manager, State 'Shipping Service, that he could do that work with two ships is, in my opinion, incorrect. There is too much work for two ships. 2718. If the other boats were cut out, there would be no development of the trade. with Java ?-The Singapore boats would then trade with Fremantle direct to Singapore, and all the products from the north-west coast would have to be brought south to Fren1:antle, n ecessipating additional handling charges.

The Whim Creek Progress J_jeague made the following statement :-If the Navigation Act be applied to this coast, it seems certain that unless other steps are also taken the ships now serving this coast and trading with Singapore will cease running. _

T.hat this would be a: disastrous thing north-west is certain, and, presumably, not denied. The progress of settlement in the north has been extremely slow at all times. It has been entirely stagnant or retrogressive for years. H the main m ea:ris of communication and trading with the outside world are to be removed the result is obvious. To apply the Act here, therefore, would not create work for white seamen. It would destroy employment for white men on land, and would injure everyone having interests here and ruin some. It would not only prevent expansion of enterprise, but would destroy part of the established industries. Mining in particular, already burdened by costly transport, would be set back still further.

When tbe :1ppbcation for pern1its for these " blark " vessels was Inade, such application received. the support of the G:overnnwnt. of. \A! estern the Interstate Shipping

Companies stated that they rmsed no obJection to the permits bmng granted. _

- The only obJections now raised to the permits being continued are from the organizations. The secretary of the Fremantle District Council of the Australian Labour Party stated the foJlowing in his evidence as one of the chief grounds of objection :-2168. . . . . . . . We view the position in this way- that while the boats manned by white labour

were trading on that coast, the provisioning, the victualling, the supplying of coal, and all that kind of thing was done in this State, and provided quite a large amount of employment, with the result that a great deal 'of money circulated jn the State. · The exempted boats, generally speaking, obtain all their supplies outside the State, thus minimizinO' ·opportunities for employment and trading generally, which would be created by boats manned by white labour.

0

The same witness also stated.: -2340. You would like to see men working in those mines The exempted boats get their supplies of coal from Sing a pore.

Your Commissioners are satisfied that neither of these stateme11ts are true, and that the coaling and victualling of the " permit " ships is done for the greater part and as far as possible Ln vV estern Australia. CONCLUSION.

Your Con1missioners of the opinion that failing the adoption of the recommendation as set out at the end of this Report, the " permit" system as applied to this portion of Australia should be continued_, but that in order to remove the precent feeling of jnsecurity which exists and so enable the companies maintaining the services to provide for replacements, &c., the Act should

1115

93

be amended to a1low of permits being granted for longer periods, say, up to five years. The problem of and the necessity for the. development of the vast territory of the north-west is so great that· no Government would be justified in removing or even failing to preserve any existing means of transport and communication.

(f) The Effect of the Navigation Act on the Whaling Industry.

Your Commissioners investigated the case of the North-\Vest Australian \Vhaling Cmnpany, and found therein ground for complaint against high and the effect of the application of the Navigation Act to this industry.

The North-West Australian vVhaling Company is a new C01npany) ;purely Australian, which operates between Carnarvon and Onslow. The supply of whales is an1ple at seasons of the year, and the Company is said to ·be capable of supplying at least the whole of the Australian demand for whale oil. ,

In 1916, three Norwegian companies began operations on the V\T estern Australian coast. They withdrew owing to war conditions and this Australian company -vvas forraed , \Vhich, in view of the withdrawal of the previous con1panies, needed every possible assistance.

Owing to high freights on interstate vessels, the con1pany decided to send their 1922 output to England; and chartered a foreign sailing ship to bring out empty drurns for the oil, and take them back full to England. The residue of the whales after extracting the oil was eonverted into fertilizer, amounting to about 280 tons. When the sailing ship arrived at the \vh aling station, it

was found that she required about 400 tons as ·ballast in addition to the cargo and oil. The company asked permission ship this fertilizer as far as Frernantle or Bunbury, discharge it there, and take timber from there to England with the balance of the available space. This request was refused, as it n1eant that t aking fertilizer as ballast wo uld anwunt to "trading on the coast." The vesse1, therefore, loaded with 400 tons of sand as ballast.

Your Conunissioners have no hesitation in pointing out that the stringent provisions of the Navigation Act had a serious effect upon the developrnent of this particular industry. To meet such exceptional cases, an amendn1ent of the Act is required, as a permit cannot at present be given to a non-British ship.

With regard to the effect of high freights on this industry, the following evidence was given by the manager for the Cmnpany :----4616. Did you find that a:n excessive charge was made to carry that fertilizer down ?- It all depends on what you call an excessive charge. I had to pay £1 a ton, which is reasonable from an Australian point of view having regard to the fact that the ship-owners have to pay abnormal rates of wages and overtime; and if they us e their seamen as stevedores, as they do on this coast north of certain ports, not only do they pay them the seamen's wages, but they have to pay them lumpers ' wages, even if they work within the eight hours. That happens at ports like Point Cloates, where there are no lmnpers . All that reacts on the freight. I will give you an illustration of that. I have just sent the Kurnalpi up to the whaling station with a number of empty oil casks . She has to bring back a consignment of 150 tons, plus as many oil casks as she can get filled within a certain period. She cannot stay there very long to the wages they have to pay their m en. I am paying her 3s. for each cask she carries up. I pay the Harbour Trust l s. on each cask.

I pay 4s. per cask when I purchase them. Six casks go to the ton. That m eans that it is costing me £2 Ss . a ton. When I send them up on the ship they charge me measurement rates. I can send the oil direct from there to England at a less rate than that from Point Clo ates to Fremantle. Then I have to compete in the open market. You will understand therefore that we are working under a very considerable handicap. May I us e one more illustration. When

I chartered the sailing ship she had quite a number of empty oil drums in which to take the oil to England. She had a couple of hundred excess drmns which she landed. There was no upward fr eight to pay on those. I brought them down to Fremantle. Then I inquired where I could best dispose of this oil. I found that the fr eight to London or Liverpool was £4 per ton dead weight, and from Fremantle to Melbourne it was 45s .· per ton m easurement. I

want to impress upon you that this was a most favorable opportunity for 1ne to ship, because the drums were up there and I had nothing to pay to convey them. Nevertheless, it paid my company better to send that oil to Great Britain than to Melbourne.

PART V.-THE SHIPPING IES OF AUSTRALIA.

THEIR R E LATio TO ONE ANoTHER.

Your Commissioners have found considerable difficulty in finding out what i. the extent of the operations of the shipping companies of Australia. 1 oon after Your Commissioner began their inquiry it became that the hippin companies had 9ther interests, apart from shipping. In some cases they are interlinked with each other, and also have bonds of relationship in other

industries. The extent of these relationships and o-partner hips has been ery difficult o deterruine. Your Commissioner ·, therefore, have had o resort to official record of li ts of

' . ,

94

shareholders, which in a number of cases are incomplete and also are misleading. For example, a trustee agency or a bank may be found to hold a large parcel of in a company .. . !here is nothing to show for whom these shares are held. Other "dummies are used, cons1stmg of officials of companies and relatives of directors.

Some facts, however, did come to light, of which the following are examples:-(1) The Adelaide Steamship Company holds about half the shares of the Leaham Collieries Ltd., and about 35 per cent. of the North Bulh Colliery Ltd.

(2) Howard Smith Limited, which originally had coal and shipping interests, its interests, and gave its shipping branch the title of the Australian

Steamships Pty. Ltd. This Company, in addition, holds interests

in Caledonian Collieries Ltd., Invincible Collieries Ltd., Australian Sugar Company Ltd., Commonwealth Steel Products Ltd., and Brisbane Wharves · Ltd. In their latest balance-sheet this company shows that the amount invested in other companies is £2,430,000.

(3) Several large shareholders in the North Coast Steam Navigation Company are also large holders in Burns Philp, and Company.

(4) Burns Philp, and Company have controlling interests in the Solomon Development Company Ltd. Burns, Philp (South Sea) Company Ltd., Chmseul Plantations Ltd., Shortland Is1ands Plantations Limited.

(5) Huddart Parker Limited are large shareholders in the Abermain-Leaham Collieries Ltd., and also in Hebburn Ltd. (Coiliery), and also hold 88 per cent. of the stock of the Metropolitan Coal Coy. Ltd.

(6) Mcilwraith, McEacharn Ltd. holds 45 per cent. of Bellambi Coal Company Limited.

There are numerous other examples of the interweaving of shipping interests with other interests, and all these examples point to the fact that the shipping companies of Australia have a grip on the key industries of Australia .

. As the gTeat Meat Trust of the United States built up its business by its interlinking with railroad interests, so the fortunes of the shipping companies of Australia (a branch of the overseas shipping combine) are bound up in those of the greatest of Australian industries, and thus it becomes patent that a comparatively few persons, mostly resident outside Australia and with large English and foreign :financial interests, constitute an enormous trust which controls the economic . destinies of Australia.

Unfortunately, the Commonwealth Constitution does not give to the Commonwealth Parliament the power to deal with such a position, even to the extent of enacting an effective "Companies i}.ct " under ·which, if it would not permit control, thorough supervision might be exercised in the interests of the people.

PART VI. - GENERAL CONCLUSIONS AND RECOMMENDATIONS.

As a result of their investigations your Commissioners have to report that there is ample evidence to establish the fact that the "coastal" provisions of the Navigation Act are to some extent acting detri:rr:entaJly to the trade, industry, and development of Australia. On the other hand, no correspondmg advantage is being gained by the shipping companies-themselves, for their balance-sheets reveal that whatever profits they are able to declare eacli year are derived for the most part from their investments in other concerns quite outside their true functions as ship­ owners.

This investigation of the :financial affairs and balance-sheets of the shipping companies was carried out for the Commission by a specially selected officer of the Auditor-General's Department, with wide experience in such investigations. As a result of the examination of the of four of the leading companies, and covering two vessels from each of the four companies,

officer reports that the percentage of profit made from activities other than shipping

m 1922 amounted to 68 per cent. of the total profit, whilst in the case of one company the proportion amounted to 80 per cent. That the investigation was carried out

on principles perfectly fair to all parties is apparent from the methods 'adopted by the Commission's auditor. For instance, it was decided to accept present market

values, as reprasenting the capital employed. That this constitutes an equitable basis

1117

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is supported by the fact that one company actually reconstructed on market values in 1920. To arrive at what constituted market values a valuator was appointed in the person of Lloyd's Surveyor, N. M. McCowan, Esq., of Collins-street, Melbourne. Allowances for " depreciation " and " insurance " were both based on the capital employed, the rate of depreciation to be that allowed bytheCommissionerofTaxesforthe Commonwealth, viz., 6 per cent., and that for insurance the actual rate prevailing 'during the selected years. The management charge was :fixed at 7! per cent., but actually the charge is in excess of this amount, especially in the later years.

In referring the inquiry to the auditor, the Commission asked that it should cover, if possiqle, one clear year before the war, one year just prior to the coming into force of the coast al provisions of the Navigation Act, and one year un.der the Act.

The war began in 1914. The companies' ships were requisitioned by the Commonwealth Government in April, 1918, and were released in April, 1920. The coastal provisions came into force on the 1st July, 1921. The years 1913, 1920-21, and 1922 were, therefore, selected for investi­ gation and comparison purposes. It being pointed out by the companies that 1913 was, speaking . generally; a bad year financially, but that 1912 was a normal year, the latter year was, therefore, . accepted as the pre-war year. Unfortunately, only two of the companies under review were operating in 1912, and this fact must not be overlooked in making a comparison of the financial results in the selected years.

It would be obviouslv unwise and a breach of confidence to reveal the financial affairs of each of the companies exai'nined, but certain general facts may be quoted for pmposes of general information, without in any way prejudicing any individual company.

The percentage increase of the earnings and expenses on those of 1913 for the years 1920--21 and 1922 respectively are as follow :-

1920-21 - Earnings 1922--Earnings

%

95 ' 58 83'27

Expenses Expenses

% 93•82 90 •88

It will be seen from the foregoing that, whereas earnings decreased 12 · 31 per cent in 1922, as compared with 1920-21, expenditme only decreased 2 · 94 per cent, and this notwithstanding that the gross tonnage increased 18· 12 per cent. in 1922 as compared with that of 1920·-21 , and that the fleet ran 15,822 days in 1922, as compared with 12,826 days in 1920- 21.

The reduction in the freight on coal in April, 1922, would paTtly account for the decrease in the earnings per gross ton, but the main inference to be drawn from the above figures is that fares and,l or freights were not offering as freely as in 1920-21. This inference appears to be substantiated by statistics furnished in evidence by the Deputy Chairman of the Australasian Steamship Owners' Federation.

Earnings increased since 1913 as hereunder :-

Freights Fares Other

Total increase

Expenses increased since 1913 as hereunder :-

Running costs, &c. Insurance Overhead expenses

Total increase

%

62•81 6 •78 24'74

52'78

%

47•92 64'20 86•03

51'56

Ht :l2.

%

86 •78 24 •11 78·05

76 •36

J9 22.

% 81 •67 67•67 112· 76

83 · 82

The increase in earnings is mainly due to the increases in the rate of fares and frei ghts since 1913, and to the abolition of return fares in 1916.

96

'folloY\ring figures show the increase in fare§ and freights since 1913 :r __ _

Ge-neral- CaTgo.

-- 1 013 . 1!)20 - 21. 1 922 .

£ s. d. £ s. d. £ s. d.

(a) Melbourne-Sydney, and vice versa .. . . . . . . . . .. 0 12 6 1 0 0 1 0 0

(b) Melbourne- Ad elaide, and vice vers J, . . . . . . . . . . 0 12 6 1 0 0 1 0 0

(c) lVIelbourne- Fremantle, and vice versa . . . . . . . . .. 1 5 0 1 5 0 1 15 0

(d) Sydney- Adelaide, and yice versa . .. . . . . . . . . . . 0 17 6 0 17 6 1 5 0

(e) Sydney-Fremantle, and vice versa . . . . . . . . . ' 1 10 0 1 10 0 2' 0 0

(f) Adelaide-Fremantle, and vice versa . . . . . . . . .. 1 2 6 1 2 6 1 10 0

Passa,qe Rates.

Steer age. - - ---;------ - S·· loon.

Stee rage . a Steerage.

1913. 1920- 21.

I 1922 ------------------- ------------------------£ s. ·d. £ s. d. £ s. d. £ s. d. £ s. d. £ s. d (a) Single . . 2 12 6' 1 1 0 3 15 0 1 12 6 4 5 0 2 0 0 Return (b) Single .. Return (c) Single . . Return (d ) Single . . 4 4 2 12 4 4 8 8 12 12 4 14 7 7 0 6 0 0 0 6 0 7 10 1 1 0 3 7 4 4 0 1 2 2 4 2 2 0 6 15 10 0 0 5 2 10 0 0 0 0 0 ol 0 . . 8 10 0 .. 1 12 6 4 5 0 2 0 0 . . 8 10 0 .. 5 15 0 13 10 0 6 10 0 . ·-27 0 0 .. 3 5 0 7 0 0 3 10 0 . . 14 0 0 .. Return (e) Single . . R eturn (f) Single .. 10 10 0 1 5 5 0 1 2 4 10 0 7 5 0 16 10 0 8 0 0 15r 15 0 9 0 0 . . 33 0 0 . . 6 6 0 3 13 6 9 0 0 5 0 10 0 Return 9 9 0 0 0 5 10 8 0 0 20 0 0 0 1 . . . . ! 1916. In 1913 ret urn tickets -vvere issued in the saloon, but these were abolished on 4th N ovmnber, The increase in expendit ure since 1913 is chiefly due to increases in wages, coa-l, labour, victualling, and overhead expenses. · -The following :Hgures will give some idea of the increased cost of wages since 1913 :­Monthly portage bill for selected " passenger " steamer ---1913 .£1,111 1920-21 . . .£2,156 1922 £2,424 lVIonthly portage bill for selected " cargo" stean1er----- _ 1913 .£392 1920-21 . . £728 1922 £785 N u1nber of hands en1ployed on cargo steanter---· 1913 36 1920- 21 40 1922 I' 43 With r espect to the coal costs the average pnce per ton of bunker coal, inclusive of tri1nming, selected "passenger" steamer was :--·-1913 s. d. 13 1 1920--21 I . s. d. 31 2 1922 s. d. 32 4 The average cost of victualling per head per diem for select ed passenger steamer was:-s. d. s. d. s. d. 1913 2 6! . 1920--21 4 1922 3 9 The percentage increases in 1922 on 1913 costs, as per the selected steamer, are as follow:- -· Wages Coal Labour Victualling Overhead expenses o/o 113 144 63 47 113 The increase in overhead expenses is due n1ainly to expansion of trade; increased wit h increased rents, commissions to agent s, and the imposition of Commonwealth taxation. The following are the actual cost s of earning £100 in each of the years reviewed:---£ £ £ £ 1912 . . 89.93 1913 . . 88 .29 1920-21 . . 87.59 1922 . . 92 .03

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The earnings and expenditure per running day were as follows :-Percen tage Increased on 1913.

Yea r. Ea rnil1gs per Expenses per

R unning Da y. R unnin g Da y .

Ea rnings. Expen dit u re .

£ £ % %

1913 . . . . . . 112 99 . . ..

1920- 21 . . . . .. I• 243 213 117 115 ·1 5

1922 . . . . .. 228 210 103·57 11 2 ·1 2

The following is a comparative · staten1ent showing the increased percentage of earnings and costs, as compared with 1913, for the years 1920-21 and 1922 respectively :--Per Gross Ton E mplo yed. R unning Days.

Percen tage Incr eaBe on 1 913 . P er centage Increase on 1 91 3 .

Yea r.

E arnings. Expen se s.

Expen ses.

---

% % %

1920- 21 . . . . .· . 95·58 93· 82 117 ·00 115 ·1 5

1922 . . . . ... 83·27 90 ·88 103·57 11 2 ·2

The net earnings and the net expenses, on a percentage basis, of four compames, as eompared with 1913, for the years 1920-21 and 1922 were as follow :- --1920-21 Earnings, 52 .78 per cent. ; expenses, 51. 50 per cent.

1922 Earnings, 76.36 per cent. ; expenses, 83.82 per cent.

From the foregoing, no matter which way we analyse the figures, it is clear that for the four companies selected, the margin between the percentage increase of earnings and expenditure in 1920- 21 had entirely disappeared in 1922. It therefore, be equital;>ly deduced t herefrom that so far as these four representative companies are concerned, under conditions operating in

1922, fares and freights have not been unduly increased. · In fact, the percentage incr ease of earnings has not marched pari passu with the percentage increase of costs.

- In common with every other business concern in the Commonwealth, the shipping . companies are entitled to. legit imate ·profits upon their capital. To require them to carry on frequent services to ports, when such service is showing them not only not a profit, but an actual loss, is to require of them something which is not required of any other business enterprise. But while this is so, the residents in and around these minor or outlying ports are surely entitled t o expect from their Governments a regular and adequate service of transport and communications. This principle is recognized in the railway extensions of the various states, and if the Government

cannot supply these services itself, as indeed it is manifestly impossible for it so to do, at least it is under an obligation not to prohibit the supplying of them by any private concern or con1pany which desires to do so . But the Govern1nent is under a further obligation, and that is t o see that, if permitted, these services are carried on under such terms as not to constitute a n1enace to the working conditions and wages of the Australian worker or the Australian shipping industry in general. How is this to be done ? The problem is not such a difficult one as it appears.

Protection is the accepted policy of and this is applied to other industries by

means of the Tariff. Why not to the shipping industry ? There are various ways in which this could be done, .but it appears to your Commissioners that the most practical way would be to impose a duty on the tonnage of cargo carried, calculated on the basis of the freights charged.

This duty could be at a rate sufficiently high to prevent unfair overseas competition. It may be, in fixing t his duty, a lower preferential concession can be provided for British shipping as against foreign countries.

In the case of passenger fares , the duty can be fixed on a percentage basis on t he rat es charged. If the coastal clauses of the Navigation Act are repealed, and duties upon foreign shipping substituted therefor, the benefits to Australian trade, industry, and development should be

considerable. It is not expected that the oversea vessels will enter largely into the cargo carrying side of the industry, at least in the more thickly populated centres. They did not do so before the inauguration of the Navigation Act , and they have no desire to do so to-day. But the fact that they can do so, upon payment of a duty, will exercise a restraining influence upon the Australian companies, so far as t.heir freight rates are concerned, and meet times of inadequacy.

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_ The principal advantage of the recommendations of your Commissioners from the-stand-point of cargoes is, that when large cargoes are awaiting transport from part of the Commonwealth to another and the existing Australian services are found to be inadequate, arrangements may be made by the shippers to charter overseas ships suitable for their purpose. And in the case of outlying ports of the Commonwealth, any vessel calling in at any time, whether

British or foreign, could be used as and when required, subject to the payment of the duty. . It is to be expected, however, that the opportunity of carrying passengers between certain ports will be more largely availed of. More particularly will this be the mise between West Australia and the Eastern States, and between Brisbane, Sydney and Hobart. · But this will apply only to a certain class of passenger, and the imposition of a duty will ensure that if they

desire to use British or foreign ships, they shall have to pay as much, if not considerably more, than if they travelled by the interstate vessels. Surely this would not be unfair competition. The degree of protection given would be much greater than that enjoyed by most of the protected industries of Australia, and it n1ust not be forgotten in this connexion that the Australian Mercantile Marine was established and built up prior to the enactment of the Navigation Act, and without any protection whatever against foreign competition. Then they ran more ships, gave a better service, and their . profits were greater. The adoption of the course proposed by your Commissioners would also remove all Tasmania's grounds for complaint against the Act, and would lead to a better understanding between the people of that State and the rest of the Commonwealth.

RECOMMENDATIONS.

Yo ur Commissioners therefore recommend :-

Melbourne,

(1) That the coastal trading provisions of the Navigation Act be repealed. (2) That there be substituted therefor adequate duties,- under the Customs Tariff Act, upon foreign shipping, with a lesser preferential rate upon British shipping, calculated in the case of cargoes upon the rates of freight charged per ton and,

in the case of passengers, upon the fares charged. (3) All sections of the Navigation Act to stand.

Your Commissioners have the honour to be,

Your Excellency's 0 bedient Servants,

WALTER DUNCAN; H. E. "RLLIOTT.

7th August., 1924.

P rin t ed and Published tor the GOVERNMENT of the COMMONWEALTH of AUSTRALIA by H. J. GREEN, G overnment Printer for the State of Victoria..