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Wednesday, 25 July 1906

Mr HIGGINS - The construction, of railways is a very different matter. We' can run railways without being called upon to face any competition, and, moreover, they traverse our own territory all the time. ' But it is quite a different thing - and I am not saying a word against the proposal of the honorable member for Barrier when the time is ripe for it - to enter into a competitive business, and', at great risk, to borrow a very large sum of money for the purpose of building ships, because, no matter whether the money be raised by means of a paper currency, or by the issue of debentures, it will be raised by borrowing. It would be disastrous to the credit of the Commonwealth if we were to borrow at this stage for any such purpose. The honorable member who preceded me, and who always speaks reasonably, pui' the position very clearly indeed. If we vote against the proposed contract, we shall not secure the establishment of a national line of steamers. We shall simply lose the contract, and we shall also lose the possibility of securing anything in the nature of a Commonwealth fleet such as the honorable member for Barrier desires. I sincerely hope that honorable members will not be entrapped into voting against the proposed contract, seeing that they cannot obtain anything better.

Mr Wilks - Is the amendment of the honorable member for Barrier a trap?

Mr HIGGINS - I do not say that it is. At the same time, many a man falls into a trap which has not been laid for him. I have not the slightest objection 10 the State undertaking operations where they seem likely to be sound-

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - They are grand things with which to obtain votes.

Mr HIGGINS - I am sorry to say that the honorable member more than any other honorable member demeans the House by imputing motives. Those who have discussed this proposal, from both sides of the Chamber, have, upon the whole, spoken unselfishly, and with a full regard to the interests of the country, and not to votes. I have no objection whatever to a sound State enterprise, but I claim that nothing would so tend to damage all efforts in the direction of securing for the people, as a whole, the benefit of the industry of the people, as a whole, as would a possibly disastrous undertaking rashly entered upon. Such an undertaking would set back for years any movement of the character suggested by the honorable member for Barrier. The Government propose that the contract shall continue for a period of ten years. Having regard io the fact that the steamers required for the service have yet to be' built, and that their construction will occupy three or four years, I maintain that the term covered by the contract is not a year too long. Indeed, I am surprised that the contractors were content to accept an agreement wilh a currency of only ten years, because it must be remembered that we have power to determine it if it is not faithfully carried out.

Mr Thomas - Is not that power contained in every contract?

Mr HIGGINS - By no means. A man may break a contract, but the other party may not be able to determine it, although he may be in a position to recover damages. Unless it is expressly stated, an individual has not the power to terminate a contract should it be broken by the other party to it. In the second place, under the proposed agreement we are at liberty to purchase the steamers engaged in the service at any time if we deem it desirable to do so. Then the contractors have also to comply with the provision in our Postal Act in regard to the employment of white labour. In this connexion, I desire to congratulate the Parliament upon the fact that all those gloomy vaticinations concerning the effect of that section upon the mail tenders have been proved to be absolutely unfounded. This House has vindicated its position, and it has been demonstrated that no loss has resulted from the operation of the provision in question. I am very anxious to hear what the right honorable member for East Sydney will have to say upon the matter when he again refreshes us with his presence. I am interested in learning whether he will withdraw his statements regarding the effect of the section in the Postal Act to which I refer. Now I may ask, " What will happen if the contract be not carried out?" Not only have we the power to determine it, but a clause in the agreement provides that the contractors shall forfeit a sum of £25,000. "Of course, it may be urged that we know nothing about the contractors. It is only a limited company with which we are concerned, and. we do not know whether it has any assets or not. We ought to be given some information upon that point. But, in this connexion, I am reassured when I recollect that we have not to rely upon the solvency of that company alone. We have two sureties, and these must be approved by the Postmaster-General. Consequently, if any breach df the contract takes place we have not to look to a limited company, which may have all its assets mortgaged and all its capital called up. We have two sureties. I think that the Postmaster-General should tell us whether he has made inquiries into the constitution of the company. We do not care what is the position of Sir James Laing and Sons. What we desire to know is the position of this limited company. I am informed by the solicitor who is acting for the contractors, that the company has a great deal of capital which has not been called up, but I think that the House should be .informed as to how far the Postmaster-General has inquired into its financial position. Under the proposed contract there is one grave danger, to which reference has been made by former speakers. I refer to the possibility of the Commonwealth being " cornered." As the contract will begin upon 1st February, 1908, let us assume that in january of that year the contractors were to say- to the Commonwealth, " We will not go on with it." If they were persuaded by the Peninsular and Oriental and Orient Companies to decline to proceed with the contract upon being indemnified, it might be said that the Commonwealth would be in a corner. It would have nobody to carry its mails from the 1st February, and it merely possesses the power to determine the contract, and to mulct the contractors in a penalty of £25,600. The Peninsular and Oriental and Orient Companies would then practically be in a position to dictate their own terms to the Commonwealth, and they might easily ad'd to their tenders an amount which would be more than sufficient to indemnify the contractors for the loss which they had suffered.

Mr Austin Chapman - But we have a right to call up another £25,000.

Mr HIGGINS - I did not understand that, although I have read the agreement very carefully.

Mr Austin Chapman - We have £27,500 in hand now, and we have a right to demand another £25,000 if satisfactory arrangements are not made to carry on the contract.

Mr HIGGINS - But the first instalment of £25,000 is only deposited until the bond is given.

Mr Austin Chapman - We have a right to demand a second £25,000.

Mr HIGGINS - I shall be glad to be assured upon that point, because I understood from the agreement that the guarantee of £25.000 was only to continue until the bond was signed, and that, after it had been signed, a separate sum of £25,000 was to be deposited. But whether the amount be £50,000 or £25,000, it might be urged that, in the circumstances which I have outlined, the Commonwealth would be cornered, and compelled to accept the terms dictated by the Peninsular and Oriental or the Orient Steam Navigation Company. But if the "worst had to be faced, we would still have the right to demand that bur mails shall be carried under the poundage system. Consequently, I feel that the Commonwealth can never be absolutely cornered, and I rather think, from what the PostmasterGeneral has told the House, that the firm of Sir James Laing and Sons Limited would not operate in that sinister way.

Mr Wilks - Sir James Laing and Sons are only the shipbuilders.

Mr HIGGINS - That is a mistake. It is true that they are shipbuilders, and that they will construct the vessels required for the new mail service; but I would point out to the honorable member that they are also the contractors for the carriage of our mails.

Mr Wilks - Then they will run the service ?

Mr HIGGINS - They are bound to run it. They may assign the contract, but no assignment can be effected without the consent of the Postmaster-General. Of course, he will see that there is a good assignee. In sanctioning any assignment of the contract - and it is quite possible that Sir James Laing and Sons may endeavour to assign it - the Government must be careful to keep their sureties bond. If the new company is simply to do what it likes, we shall be at the mercy of the contractors. The more I see of this proposed agreement the more I like it, and the more I think that the Government are to be congratulated upon it.

Sitting suspended from 6.30 to 7.30 p.m.

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