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Wednesday, 4 July 1906
Page: 993

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) . - Ihave carefully considered the reply given by the Minister to my request for information, and the enlightenment thrown on the subject by the speech of the honorable and learned member for Northern Melbourne, but neither speaker has in any way convinced me of the effectiveness for any proper purpose, or of the safety, of paragraph b. Replying to the satire indulged inby the honorable and learned member for Northern Melbourne in regard to the commercial competition which seeks to destroy an opponent, I venture to say that, as a rule, it is not usually the aim of commercial men to destroy their rivals. They are actuated by the motives that impel a barrister, for instance, to strengthen his mental capacity and to put forth his best efforts to win cases, so that he may obtain more briefs, and thus win fame and fortune in his profession. In doing this, the successful barrister displaces men who are his inferiors, and thus we find practitioners who, because they cannot, in competition with their superiors, obtain a reputation which will bring them work enough to enable them to live by their profession, are driven from it. But it would be as improper to charge a leading barrister with attempting to destroy his competitors as it is to make that charge against commercial men. I admit that there are exceptions, just as there are barristers who adopt improper methods in attempting to get a connexion. Those engaged in commerce use their mental powers, and put forth their best efforts, first, to obtain business, and then to increase it, and if in the competition others go down, they do so only in the same way as, in other avocations, the unsuccessful sink after collision with the heavier weight of their successful rivals. I allude to the matter only because it is so often suggested here that commercial men conduct their businesses in this respect in a manner different from that in which others conduct their businesses or follow their professions. The difficulties created by the clause have been clearly shown by the discussion which has taken place. I have no hesitation in saying that it was drawn to prevent unfair competition, not between Australian industries, but between foreign and Australian industries only. If there had been any other intention, it would have been expressed more clearly. The Minister of Trade and Customs said that action by an, Australian industry which might injure another Australian industry would entail liability to the penalties here set forth, and that action by combinations or operations within an industry which might injuriously affect others engaged in that industry, or, possibly, the industry itself-

Sir William Lyne - I said the industry itself.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - In the first place the honorable gentleman spoke of unfair competition between portions of an industry. He said that combinations guilty of such competition would be liable to the penalties of the clause. Even adopting the Minister's correction, it is evident that the clause was drawn merely to prevent unfair competition from outside. What is the " Australian industry " that will be injured or destroyed ? Is it an industrycarried on all over Australia or an industry confined to a State which may be injuredby the operations of those connected with the same industry in another State; or is it an industry in acity which may be injured or destroyed by the operations of those engaged in the same industry in another city ? What is meant by the term "Australian industry"? Those words must be defined; the Bill contains no definition of them. Paragraph a deals with combinations of persons which endeavour to restrain trade to the detriment of the public, and will affect Australian combines or trusts as well as importing combines or trusts; but paragraph b might as well be left out, so far as any effect upon Australian trusts is concerned. I think that the honorable and learned member for Northern Melbourne will agree that there is nothing in paragraph b affecting Australian combines.

Mr Higgins - This case occurs to me. A very big concern might be established to work a deposit of sienna found in one Stateonly. I should take its operations to be an Australian industry. , If those en gaged in supplying paint made from other materials resolved to crush the production of sienna, that would be an attempt to destroy an Australian industry.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It might happen that both the paint produced from, the sienna deposit and the competing paint would be made of Australian material.

Mr Higgins - I did not say that both paints mightbe made from Australian material.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But that case might arise. I submit that the clause is framed to deal with competition from abroad, and that if the paint sold by the combination attempting to crush the sienna production was made from material brought from abroad, the Australian industry affected could be protected under its provisions. But if both paints were made of Australian ingredients, how would one Australian industry be destroyed by the. building up of the one paint industry at the. expense of the other.

Mr Higgins - Suppose that a cane sugar combine destroyed the beet sugar industry ?

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - How would the sugar industry of Australia be destroyed by substituting cane for beet?

Mr Higgins - The beet sugar industry would be quite distinctfrom the cane sugar industry.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) -But it would still be the sugar industry. However, we have no definition to guide us, and we have no means of knowing how far a definition of industry would extend. There are many puzzling cases which arise out of the wording of the provisions.

Sir William Lyne - I wish that the honorable member had had to draft the Bill.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Minister did not apply to me for assistance. When a' request of that kind is addressed' to me, I shall, at any rate, consider it. The Minister will have to face the position sooner or later, and it ought to be faced" whilst this measure is under consideration. The interjections of the honorable and learned member for Northern Melbournesupport my view. He is a skilled barrister, and as he cannot show me that I am wrong. I may presume that I amvery nearly correct. The clause will permit of combinations in Australia to any degree. The two sub-clauses proceed "in opposite directions. Paragraph a provides against restraint of trade to the detriment of the public. That practically means - as it has been interpreted in America - that trusts shall not tax the public by charging excessively high prices. Parapragh b proceeds in an entirely different direction. All the persons engaged in an Australian industry might combine for the purpose of keeping up prices - that would benefit, and not injure, the industry - and they would not be interfered with in the least degree. It seems to me that paragraph b is unnecessary, especially in this part of the measure, and personally I should like to strike it out and leave paragraph a to operate as intended to prevent any trusts from operating to the detriment of the public. The whole nature of paragraph b is fiscal more than anti-trust. I do not consider it is necessary, or desirable, in a clause which deals with combinations detrimental to the public. I would again direct attention to the difficulty of determining what is injurious to an Australian industry. A decision might readily be arrived at upon that point as regards goods coming from outside, and the clause was evidently intended to apply to such cases. The Attorney-General, however, told us that it would also operate with regard to competition within Australia. The clause was evidently drawn with the intention of applying to competition coming from beyond Australia, and notwithstanding the statement of the AttorneyGeneral, no proper provision has been made for dealing with combinations using unfair competition in Australian industries. Take, for instance, the coal industry, which is common more or less to all the States except, perhaps, South Australia.

Mr Hutchison - We have one mine, but we do not work it.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - South Australia is the only State that does not produce coal. When we speak about injuring an Australian industry, do we mean the industry as it affects the whole Commonwealth? It would not affect the whole coal industry of Australia if the mines in one State, or in one part of the State, were closed up, and the output of other mines were increased to make up for the loss. When an industry is spoken of, is reference made to the industry of the Commonwealth, or the industry of a State? If State interests had to be considered, the questions that would arise would be of an entirely different character. It might be complained that the Newcastle coal mine-owners interfered with the Victorian coal-mines, and that they were in juring or attempting to destroy them. No such charge .could, however, be levied if the industry of Australia as a whole were looked at. Then, again, a question might arise within a State between one group of mines and another. Could any such matter be dealt with under the Bill? For instance, in New South Wales the Newcastle mine-owners might be charged with attempting to injure or destroy the coal-mines of Lithgow. It seems to me that there is1 nothing in paragraph b that would restrict the operations of Australian trusts, whether detrimental or non-detrimental to the public. There is certainly provision in sub-clause a which would interfere with them. On the other hand, they would be encouraged by sub-clause b. because any competition that would injure them by reducing their profits would be done away with - at any rate, it might be declared to be illegitimate. What I have stated tends to show the difficulty of understanding the provisions of the Bill, and of arriving at some conception of their possible effects. Now, another point that has been alluded to concerns the jury that will have to try the questions arising under the clause. I am quite aware of the constitutional difficulties that would arise in a case that might lead to imprisonment, but I am satisfied that a jury is one of the least satisfactory tribunals to which cases arising under the Bill could be submitted. As in other branches of jurisprudence, the Judges have at the outset: to establish standards upon which to base the administration of the new law. This is not a work of days or weeks or months, but of years, and it is only after many decisions have been given, and many arguments have been engaged in that the standards of justice are clearly established. It is now proposed to refer many important matters - not merely questions of fact - to the decision of the jury. The jury will, in many cases, be prejudiced, perhaps, by personal considerations or interests, and also by their local views. Take, for instance, a jury sitting in Melbourne to inquire into a complaint that the Victorian coal-mines were being injured bv unfair competition on the part of the Newcastle coal-owners. The members of the tribunal would certainly - not intentionally, but unwittingly - lean towards the Victorian industry. The. State aspect would have a certain effect upon the jury. For example, it would be to the interests of South Australia to obtain coal as cheaply as possible, whereas, it would be the object of New South Wales, or any other coal-exporting State, to obtain as high a price as possible. The jury would be bound to be affected in their view by the State aspect of the matter. The Minister has not explained what would be the result, in the event of the jury in one State giving a certain decision, and the jury in another State arriving at a directly opposite conclusion in regard to similar matters.

Sir William Lyne - The result would be the same as in the case where one jury finds a criminal guilty, whilst another juryfinds him not guilty.

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