1921-11-29 8 1 0 REPS 13309 0 House of Representatives. 1921-11-29 Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 3 p.m., and read prayers. 13309 papers The following papers were presented : - Customs Act- Proclamation (dated 16th November, 1921) revoking the Proclamation (dated 2nd July, 1916) which prohibited the exportation - of all goods to (late) German New Guinea. Proclamation (dated 16th November, 1921) revoking the Proclamation (dated 24th September, 1919) which prohibited the exportation of rabbit skins. Proclamation (dated 16th November, 1921) revoking the Proclamation (dated 14th August, 1918) which prohibited the exportation of sausage casings. Regulations Amended - Statutory Rules 1921, No. 218. Norfolk Island - Ordinance of 1921- No. 5 - Prevention of cruelty to animals. Northern Territory - Ordinance of 1921 - No. 15 - Foreign marriage. War Service Homes Commission - Further correspondence in the case of Mr. J. T. Caldwell, and also relating to charges made by Mr. T. R. Ashworth. 13309 Questions 13309 Commonwealth Assistance 13309 JXA 0 0 CHARLTON, Matthew Mr CHARLTON -Is the Prime Ministerable to say now what is the intention of the Government in regard to relieving the distress occasioned by the Russian famine? 13310 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - The Government has decided to co-operate with the Governments of other civilized nations in the relief of the famine-stricken populations of Central Europe and Russia, and has been in communication with the authorities of Great Britain with a view to making a donation in kind, with meat and wheat, to the value of £50,000. 13310 JXA 0 0 CHARLTON, Matthew Mr Charlton - Will that meat and wheat be supplied from Australia or from stocks that may bo held abroad? 13310 DQC 0 0 HUGHES, William Morris Mr HUGHES - The wheat must, 1 think, in any case, be supplied from Australia. But as time is of the essence of the contract, and as these people are starving, we propose, if possible, to take the meat from England. If that is not possible, we must send it from here. 13310 13310 KMU NAT; IND NAT from 1929 0 0 MARKS, Walter Mr MARKS - I have here a letter which I have received from Mr. Consett Stephen, Chairman of the Australian . Jockey Club, in which it is stated in regard to the " Canonbury " Hospital, at Darling Point, Sydney, which was ' presented to the Government by the club, that, although the hospital can accommodate twenty-two patients, there are never more than eighteen there. The club is desirous that the full accommodation shall be used. Some regulation appears to prevent many cases from getting to the hospital. I hand the letter to the Assistant Minister for Repatriation, and ask him to bring it before the Minister. 13310 KZT LP; NAT from 1917 0 0 RODGERS, Arthur Mr RODGERS - I shall confer with die Minister on the subject, and give the honorable member a reply later. 13310 13310 KX9 0 0 WATKINS, David Mr WATKINS - As a portion of the steel works in Australia is already closed down, and the major portion will be closed down very shortly, because steel which undoubtedly is of German origin it being dumped in the country, I ask the Prime Minister whether ho will redeem the promise given to the House when we were considering the Tariff, and either recast the Tariff Schedule, or proceed with the Anti-Dumping Bill? If such action is not taken, thousands of men will be out of employment before Christmas. Is'.: 13310 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - I have said very many times that the Government will introduce before Christmas, and will do its best to get passed', the anti-dumping legislation to which the honorable member has referred; but, in view of what has been said by Mr. Dooley, the Premier of New South Wales, it is only fair to point out that Australia is the only country into which German goods are not permitted to enter. I do not deny that some German goods have been coming here in a roundabout way, and, indeed, I suggested the probability of this to a deputation that recently waited upon mc, but I repeat that this is the only country in the world which specially restricts German importations. This Government cannot, therefore, be charged' with laxity in the matter. The business of the House is under its own control. The Government has been compelled to devote itself exclusively of late to the Estimates, and until they have been disposed of nothing further can be done. This afternoon we shall discuss shipping and shipbuilding, two phases of a very important matter which is directly related to the steel industry. We must have the Estimates disposed of in order that we may know where we are. Unless members make an earnest attempt to get rid of business, nothing can be done. The Government intends to introduce the legislation referred to by the honorable member,' and to dispose of the Tariff before Christmas. 13310 13310 KZC 0 0 LAMOND, Hector Mr HECTOR LAMOND - Can the Prime Minister inform the House when the proposed Bill to provide for superannuation for the public servants will be introduced ? 13310 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - The Bill to which the honorable member refers has been under consideration for a very long time, and is now in its final stages of preparation. After further submission to actuarial experts, it will be proceeded with; but whether it can be reached this session is a matter on which honorable members generally are as well able as I am to express an opinion. If the Bill is not dealt with this session, it will be one of the earliest measures of next session, being long overdue. I think that the measure is framed on right lines, and we ought at least to let the public servants know exactly what their position is to be. I hope that the measure may bare the approval of the House. 13311 Flogging of Natives 13311 KLG 0 0 MAHONY, William Mr MAHONY - In view of the serious allegation that natives are being flogged at Rabaul, will the Prime Minister consider the advisability of appointing a Committee of members of this House for the purpose of thoroughly investigating the whole matter? 13311 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - If members wish to visit Rabaul, no obstacles will be put in their way by the Government; but it is surely not necessary to invent for the purpose such an investigation as is suggested. ' Members can go at any time and make all the inquiries they desire. The Government does not admit that the facts are not as they have been set out. Speaking for myself, and for myself only, I am not in favour of that kind of administration that considers merely the natives and not the white population. The other day, when replying to a question, I said that if natives had been flogged they had been flogged because they were prowling about and molesting white women. Does this House wish the Government to tolerate that sort of thing? If it does, let it say so. I added that those who ordered the floggings had been dismissed. That disposes of Government complicity in the matter. I do not propose to allow people, whether they be black or white, to prowl about, molesting and frightening white women. 13311 13311 JUB 0 0 CAMERON, Donald Charles Mr CAMERON - Is the Assistant Minister for Defence aware that the dismissal of temporary employees in the Defence Department has been referred to in my electorate as "Billy's Christmas Box," and can he give the House any details as to the number of men who have been dismissed, and when the notice of dismissal was given? 13311 L0I NAT 1 0 RYRIE, Granville Sir GRANVILLE RYRIE - As a matter of fact, I have seen some such lying and venomous statement in the press, but I say, advisedly, that the Prime Minister (Mr. Hughes) was very strongly opposed to any of these men, especially returned soldiers, being dismissed from the Defence Department. I also was strongly opposed to the putting off of these men, but the responsibility for the dismissals must re3t upon the shoulders of those honorable members who insisted upon applying a "meat-axe" to the Works and Buildings Estimates relating to the Department of Defence. 13311 JPV 0 0 BLAKELEY, Arthur Mr Blakeley - That is an evasion of the honorable member's responsibilities. 13311 L0I 0 0 RYRIE, Granville Sir GRANVILLE RYRIE - Unfortunately these dismissals have been applied to temporary employees. 13311 L4X ALP 0 0 MOLONEY, Parker Mr PARKER MOLONEY - You cannot have it both ways. 13311 JPV 0 0 BLAKELEY, Arthur Mr Blakeley - How many " brass hats" has the honorable member dismissed? 13311 10000 0 0 JOHNSON, Elliot Mr SPEAKER (Hon Sir Elliot Johnson - Order ! 13311 JPV 0 0 BLAKELEY, Arthur Mr Blakeley - I want to know how many "brass hats" have been dismissed? Mr. SPEAKER. - Although the Standing Orders make no special provision for the asking of questions without notice, and questions without notice are never invited, the opportunity to put such questions occurs when notices of motion are called on, but they are supposed to deal only with matters of urgent public importance. If this practice of constantly heckling Ministers, while they are endeavouring to reply to questions without notice, is to be continued, the House will have to seriously consider the whole position, since it gives rise to an irregular debate which is clearly opposed to all parliamentary procedure. If honorable members desire information, and Ministers are willing to supply it in response to questions without notice, then, as a matter of common courtesy, Ministers should be allowed to give their replies without interruption. 13311 L0I 0 0 RYRIE, Granville Sir GRANVILLE RYRIE - In continuation of my reply to the questions put by the honorable member for Brisbane, I wish to say that, unfortunately, this cutting down must apply to the temporary employees of the Department, and that, as amongst the temporary employees there are no senior officers, it cannot apply to them. It applies at present only to the temporary staff, but if, when we go into Committee on the general Estimates - and I do not say this by way of a threat - a further attempt is made to apply the "meat-axe" to the Defence Estimates, there will probably have to be a reduction of the permanent, as well as the temporary, staff. 13312 13312 JPV 0 0 BLAKELEY, Arthur Mr BLAKELEY - Will the Prime Minister state whether the Government intend to carry out their promise to purchase, on behalf of the Commonwealth, the valuable and historical Rowan collection? 13312 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - As I have not, the papers at hand, I must speak from memory. The matter was submitted to the art advisers of the Government, and I think their report was to the effect that the paintings of the Rowan collection were of great scientific, educational, and artistic value. Some of them, as the honorable member is, perhaps, aware, are pictures of the flora and fauna of other countries besides Australia, but the great majority of them relate to Australia and New Guinea. It was proposed by the Committee that £2,000 should be given for such of the paintings as applied to the fauna and flora of Australia and New Guinea. As that would amount to something like £2 or £3 per picture, the price seemed to be absurd. In view of the declaration of the Committee that the collection is of great artistic, scientific, and educational value, the Government is of the opinion that such an offer would be an insult to Mrs. Rowan. Mrs. Rowan is prepared to take payment in Papuan lands for the greater part of her collection, and it will be for the House to express an opinion as to whether we should acquire it on those terms. It has been my good fortune to see the collection, and I think it would be a very great pity if Australia did not acquire it. I, however, am not going to offer Mrs. Rowan £2,000 for her life's work. If the House thinks that we should acquire these paintings, we should offer Mrs. Rowan a fair price for them. She has asked, I believe, £21,000 for the collection. Whether that is fair or not I am unable to say, but an offer of £2,000 would obviously be absurd. 13312 Complaint of Faulty Construction 13312 L1J 0 0 LISTER, John Mr LISTER - Has the Assistant Minister for Repatriation seen the statement made by Mr. Turnbull, President of the Victorian Branch of the Returned Sailors and Soldiers Imperial League of Australia, with regard to the faulty construction and bad drainage of certain War Service Homes at Northcote? If so, is the honorable gentleman in a position to inform the House what he contemplates doing in the matter? 13312 KZT LP; NAT from 1917 0 0 RODGERS, Arthur Mr RODGERS - I have not only seen the statement, but have inquired into it. Early this morning I sent for the Deputy Commissioner and the branch architect, and they inform me that there is no War Service Home in Northcote in the condition described by Mr. Turnbull. Only two Victorian cases have been brought under the notice of the Department. One is that of a house at Coburg, which was built by the Commonwealth Bank on land bought by the soldier himself. The Department has carried out the work of drainage, but as to that the person complaining is silent. The second case is that of a house in Herbert-street, Preston. That, I believe, is the house referred to by Mr. Turnbull. In that case also the Department is carrying out the necessary drainage work. I regret to say that statements of this kind would make it appear that nothing had been done by the Department, whereas the fact is that the remedy has been applied. 13312 13312 KEV 0 0 FENTON, James Mr FENTON - In view of the very great importance of the constitutional issue at stake, will the Prime Minister mention to the House on what day the Government will indicate their attitude regarding the Senate's action in pressing certain requested amendments to the Customs Tariff Bill? Honorable members would like to know the day on which this matter will be considered, so that they may be in their places to discuss it. 13312 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - There are very many matters of great importance to be considered and, therefore, it would be to the interests of the House and the country if honorable members were in their places every day. Amidst such a galaxy of important questions, it is not for me to single out any particular one for special notice. Although the question of whether or not certain rights of this House are being invaded is very important, still, I do not know that the country is aching to hear a discussion on the subject, or that its many and great troubles would be sensibly relieved by a decision one way or the other. All I have to say is that if honorable members who are interested are in their places every day they will receive notice of an opportunity to discuss this question before the House is prorogued. 13313 Surplus Stores 13313 KMU 0 0 MARKS, Walter Mr MARKS - Will the Assistant Minister for Repatriation state what progress has been made in connexion with the appointment of a Board in New South Wales to dispose of surplus stores acquired for the War Service Homes Commission? 13313 KZT LP; NAT from 1917 0 0 RODGERS, Arthur Mr RODGERS - A subsidiary Board has been appointed, consisting of Mr. G. J. Oakeshott, Commonwealth Director of Works in New South Wales (Chairman), and Mr. John Harrison, who has taken a leading part in providing homes for soldiers' widows and maimed soldiers. 13313 13313 KLG 0 0 MAHONY, William Mr MAHONY - In reference to the theft of a large amount of gold coin consigned from Australia to America by the s.s. Sonoma, has the Prime Minister any explanation to offer as to why such large parcels of gold are allowed to be exported to America, especially in view of the fact that the trade balance between the two countries is in favour of Australia. ? 13313 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - That is one of the questions I am unable to answer. 13313 13313 KIT 0 0 MACKAY, George Mr MACKAY - Does the Minister for Trade and Customs propose to extend the benefits of the Fruit Pool to Queensland, where 150,000 cases of pineapples will be available for export? 13313 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - The Government have agreed to form a Fruit Pool, and have drafted the conditions upon which it will be conducted. The Commonwealth and the States will share the liabilities, and as soon as we have had time to communicate the particulars of the scheme to the States we shall make them available to the public. It is proposed to extend the Fruit Pool to Queensland, and to include pineapples. 13313 13313 JSC 0 0 BRENNAN, Frank Mr BRENNAN - Will the Prime Minister make available for perusal by honorable members all departmental reports and papers relating to the alleged cruelty to natives at Rabaul ? 13313 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - I shall be glad to do so. 13313 13313 KZA 0 0 WEST, John Edward Mr WEST - In view of the statements that are being made in all the capital cities, and which a lot of people are beginning to believe, that the Ministry will be reconstructed, and will include members other than those of the National party, will the Prime Minister promise to reconstruct the Ministry before the Parliament goes into recess, and set apart a day on which the Opposition may discuss the merits or demerits of the appointments ? 13313 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - The statement that rumours are in circulation in several of the principal cities I can quite credit, but that people are beginning to credit them I do not believe. As to setting apart a day on which the reconstruction of the Ministry may be discussed after it has been done, if the reconstruction takes place before the House goes into recess, an opportunity to discuss it can be taken in the usual way. If the reconstruction does not take place before the prorogation, honorable members have their remedy by a motion in anticipation of what may be done. 13313 13313 KFF 0 0 FOLEY, George Mr FOLEY - I do not ask the Prime Minister to usurp the function's of a higher authority, but can he give the House any idea as to when the session will close? 13313 DQC NAT 1 0 HUGHES, William Morris Mr HUGHES - Yes; on the earliest possible date. 13313 Palm Passage, Great Barrier Reef 13313 K7L 0 0 STORY, William Mr STORY asked the Minister for Trade and Customs, upon notice - Will he state upon what new lighthouses and apparatus the amount allocated under the Loan Appropriation Bill, namely, £10,404, will bo expended, and the estimated cost of each new light? Willhe say whether, in framing these estimates, consideration has been given to the advisability of providing lights to permit of the safe navigation of what is known as Palm Passage through the Great BarrierReef? 13314 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - The answers to the honorable member's questions are: - The lighthouses affected are as follow: - South Brook, Hannibal Island, Albany Rock, Ince Point, Eborac Island, and Hammond Rock ; the estimated cost of each new light being £5,320, £5,500, £3,800, £4,500, £4,275, and £1,150 respectively. Apparatus will be provided for Cairn Cross, Hannah Island, and Restoration Bock at a total estimated cost of £3,200. This question has received full consideration, with the result that it has been decided that it must stand over until more urgent work in Queensland waters shall have been completed. It may be mentioned that two vessels only have arrived at Townsville direct, and three via Cairns, using Palm Passage, during the last two years. 13314 Commissioner's Report 13314 KNP 0 0 MAXWELL, George Mr MAXWELL asked the Minister for Trade and Customs, upon notice- Whether he has received a report from the Trade Commissioner in the East (Mr. Little) ; if so, what is the nature of such report? 13314 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - A report has been received, the nature of which can be ascertained by reference to pages 15 to 18 inclusive of the annual report issued by the Bureau of Commerce and Industry, a copy of which has been sent to each honorable member. This portion of the report was compiled from the report received from the Trade Commissioner and correspondence which has taken place with the Commissioner. Mr. Little has been instructed to report fully at frequent intervals. 13314 Approximate Cost 13314 KYV 0 0 RILEY, Edward Mr RILEY asked the Minister for the Navy, upon notice - What is the approximate cost of the latest up-to-date capital ship, including its full equipment? 13314 KTU NAT 1 0 SMITH, William Mr LAIRD SMITH - Approximately £7,000,000 sterling. 13314 13314 L0I NAT 1 0 RYRIE, Granville Sir GRANVILLE RYRIE - On Fri day last the honorable member for Maribyrnong (Mr. Fenton) drew my attention to the case of the dependants of a soldier who was gassed and injured on active service, and who has since had to enter a mental hospital. I have made inquiries regarding this case, and find that the matter is one for the consideration of my colleague the Minister for Repatriation, to whom I have accordingly forwarded the honorable member's representations. 13314 bill Assent reported. 13314 miscellaneous In Committee of Supply (Consideration resumed from 25th November, vide page 13307) : Department of the Treasury. Ordered - That the further consideration of the votes under the Department of the Treasury be postponed until after the consideration of postponed divisions 24 to 27a. Department of the Prime Minister. Postponed division 24(Commonwealth Shipbuilding), £24,253. 13314 DQC Bendigo NAT Prime Minister and Attorney-General 1 0 HUGHES, William Morris Mr HUGHES . - I do not propose to address the Committee at length now, but it will be recollected that on the 16th instant, when I had the honour of setting out the position in regard to the Commonwealth Line of Steamers and Commonwealth Shipbuilding, I said that an offer had been made, if I remember right, in 1919 to purchase the Commonwealth Line of Steamers, and that I had reason to believe that we could sell our ships now if we desired to do so. I have here a cablegram dated 17th November, which is of so much importance that I propose to read it to the Committee. Mr. Larkin, the General Manager of the Commonwealth Line of Steamers, has cabled to me conveying the following message from Lord Inchcape, which his Lordship wished him to forward to me: - I realize that prospects of shipping all over the world for several years to come are extremely bad. Americans have overbuilt them- selves at high costs, Germany is building at low costs, while tonnage at present laid up is more than can be profitably utilized for some years. The Conference Lines to Australia must keep their ships running even at serious loss, utilizing their accumulated reserves to take up deficiencies. I recognise, and admit quite freely, that Australian Government, with taxpayers behind it, can go on indefinitely, and that Conference Lines may eventually be ruined. I am prepared to recommend Conference to come to an agreement with Australian Government, either to buy its ships on reasonable terms, or to suggest they should sell their ships to Australian Government, and leave latter a free field. If you decide to adopt the first alternative, I feel sure an arrangement satisfactory to you could be arrived at; and I may say the same if you decide to adopt the latter. The message is quite clear, and speaks for itself. I propose to make no comment upon it. Honorable members are now in possession of all the facts in regard to shipbuilding and shipping. Copies of the speech I delivered upon both subjects have been distributed. Any further details required in regard to shipbuilding will be furnished by my colleague, the Minister in Charge of Shipbuilding (Mr. Poynton). If further details in regard, to the Commonwealth Line of Steamers are required, I shall be glad to supply whatever information is at the disposal of my Department or the Shipping Office. I leave die matter now for honorable members to determine. The Committee is asked to take a momentous step. It is now in a position, as clearly set out in the cablegram, of being able to say if it so wishes, "We will sell the Line," Lord Inchcape having said, " I feel sure that an arrangement satisfactory to you could be arrived at." I assume that he refers to the matter of price, if we decide to sell. I take it that the second alternative is out of the question, that is to say, that we should buy the Conference Line of Steamers. Of course, the Committee can decide otherwise, but I should raise my voice most strenuously against it. We have enough troubles a3 things are now without adding to them. However, all the facts are before the Committee relating to shipbuilding as well as shipping. The two matters are so co-related that it is impossible to discuss the one fairly without touching upon the other. In the circumstances, no doubt the Chairman will allow the discussion to cover both phases. 13315 JXA 0 0 CHARLTON, Matthew Mr Charlton - If the Committee pass the Estimates as they stand will the right honorable gentleman take it as an indication that things are to continue as at present? 13315 DQC 0 0 HUGHES, William Morris Mr HUGHES - Yes. The position, is very simple; if any honorable member wishes to register the decision of the Committee against shipping or against going on with shipbuilding, it will be sufficient for him to move to reduce the Estimates by any specified amount, provided he intimates that he does so with a view to testing the feeling of the Committee upon the matter. 13315 KFE 0 0 GREGORY, Henry Mr Gregory - On the special point as to whether we should continue building or carrying on the line of steamers? 13315 DQC 0 0 HUGHES, William Morris Mr HUGHES - If an honorable member thinks there is clearly room for the reduction of any item and he moves to reduce it without intimating that he does so for the purpose of testing the feeling of the Committee on any specific point, it is quite a different matter. But it is quite easy for honorable members to say why they propose to reduce an item or a vote. 13315 JPC 0 0 BEST, Robert Sir Robert Best - The decisions in regard to shipbuilding and the Commonwealth Line of Steamers should be quite separate. 13315 DQC 0 0 HUGHES, William Morris Mr HUGHES - Yes. Some honorable members may not be in favour of continuing shipbuilding, hut may be in favour of continuing the Commonwealth Line of Steamers. It will be open for any honorable member to move to reduce an item and say in doing so, " I do this with the intention of testing the feeling of the Committee on this one point." 13315 JXA Hunter 0 0 CHARLTON, Matthew Mr CHARLTON .- The Prime Minister (Mr. Hughes) has made it very clear that he desires an expression of opinion from the Committee as to whether it favours the continuation of the Commonwealth Line of Ships and also the continuation of shipbuilding in Australia. 13315 10000 0 0 ATKINSON, Llewelyn The TEMPORARY CHAIRMAN (Mr Atkinson - I point out to the honorable member that division 24, which is before the Committee, covers only shipbuilding. 13315 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - The Prime Minister has just asked that the discussion of both shipbuilding and the Commonwealth Line of Steamers should be taken together. 13316 KXG 0 0 WATT, William Mr Watt - May I, as a matter of order, suggest that, if it is desired by the Government and the Committee that these matters should be regarded as separable, and treated separately, it would be better to put the divisions covering them separately, and then honorable members will be able to vote upon a clear-cut issue in each case? 13316 DQC 0 0 HUGHES, William Morris Mr Hughes - We can take a vote on each division, but it would be better to permit the discussion to cover both. 13316 KXG 0 0 WATT, William Mr Watt - That is so. 13316 JXA 0 0 CHARLTON, Matthew Mr Charlton - I desire to say a word or two before the Temporary Chairman decides how these matters shall be dealt with. When it was proposed to postpone the Treasury Estimates last week, it was tacitly agreed by the Committee that the postponement should be for the purpose of discussing the whole position with regard to the Commonwealth Shipping Line and shipbuilding in the Commonwealth, as it was felt that that would shorten our proceedings. If it is' now proposed that each division shall be discussed separately- 13316 DQC 0 0 HUGHES, William Morris Mr Hughes - I do not say that. 13316 JXA 0 0 CHARLTON, Matthew Mr Charlton - I understand that is what is suggested by the honorable member for Balaclava (Mr. Watt). 13316 DQC 0 0 HUGHES, William Morris Mr Hughes - No. The TEMPORARY CHAIRMAN It is to be understood that discussion will be allowed to cover shipbuilding and the Commonwealth Line of Ships, but each of these divisions will be put to the Committee separately. 13316 DQC 0 0 HUGHES, William Morris Mr Hughes - That is what the honorable member for Balaclava (Mr. Watt) suggested. 13316 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I was saying that the Prime Minister has made it clear that he desires an expression of opinion from the Committee in regard to the Government continuing to own and control a line of boats and also the continuation of their shipbuilding policy. In my opinion, the two things must go together.' I do not see how, in justice to the shipping line, we can eliminate the question of shipbuilding. If we are going to run a line of boats, it will be essential that we should have shipyards, not only for the purpose of repairs, but in order that we may build additional vessels when they are required. We have already provided shipyards in Australia for the building of vessels. We have the testimony of the Prime Minister, on. the authority of experts, that no better ships are built anywhere than those which have been turned out in Australian yards. We have our own Commonwealth yards at Cockatoo Island and at Williamstown. In addition, private yards have been established, in many cases at very considerable expense, and the Government of New South Wales, at the request practically of the Commonwealth Government, during a time of stress in the war period, made provision for the building of large boats at Walsh Island. 13316 KXG 0 0 WATT, William Mr Watt - At the request of the Commonwealth Government? 13316 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Practically, because they were asked to make provision for the building of ships during the war period in order to replace tonnage that was being sunk at that time by enemy submarines. The position now is that we have shipyards established in Australia, and we have the Commonwealth Line of Steamers, which was brought into being through the action of the Prime Minister. During the war period, when things were going badly at sea, and when in consequence of the submarine campaign of the enemy, a great many boats were being sunk, action had to be taken by those charged with responsibility with a view to seeing that as much shipping as possible was provided in order that supplies from Australia and from every part of the globe might be carried for the Allied troops. The Prime Minister launched out at the time, and purchased the steamers which are known as the Austral boats. When those vessels were purchased any man in the Prime Minister's position was bound to accept certain responsibility ; and the only objection I have at any time taken to the right honorable gentleman's action was that he did not sooner consult Parliament, after he had acquired the boats, in order to obtain parliamentary indorsement for their purchase. The purchase of these vessels turned out to be a very profitable investment. They cost £2,052,000, and the Prime Minister has told us that the profits they have earned to date amount to over £1,600,000. 13317 DQC 0 0 HUGHES, William Morris Mr Hughes - Considerably more than that. That is after writing them down. 13317 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I think the right honorable gentleman will find that the net profit on the line to date is £1,600,000. So that the purchase of these vessels may be regarded as a good deal. At a subsequent date it was found that other arrangements should be made because of the very heavy loss in shipping incurred by the Allies. There were no less than 911 ships, with an aggregate tonnage of 3,729,000 tons, destroyed during the year 1917 alone. In consequence of this the Prime Minister entered into negotiations to have more ships constructed. He placed orders for ships in Australia and in America. So far as the Australian orders are concerned, the ships built at Cockatoo Island, at Walsh Island, at Williamstown, and in some of the private shipyards, gave every satisfaction. There were some wooden ships that were not satisfactory. It is not necessary for me to dilate upon that point, because we have a report from the Public Works Committee who inquired into the building of those ships, and are awaiting the decision of the Government .in regard to that report. The fact remains that it was found that although shipbuilding was only in the initial stage in Australia, and our workmen had to gain knowledge of the business, we were able to build ships at fair and reasonable prices, and, indeed, at a cost not greater than ships were being built for in other parts of the world at that time. At Cockatoo Island the cost was £33 10s. 4d. per ton, and at Williamstown £29 17s. Id. That was the cost of building vessels of the D class. The cost of building the E class boats at Williamstown was £30 per ton, and at Cockatoo Island Dock £32 6s. 3d. These prices compared favorably with the cost of ships built elsewhere. 13317 JUV 0 0 MCWILLIAMS, William Mr McWilliams - At that time. 13317 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Yes, I have put it in that way. The Prime Minister has said that so far as the workmanship on these vessels is concerned it is equal to the workmanship in any other part of the world. The costs at Walsh Island have not been supplied, but I think I am right in saying that they were something like £30 per ton. When at the time I visited Walsh Island the manager of the shipyard there told me that Japanese buyers had just visited the island in search of ships. The Japanese Government were then asking for tenders for the building of vessels, and their buyers were surprised to find that vessels could be built at the time in Australia for £30 a ton. They said that they could not bo built at the same price in many other parts of the world, and it was a lower price than that which they expected to have to pay for ships. 13317 KYD 0 0 POYNTON, Alexander Mr Poynton - It was really £6 per ton under the cost of shipbuilding in any other part of the world. 13317 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I am glad to hear the Minister's statement. It stands to the credit of every one concerned in shipbuilding in Australia, when we consider that the industry here was in its initial stage, that we were able to compete successfully with shipbuilding yards in other parts of the world, which had been established for years. As we have spent so much in establishing shipyards, and have been so successful, are we going now to permit the building of ships in Australia to cease? Are Australian workmen, who have done so magnificently, to remain idle while artisans in other countries do our work for us? Or shall we stand by the policy, so far as may be possible, of having Australia's ships built in Australia? There is no reason at this juncture, when war conditions are past, why Australian workmen should be required either to come down to the level of workmen in countries where had times are being experienced, or be rendered idle owing to the cessation of shipbuilding activities. There is something more than the actual factor of costs to be considered. We should not lose sight of the fact that, by giving the work of building ships to Australian workmen, we employ not merely those workmen, but almost innumerable hands in other directions. 13317 KYI 0 0 PROWSE, John Mr Prowse - But that consideration does not reduce the cost to those who have to pay for the ships. 13317 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - No; I shall go into that directly. My point is that so much more work is provided, so much more revenue is raised by having Australian ships built locally, that the question of cheaper rates, ton for ton, is considerably more than balanced. What is the advantage of a few pounds per ton compared with widespread idleness throughout Australia? I do not know that all the considerations favouring the work being done locally could be put into figures, but I am confident that, in view of the maintenance of general employment, not only in the industry itself, but in many other directions - added to the consideration of revenue derived by way of income tax and the like - the whole would represent very many hundreds of pounds per ton as against the actual cost of having ships built for us elsewhere. I propose to quote specific figures covering the activities of one company alone which is vitally concerned in shipbuilding in Australia for the reason that it produces much of the material essential to the industry. I refer to the Broken Hill Proprietary Company. That great firm is being compelled, at the present time, to dispense with a large number of hands owing to slackness of trade - a state of affairs due largely to various orders having been sent abroad, so that the materials are now being dumped in Australia from overseas. In this latter regard I may cite the case of the Victorian Government, which recently placed " outside " orders, having to do with the Morwell scheme, totalling between £400,000 and £500,000. The reason is stated to have been that the materials could be purchased more cheaply overseas; but I emphasize that there are many other considerations besides the factor of exact cost. There is that incalculable consideration of the maintained employment of Australians in the production of materials from Australian raw supplies. I hold that that factor alone more than counterbalances the consideration of a cheaper foreign quotation. Last year, the Broken Hill Proprietary Company paid to the Commonwealth Government by way of war profits taxation £70,334; to the Commonwealth Government, for income tax, £77,412; to the New South Wales Government, £66,784; and to the South Australian Government, £28,054 - a total of £242,584. Those statistics will indicate to what extent the local manufacture of products required in Australia should be considered over and above the question of precise cost. Not only is there the maintenance of employment in the direct industry itself, but there is the huge amount of activity involved in associated industries to be taken into account. For example, the Broken Hill Proprietary Company keeps a couple of coal mines going to-day. The firm probably takes between 1,000 and 2,000 tons of coal for every day that its works are kept going. If the Broken Hill Proprietary Company's works are to be allowed to close down, the men employed on those two coal mines must also be thrown into idleness. If the Broken Hill Proprietary Company's works at Newcastle cease, the men working in South Australia and in Tasmania providing the iron ore will be unemployed. 13318 JPC 0 0 BEST, Robert Sir Robert Best - The honorable member is taking it for granted that private enterprise is not going to take up shipbuilding. He prefers that activity to be carried on by the Commonwealth at a loss. 13318 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - No! What I am troubled about is the possibility of further ships being ordered overseas or bought ready built from an outside source. There are, for example, those five 12,500-ton ships being built in England. All could have been constructed in Australia, and should have been built here. The work could have been done in this country without trouble. But there are no private yards in Australia which could turn out vessels of that capacity ; they must be built in the Government yards, which have been specially equipped for such a purpose. 13318 JPC 0 0 BEST, Robert Sir Robert Best - The honorable member should not forget that the Government have offered to give every facility, and to hand over those yards, in fact, to private enterprise. 13318 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I say, "Let us have our own work done in our own country if we possibly can. Let us find employment for our own people." The great consideration, I repeat, is not one of a few pounds per ton, more or less, added to the cost, but of what advantage, in comparison, is afforded to the Commonwealth in almost innumerable directions by the maintenance of local industries. I have no idea what all this may mean in terms of pounds, shillings, and pence. It would probably be impossible even for an accountant to work out the sum; hut, without doubt, the policy of building our own vessels in our own yards, employing our own hands, and using our own material as far as possible, means anything between £200,000 and £300,000 per annum. Whatever may be the figure, it must be offset against the tonnage cost in the overseas yards. We should not be ready to jump to the conclusion that because we can order vessels from overseas at from £10 to £12 per ton less than Ave can turn them out at home, the Australian yards should be shut. If we were to follow that practice along every avenue, where would Australian activities find themselves ? The wooden vessels built in America to our order proved to he very unsatisfactory. The Prime Minister has stated that the loss1 sustained amounted to £2,343,159. The right honorable gentleman mentioned that nine of the vessels have been sold, and that five are lying idle to-day, serving no good purpose, and adding to the total of their cost. 13319 JUV 0 0 MCWILLIAMS, William Mr McWilliams - And are not some of the steel ships also tied up? 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I believe so. The Prime Minister justified the placing of the Commonwealth order in the United States of America 'by reminding this country of the extraordinary maritime conditions due to submarine warfare. As for what the Prime Minister did, I am bound to say that no other man holding similar responsibilities, would have been justified in hesitating to do the same. But I wish to know whether the specifications in respect of those contracts were satisfactory. Had those vessels been delivered at their due date - the Prime Minister has pointed out, further - there would have been a different story to tell. 13319 K6S 0 0 CORSER, Edward Mr Corser - I think that strikes in the United States of America were the prime cause of late delivery. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Yes ; the Prime Minister has indicated as much. But, generally, in all contracts of this nature a clause is inserted which covers the party who has placed the order. It is usually provided that, instead of the buyer carrying the whole of the loss occasioned by late delivery, responsibility must he shouldered by the contractor. And such provision is only proper; for, otherwise, there would be some shipbuilding firms, no doubt, which would find it to their interest to make trouble. Being in a tight corner, and realizing their inability to deliver on time, it is quite possible - and it would certainly be to their advantage - that they might engineer difficulties. I do not say that there was anything of the kind in respect of these American contracts; but I want to know whether any provision was made in the specifications concerning delivery at a specific date; and whether, if so, there was any penalty, and what was its nature, in case of default. 13319 DQC 0 0 HUGHES, William Morris Mr Hughes - Each ship had to be delivered at a fixed date; there was a penalty. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Did the contractors pay that penalty ? 13319 DQC 0 0 HUGHES, William Morris Mr Hughes - Of course not. We had our opportunities to press for the payment of the penalty. That is to say, we could have gone to law; but there are many considerations available to one on the other side of the water which are not open to a litigant so far away as we are. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - The Prime Minister says, in effect, that the contractors defaulted, but that it was not worth while for the Commonwealth Government to waste powder and shot upon them? 13319 DQC 0 0 HUGHES, William Morris Mr Hughes - Yes; we had Sir Henry Braddon and Mr. Mark Sheldon, who were first class business-men. They were there at a very critical time, and we handed the matter over to them. We could not do better. 13319 KLG 0 0 MAHONY, William Mr Mahony - Was it the negotiations in connexion with the proposed sale that were handed over to them? 13319 KYD 0 0 POYNTON, Alexander Mr Poynton - Yes, and the contracts, too. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Were the boats seaworthy when they were completed ? 13319 DQC 0 0 HUGHES, William Morris Mr Hughes - They were seaworthy, apparently, within the meaning of the American conception of seaworthiness. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Did they pass Lloyds' surveyor? 13319 DQC 0 0 HUGHES, William Morris Mr Hughes - They did. Perhaps they were surveyed through the cracks where the caulking was wanting. 13319 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I always understood that if a ship passed a Lloyds" surveyor, it wa9 supposed to Be "Al." The Prime Minister, in his speech, did not state the exact amount that was paid for the boats. He mentioned the total loss, and the amount they were sold for. The loss was £2,343,159, as far as I can gather from his speech. 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - I am sure that I gave the figures. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I cannot find them, although I have looked closely at the speech. I think the Prime Minister said the total loss to the Commonwealth was £2,343,159, and that nine of the boats had been sold for £17,360 each. I suppose the amount for which the nine vessels were sold was credited to the total cost, and that the amount remaining was £2,343,159. In addition, the Prime Minister said there were five boats laid up in Australia, and incurring certain costs which would have to be taken into account. 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - On page 12826 of the Hansard report of my speech it states that the capital cost of " all " the vessels was £2,275,299. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Is that the capital cost of the American boats only ? 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - Yes. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - If the capital cost was £2,275,299, how is it that we get a loss, after selling nine of them for £17,360 each, of £2,343,159? The loss is even more than the cost of the boats in the first place. 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - That is so because we lost on the running of the boats. There was a loss on every voyage. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Did the Government actually run the American wooden boats? 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - Yes, certainly. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I was under the impression that the Government did not run them, although there is a suggestion that it '' tried " to do so. I now desire to draw attention to the list of enemy vessels. I always had a considerable amount of doubt as to what would become of them. We have eighteen enemy vessels running, which show a net gain of £4,826,338. Their capital value was £909,315. I do not know how that capital value is arrived at. Has any one valued them? 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - The value of the vessels is debited against the Commonwealth Shipping Line at the amount stated, but what the value actually is can only be ascertained by the Prize Courts. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - I am not sure whether the Commonwealth, now that the war is over, has a right to retain these ships, or whether they have a right to retain the profit of £4,826,338 earned by thems I notice in the newspapers to-day that a judgment has been given which seems to set this point at rest. The Judge has held that the Commonwealth Government are entitled to hold these ships. I had a doubt on the point, but I may be wrong. I hope that, when the Prime Minister is speaking later, he will make it clear whether the Commonwealth Government have a right to retain these vessels, and will state the amount of their earnings during the time we have been running them. 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - I do not doubt that we have the right to retain them; but their value has to be determined by the Courts and debited against our share of the reparation payments. This matter has been before the authorities many times, and I have stated quite definitely that we regarded these ships as ours, and quite properly so. The question of how much we should be debited with has to be determined outside ourselves - that is to say, by the Court - and it will be debited against our share of the reparation payments. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - It appears that whatever we may get from these boats will be part and parcel of the reparation payments to be received by us from the enemy. The Prime Minister stated that the cost of the vessels of the Commonwealth Line was £9 per ton. I do not want that to be regarded as a fair index of their present value. In arriving at that figure, the Prime Minister made certain deductions. He took the value of the profit made by the ships and deducted that from their capital cost; then, by taking the total tonnage of the vessels into account, he arrived at the figure of £9 per ton. It is not fair, however-, to take that figure into consideration when deciding whether the Government should continue shipbuilding. 13320 DQC 0 0 HUGHES, William Morris Mr Hughes - The only point I desired to make was that, if the Line is to continue as a business concern, it must earn profits on the £9 per ton basis, and not upon the present prices. 13320 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - The Prime Minister was making a comparison to show that the deal was a good one for the Commonwealth; but, as far as the future is concerned, the amount of capital that will be involved is not so great. -T,he Commonwealth Government place! certain orders for shipbuilding recently. In most of these cases, with two exceptions, the orders have either been completed or the ships are in process of construction. The two exceptions are ships which will be built at Cockatoo Island, and in connexion with them the Government have already expended £336,000 on machinery. If the Committee decides that no further shipbuilding must be undertaken, it means that £336,000 worth of machinery will have to lie deteriorating at Cockatoo Island, or will have to be sold at a big loss. It is very questionable whether the Government could find a purchaser for the whole of it, although they might for portion of it. Another matter, also, has to be considered. The ships are both of 12,500 tons capacity, with an average speed of 15 knots, and are an improvement on the ordinary class of vessel in the fleet. Most of the existing vessels are tramp steamers - cargo carriers - but the new boats are to be built with refrigerating space, and to carry passengers. 13321 KYD 0 0 POYNTON, Alexander Mr Poynton - Each vessel has 350,000 feet of refrigerating space. 13321 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - That class of ship is very scarce, because, during the war, our late enemies seemed to lay themselves out to sink passenger ships with refrigerating space for perishable produce. Since the armistice every effort has been made by all those countries that suffered losses ' during the war to replace vessels that have been sunk. The vessels to be constructed at Cockatoo Island Dockyard and the five that are being built in Great Britain will be faster than our existing ships, and, therefore, will be very suitable for the carriage of our primary products. {Extension of time granted.] No one should welcome the construction of these vessels more than the primary producers and their representatives in this Parliament, because the shipping position, as disclosed by the cable which the Prime Minister read to-day from the Manager of the Commonwealth Shipping Line (Mr. Larkin) is likely to be serious. Mr. Larkin has advised the Prime Minister that Lord Inchcape holds the view that the prospect for shipping is bad all over the world, and that the Conference Line should either buy the Commonwealth ships or else the Commonwealth should purchase their vessels engaged in the Australian trade. Why do they want to buy our ships? 13321 KMU 0 0 MARKS, Walter Mr Marks - Because they will be on a good wicket if they do. 13321 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - They want to buy our ships in order that, as a Combine, they may more effectively regulate freights and fares. Make no mistake about that. Only on Friday last a cable, emanating from the Conference Line, appeared in the Melbourne Herald stating that owing to. the unsatisfactory outlook for shipping all over the world it would be necessary either to sink or destroy a large number of the vessels controlled by the Line, in order that by regulating freights and fares a more satisfactory return may be obtained from the vessels that are left. Some honorable members suggest that, in view of the changed shipping position, as a result of which vessels may be purchased for a few pounds per ton less than the cost of construction in Australia, we should not go on with our shipbuilding programme. I say that if we adopt that line of reasoning we shall be playing right into the hands of the great Shipping Combine, because if they succeed in buying our vessels they will be able to control shipping from one end of the world to the other, and make their profits from higher freights and passenger fares. What will be the position of the primary producer then? 13321 KYI 0 0 PROWSE, John Mr Prowse - Much the same as before, because the Commonwealth Line practically joined the Combine. 13321 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - The management of the Commonwealth Line would have no right to do that. 13321 KYI 0 0 PROWSE, John Mr Prowse - But they did, all the same. 13321 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Honorable members of this House have it in their power to determine the policy of the Commonwealth Shipping Line. If there is any Combine in regard to Commonwealth ships I shall be at all times willing to assist the honorable member for Swan to break it in the interests of primary pro,ducers. We, on this side of the House, do not stand for any such Combine. We stand for justice to all. If now we allow the Conference Line to secure control of our shipping, the man who is producing wheat in Australia or the exporter of beef or of any other product will have to pay freight to the fullest possible extent. 13322 KYI 0 0 PROWSE, John Mr Prowse - That has not been our past experience. 13322 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - If it has not been our past experience the honorable member should, at all events, be guided by the statement that appeared in the Melbourne Herald on Friday last as to the probable future of overseas shipping. It was confidently believed that after the war there would be such a shortage of supplies in all countries that every available ship would be profitably employed, but instead of that belief materializing we find that although the people of many countries are suffering from a shortage of foodstuffs their financial position is such that they are unable to purchase. As a result, very little trade is offering, and vessels are tied up everywhere. We are hoping, however, that inside, of a year or so things will right themselves and that we shall require the same number of vessels for the carriage of our produce as formerly. In the interests of our primary producers, we should give this shipping question very serious consideration. If the Government cannot see their way clear to enter into further contracts, they would be wise, at all events, to complete the two vessels now under order, especially in view of the fact that machinery to the value of £336,000 has been purchased. They will be vessels as fast as the Orient ships, and quite suitable for the carriage of our mails. Why, then, should we subsidize a private company to the extent of hundreds of thousands of pounds when vessels of our own may be utilized? We have five in construction in the Mother Country, and two are to be built in Australia. Why should we not build a sufficient number to establish a regular mail service with the Mother Country and carry all our surplus produce intended for overseas markets at fair and reasonable rates ? The matter is in the hands of thi9 Parliament. These ships, as I have already stated, are faster than the other1 vessels owned by the Commonwealth Government, and their refrigerating space should be equal to all our requirements. 13322 KMU 0 0 MARKS, Walter Mr Marks - And they will save a week on the voyage between Australia and London, because they will not be delayed for coaling purposes. They will be oil fed. 13322 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - The saving of time is an important consideration from the primary producers' point of view. There is every reason why the construction of the vessels should be proceeded with, and I trust the Committee will favour such a proposal, although it may not be acceptable to some honorable members, because so many vessels are at present idle. If honorable members will analyze the position they will find that the vessels which are held up are not of the type that we are constructing, and are not of the class in which cur primary products are being shipped. We would, therefore, be acting unwisely if we deleted the items in the Estimates in which provision is made for ship construction, and continuing the operations of the Commonwealth Line. The vote in connexion with shipbuilding should be allowed to pass, and the Government given the right to construct such ships as are required. We may not find it necessary to build more than the two which have already been authorized, but the Government would have the power, subject to the approval of Parliament, to construct further vessels if the circumstances should demand it. The vote in connexion with the Commonwealth Line of Steamers should also be allowed to remain, because the line is more essential now than, perhaps, it has ever been in its history. The honorable member for Swan (Mr. Prowse) stated by interjection that the Commonwealth steamers and those of the Conference Line had combined in the matter of freights. That is not so; but the honorable member must recollect that previously there has been a Shipping Combine which has been detrimental to the interests of the primary producers. In view of the evidence we have had to-day, including the cable which the Prime Minister (Mr. Hughes) submitted to the Committee, it is quite evident that those interested in the world's shipping are putting their heads together in an endeavour to control ocean traffic, and the only obstacle at present in their way is the Commonwealth Line of Steamers. 13322 JUV 0 0 MCWILLIAMS, William Mr McWilliams - It has not proved an obstacle up to the present. 13322 JXA 0 0 CHARLTON, Matthew Mr CHARLTON - Perhaps not; but it will.Iremember the honorable member stating by interjection that the vessels of the Commonwealth Line had not been competing with those of the Combine, but had fallen in with them. Honorable members on this side of the chamber are prepared to give every assistance to the Commonwealth Line if it is showing an adequate return for the money invested after setting aside a reasonable sum for depreciation. We do not wish the vessels of the Commonwealth Line to return handsome profits, but to carry our products to the other side of the world. I trust the Committee will be prepared to support both these items, because if they are passed, it will indicate that Parliament is in favour of the ship construction policy being continued, and the operations of the Commonwealth Line not being interfered with. 13323 JUV Franklin 0 0 MCWILLIAMS, William Mr McWILLIAMS . - I agree with the statement of the Prime Minister (Mr. Hughes) and that of the Deputy Leader of the Opposition (Mr. Charlton) that this is an exceedingly important subject, and should be fully debated. It has to be admitted that there has been considerable muddling in connexion with the construction of ships in the past. I was a member of the Royal Commission which inquired into Commonwealth shipbuilding generally, and I should admit at the outset that I. was pleased to learn that the work performed by Australian artisans was of the highest standard. That fact has never been challenged, and it is one which we should freely recognise. The whole procedure in connexion with shipbuilding at Cockatoo Island would have been a screaming farce if it unfortunately had not been so costly, because of the fact that at least four Government Departments were interested in Cockatoo Island. Each Department had its own officers and regulations, which were very often in conflict, and which invariably resulted in chaos and increased the cost of the work. It is a wonder to me that the Superintending Manager succeeded in carrying out any work, considering the circumstances under which operations were conducted. One of the principal reasons for dissatisfaction was the absurd Shipping Tribunal, the decisions of which overrode Federal and State awards, and which produced in some instances startling results. In some cases two first-class mechanics with equal capabilities would be receiving different rates of pay. One would be earning 18s. 6d. per day, while the one working under the conditions set up by the tribunal would be earning perhaps £3 10s. per day. There was also the absurdity that the unskilled labourer attached to the latter would be receiving 50s. a day, whilst the skilled artisan working beside him would be receiving 18s. a day. 13323 KYD 0 0 POYNTON, Alexander Mr Poynton - The honorable member, ought to be aware that on a ship costing £170,000 the additional cost so involved would be only a little more than £800. 13323 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - That is not any justification for setting up an absurd tribunal, the decisions of which overrode Federal and State awards, and which created dissatisfaction among the workers. 13323 KLG 0 0 MAHONY, William Mr Mahony - How could it override a State award when they do not apply to Commonwealth activities ? 13323 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - The decisions of that tribunal overrode all awards. It was a special tribunal created by the Prime Minister to deal with this particular class of work, and the honorable member for Dalley (Mr. Mahony) must admit that its decisions were extraordinary in their results. The honorable member and others who were members of that Commission will admit that when witnesses appeared before the Commission and were asked certain questions they frequently replied, " That is not in my Department. It is a matter for the Public Works Department." Another witness would say, " That is a matter for the Department of the Navy." 13323 KMU 0 0 MARKS, Walter Mr Marks - But that has all passed. 13323 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - Yes, but it shows the absurdity of the position. Honorable members can readily understand the difficulties that would arise when operations were being conducted by three or four Departments under different Ministerial heads. The work was carried out in such a way that, approximately, 2,400 men were thrown out of work without any warning, and it was a disgraceful act on the part of those who were responsible. A sum was voted by Parliament to cover the expenditure on ship construction for twelve months; but the amount was spent in about eight months. 13324 KYD 0 0 POYNTON, Alexander Mr Poynton - Conflicting authority had nothing to do with that. 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - If the Minister (Mr. Poynton) will turn up the evidence he will find that it supports what I have said. 13324 KFP 0 0 FOSTER, Richard Mr Richard Foster - Who was responsible for it? 13324 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - Personally, I think the blame rested upon the shoulders of two or three. It was stated in evidence that a member of the Naval Board visited the works and verbally intimated that operations should proceed. Instructions should not have been given in that way; but, in justice to that officer, it should be mentioned that there was a misunderstanding. A vicious principle was adopted in effect when the expenditure voted had been exceeded; money was taken out of a Trust Fund, and the trust account was charged with exorbitant overhead expenses when the ships had to be repaired. 13324 KFP 0 0 FOSTER, Richard Mr Richard Foster - Who was responsible for that ? 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - About four Ministers. There were four Ministerial Departments concerned. 13324 KMU 0 0 MARKS, Walter Mr Marks - What is the use of going into that? 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - I am trying to show how the cost of these ships was run up inordinately. I grant that the quality of the work done was first-class. 13324 KLG 0 0 MAHONY, William Mr Mahony - The workmen did not have a fair chance. 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - I agree with the. honorable member for Dalley that the men did not have an opportunity of doing the work properly, because there were three or four Departments interfering with the ordinary procedure. I am glad that shipbuilding has now been placed under one Minister, who will have complete responsibility and also absolute authority. 13324 KLG 0 0 MAHONY, William Mr Mahony - Unfortunately, he has not ; the matter is under the Prime Minister's Department. 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - I understand, from the remarks made in this House some time ago by the Prime Minister (Mr. Hughes) - and I think every member of the Committee was exceedingly glad to hear them - that he has practically relinquished control in this matter, and that we shall now have one Minister responsible. 13324 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - For a long time most of these matters have been only nominally under the Department of the Prime Minister. 13324 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - But are they building boats more cheaply? Mr.Mcwilliams.- The disquieting aspect, to , my mind, is that the Royal Commission could not get from a single officer the slightest indication that there would be any reduction in the cost of ship construction in future. The evidence was not published, but it is available. The great Inchcape Combine governs British shipping, and the Morgan Trust controls American shipping. Those two great Combines are practically working in unison, and it may be news to some honorable members to know that they own a very considerable portion of the shipping plying on the Australiancoast to-day. For instance, the Peninsular and Oriental Steam Navigation Company, which bought out the Union Company, has joined the Inchcape Combine. The Union Company is in partnership with Huddart, Parker, and Company, and several of the other lines have been bought out, so it is exceedingly difficult now to find lines of steamers which are not in this Combine. My complaint is that the Commonwealth Line has not hitherto proved a check on the rates of freight charged between Great Britain and Australia. 13324 KYD 0 0 POYNTON, Alexander Mr Poynton - That is not correct. 13324 L4X ALP 0 0 MOLONEY, Parker Mr PARKER MOLONEY - That is a complaint against the management, and is not a valid objection to the principle. 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - I remember recently reading a statement by Mr. Larkin that it was not his intention to enter into a war of freights with the Conference Line. Information came to us the other day that there was a prospect of certain freights being reduced. It was stated that one company was prepared to reduce freights, but that the others would not agree to do so, and the one that was prepared to make a reduction was not the Commonwealth Line. 13324 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - To which company do you 2'efer? 13324 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - The name was refused me, but I shall make an attempt to' obtain it for the Minister. 13324 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - I should like to have it. Mr. McWILLIAMS.- I have mentioned previously that prior to the war the fruit freight to Great Britain from Australia, including Tasmania, ran from 2a. 3d. to 2s. 9d. pex case. While the war was in progress, the then Minister for Trade and Customs (Mr. Jensen), after going closely into the figures and facts, permitted a charge of, I think, 3s. 6d. per case, which he said was a fair price. That was when the insurance rates were high, owing to war risks. Now, with the war over, the charge has been increased to 8s. for a bushel case. The honorable member for Grampians (Mr. Jowett) has repeatedly brought under notice the freight on meat. The cost of running ships must, of course, bo taken into consideration. I put a question, I think, to the Prime Minister some time ago, and he told the House that the cost of running a boat from Australia to England was now 285 per cent, higher than before the war. This Parliament must make a choice deliberately and quickly, unless the primary products of Australia are to be shut out of the world's markets. We must either reduce the cost of running ships and the cost of building them, or we must make a deliberate vote in order to meet the added .cost. We have already agreed to a.. duty of 25 per cent, on vessels, and that increases the capital cost by one-fourth. Running costs having increased 285 per cent, as compared with the figures of seven years ago, we must either deal effectively with this serious situation, or Australia's primary products will not be able to reach the markets of the world. Australia, is 12,000 miles from the Mother Country, and we have to compete with Canada, the United States of America, the Argentine, and Europe, from any one of which countries it is not half so far to Great Britain a& it is from Australia. 13325 KLG 0 0 MAHONY, William Mr Mahony - Would it help f.. if we disposed of the Commonwealth Line and ceased to build ships? 13325 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - I am trying to put the case fairly and moderately. So far as the running of ships by the Government is concerned, I can see Scylla on the one hand and Charybdis on the other. The main justification for the Commonwealth acquiring a line of steamers at all was that it would prove a check on the' Combine, but the Commonwealth Line has failed in that respect. 13325 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - I can assure the honorable member that it has not failed. 13325 K0A 0 0 GABB, Joel Mr Gabb - Why are these people willing to buy our ships if the Commonwealth Line is no check on them? 13325 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - it is my deliberate opinion that, in regard to every line of freight, there is a gentleman's arrangement between the management of the Commonwealth Line in England and the management of the combined companies. 13325 L4X ALP 0 0 MOLONEY, Parker Mr PARKER MOLONEY - That is a very serious thing to say. 13325 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - It is a serious matter. The Prime Minister stated the other day that he would resolutely refuse to allow politics to be brought into the management of the Commonwealth Line. That would be a very good stunt if it were carried out, but it is not carried out. This is one of the recommendations of the Select Committee on the Sea-carriage of Goods which investigated shipping matters some three years ago - Your Committee has been advised that changes have been made in the agencies of the Commonwealth Line of Steamers dlt Australian ports by the establishment of branch offices at various ports. Your Committee recommends that, wherever possible, this policy should be extended and the oversea agency taken out of the hands of firms who are also agents for privately-owned steam-ship companies. The management of the Commonwealth Line of Steamers enforces everywhere but in Hobart the very wholesome regulation that no one who is an agent for the steamers of the combined companies shall act as agent for the Commonwealth Line. 13325 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - Who has the agency of the Commonwealth Line at Hobart? 13325 JUV 0 0 MCWILLIAMS, William Mr mcwilliams - Sir Henry Jones and Company; the very firm that should not have it. Last year, that firm tried to crush out a local co-operative company in regard to a shipment of fruit by a vessel for which it was agent, and that action in itself should have determined the Government that it must no longer represent the Commonwealth Line. It is, however, the only one of the agents for the combined steam-ship companies that has been allowed to retain the agency of the Commonwealth Line. i think it was the honorable member for Wakefield (Mr. Richard Foster) who moved the insertion in the report of the paragraph that i have read. The firm that i have named used its opportunities last year to the prejudice of a local cooperative company, and should not be allowed to retain the Commonwealth agency. It is malting a special charge for shipping arrangements which should not he allowed. I have spoken of this matter here before. The honorable member for Wakefield and others who were on the Committee know that the management of the Commonwealth Line expressed its disapproval of the arrangement. I was asked to advocate the handing over of the agency to a co-operative company, but I replied, "No. There is a State-owned steam-ship company in Tasmania, and it should be the agent for the Commonwealth Line. If it were the agent, all who approached it would get a fair deal." I differ from the Prime Minister on the subject of the wooden ships that were built for the Commonwealth. Those vessels failed, not because they were wooden but because they were badly constructed. The pumps had to be used all the way to Australia on the first of the wooden vessels that* came here from America to keep her afloat. 13326 KYD 0 0 POYNTON, Alexander Mr Poynton - That was not the vessel. 13326 JUV REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928 0 0 MCWILLIAMS, William Mr McWILLIAMS - The statement applies to nearly all the wooden vessels built in America. One of them, when loading at Hobart, had to discontinue taking in cargo which was waiting for it, long before its hold space was fully occupied, because the water was pouring in between the top planks. The Prime Minister quoted me as having favoured the construction of wooden vessels, and it is because of that quotation that I am referring to the matter now. Immediately after the war broke out I advocated the construction locally of two Diesel-engined fore and aft schooners of 1,000 tons, or a little more, each. The price was to be £25 per ton, and a builder was willing to bind himself under an enormous penalty to construct the vessels within twelve months. The "Government made a very great mistake in not haying those vessels built. No one complained when steamers were taken away from Australia to assist the Empire elsewhere in the conduct of the war ; but the dearth of coastal shipping which resulted caused produce to rot, and timber to warp, everywhere in Tasmania. 13326 KTU 0 0 SMITH, William Mr Laird Smith - Where would you have got the Diesel engines? 13326 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - Finlayson, of the Mersey, offered to supply them. Mi. Poynton. - He got a contract, and did no good with it. 13326 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - The Government refused to give him a contract for schooners, which he could have built, but gave him a contract for large steel steamships, which he could not build. If the wooden vessels which were . built in America had been honestly constructed- 13326 KFC 0 0 FLEMING, William Mr Fleming - Hear, hear! H.M.S. Victory is still afloat. 13326 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - To say that wooden vessels are not capable of good service is ridiculous. There are no finer ships anywhere than the six-masted schooners which come to; Australia from the United States of America and Canada, but they are vessels which have been honestly constructed. I have asked over and over again for the names of those responsible for the specifications of the wooden ships built for us, of those who drew up the contracts and perused them on behalf of the Commonwealth, and of those responsible for the boats being taken over. 13326 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - We ought also to know1 the names of those who overlooked the work in America ? 13326 JUV REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928 0 0 MCWILLIAMS, William Mr McWILLIAMS - Th| reason why those vessels are now being employed in the unprofitable business of barnacle-farming is that they were built of green Oregon, and will not have a life of more than ten years from the date of launching. The Prime Minister has told us that it was useless to go to law about them, but in Fairplay of the 11th August this statement occurs - It is reported in the American papers that an Arbitration Board has awarded the Patterson -MacDonald Shipbuilding Company of Seattle $1,028,458 in shipping claims against the Australian Commonwealth Government. The award has been submitted to the United States Court for approval. The claims grew out of the construction of nine 4,200-ton wooden ships by the company for the Australian Government, the original claim being for $1,114,944. The Commonwealth, in addition to what it has already paid for these rotten sieves, will have to pay £275,000 because of the faulty contract under which the vessels were built. 13326 KFP 0 0 FOSTER, Richard Mr Richard Foster - The Americans are in the same mess themselves. 13327 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - Everything was corrupt. The vessels which were sent to Australia were fraudulently constructed, and were corruptly accepted on behalf of the Commonwealth. That may seem strong language to use, but the statement is true. The officers who came over on those boats will tell you that they were sieves, and that nothing but corruption would have accounted for them having been passed. The fault was, not in constructing the vessels of wood, but in allowing badly-constructed vessels to be passed off on us. These vessels have been built of green Douglas pine, known here as oregon, and their life, as I have said, will not exceed ten years, and I doubt if it will reach eight years. One of the vessels had to be replanked from the deck-line up. This is not the fault of the Minister who is now in charge of shipping (Mr. Poynton), but it is the fault of those who drew up the contracts, and of those who supervised the work for the Commonwealth and took over the vessels on completion. 13327 JWG 0 0 FOWLER, James Mr Fowler - Is there no Ministerial responsibility in a matter of this kind? 13327 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - I have ceased to look for Ministerial responsibility in this House. No one in this Ministry is responsible for anything. When the Sea-carriage of Goods Committee was taking evidence at Cockatoo Island, I understood that there was, roughly speaking, between £3 0,000 and £40,000 worth of material on hand. 13327 JXA 0 0 CHARLTON, Matthew Mr Charlton - I accepted the figures of the Prime Minister. 13327 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - Did they include the whole of the machinery ? While we have warships, we must make provision for repairing them, and must keep employed the staff needed for that service. If the figures given by the honorable member are correct, there is about £250,000 worth of material at Cockatoo Island. 13327 KFP ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925 0 0 FOSTER, Richard Mr RICHARD FOSTER - Three hundred and fifty thousand pounds' worth. 13327 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS - If we have on hand £350,000 worth of material for the construction of ships, then probably the best course would be to complete those now being built. I hope, however, that there will be a complete cessation of shipbuilding as it is now being carried on by the Government, because a vessel is no sooner completed and ready to be put into commission than she has to be tied up for lack of cargo. The Prime Minister has said that there is something like 11,000,000 tons of shipping over and above the ordinary requirements of the world to-day, and that statement, according to my reading, is by no means exaggerated. [Extension of time granted.] It is impossible for the Government to go on building ships at a cost very much in excess of their actual value when launched unless we are to have a millstone tied for all time round the neck of Australian trade. The one object of building our Tariff wall higher and higher is to put a stop to importations. If our ships have to depend for their revenue on only one-way cargo, and if, in addition, we are to have these increased capital costs, and an increase of 285 per cent. in running costs, it will be impossible for our primary products to compete in the open markets of the world. One of the great difficulties with which one is always confronted in reducing public expenditure is that it means to many loss of employment. Every department introduced creates vested interests. To set out on a policy of retrenchment, a man should have no heart. No one desires to see men thrown out of employment; and it makes one's heart ache to learn that, because of the retrenchment already decided upon, 400 or 500 returned men have been thrown out of work. If the Government are to discontinue shipbuilding, thousands of men will be thrown out of employment. This Committee, however, must sooner or later face the position, and must cut down expenditure wherever it can reasonably do so. We cannot continue building ships at three times their value solely to create work. If the Commonwealth Line of Steamers is to be run in competition with other lines, the manager must be given a fair run. When giving evidence before the Committee appointed to inquire into the Cockatoo Island Dockyard, the Manager of the Commonwealth Line of Steamers said that he could not compete with the shipping of the world if in the construction of his ships his capital cost were overloaded. I know the Manager of the Commonwealth Line, and believe that the Government have been exceedingly fortunate in securing his services. He served in a good school - he was for years with the old Union Steam-ship Company - and knows the whole question of freightage from A to Z. He tells us deliberately that he cannot compete with private shipping companies if we overload his capital cost in the building of ships for. the Commonwealth Line as we are building them to-day. 13328 DQC 0 0 HUGHES, William Morris Mr Hughes - It is impossible. 13328 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS -Quite so. If the Committee makes up. its mind that the Commonwealth shipbuilding programme shall be continued under existing conditions, then unless the export of our primary products is to be utterly destroyed, we shall have to make such financial arrangements as will enable that work to be carried on. We cannot build up the capital cost of our ships, increase the running costs by 285 per cent., and carry our primary products more than twice as fax as the produce of other countries has to be carried, unless we make special arrangements to bridge the financial chasm. The Prime . Minister has asked that the feeling of the Committee shall be tested. I think it should be. I therefore propose to move - That, the proposed vote foe reduced by £1 as an instruction to the Government that the Committee does not consider that shipbuilding should be continued under present conditions except where such large sums have been expended as would justify the completion of the work, That will give the Committee an opportunity .to deal fairly with the whole subject. 13328 DQC 0 0 HUGHES, William Morris Mr Hughes - The honorable member's amendment will not serve the required purpose. The policy of the Government is not to continue shipbuilding except in regard to those vessels that are already on the stocks, or for which material has been purchased'. Beyond that we do not propose to go. If the Committee wishes to go further, it must indicate the extent to which it desires us to go. We do not need any such instruction as the honorable member now proposes that the Committee shall give us, since it embodies our actual policy. 13328 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - i think _ it would be wise to place such a decision on the records. The Prime Minister may not always be at the head of the Commonwealth Government. There will be an election, or the right honorable gentleman may see fit to retire from his exalted position, so that it is just as well that an instruction of this kind should appear on the records. It has been laid down by a great parliamentary writer that it is most dangerous for a Parliament to be governed by the promises of Ministers. 13328 KYD 0 0 POYNTON, Alexander Mr Poynton - But the honorable member's amendment would tie the hands of many honorable members. They may want to vote on one of the two questions involved, but not on both of them. 13328 JUV 0 0 MCWILLIAMS, William Mr McWILLIAMS --I understood from the Temporary Chairman (Mr. Atkinson) that, although for the sake of saving time, both questions would be discussed on the one motion, it would be necessary to take a separate vote with respect to each of them. 13328 DQC 0 0 HUGHES, William Morris Mr Hughes - Yes; but if the honorable member moves the amendment just outlined' by him, it will become the question immediately before the Chair, and the debate will be confined to it. 13328 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - I have no desire to tie the hands of the Committee. My wish is that there shall be the fullest and freest discussion, and, that being so. I shall leave it to some honorable member to submit at a. later stage the amendment I have outlined. 13328 KNF Richmond LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - The difficulty I see with regard to it is that, so far as I am able to understand it, it exactly expresses the policy of the Government as already announced. 13328 DQC 0 0 HUGHES, William Morris Mr Hughes - So far as I have been able to gather the purport of the honorable member's suggested amendment, it exactly covers the policy of the Government. 13328 JUV 0 0 MCWILLIAMS, William Mr MCWILLIAMS - If .it represents the policy of the Government, then there can be no objection to placing on record the fact that it is also the policy of the Committee. As it has been pointed out, however, that to submit such an amendment now would be to restrict the debate, I shall allow it to stand over for the present. 13328 JPC Kooyong 0 0 BEST, Robert Sir ROBERT BEST . - I do not think much is to be gained by referring at this stage to the shipbuilding and ship-purchasing operations of the Government during the war period. Much to which we could have objected, and against which I strongly protested as the time, was done ; but while the war was in progress emergent conditions were constantly arising, and the Government, and particularly the Prime Minister, had to be left free to a large extent to do what they considered to be best for the proper defence of Australia. The honorable member who has just resumed his seat has referred to the establishment oi what was known as the Shipbuilding Tribunal, which managed in a very extraordinary way to settle the disputes which arose from time to time by practically conceding the demands made without any consideration for the Government. Whether the disputes were right or wrong, those who created them - the workmen immediately concerned - were the men in whose favour the decisions of the Tribunal were invariably given. Such a one-sided " Heads I win, tails you lose," sort of Tribunal was no commendation to the Commonwealth shipbuilding policy. I am glad that the Government have intimated their determination to put an end to Commonwealth shipbuilding. That decision does not mean that the industry is not to be carried on in Australia. The Prime Minister (Mr. Hughes) has indicated very clearly that he wants to offer every facility to the development of the shipbuilding industry by any private individual or firm that chooses to commence operations here. He has said that, as far as possible, the docks and machinery of the Government will be placed at the disposal of such people. In addition, the Government have deliberately imposed a duty of 25 per cent, to protect and encourage the shipbuilding industry in Australia. If the industry is to be a profitable one, then the Government offer every facility for its development. If it is going to be an unprofitable industry, that is a special reason why the Government should at once bring it to an end. If we are to continue the ownership of the existing Commonwealth Line of Steamers it may be necessary to some extent that we should at least have in the Commonwealth repairing yards, apart from those controlled by private enterprise. Assuming that we are going to continue, the ownership of the Commonwealth steamers, ship repairing yards must be available to the Government at any time. I applaud the decision of the Government. I am distinctly opposed to the continuation of the industry by the Government itself. The exigencies of the war have passed. The circumstances which might then have justified the Government in entering upon the industry no longer exist, and the time has arrived for us to survey the whole position, and to say how best we can get out of it. I admit that the sudden discharge of a great number of workmen must give rise to difficulties, and it must be left to some extent to the Government to make the change as gradual as possible, so that there will be no undue hardship. 13329 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - They must ease down the position. 13329 JPC 0 0 BEST, Robert Sir ROBERT BEST - Quite so. For that reason the completion of those ships whose construction has been substantially advanced, may be justified, firstly, because we are committed to their construction, and, secondly, because of the unemployment problem which we cannot altogether disregard. But at the earliest possible moment an intimation should be given to the workmen in this industry that their occupation is gradually, but surely, coming to an end, I listened with interest to the speech upon shipping made by the Prime Minister (Mr. Hughes). It was skilfully prepared and delivered, and a good prima" facie case was made out. But I do not take it all at its face value, and certainly, from an accountancy stand-point, most of it could be readily challenged. The right honorable gentleman contended that we were not justified in debiting the Government enterprise with the loss of over £2,000,000 on the wooden ships, because that was essentially a loss due to the war. There is, no doubt, much to be said in favour of that contention, but the right honorable gentleman surprised me very much when he sought to take this credit: "Net earnings of ex-enemy vessels for whole period since they were seized, not counting saving to Commonwealth in carrying large numbers of soldiers, £4,066,266." On the one hand he claimed that the loss on the wooden ships was a war loss and should not be debited, but on the other hand he claimed a credit of £4,066,266 in respect of the earnings of the ex-enemy ships, although they were equally incidental to the war. 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - If the ex-enemy ships are not to be taken into consideration, neither are. the wooden ships, and so we are confined to the "Austral" ships, from which we made a profit of nearly £3,000,000. 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - That is the point I am making. We should not take into consideration either the losses on the wooden ships or the earnings by the ex-enemy ships, because they are a debit and a credit respectively to the war. Moreover, as the right honorable gentleman mentioned this afternoon, the Peace Treaty provides that all liabilities owing to. the Germans by Australians must be paid to the Australian Government, and, on the other hand, all moneys owing to Australians by Germans must be paid to the German Government. 13330 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - I think the honorable member is in error. There is no liability on the Australian Government to pay anything to Germany. 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - Moneys owing to Australians by Germans must be paid by the Australian Government, and moneys owing by Australians to Germans must be paid by the German Government. 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - There is no liability on our part at all. 13330 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - All these debts go through the clearing house. 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - What I have said represents the practical operation rf the arrangement made in the Peace Treaty. I am. not speaking of an individual liability ,on the part of the Government, but I am reminding the Committee that German assets which are collected here are liabilities for payment there out of debts owing to Australia; by this process a debtor and creditor account is established. 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - They are set off against our claims, but there is this to be said: We have got this money, and as to the other moneys owing, we are not so sure. 13330 JPC 0 0 BEST, Robert Sir ROBEST BEST - That is so. The operations of the "Austral" Line have been very satisfactory, and the right honorable gentleman is entitled to every congratulation therefor. But, at the same time, when he claims a. credit of £3,000,000 in regard to that transaction, that claim can be allowed only by taking the remaining ships into credit at cost value, whereas, as a matter of fact, they are practically valueless at the present time. 13330 F4B 0 0 BRUCE, Stanley Mr Bruce - No. 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - We own those ships; we have paid the book value for them, and after writing off the whole capital cost, we have made a net gain of £1,669,387. If they are valueless, we still have the profit of £3,000,000. 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - I do not think that is strictly correct; but I turn now to another point. In the Budget speech, the Treasurer stated that the capital cost of ships purchased or constructed out of loan moneys, including ships in course of construction, was £7,137,328. Does that amount represent the actual cost of those ships to the Government or their present- day value? 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - That is the amount we have actually paid or contracted to pay. 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - I understand that the amount stated represents the cost, and that it is not to-day's value of the ships of the " Austral " Line that is included in that amount. 13330 DQC 0 0 HUGHES, William Morris Mr Hughes - It evidently includes the " Austral " ships at their book value 13330 JPC 0 0 BEST, Robert Sir ROBERT BEST - The past operations of the " Austral " ships have been satisfactory, but shipbuilding cannot continue in Australia at the present price. It is perfectly clear that we have to reckon up the position at once, and bring the present operations to a termination as early as possible. At the same time, I am very anxious that every effort shall be made to continue the shipbuilding industry in Australia by private enterprise; that is the very object of the Tariff, and, I hope, of the Government. The future of the Shipping Line is a more difficult problem., and in regard to it one is hardly justified in coming to a hasty determination at the present moment. Possibly there may be some justification, for continuing to operate this Line for a time, but I am desirous that it should not be continued indefinitely. The Government should take an early opportunity of getting rid of this enterprise, because I am perfectly certain that it cannot be carried on by the Government as advantageously as it could be carried on by private enterprise. I do not approve of the cabled suggestion , Dy Lord Inchcape that the Commonwealth Line should be sold to the Conference Ring which he represents. There is no doubt that the influences of the " Conference" are very serious, but how far the small Line of ships owned by the Commonwealth has an effect upon the operations of the " Conference " is another matter. Indeed, I am of opinion that the influence of our small fleet is but negligible. 13331 KYD 0 0 POYNTON, Alexander Mr Poynton - Why should he propose to buy our ships if they have no influence? 13331 JPC 0 0 BEST, Robert Sir ROBERT BEST - Simply to enable us to get rid of the ships, and thus free him of their competition, whatever it is. They do handle some proportion of the trade, and Lord Inchcape is a keen business man. 13331 KFP 0 0 FOSTER, Richard Mr Richard Foster - He desires to make a business deal. 13331 JPC 0 0 BEST, Robert Sir ROBERT BEST - Of course; and, no doubt, it would be very satisfactory to him to rid his enterprise of the influence of the Commonwealth ships, small though it be. Nevertheless, I am distinctly opposed to a continuation of the Commonwealth ownership of this Shipping Line; and, whilst I am not prepared to say that the Government should get rid of the ships at once, I urge that the first reasonable opportunity to do so should be taken. In regard to shipbuilding, the Government have advised the Committee wisely, and are adopting a proper course. 13331 KYD Grey NAT Minister for Home and Territories 1 0 POYNTON, Alexander Mr POYNTON . - I desire to supplement the remarks made by the Prime Minister (Mr. Hughes), and I shall deal particularly with shipbuilding. But, preliminarily, I should like to remind our farmer friends of some of the advantages they have already derived from the Commonwealth Shipping Line. Those advantages do not show in pounds, shillings, and pence, and apparently they have been forgotten. I recollect a period during the war when it was impossible to import a ton of phosphatic rock because freights were not procurable by any means. For the benefit of the farming community, Commonwealth ships had to be diverted to that work, and they brought to Australia 123,000 tons of phosphatic rock. One ton of rock will break down into, at least, 2 tons of phosphates, so that that importation was equivalent to about 247,000 tons of phosphates. That represents nearly 5,000,000 cwts. ; and, if we attempt to calculate the advantage of the use of that fertilizer to Australia, we get into very big figures indeed. Many millions of acres could not have been planted that year and in subsequent years - for Commonwealth ships are still carrying that phosphatic rock - but for the fact that our ships were available to be put on to that trade. 13331 KNP 0 0 MAXWELL, George Mr Maxwell - Whence was the phosphatic rock brought? 13331 KYD 0 0 POYNTON, Alexander Mr POYNTON - From Nauru and Ocean Islands. That is one of the indirect gains from the Commonwealth Shipping Line, and it represents millions of pounds.. The honorable member for Swan (Mr. Prowse) has had his wheat yield considerably increased during the last few years as the result of the employment of Commonwealth steamers to bring phosphatic rock to Australia when otherwise it could not have been obtained. In all, nine vessels were thus engaged. 13331 KYV 0 0 RILEY, Edward Mr Riley - I suppose that it was done to help the farmers. 13331 KYD 0 0 POYNTON, Alexander Mr POYNTON - Yes; but they seem to forget that fact. Deputations from various parts of Australia pointed out to the Government that stagnation was staring the farmers in the face if they could not get manures. But many of us have short memories. We forget that only a short while ago there was a coal famine in the southern parts of Australia, and when Inter-State vessels could not be obtained to carry coal from Newcastle to the other States, great pressure was brought to bear in this House upon the Government to take Commonwealth steamers off the overseas trade and employ them carrying coal in the Inter-State trade. We transferred twenty-six of our vessels to that class of work. 13331 K6S 0 0 CORSER, Edward Mr Corser - If it had not been done coal would have been unobtainable in Melbourne. 13331 KYD 0 0 POYNTON, Alexander Mr POYNTON - That is so. On another occasion when it was almost impossible to get sugar from Queensland an agitation commenced for the use of Commonwealth steamers' in that trade, and, in consequence, we had to put our vessels in the sugar trade, even to the extent of employing vessels with refrigerated space. I may remind my farming friends, who seem to be so hostile to the Commonwealth Shipping Line, that when stock were starving in many parts of Australia although there ' was an abundance of fodder available in other parts, Inter-State shipping could not be obtained to shift chaff to those places where it was required. Here, also, we had to employ Commonwealth steamers, and they conveyed produce from Western Australia and South Australia to New South Wales. 13332 KYI 0 0 PROWSE, John Mr Prowse - Very little. 13332 KYD 0 0 POYNTON, Alexander Mr POYNTON - It amounted to 25,000 tons. 13332 KYI 0 0 PROWSE, John Mr Prowse - Would you call that a considerable quantity? 13332 KYD 0 0 POYNTON, Alexander Mr POYNTON - It was a quantity that would go a long way at the time. If that fodder had not been removed in this way more stock would have died than did die. From Australia our steamers have taken 385,611 tons of wheat and 189,383 tons of flour, the total being 574,994 tons of wheat and flour. Was that not to the benefit of the farmers? 13332 KYI 0 0 PROWSE, John Mr Prowse - No. 13332 KYD 0 0 POYNTON, Alexander Mr POYNTON - Then the honorable member thinks it would have been better to let the wheat rot here? The Commonwealth Line of Steamers has been the means of keeping prices down. 13332 K6S 0 0 CORSER, Edward Mr Corser - There is no doubt about that. 13332 KYD 0 0 POYNTON, Alexander Mr POYNTON - The honorable member, as a business man, knows that the Line was able to bring down prices, which others would not do. In order to remove the impression some seem to have that Mr. Farquhar, who is in charge of shipbuilding, is incompetent, I take this opportunity of placing that gentleman's qualifications on record. He has had fifty years' experience in commercial and naval shipbuilding. As a boy he passed through the drawing office, and then the mould loft and yard. He then became, in turn, assistant draughtsman, chief draughtsman, naval architect, works manager, general manager, and director. For thirteen years he was manager and director of the well-known firm of J. Samuel White and Company Limited, of the Isle of Wight. He is a member of the Institute of Naval Architects. I have a book with me which honorable members can peruse. It shows the class of naval ships turned out in works of which he has had control. Some of the vessels have put up wonderful records. I think that this statement of Mr. Farquhar's qualifications as a naval architect will dispel any fear that he is not qualified to complete the unfinished vessels at Cockatoo Island. Provision is made on this year's Estimates for an expenditure of £3,000,000 upon ship construction. The bulk of this money will be spent on ships which are being constructed overseas. It is anticipated that the payment to Vickers Limited for the period will be £1,267,000. We hope that the vessels they have under construction will be practically completed during the twelve months. It is also anticipated that £900,000 will be paid this year to Beardmore's. These two amounts leave but a small balance for the construction of ships in Australia. These payments swell the Estimates for this year, but as a result of the completion of the vessels overseas this item for construction will practically disappear next year. In Australia there are three further vessels of the E type to be launched; two during December, and one in January next, which will leave only two others of that type still to be constructed out of the original contract; one by Poole and Steel, of Adelaide, and one at Williamstown, which is to be put together from material supplied by Walkers Limited, Queensland. At Cockatoo Island we have the material and a large portion of the engines for two 12,800-ton ships, which will provide about 350,000 cubic feet of refrigerated space. 13332 KYV 0 0 RILEY, Edward Mr Riley - I understand that all the machinery for those vessels is nearly complete. * 13332 KYD 0 0 POYNTON, Alexander Mr POYNTON - About . two-thirds of the machinery has been got ready. We have plates, girders, and ribs, and all the steel parts to the extent of 6,802 tons. There are 1,474 men employed on shipbuilding on Cockatoo Island, of whom 578 are at work on the Adelaide and 205 on the Mombah, while about 250 are engaged in completing machinery for the two 12,800-ton boats. There are in all about 3,000 men engaged in shipbuilding in Australia, including those employed by private firms. At one period during the war there were as many as 5,000 employed on this class of work. There is no country in the world that has greater need for encouraging shipbuilding than has Australia. As we increase our production so will our need for vessels increase, no matter what Government may be in power. The men we have employed upon this work of shipbuilding have proved themselves capable. The last vessel launched has shown a marked improvement upon those previously launched, but it is recognised by Lloyds' surveyors and others that the workmanship on the vessels built in Australia is quite equal to that which can be seen in vessels built elsewhere. No industry employs a greater variety of trades. We have distributed £1,337,000 in wages among thirty-three classes of tradesmen. These include ship draughtsmen, engine draughtsmen, accountants, clerks, time-keepers, watchmen, platers, riveters, caulkers, drillers, angle-iron smiths, ironworkers' assistants, blacksmiths, shipwrights, joiners, cabinetmakers, painters, polishers, upholsterers, saw-millers, sheet-metal workers, electricians, riggers, general labourers, boilermakers, engine-fitters, machinists, ironfounders, brassfounders, coppersmiths, plumbers, brassfinishers, and fettlers. These are the men directly employed, but a glance at any shipbuilding yard will show at once how many other classes of people find employment as the result of shipbuilding. I have been associated with the Commonwealth Shipbuilding Department since its inception. In my opinion it would be madness for Australia to close down its yards simply because of a little panic at the present time. I have recently taken over control of Cockatoo Island, where various reforms have been instituted, and I propose to show some of the results. For one thing overhead charges have decreased from 133 per cent. when the Board took control to 35 per cent., including interest and depreciation. 13333 KXG 0 0 WATT, William Mr Watt - What is the explanation of that huge difference? 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - We have dispensed with the services of twelve foremen, thirty-six draughtsmen, one medical officer, one assistant shipyard manager, and three inspectors. We have abolished the twelve days' annual leave which the employees enjoyed. We have saved £10,000 by doing away with the ferry boat which formerly ran to the island. The annual charges have been reduced by £69,000. 13333 KXG 0 0 WATT, William Mr Watt - Surely a reduction of overhead charges from 133 per cent. to 35 per cent. is not represented by a reduction of £69,000 in annual charges? 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - It will be found that my statement is absolutely correct. 13333 KXG 0 0 WATT, William Mr Watt - Does the honorable gentleman mean to say that overhead charges were ever 133 per cent. ? 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - They were at Cockatoo Island. 13333 KXG 0 0 WATT, William Mr Watt - Surely not 133 per cent. as against wages and material ? 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - Yes, they were. 13333 KLG 0 0 MAHONY, William Mr Mahony - That is what the workers have had to carry all the time. 13333 KZC 0 0 LAMOND, Hector Mr Hector Lamond - It is due to a large amount of plant being used only for special naval work. 13333 KXG 0 0 WATT, William Mr Watt - But that should not be charged to commercial shipbuilding. 13333 KLG 0 0 MAHONY, William Mr Mahony - It was, and that is why our ships cost so much. 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - We have adopted a new system of accounts, costing, timekeeping, and storekeeping. 13333 KLG 0 0 MAHONY, William Mr Mahony -How many managers less are there now ? 13333 KYD 0 0 POYNTON, Alexander Mr POYNTON - One assistant manager less. To make the place pay we have been doing a considerable amount of private work. We have done a lot of repair work for the Navy, such work as could not be done at Garden Island. 13333 KTU 0 0 SMITH, William Mr Laird Smith - All the big work. 13333 KLG 0 0 MAHONY, William Mr Mahony - The Navy are not giving Cockatoo Island nearly all the work they should give that dockyard. 13333 KTU 0 0 SMITH, William Mr Laird Smith - We are giving all the work that we can to Cockatoo Island. 13334 KYD 0 0 POYNTON, Alexander Mr POYNTON - Perhaps some more work might come to us at Cockatoo Island from the Navy, but we are getting the work done now on a basis that is very satisfactory. In connexion with work done for outside people, I want to read for the information of the Committee the following testimonial : - I have to acknowledge receipt of your favour of the15th inst. enclosing account for £722 2s.1d., for which I enclose herewith my company's cheque, and would ask you to accept our thanks for the skilful and expeditious manner in which the work was completed - only one week from start to finish. The work was a large shaft for a winding engine. The letter continues - I am pleased to state that since the installation of the shaft the engine has been giving every satisfaction. . . . We express our sincere appreciation of the excellent work performed, and shall have no hesitation in recommending Cockatoo Island for work of a similar nature. Mr.Fenton. - This is private enterprise testimonializing Government enterprise. 13334 KYD 0 0 POYNTON, Alexander Mr POYNTON - That testimonial came unsolicited from a person who is carrying on business in rather a large way. Something has been said about the losses incurred in connexion with wooden ships, and a quotation on the subject was made some little time ago from the publication Fair Flay. I am going to quote also from Fair Flay an extract from, a speech delivered by the Chairman of the American Shipping Board. He said, in the first place, that America lost £79,000,000-I am reducing the dollars to sterling - in her war shipping undertakings. He said at the close of his speech that they lost no less than £65,000,000 on wooden ships. But do they talk about closing down? 13334 JWG 0 0 FOWLER, James Mr Fowler - They have closed down on Government shipbuilding. 13334 KYD 0 0 POYNTON, Alexander Mr POYNTON - Let honorable members listen to this statement by the Chairman of the American Shipping Board - In other words, the Shipping Board is not disheartened. The very purpose, startling as these figures are, proves to us that with patience something can be done, and out of this wreck, like Phoenix from its ashes, a real American merchant marine can arise that will be worth all the penalties that we have suffered, and when prosperity comes to the world, that marine will be the greatest insurance that America will get its full share. 13334 F4B 0 0 BRUCE, Stanley Mr Bruce - When did he say that ? 13334 KYD 0 0 POYNTON, Alexander Mr POYNTON - Quite recently. The quotation is taken from Fair Play for the 4th August of this year. I make the quotation in order to show the spirit with which they are facing the position in America. Here we are cavilling over a few pounds. 13334 JXA 0 0 CHARLTON, Matthew Mr Charlton - Japan is also giving every encouragement to shipbuilding. 13334 KYD 0 0 POYNTON, Alexander Mr POYNTON - I want to say in connexion with the cancelling of ships that we have a remarkable record in Australia. As soon as the Armistice was signed, I cancelled sixteen out of eighteen wooden ships being built in Australia, and those cancellations represented a total loss of something like £4 per ton per ship. In America at that time on the first 370 ships ordered their cancellations represented a loss of £14 14s. per ton. Within the last nine months I arranged for the cancellation of three steel ships of the E type, and I was able to do that without a loss to the Commonwealth of a solitary penny. I made arrangements with Messrs. Poole and Steel to give up one of the ships ordered from them, and with Walkers Limited, of Maryborough, Queensland, to give up two ships. This was the more readily agreed to because of financial stress and the fact that the firms mentioned found it very difficult to finance their big undertakings. As I have said, the cancellation of these vessels has not cost this country one penny. I have no hesitation in saying that the men of Australia can build ships. There is no country in the world that is more favorably situated for shipbuilding. We have our own material. We are now getting on with our steel works, though it is true that locally-manufactured steel is somewhat dearer to-day than imported steel. If the arguments which have been used against the shipbuilding industry were used against other Australian industries we should never attempt the establishment of any industry in this country. I venture to say that the shipbuilding industry stands above all the rest. 13334 KYI 0 0 PROWSE, John Mr Prowse - Some honorable members seem to be sorry that steel is getting cheap. 13335 KZC 0 0 LAMOND, Hector Mr Hector Lamond - Not nearly as sorry as some farmers are that wheat is getting cheap. 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - I see no danger in the circumstances in continuing the shipbuilding industry. I believe that with strict supervision it can be carried on satisfactorily. 13335 JOS NAT; UAP from 1931 0 0 BELL, George Mr BELL - - By private enterprise, the honorable gentleman means? 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - We tried to induce private enterprise to take up the work. We offered to sell two yards. We recommended people to go and inspect Walsh Island and note how favorably it is situated for carrying on the industry, but private enterprise did not take on the business. When I remember the cable which, we received to-day, and ponder upon the benevolence of those who are trying to buy out our ships for the purpose of assisting the primary producers of this . country, I am amazed. Lord Inchcape represents between 7,000,000 and 8,000,000 tons of shipping. ° If our ships were not interfering with his ambitions, and were not putting some check on the conditions and freights which he would impose, do honorable members think that he would offer to buy them? 13335 KYI 0 0 PROWSE, John Mr Prowse - He suggests, as an alternative, that the Commonwealth Government should buy his ships. 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - He knew what the answer to that proposal would be. I hope that in all the circumstances our shipbuilding enterprise will be kept intact, and will he continued. In the meantime, we have work to go on with. All the steel plates required to finish ships under construction are here. 13335 KYV 0 0 RILEY, Edward Mr RILEY - And paid for. 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - Yes, and paid for. It would be madness to cease shipbuilding at this juncture. There is another phase of the question which is worthy of consideration. I venture to say that, if it were not for the shipbuilding industry, we should be paying hundreds of thousands of pounds by way of sustenance to returned soldiers. During the time I have had charge of shipbuilding we have had from 2,000 to 2,500 men. employed, many of whom were returned soldiers. If shipbuilding had not been proceeded with, we would have been called upon to pay sustenance to those returned soldiers, and, even if we do lose a little on the ships we build, our loss will be much less than the amount we would lose by paying sustenance to returned soldiers, from which expenditure there would be no return at all. 13335 JXA 0 0 CHARLTON, Matthew Mr Charlton - What about the return we get indirectly from the building of ships ? 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - I have already given particulars of the quantity of wheat we have carried in our ships., and have mentioned the fact that millions of acres of land had been kept under crop as a result of the employment of our ships in -the transport of phosphatic rock to Australia. I mentioned, also*, the advantages gained in other indirect ways. I cannot understand any man objecting to our continuing shipbuilding in a reasonable way, feeling our way as we go, and keeping the industry intact. There is a considerable number of men engaged in the industry now, and if we closed down the business to-morrow, do honorable members think that we could turn 3,000 or 4,000 men now employed in the shipbuilding industry out of employment unless there was something else for them to do ? The men who object to the continuance of the industry would be the first to demand that the Government should undertake relief works to provide them with employment. They are not now engaged on relief work, but on work that is useful to the country. 13335 JPV 0 0 BLAKELEY, Arthur Mr Blakeley - They . are not employed on sand shifting work, either. 13335 KYD 0 0 POYNTON, Alexander Mr POYNTON - No, they are not. I have every confidence, in all the circumstances, that the Committee will support the policy of the Government. 13335 KYI Swan 0 0 PROWSE, John Mr PROWSE .- There are three issues involved in the question before tha Committee! at the present moment - the continuance of the Commonwealth Pleat, the question whether we should add to it by shipbuilding, and a third issue raised this afternoon as a result of the cable message which the Prime Minister (Mr. Hughes) read to the Committee, making an offer for the purchase of the Commonwealth Fleet with an alternative proposal that the Commonwealth Government should purchase the Australian section of the Inchcape vessels. I cannot say right away that under existing conditions I am entirely opposed to further shipbuilding by the Government in Australia. There are ships, the keels of which have been laid and upon which a considerable amount has been spent, and it might be a wise policy to complete them. At the same time, it might be a business proposition not to go on with them. Nevertheless, as we have commenced their construction, I may support the continuance of the work upon them until they are completed. The Prime Minister, in his speech on this matter, -went into the early history of the Commonwealth Line transaction. He read many cablegrams and communications in connexion therewith, and pointed out how he came to purchase the Austral Line. He referred also to the huge profits made by the Line after liquidating the capital account. He showed that we have made up to £4,000,000 in profits by the transaction. I should like to say that while it is fortunate we did not make that loss, the profits which have been made indicate that the right honorable gentleman did a considerable amount of profiteering with the Line. The ships of the world were available, so far as they could have been made available in the light of warlike operations by sea. The right honorable gentleman placed the ships fie bought entirely in the hands of the Imperial Government, notwithstanding that he now claims that he bought the Line to shift Australia's produce, and to do so at cheaper rates. 13336 K6S 0 0 CORSER, Edward Mr Corser - Which the Prime Minister did. 13336 KYI 0 0 PROWSE, John Mr PROWSE - Then, if he did, he owes the primary producers those ships, because they bought them by their payment of high freights. But the fact is that, so soon as the Government got hold of those vessels, they joined the Combine. The Government bought them with a view to keeping rates down to a reasonable margin in the interests of -Australia's primary producers. That was what was said on the one hand, but the incontrovertible fact, on the other, is that the Government immediately joined the Combine which they had set out to fight. The result was that they made immense profits out of the ships, and the freights from Australia to the Old Country were such that the capital cost of the vessels was wiped out, leaving huge profits to be piled up. 13336 K6S LP; NAT from 1917 0 0 CORSER, Edward Mr CORSER - Australian produce was carried by the Australian ships at far cheaper rates than other lines could have carried it for. 13336 KYI 0 0 PROWSE, John Mr PROWSE - I cannot see where there is much difference between Lord Inchcape having complete control and of his having such special influence over the Commonwealth Line that the Government are forced to become members of the Combine. Much alarm has been raised by honorable members concerning what would happen if Australia were thrown back into the hands of the Combine as an outcome of the disposal of our fleet. I would remind honorable members of the state of affairs existing before the war. When we had no ships of our own in active competition, Australian wheat was conveyed to the Old Country at the rate of about lOd. per bushel. The Commonwealth Line charged freight rates running between 3s. 6d. and 4s. 6d. per bushel. 13336 KYV 0 0 RILEY, Edward Mr Riley - And what was the price of the wheat sold in the Old Country? 13336 KYI 0 0 PROWSE, John Mr PROWSE - That consideration has nothing to do with the matter. That the Australian vessels were so soon paid for demonstrates the fact that, not only did other people profiteer, but the Commonwealth Line also; and it is clear that the Australian shipping authorities have not acted differently from other similar concerns. Australia's greatest disadvantage lies in her distance from the world's markets. 13336 KLM ALP; FLP from 1931; ALP from 1936 0 0 MALONEY, William Dr MALONEY - And in dear bread, of which the honorable member is the apostle. « 13337 KYI 0 0 PROWSE, John Mr PROWSE - Australia, in the past six years, has got her bread at about one-third of the price which other; countries have had to pay. 13337 KLM ALP; FLP from 1931; ALP from 1936 0 0 MALONEY, William Dr MALONEY - But there is no reason why the farmers should rob the mass of consumers now, as they have done for some time past. 13337 KYI 0 0 PROWSE, John Mr PROWSE - I can only say that some people are not amenable to reason. I repeat that Australia's great handicap is her distance from the world's markets. I can, of course, appreciate the attitude of honorable members who represent shipbuilding localities. They are engaged in special pleading, but I invite them to view the whole case in the broadest light. Australia is 12,000 miles away from the world's markets, and the most important consideration is to have Australian produce conveyed to those markets as cheaply as possible, in order to offset the handicap of distance. What will be the effect upon Australia, however, following upon the imposition of the 25 per cent, duties recently decided upon? The effect must be to increase the handicap of distance; Australia will be virtually 16,000 miles away from the heart of her markets. When the 25 per cent, duty has been levied upon shipping brought here to carry Australian produce, the outcome must inevitably be to add that percentage to the price of freights. In other words, Australia will have been removed another 25 per cent, of her present distance from the world's markets. 13337 KLG 0 0 MAHONY, William Mr Mahony - And 50 per cent, will be added to the price of bread. 13337 KYI 0 0 PROWSE, John Mr PROWSE - It is obvious that representatives of shipbuilding constituencies are specially pleading for the continuance of the industry in Australia. But, as one who will be called upon to contribute to the payment for those vessels, I claim that I have a right to discuss the whole subject from every aspect. I concede that there are other trades more or less closely associated with the shipbuilding industry ; but I am concerned with the ships which have been delivered here to carry Australian freight to Great Britain. If Australia were in a position to build ships so cheaply that they could afford to carry freight at the same rates as the vessels of any other line, built in any other part of the world, I would be satisfied. But, if Australia cannot do so, why should there be complaints if the Combine can transport our produce more cheaply? 13337 K6S 0 0 CORSER, Edward Mr Corser - What guarantee is there that the Combine will keep prices down? 13337 KYI 0 0 PROWSE, John Mr PROWSE - Before the war, freights were exceedingly reasonable. 13337 K6S LP; NAT from 1917 0 0 CORSER, Edward Mr CORSER - The present Combine did not exist then. 13337 KYI 0 0 PROWSE, John Mr PROWSE - Whether or not, I have no reason to expect that the Combine will take an undue advantage of or will adopt a different attitude towards Australia compared with our experience of former days. I would like the Prime Minister to explain how the imposition of a 25 per cent, duty will be covered except by way of increased freights. There can be no other way, unless the public is prepared to pay the difference involved, by way of a bonus. And, if that difference is added to the freight rates, the effect will be to remove Australia still further from the world's markets. 13337 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - The duty will not be levied upon any ship unless engaged in Australian waters. If a vessel simply comes here and goes away again, carrying our produce overseas, there will be no question of duty. 13337 KYI 0 0 PROWSE, John Mr PROWSE - A ship built here for the overseas trade will be protected by a duty of 25 per cent. A vessel bought overseas, after a certain date which has been fixed, will be subject to a 25 per cent. duty. That 25 per cent., levied upon a ship costing £500,000, will mean, in fact, an imposition of £125,000. 13337 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - Where does the honorable member suggest that that ship will trade ? 13337 KYI 0 0 PROWSE, John Mr PROWSE - I am speaking of one locally owned. 13337 KNF LP; NAT from 1917 0 0 MASSY-GREENE, Walter Mr GREENE - That will not matter. So long as she is conveying produce overseas there will be no duty levied upon the vessel. 13337 KYI 0 0 PROWSE, John Mr PROWSE - That has not hitherto been made clear, at any rate to myself. If ships could be built as cheaply locally as elsewhere there would be no objection to what is proposed. But, if the local cost is greater, freights are bound to be inflated; and that fact will represent a tremendous handicap. The Prime Minister pointed out what the Austral Line has done for the farmers. If that Line has done anything for the farmers, the farmers have paid for it. For the conveyance of our superphosphates, for example, we paid exactly 50 per cent, more than before the war. And that was only a part of the profiteering enterprise of the Commonwealth Line. 13338 K6S 0 0 CORSER, Edward Mr Corser - Wages and insurance and everything else went up, so that the Commonwealth line was bound to charge more. 13338 KYI 0 0 PROWSE, John Mr PROWSE - If the increase had been limited to 50 per cent., I would be inclined to say that that margin was no more than fair. The Commonwealth shipping authorities, however, were influenced by the Inchcape interests. Freights upon fertilizers imported to this country were inflated far above pre-war rates. During the war Australia was short of petrol supplies with which to run many of her industries. Those industries were exploited by inordinate freight charges. The Minister for Home and Territories1 (Mr. Poynton) made reference to the conveyance of stock between the various States. Had more sympathy been shown with respect to the transport of fodder for Australian stock; Lad the Government done more in that direction, instead of permitting their vessels to carry petrol across the seas at profiteering rates, Australia would have benefited infinitely more. Much stock would have been saved in New South Wales which perished because fodder, which was available in some of the_ States, could not be shipped in adequate quantities to the drought-stricken areas. My main complaint is that the Commonwealth Line is only an appendage of the Inchcape interests of to-day. The Commonwealth vessels are having no effect upon the Combine. The Government has tried to cut in, while running in agreement with the Combine. There is an understanding with the Combine regarding rates. I hope that, when the Committee has decided that the Government shall not build any more ships than .those for which the keels have been laid down, we shall then consider Lord Inchcape's offer. I want to hear more about that offer; although it has been made, it is too indefinite in its present form for the Committee to consider. The full nature of the offer ought to be disclosed. I take it that it is an alternative offer, and if Parliament and the people are sincere in a desire to have a fleet in Australia, here is an opportunity of having the trade to ourselves uninterruptedly. I am opposed to Government control; I have seen enough of it recently, and the Australian taxpayers are paying enough for it, and will continue to pay for it. We have an opportunity to buy Lord Inchcape's section of the Australian Fleet, or, as an alternative, he to buy our fleet. I want to know what the terms of the offer are. Will Australia be guaranteed sufficient tonnage and insulated space ? I think the farmer will be more inclined to listen to those who are his friends than to those who have other interests than his at heart. I do not think that we should allow the offer to rest where it is. I think it would be infinitely better to sell the ships, even if they have made a profit in the past which would liquidate their cost, and leave something to spare, than to now lay them up for barnacles to fasten to them. I would regard the opportunity to sell the ships almost as a godsend. The statements of the Prime Minister (Mr. Hughes), and of the Minister controlling shipping (Mr. Poynton), show clearly that the nations of the world have rushed in to shipbuilding, and that there is now an excess of tonnage over that required. Therefore, costs are down to zero. Ships are being built in other countries for one- third of what they are costing in Australia. No honorable member can say in those circumstances that we should assist Australia by building ships here. After all, the main thing is to get closer to the market, but by increasing the cost of ships we are getting further away from the world's market. Whilst I may be persuaded to vote - although I think it is a bad proposition - for the completion of those ships the keels of which have been laid down, I think the Government should not undertake any further shipbuilding. If any one feels that the facilities for obtaining iron, coal, and other shipbuilding materials in Australia are such that they can profitably undertake shipbuilding here, let us, by all means, give them every opportunity. In my opinion, it was extremely unwise to put a duty on ships. 13339 F4B Flinders 0 0 BRUCE, Stanley Mr BRUCE .- The question the Committee has to consider is a very serious and a very momentous one. It involves a matter running into many millions of pounds, and I think we must all be somewhat diffident in approaching a subject upon which none of us is an expert. Personally, I have tried to consider it from the point of view, as far as the Shipping Line is concerned, of a member of a syndicate which was proposing to buy the ships from the Australian Government and to run them. We have made it quite clear that this venture is not going to be run politically. It is to be handed over to its own management and its own control, and it has to stand on its own bottom. For that reason it seems to me that one has to look at the question exactly as if one were a member of a syndicate and proposing to buy the ships. Before dealing with the actual position, there are questions relating to the past that I must refer to. During the war period Australia bought a line of ships, ran them, and made a profit out of them. There have been different views expressed in regard to that venture. For my own part, I am quite prepared to accept the action taken. I believe it was essential in the interests of Australia, at that time, that we should get our own ships. We are the farthest country away from the central markets of the world in Europe, and if, when the scarcity of shipping became acute, we had not had our own ships, which we could direct ourselves, very little shipping would have come to these waters. I am certainly not going to rake up any of the controversies relating to that matter. With regard to the wooden ships, I have no intention of going over that ground either. I believe that when they were bought the action of the Government was wise and prudent, and I do not think we could have done anything else. With regard to disposing of them, I have looked at that matter also, but I find it difficult to see how we could have got out of the trouble any quicker. The only point about which there may be something to say is the question of contracts and the supervision of the building of the ships. That is, at its worst, a debatable question, but whether we were right or wrong the matter is now past and gone, and we shall do no good by reviving it. The only reason why I have referred to it is to say that, for my part, I do not see any justification at all for loading the Shipping Line with the losses that were made on the wooden ships, which were built purely and simply as a war measure. We went wrong, and we lost money, and we have to accept the fact as one of the unavoidable results of the war and the dislocation that it caused. 13339 JUV 0 0 MCWILLIAMS, William Mr McWilliams - There is no reason why we should have taken over very faultily constructed ships. 13339 F4B 0 0 BRUCE, Stanley Mr BRUCE - That interjection seems to me to be reverting back to the question of the purchase of the ships - a question which has been already threshed out many times. There may have been something wrong about the purchase of those ships, but to-night we are not concerned with it. In regard to the ships that we are concerned with, only two questions arise - (1) Shall we continue the Commonwealth Shipping Line; and (2) Are we going on with the building of ships in this country? Consideration of the position with regard to wooden ships will not help us in the least in determining those questions. It is extraordinarily difficult to arrive at the actual facts concerning the shipping position. . The Prime Minister has given us certain figures, which I am prepared to accept, and work upon; but before doing so I should like to say how incredibly difficult it is for any honorable member who wants to get information to obtain it from the published figures. Taking first the Austral Line, it is impossible either for an accountant or an ordinary, intelligent layman to get at the position from the statements as they have appeared in the Budget-papers from year to year. To show that this is so, I have taken the trouble to bring together the liabilities and assets as set out in the balance-sheets for the years 1917, 1918, 1919, and 1920. The tabulated information will, I fear, give little assistance to honorable members in understanding the position. The figures are as follow : - The position with regard to information about ex-enemy ships is even worse. I have done my very best to get at the facts. I have hunted through the Budget-papers for information, but cannot get a figure. It is hopeless to expect honorable members to express their views about this adventure when there is no possible way of getting at the facts. 13340 KYD 0 0 POYNTON, Alexander Mr Poynton - Has the honorable member asked any of the officials for a statement concerning ex-enemy ships? 13340 F4B 0 0 BRUCE, Stanley Mr BRUCE - No. With all respect to the Minister, I do not think it is part of my business to hunt out information which ought to be readily available to every honorable member of this House, and which, I venture to say, they are entitled to. I shall endeavour to put the position as I see it, and upon the facts that are available. I do not know whether the profit of £4,000,000 with which they are credited is ours, or whether the figure £909,315, representing their original capital cost, is a fair one. At all events, the amount will be set off against any reparation claims, and probably we can accept the figures as given by the Prime Minister. There is only one other point which I want to raise before I deal with the ships themselves, and that is with regard to the profit which the Prime Minister is claiming for the Austral steamers of £2,993,245. The profit in June, 1920, was £2,201,000, which means that since June of last year the steamers have earned a profit of practically £800,000. It is perfectly clear to anybody with a knowledge of the conditions in the shipping world for that year that this profit was never made. There is also the statement by the ex -Treasurer (Sir Joseph Cook) that our shipping activities showed a profit of £500,000, but I imagine that the answer which no doubt will be given is that the figures mentioned by the Prima Minister do not allow for depreciation on capital cost of the ships themselves. The balance-sheet, figures from which I have just placed before honorable members, includes certain amounts written off for depreciation, and the only way in which we can arrive at the figure given by the Prime Minister is by restoring those depreciation charges and adding the profit for the year 1921. 13341 KYD 0 0 POYNTON, Alexander Mr Poynton - The rate allowed was at least 10 per cent., whereas general depreciation on shipping is 6 per cent. 13341 F4B 0 0 BRUCE, Stanley Mr BRUCE - That does not matter. There was one amount of £180,000 written off on one occasion, but i presume this has been restored to make up the £2,993,000. i have safeguarded myself by using the Prime Minister's figures. We should endeavour to ascertain the value of the Shipping Line, what the profits are, and at what figure we could sell and get back our capital expenditure" without making any loss. Sitting suspended from, 6.30 to S p.m. 13341 F4B 0 0 BRUCE, Stanley Mr BRUCE - -rue ore tha adjournment I dealt with the position of the Commonwealth Shipping Line, the wooden steamers, and to a certain extent with the figures that have appeared in regard to the Austral Line, and the ex-enemy ships. I now wish to deal with the actual position of the ships we own, and the value at which they stand to the Commonwealh. In my figures I shall quote those used by the Prime Minister (Mr. Hughes), which deal with the cost of the vessels, the profits made, and their present capital cost to the Commonwealth. The actual position as shown by the statement of the Prime Minister is as follows : - In those figures I have dealt with the " D " and " E " ships in commission and in course of construction, and have in- eluded the whole number in contemplation. The amount I have given as the original capital is that at which these ships stand, or which they are estimated to cost when completed. In connexion with the Austral Line I have taken into account the ships sold, and in regard to those lost the cost recovered from the underwriters. Against the original capital cost of £10,706,976 there are certain profits made both by the Austral Line and the ex-enemy ships, and the profits given by the Prime Minister the other day are the net profits earned to the 30th June, 1921, without making deduction for interest and depreciation. Certain depreciation does appear in the balance-sheet, and I am under the impression that that has been restored to the balance of profit and loss, and that is how the total of £2,900,000 is arrived at. The figures concerning the profits given by the Prime Minister were: - If the value of that profit is employed in writing down the present value of the ships held by the Commonwealth, they stand in to the Commonwealth at £3,265,157. But to that amount interest on the money employed - the amount, again taking the Prime Minister's figures, of £382,000- has to be added. That means that the fleet stands in the books of the Commonwealth at £3,647,157. The Prime Minister's figures give the amount as £3,527,157, which shows a slight difference, which is accounted for probably in the additions, because the figures appear quite plain in the statement. If we take the Prime Minister's figures, these ships stand in to the Commonwealth Government at £9 5s. per ton dead weight, which is, apparently, quite correct. I have heard that figure challenged, but I do not see how that can be done, because if we take the total dead-weight tonnage, and divide it into the capital value, the result will be found to be £9 5s. It seems to me, however, that the point on which, there may ba some difference of opinion is whether some of the steamers are worth that figure per ton. Some may be worth more, and some less, but the point we have to arrive at is whether £9 5s. per ton is a fair basis on which to value the asset. We have to take the different types of steamers into account, and the obvious place where one has to begin is on the Austral steamers still in commission. I have a list of these steamers showing the name, the year of construction, age in 1921, and the tonnage. It is as follows : - The principal point which we have to consider, and one in which, I think, every one is. interested, is the average age, which is shown as thirteen years. ' The actual position is really worse than it might appear, because the average age is not a fair basis on which to work. According to the statement the Australport is only six years old, and the Australmead nine years, and these two have had a considerable effect in reducing the average age, which is shown as thirteen years. 13342 JOG 0 0 BAYLEY, James Mr Bayley - What is the other extreme ? 13342 F4B 0 0 BRUCE, Stanley Mr BRUCE - The Australpeak and the Australpool are fifteen years old. It is difficult to deal with the question of tonnages. The only tonnages that can be ascertained, so far as I can gather, are the gross tonnages; and I wish to make it perfectly clear that the figures in the statement are gross tonnages, and not dead-weight tonnages. The average age of the eighteen ex-enemy ships is 14.61 years, and, for the information of the Committee, I submit the following table showing the name of the vessel, when built, age, and the tonnage : - The point we have to determine is the value of the steamers to Australia and what is a fair price. In arriving at the value of the steamers, the only basis that can be relied upon is the price which we could obtain for them. If we are to consider this enterprise and endeavour to ascertain whether it is on a sound basis or not, we must look at that fact. 13342 JXA 0 0 CHARLTON, Matthew Mr Charlton - We should not have to do that. 13342 F4B 0 0 BRUCE, Stanley Mr BRUCE - We must; and I shall give my reasons for doing so. We have to realize what ships of this character are worth. Recently, a sale of the Western Counties Shipping Company's vessels was held, and the following table gives details which are of interest : - The total gross tonnage is 33,572, and the dead-weight tonnage 56,275. The ships realized £266,200. 13343 JPC 0 0 BEST, Robert Sir Robert Best - And they cost £1,450,000. 13343 F4B 0 0 BRUCE, Stanley Mr BRUCE - Yes. The average age is ten years, and in this connexion it is well to note that the average age of our Austral boats is thirteen years, and that of the ex-enemy ships fourteen years. The -purchase price per gross ton of the above ships was £43.19, and the selling price £7.93. The purchase price per dead-weight ton was £25.75, and the selling price £4.73. Considering that our ships are older, are extremely slow, and that they are of very limited capacity, I think a very outside estimate of their value would be £5 per gross ton. These ships, it might very well be said, would be sold on the break up of the market, which is the worst conceivable time for selling ships. 13343 JXA 0 0 CHARLTON, Matthew Mr Charlton - That is so. 13343 F4B 0 0 BRUCE, Stanley Mr BRUCE - As against the question of selling, let us consider our prospects in another direction. These ships are all very old, and if we wish to retain our position in Lloyd's Register, we must comply with their regulations, which require a survey at the end of the first- four years, at the end of eight years, and at the end of twelve years ; and then surveys take place subsequently every four years. The examinations become increasingly severe as the ships increase in age, and the cost of surveys to-day is so great in the case of old ships that some owners have found it almost prohibitive, and have been compelled to scrap their ships. To give a concrete instance I may quote the case of the Western Counties Shipping Company referred to before, which had a ship named the Ulversmead, which cost £130,000, and for which they received £6,150 when fourteen years old. The company had also two ships fifteen years of age of the same tonnage capacity, for which they received £23,000 and £26,000 respectively, although purchased at £140,000 and £150,000. The Ulversmead brought only £6,150, because she was just about due for survey, and the cost of such work was so prohibitive that no one would purchase her. If we hold on to the old steamers, it is probable that we shall not get as much as £5 per ton. 13343 JXA 0 0 CHARLTON, Matthew Mr Charlton - What does the honorable member consider the average life of a ship? 13343 F4B 0 0 BRUCE, Stanley Mr BRUCE - I wish to make it perfectly clear that I am not a shipping expert, and am not submitting these facts as one possessing expert knowledge of shipping matters. If the honorable member desires information on that point, he should approach a ship-owner j but I can tell him what the answer would be. The life of a vessel depends absolutely upon when she was built, by whom she was built, and the order in which she had been kept. One ship might have a life of twenty-five years, and still be good, whereas another with a very short life might not be so serviceable. The ex-enemy ships, while in good condition when taken over, had to be run to death during the war, and it is very doubtful whether they could be held advantageously now. If we could get £5 per ton for them they should be sold. My personal view is that they should have been sold when we thought of getting rid of the wooden ships. [Extension of time granted).'] 13343 JXA 0 0 CHARLTON, Matthew Mr Charlton - Would the honorable member advocate selling ships when the conditions are so unfavorable, owing to the slump throughout the world, if we had sufficient grain and other commodities which we could carry in our own vessels ? 13343 F4B 0 0 BRUCE, Stanley Mr BRUCE - I think these ships are so old, and it would cost so much to maintain them on the register - which we would have to do in order to get insurance at proper rates - that the running of them would become prohibitive, and we would not save money by keeping them going. The vessels of the Austral Line are quite valueless for fighting the Conference Lines. 13343 JXA 0 0 CHARLTON, Matthew Mr Charlton - Could not many of them be used for coastal trade, especially as we are told that there is a shortage of steamers for the supply of coal? 13343 F4B 0 0 BRUCE, Stanley Mr BRUCE - That is just where they probably would be of value; but we are not considering to-night the question of the Government running a Commonwealth Line around our coasts. We are discussing what the Government can do with regard to overseas freights. It seems to me that £5 per ton would be the utmost amount at which we could possibly take the Austral and ex-enemy ships into our balance-sheet, and it is by no means certain that they would realize as much. The result of these ships going at that price would be that the capital value of the whole fleet would stand in at £3,527,157. If we deduct the gross tonnage of 130,061 at £5 per ton, which amounts to £650,305, we have a balance remaining on the fleet of £2,876,852. Owing to the necessary information not being readily available, I have had to deal with the tonnage of the ships in a most unsatisfactory way. The ex-enemy and Austral vessels have been taken at their gross tonnage, while the "D".and "E" and "Bay" steamers are taken at dead-weight tonnage. 13344 KZC 0 0 LAMOND, Hector Mr Hector Lamond - There is a good deal of difference in the value at an average price per ton. 13344 F4B 0 0 BRUCE, Stanley Mr BRUCE - I have made the calculation right through on the basis of comparing gross tonnage with gross tonnage, and dead-weight tonnage with deadweight tonnage. The total tonnage on the basis I have indicated of all our ships is 292,661, and if we deduct the 130,061 tons of " Austral " and ex-enemy ships, we are left with 162,600 tons. The value at which this 162,600 tons stands is £2,876,852, or about £17 15s. per deadweight ton for the " D " and " E " and the " Bay " ships. The 162,600 tons are made up as follows: - There are six "D" class steamers which were commissioned in 1919-20, namely, the Dromana, Delungra, Dundula, Dinoga, Dumosa, and Dilga. These are absolutely short-journey steamers, and they are not vessels that could fight the Combine. They are obviously suited for our own coastal trade. The four " E " class steamers, which were commissioned in 1921, are the Erriba, Enoggera, Eudunda, and another vessel the name of which I cannot give. There are seven other ships of the " E " class building. The total tonnage of the " D " and " E " class steamers is 100,100. These vessels have cost us approximately £31 per ton, but under present conditions we cannot possibly put them down at more than £15 per ton. Personally, I think that a very generous valuation. 13344 JXA 0 0 CHARLTON, Matthew Mr Charlton - They are new boats. 13344 F4B 0 0 BRUCE, Stanley Mr BRUCE - They are new, and are well built, and apparently they have given every satisfaction to date. If we take that valuation it means that they stand at £1,501,500 for the 100,100 tons. That reduces the tonnage left from 162,600 capitalized at £2,876,852 to 62,500 capitalized at £1,375,352, which equals about £22 per ton. This means that the five Bay steamers, which are costing £80 per ton, are held by the Commonwealth at £22 per ton. They are absolutely up-to-date boats, and have a great deal of insulated space, while they have very valuable passenger-carrying accommodation for an immigration traffic. The analysis I have presented, putting a fair value on the different classes of steamers Australia owns, establishes the fact that the Commonwealth Line is today standing in at a price which is probably lower than we could realize for it if we sold it. So it appears to me, so far as that part of my remarks is concerned, that the Commonwealth Line, from every point of view, has justified itself up to date, and that the Commonwealth can either get out of the venture at this moment, and look back on a record which shows no loss, and probably a slight gain, or hand the vessels over to the Commonwealth Line on a capitalized basis which would give them a chance to compete with any likely competitor. That brings me to the question of whether we are to go on with the shipping venture or have nothing further to do with it. So far as I have been able to understand, a majority of the members of this Chamber are prepared to go on with the Line for one reason, and for one only, and that is that they fear the machinations of the great Shipping Combine, if it is left unfettered in the Australian trade. They are desirous of seeing the Commonwealth Line kept in existence for the sake of maintaining competition with that Combine. In order to ascertain whether the Commonwealth Line would be of real value in future for the purpose of restraining that combination, we have to look at the records of the past when we had our vessels in operation under very favorable conditions. The war period was not a very difficult one for the shipping companies. There are only four things that have been claimed on behalf of the Commonwealth Line. The first thing Mr. Larkin has claimed is that our ships prevented the Conference Lines from increasing the general cargo rates last year, as they had done in other places. This, it is claimed, has saved us an increase of 25 per cent. That is one of the things that can never be ascertained with certainty, but there is, very possibly, some justification for the assertion. The second claim is that the Commonwealth Line has benefited shippers by incorporating the Commonwealth Sea Carriage of Goods Act provisions in bills of lading, and that various lines have followed with a clause tantamount to this. I think the Commonwealth Line can claim to have had a considerable effect in this direction. In the third place, it is said to have been of advantage to shippers by giving opportunity for shipping from other British ports. Finally, it is claimed that the Line has increased the bill of lading valuation limit. With regard to the last-named point there is not a shadow of doubt that the Commonwealth Line had a very considerable influence in that respect. The Conference Lines were refusing to accept liability for anything over £100 per package, but they have had to come into line eventually and increase that amount. It i3 open to question whether it was the Commonwealth Line which brought that about or whether it was obvious that the Conference Lines would have to increase the amount owing to the general increase in prices. I think, however, that the Commonwealth Line is entitled to claim some credit for what was done. Something has been achieved, I admit; but it is not very great, and I do not think that it is sufficient to justify the continuance of a Government venture for the specific purpose of checking the Conference Lines, if that is all we can do. Personally, I have great doubt if there is very much that we can accomplish. The first point to remember is that we have only sixteen steamers. Even when all the " E " and " D " class boats and the Bay steamers are completed, the Commonwealth Line will be in no sense equipped to compete with the Combine. The Australs and ex-enemy ships are finished with. Their rate of speed is about 7 or 8 knots, and, therefore', they cannot compete with the shipping of the world. The vessels of the "D" type built here are too small. Their carrying capacity is not enough to make them serious competitors against privately- owned vessels. This leaves only the eleven " E " steamers and the five " Bay " steamers. These sixteen vessels cannot affect the Combine seriously, because there are not enough of them. We must recognise that the Commonwealth has, not fifty-one, but only sixteen, steamers with which to carry on a freight fight, and we must have many more to make an effective impression. 13345 JXA 0 0 CHARLTON, Matthew Mr Charlton - It would be better to have more steamers than to allow the Combine to regulate everything. 13345 KNP 0 0 MAXWELL, George Mr Maxwell - Have you estimated the number of vessels required to effectively challenge the Combine? 13345 F4B 0 0 BRUCE, Stanley Mr BRUCE - :No ; hut a large number would be needed, because at some seasons of the year you would want them coming one way, and at other seasons the reverse way. Competition cannot be worked effectively on a narrow margin. There must be a large number of ships which, at a. given moment can be diverted in a specified direction. But the path of the Combine in the immediate future is not going to be so easy that it will be able to do exactly as it pleases in the Australian trade. I am under no delusion as to what its policy would be if it could do as it wished. It has suffered great losses in the last year or two. It has seen its fleets depreciate, but has had to go on trading although losing money. If it had the opportunity it would no doubt try to get back what it has lost. Whether that would or would not be justifiable business procedure is not for me to say now. The question for us is, What could we do to stop it? I 'am sure that we could not do anything without a very largie fleet. But I ask the Committee to consider whether the Combine will have an opportunity to do what it would like to do. The surplus shipping of the world amounts to about 10,000,000 tons. Ships are very expensive to run now, and for some time to come the rates of the Combine will remain high; but, should it carry them still higher, to a point at which it would get back the profits it has lost, there would be attracted to the Australian trade part of the shipping that is now lying idle. We have heard of what America hopes to do, and we know that the Scandinavian countries, Holland, Italy, and other countries are trying to get more 'of the shipping business of the world. I do not think that the British Shipping Combine will be able to raise freights to any figure it likes, because of the surplus shipping of the world, which will be a more effective control, upon its operations than we can impose. Indeed, I am not at all sure that we can achieve control by continuing to run our ships. Moreover, one has to look at the matter as it affects the Australian taxpayer. Will it be possible to continue to inn the Commonwealth steamers without losing money on them ? Can they be run on a basis on which they will pay their way without the taxpayers of this country being called on to find large sums to make good their operations? I see no hope of that for some years to come. The shipping trade is depressed, and things will not right themselves within a year or two years; it will probably be much longer before the depression ends. The record of the working of our most successful shipping branch, the Austral Line, indicates the position. In 1917 it made £327,335; in 1918, £576,164; in 1919, £1,160,055; and in. 1920, £137,959. It reached the maximum of profit, and has since, like every other shipping 'concern, been falling back. I think that for some years to come we can look for nothing but loss on our shipping venture, and I do not see what is to be gained by continuing it without compensating advantages. I do not think any one of us wishes to be a party to the running of these ships if they can be run only at a heavy loss, and at the expense of the general taxpayers, without reducing the cost of carrying our primary products below the prevailing rates. If we are going' to run our vessels for some years merely to lose money on them, I see no reason for continuing in the business. 13346 JXA 0 0 CHARLTON, Matthew Mr Charlton - Which would be the cheaper to the taxpayer - to abandon the Line, and allow the Combine to increase freights, or to run the risk of making a profit? We have made the ships pay so far. 13346 F4B 0 0 BRUCE, Stanley Mr BRUCE - If it were certain that by continuing to run the Line we could do something to check the Combine, that would have to be seriously considered as a factor in its favour; but my attempt has been to show that with the sixteen vessels to which I have referred we cannot do anything to check the Combine. If honorable members will review the history of the venture they will admit that it has not hitherto had a great effect in checking the Combine. 13346 JXA 0 0 CHARLTON, Matthew Mr Charlton - I do not think that the honorable member is justified in putting aside the vessels of the "D" and "E" type built in Australia, because the Combine uses vessels of the same capacity as tramp ships. Quite a number of them are trading here. They come to Newcastle regularly when there is a demand for them. 13346 F4B 0 0 BRUCE, Stanley Mr BRUCE - I a,m not trying to force my views upon the Committee, but I feel "that I must look at the whole matter as if I were dealing with my own money. I have put the position as it appears to me, and, of course, I may be wrong in the deductions I have drawn. I cannot vote for continuing to carry on the shipping business, because I do not believe that we can achieve the object which influences members 'to support it, namely, the curbing of the machinations of the Combine against Australian shippers. As to the shipbuilding programme, I have very little to say. I was pleased to hear that the Government has decided that it cannot continue to build ships at prices in excess of their market value. I do not think that any of us would consider that a right thing to do. ' We cannot bolster up an industry by losing millions in connexion with it year after year. That would be an attempt to remedy an unfortunate economic position by the adoption of unsound methods which in the end would injure us much more than it would benefit us. Therefore, I shall support the Government in that matter. But there are vessels now under construction. There is one vessel of the "E" class, of 6,100 tons, which has just been started at Williamstown with material taken over from Walkers Limited. I understand that the whole of that material has been taken over to get out of a contract. Although this vessel will cost more to build than will ever be realized on it if it comes to be sold, we must, it seems to me, finish it. As to the other "E" class vessel of the same tonnage not yet commenced by Messrs. Poole and Steel, I think we should avoid its construction if we can, because we should lose £15 a ton on its construction. 13346 KLL 0 0 MAKIN, Norman Mr Makin - The material for it is in the yard. 13346 F4B 0 0 BRUCE, Stanley Mr BRUCE - If the whole of the material for the vessel is on hand, the position is not what I think it to .be. I agree that we could not scrap it. all; but if there is only part of the material - say, £20,000 worth, or something like that - ready to hand, we should consider how best we can deal with it. 13347 KLL 0 0 MAKIN, Norman Mr Makin - 4Would that be fair to those who have invested their money in this project? 13347 F4B 0 0 BRUCE, Stanley Mr BRUCE - Of course, they would have to be settled with. A Government cannot walk out of its contracts without paying compensation. 13347 JXA 0 0 CHARLTON, Matthew Mr Charlton - Do not build the ships, but pay heavy compensation with the taxpayers' money! 13347 F4B 0 0 BRUCE, Stanley Mr BRUCE - There are two 12,700- ton vessels to be built at Cockatoo Island, for which, I understand, there is £336,000 worth of material on hand. I have not seen a statement of the estimated cost of these steamers, but I understand that it is between £650,000 and £700.000 per ship. 13347 DQC 0 0 HUGHES, William Morris Mr Hughes - £650,000. 13347 F4B 0 0 BRUCE, Stanley Mr BRUCE - Then the two would cost £1,300,000. These vessels are to have an insulated space of 350,000 cubic feet, which is a considerable factor in their favour, though it must be borne in mind that a number of vessels already in this trade have a bigger insulated space, and a great number have as much. My first thought regarding these vessels was that if they had a very large insulated space we should go on with them, even though they might cost a great deal, because they are of a type that is wanted. Apparently they are to be vessels of a good class, and of a type that has retained much of its value. I do not know whether we could get back their full value, but we could recover a great part of it. If these steamers are constructed we shall, at least, avoid making a great loss on the material to hand, which is valued at £336,000 ; but, on the other side, we shall probably make a considerable loss on the vessels themselves in the present condition of affairs. It may be argued that these are vessels of a particular type, which will have their full value; tout vessels of a particular type have only a particular market in which they can be sold. They are not as readily and easily sold as tramp steamers. A lot of factors have to be weighed in arriving at a decision regard ing the building of these steamers; but it seems that, on the whole, we should be justified in building them, for the reason that, because of their character, the loss on them is not likely to be as great as it would be on other tonnage, and, further, that as we are, to a great extent, limiting our shipbuilding activities, and, as I hope, may decide to withdraw entirely from shipbuilding, it will be as- well for the encouragement of private shipbuilding not to disperse the technical staffs that have .been gathered together. 13347 JXA 0 0 CHARLTON, Matthew Mr Charlton - Could not the " Bay " steamers be used for carrying the mails ? This would save the subsidy now paid to the Orient Company. 13347 F4B 0 0 BRUCE, Stanley Mr BRUCE - I do not think that the service could be conducted with five steamers, although their rate of speed - 15 knots - may be sufficient. The conclusion at which I have arrived is that the running of the Commonwealth Shipping Line should be discontinued; and I am opposed to the continuance of shipbuilding by the Government. I think that if shipbuilding is to become a successful industry in Australia it must be conducted by private enterprise. At the same time, I shall support the Government in finishing the ships now under construction, and in going on with the two that are to be constructed at Cockatoo Island, for which £366,000 worth of material has been obtained. 13347 DQC Bendigo NAT Prime Minister and Attorney-General 1 0 HUGHES, William Morris Mr HUGHES . - It could hardly be expected that I should follow in detail the figures of the honorable member for Flinders (Mr. Bruce) until I had had an opportunity to closely examine them; but I understand that they were those supplied by Mr. Larkin. 13347 F4B 0 0 BRUCE, Stanley Mr Bruce - The figures which the right honorable gentleman gave the other day. 13347 DQC 0 0 HUGHES, William Morris Mr HUGHES - I propose' to confine myself to an examination of the honorable member's argument as directed t© the Commonwealth Line of Steamers. Analyzing the different classes of ships that the Commonwealth. Line controls, the honorable member arrived at the conclusion that there were only some sixteen vessels that could be seriously considered, and that, for one reason or another, the others must be disregarded. I am afraid that I cannot accept that statement of the case. I think that, upon careful examination and inspection of the ships that come into the various ports of this country, he will see that a very large number of those which he has ruled out are quite equal to many of the ships that trade regularly to and from Australia. If that be so, it appears to me that it vitiates the honorable member's argument which led him to the conclusion that the continuation of the Line served no useful purpose to Australia, and probably would involve us in very heavy loss. If we are to look at the Line from the stand-point of a business proposition, we ought to apply that test by which men judge their own business affairs. It was, indeed, through those glasses that the honorable member declared he looked at it. He says that if he could be persuaded that this Line served a useful purpose - that it stood between Australia and the unrestricted operations of the Combine, as a shield protecting the producer, and assuring him as far as possible that freights should be fair and reasonable, he would, perhaps, be in favour of its continuation. Udt he cannot see what the sixteen vessels, which he says are all that can be seriously considered, could do. Taking the points of the honorable member's arguments as he set them out, I say, first of all, that I do not admit that there are only sixteen ships in the Commonwealth Line. There are a good many more. As to the point whether the Commonwealth Line is of such value to Australia as to deserve continuance, let us apply the supreme test by which affairs are judged by men of business. The honorable member says he does not think the Line does or can affect the producer. I laid on the table of the House to-day an offer by the greatest shipping master in the world to buy this Line. Are we to believe for one moment that that offer, which is bond fide and direct, is made for any other purpose than that which is suggested by its terms? Supposing that honorable members were engaged in a certain business, and a competitor said to them, " I will buy your business, or you can buy mine," one naturally would ask, " What is the reason for this offer, other than a desire to secure a monopoly of the trade ? " What other reason could there bc? What other reason could have induced the head of the Conference Lines to make this offer, except to secure immunity from that competition which he regards as harmful to his business? Does the honorable member suggest that any business man makes such an offer except for such a reason? The motive in this case is obvious. The honorable member says that Ave cannot do the Conference Lines any harm. He asserts that our competition is to be disregarded, because it is insignificant. The answer to that is that it is so significant that our sole competitor - for there is only one competitor - says to the Commonwealth, "Your competition is such that either we must buy . you out or you must buy us out." I ask myself what that means. .Does Lord Inchcape want to buy us out for the good of Australia, or for the good of the Conference Lines ? If we buy him out, do we buy him out for the benefit of the Conference Lines or for the benefit of Australia? Let us put it that way. This was a double-barrelled offer - " I will buy you out, or you shall buy us out." Let us put aside the first part of the offer, and consider the reasons that exist as to why we should buy him out. If we are to buy him out, it is because we should extinguish competition and substitute for shipping over which we have no control shipping that we would directly own and control. If this argument applies in the one case it Will apply in the other. And so I say that the honorable member's main argument, that he cannot see his way clear to support the Commonwealth Line because it serves no useful purpose, and that its competition is negligible, fails in the face of this offer of our competitor, who says, in effect, " Your competition is so material that, having behind you, as you have, the taxpayers of Australia, you may go on and we shall be ruined. Rut if we buy you out we shall not be ruined." Why not? What is going to save them? The answer is obvious: the shippers of this country are going to save them from ruin. That is so obvious that it needs no argument. So tried by the test that all business men apply to business transactions, it is quite clear that, in the opinion of the head of the Conference Lines, the Commonwealth steamers, so far from being a negligible factor, exercise in fact a salutary restraint upon the Conference Lines. The honorable gentleman's argument did not convert me, nor; in the face of the facts, will it convert others. While I am perfectly prepared to accept the decision of the Committee, as I said when I was speaking on this matter originally, I shall raise my voice and record my vote against the sale of the Commonwealth Line. 13349 KFE 0 0 GREGORY, Henry Mr Gregory - Were there any negotiations by the Government, or. their agent, with Lord Inchcape which led to this offer being made? 13349 DQC 0 0 HUGHES, William Morris Mr HUGHES - None whatever. Lord Inchcape is a man whose word I accept without reservation, and I have no doubt that if we decided to sell we should receive a reasonable offer that we could accept. It is only fair that honorable members should have that clearly before them. That fact in itself, to my mind, is an added argument why we should not sell. I said when I was speaking on this subject before that I would not agree to the Commonwealth Line of Steamers being conducted other than on business principles, and with much that the honorable member for Flinders has said on this aspect of the question I am in entire accord. I said it was not fair to load the Commonwealth Line of ships with a value of £30 to £32 per ton when their actual value was only, say, £15 per ton. If the vessels of the "D" and "E" class are to be loaded on to the Line, the Line should be charged, not their cost price, but their real value, whatever it may be. I think the honorable member put the value as £15 per ton, and I accept that as being sufficient, at all events, for the argument. Having said so much on one side, let me say a word or two on the other, because I want the Committee to register its decision only after very careful consideration. I do not agree with the honorable member in that part of his argument to which I have referred ; but in one respect I agree with him entirely. He showed by a citation of the profits of the Line over different years how we had climbed up until, in 1919, I think, we had reached the top of the peak, and since then had been sliding down. That is not singular to the Commonwealth Line; it is an experience common not only to the shipping companies of the whole world, but to all trading concerns. And so I say to the Committee and the country that the fact that we are in for a period of lean years must not be overlooked. If honorable members expect this Line to make huge profits in the future, then they will register a decision under a misapprehension. It will do nothing of the sort. By careful businesslike management it may make both ends meet. But it can do that only if we write down the ships to their fair value. That is why, in presenting this case, I did what all business men would do, and what I think Lord Inchcape himself has done. I wrote the values down by taking into account the profits earned. Although the profits of the Conference Lines at present were such that their fleets did not pay - 'that the cost of many of their vessels was vastly in excess of prewar prices - still, by taking in their reserves, they could write down the book value of their tonnage to a level that would enable them to make both ends meet. It is precisely that course which the Commonwealth Line ought to follow. But when it has done all that, it is not a profitable venture that I invite the Committee to contemplate. Like every business firm, we shall have to trim our sails to the breeze in order that we may make both ends meet, and the reason why the Line has commended itself to the people of the country is that the producer who lives by the sale of his products overseas, and whose prosperity depends upon cheap and effective sea transport of produce, thinks it will be better for him, and so for Australia, that he should not be at the mercy of one toll-gatherer. But for the Commonwealth Line there is no way to the markets of the world save at the price that the great Conference Lines determine. I do not say that they have extorted exorbitant freights, but I do say that the great majority of the producers of Australia are of opinion that their interests would be best served if the Commonwealth Line were continued. The honorable member for Flinders spoke of the " Bay " steamers as though they were not of themselves to be regarded as sufficient reason for the continuance of this Line, if we sweep aside all others; but may I remind him that the Orient Company, which has, so far as I know, only eight steamers, and is an admirably-managed Line, continues, in spite of hard times, to run its boats in such a way as to warrant its continuance. The five vessels that we are launching - indeed, one is already in the water and will, I understand, start for Australia on 5 th December, will themselves form a fine fleet. They will have a sea speed of 15 knots. They are scheduled to beat the mail steamers on the run to Australia by three days. The Deputy Leader of the Opposition (Mr. Charlton) said that there was no reason why these steamers should not carry the mails. The honorable member for Flinders said that he thought that that was not of itself a sufficient justification, but I remind him that they will also carry a large number of immigrants, and they will make available, at a time when it is very much needed, that added amount of refrigerating space so vital to the interests of this country. Therefore, viewing the question broadly, I am in favour of the continuance of the Line. I cannot accept the somewhat gloomy view taken by the honorable member for Flinders, and I cannot help thinking that the best proof of the value of this Line lies in the eagerness of its competitors to absorb it. I turn now to a brief consideration of shipbuilding. When speaking on . this subject before, I said that the policy of the Government was to discontinue shipbuilding but to complete the vessels which are now in course of construction. The honorable member for Flinders indorsed our policy nearly all the way. He expressed some doubt as to which of the new vessels had been advanced so far in construction as to make it more profitable to build than to discontinue building, but, broadly, he accepted our policy so far as it related to ships on which a considerable initial outlay had been made. In reply to those who say that we should cease shipbuilding altogether and not even complete those ships which are under order or partly built, let me say that this matter must be considered in its national aspect. I do not hesitate to repeat, what I said when addressing the Committee previously, that some encouragement must be given to this great industry. Such encouragement is profitable to the whole community. Britain, one of the greatest manufacturing nations of the world, is so because for a considerable period of her existence she adopted a policy of Protection which was carried to a point far beyond what we in Australia have adopted. Whatever there is of Empire, whatever .there is of control of the sea by the British mercantile marine, and whatever there is of manufacturing greatness, she owes to the fact that for three centuries or so she adopted the most rigid navigation laws, and sedulously encouraged shipbuilding. Had Britain not pursued such a policy there would have been no Empire, for there would have been no ships, and so no command of the sea, and, therefore, no opening for seamen. We must remember that Australia is an island continent, and that it possesses almost unlimited quantities of some of the best iron ore in the world. We must, if we wish to develop our resources and become a great nation, encourage the iron and steel industry, and there is no better way than by the making of ships, which an island continent, whose market is 12,000 miles away, must have at all hazards. The subject of unemployment has been mentioned, and it lias been said that it is most unprofitable to build ships at £30 per ton to provide employment for people if, when the work is completed, its value is only" £15 or £16 per ton. I do not deny that for a moment. The shipbuilding industry has been labouring under very great disadvantages, but it is not fair to charge it with all those added costs of material which will not necessarily recur, at any rate, not to the same extent as in the past. But, in any case, this is not the time to throw thousands of men idle. If we do that we have to consider who is to maintain them. Hearing some people speak of unemployment, any one would imagine that by throwing tens of thousands of men out of work the State had rid itself of all responsibility. But when we have thrown out of work thousands of men, we shall still have to maintain them and their wives and children. In a barbarous state, or even in the condition of society a century or more ago, the unemployed man and his wife and children could have been allowed to starve, but we cannot do that to-day. So there is thrown upon us as a civilized community the responsibility of maintaining them, either by work or by doles. In Great Britain a system of doles is in operation, and no one can say that it is very satisfactory. 13351 JXA 0 0 CHARLTON, Matthew Mr Charlton - And our men do not want doles; they want employment. 13351 DQC 0 0 HUGHES, William Morris Mr HUGHES - Quite so. I accept the position, which indeed I myself set out, that we cannot continue an industry which turns out an article worth only 10s. for every 20s. spent in its production. But I will be no party to an abrupt and almost criminal abandonment of the shipbuilding industry at this moment, when we have spent hundreds of thousands of pounds in massing material, and when we have trained men to such a pitch of skill and experience that they are much better workmen now than they were three or four years ago. So we are all agreed that for every reason it is best that we should bring to completion the ships in course of construction, and then leave to private enterprise the business of carrying on the industry. 1 do not know that there is any reason to emphasize that point, because in substance we are all agreed upon it. In regard to the Shipping Line, there may be a difference of opinion. I am strongly in favour of its continuance. If, however, it is to be sold, we must face the position which will be created. It is quite true that if we continue the Line wo shall have to pass through a period of lean years, and it may be that this time next year we shall have before us figures showing that the Line has barely paid its way, and that may continue for two or three years or more, but it will only continue for as Jong as it continues for private companies. That is one alternative; the other is to sell. In that way we shall avoid a loss in the immediate future, but we shall sell at the expense of the producers of this country. I am very certain that there can be no other reason why the Conference Lines are prepared to purchase the Commonwealth Line than that by absorbing it, they may be able to make that which is now unprofitable1 profitable by raising freights. I leave the .matter now, and I hope that the Committee will come to a decision at a reasonable Hour!. 13351 KLM Melbourne ALP; FLP from 1931; ALP from 1936 0 0 MALONEY, William Dr MALONEY .- Of the honorable members who have spoken for and against the proposal to sell the Commonwealth Line of Steamers to the Shipping Combine, I have not heard one endeavour to show how freights from Europe may be stabilized for our ships. I propose to place before the Committee a plan whereby our ships will be insured of payable freights from Europe for the next twenty years. If my proposal be accepted we can snap our fingers at all the Shipping Combines in the world. Lord Inchcape is one of the men who have been most unswerving in their control of the market of the world. For what have the sailormen, or the merchants whom he compelled to pay unfair freights, to thank him? The Commonwealth Line of, Steamers has stabilized freights, and, though, oh account of the increased cost of operations during the war, it had to raise its freights somewhat, it did not raise them to the same extent as did the shipping companies of whose operations we get glimpses through the newspapers. -The only vessels that did not raise their rates of freight during the first three years of the war were those owned by the "Western Australian Government; and, although many people in "Western Australia are opposed to Stateowned ships, I do not know that any honorable member of the State Parliament would care to advise giving up the ships now owned by their Government. In my lifetime, Japan has made marvellous strides in shipbuilding. It has done what Australia cannot do, what even England or the United States of America have not done. It has built a 40,000-ton up-to-date capital warship. No other nation can show such a record. Has the British race in Australia become decadent that we can be beaten by a nation whose warriors in my lifetime fought with bows and arrows and wore something like shell armour? It was ridiculous for the honorable member for Flinders (Mr. Bruce), who is so well versed in the affairs of Flinders-lane, to suggest that the Commonwealth Line of Steamers should be sold for whatever they would fetch. Would any firm in Flinders-lane in a time of depression sell their stock for what it was worth, even if prices fell to nothing? No merchant would do so. He would hold on as long as he was not compelled to sell. And there is no compulsion on Australia to sell its ships'. The wealth of the Commonwealth in 1913-14, before the war, was £1,200,000,000. According to Knibbs, it had increased by the 30th June, 1915 - ten months after the declaration of the war- to £1,600,000,000. Our debts to-day total £860,000,000, upon which we have to pay interest. The value of the German mark to-day is about 1,000 to the British sovereign. 13352 10000 0 0 FLEMING, William The TEMPORARY CHAIRMAN (Mr Fleming - How does the honorable member propose to connect his remarks with shipping? 13352 KLM ALP; FLP from 1931; ALP from 1936 0 0 MALONEY, William Dr MALONEY - I propose to show that we shall have "plenty of money to spend on ships, and that we are not so much in debt as honorable members would have us believe we are. The value of the British sovereign is 1,000 German marks, so that it "has now fifty' times the nominal value it had before the war. However, we may estimate that the cost of the production of goods in Germany is now five times what it was before the war. My purpose is to show that we can make enough by the freight we earn on the shipment of goods from Germany to Australia to pay not only our war debt, but also the cost of the finest fleet of vessels that ever sailed the seas. Our war debt is a curse that will lie upon our children and our children's children, even upon the children of the men who died at the Front; but I am not for repudiation of debts. Even Sir Robert McC. Anderson is talking about the national forgiveness of debts, but he does not realize where such a thing would end. As I have said before, I wish to goodness all debts were debts of honour. It would be very much easier for some people if they were. However, to return to my figures, I have made my calculations on the basis of 710 marks to the sovereign. If, instead of the £50,000,000 worth of gold- our share of the indemnity - we take from Germany goods not capable of being manufactured in Australia to the value of 50.000,000 sovereigns, we would receive goods of an actual value of £1,700,000,000, and thus, not only be able to pay the whole of our war debt, but also able to provide enough freight to* keep our ships employed for the next twenty or thirty years. The first question to be considered in the building of a railway is whether the prospective passenger and goods traffic outward from the city to the interior, and backward from the primary producers to the centre of population, will pay not only working expenses, but also interest and sinking fund on the cost of construction. The railway history of Western Australia should be taken to heart by every honorable member. The State has done far more than has any other State in the matter of building developmental railways. I have travelled for 80 miles from. Kondinin to Narrogin along one of the narrow-gauge lines of Western Australia, and seen at each station and siding stacks of wheat ranging from 3,000 to 10,000 bags where before that line was built there was not one bag of wheat to be seen. In the same way we ought to estimate the possibility of providing for our primary producers means of carrying their produce from coastline to coastline. 1 have the interests of the primary producers at heart. I do not want to see them at the mercy of any Combine. They cannot deny that Government railways have been a God-send to them. Why should not Government steamers also be a God-send to them? If honorable members will do me the honour of reading a speech I delivered in 1912,. in which I prophesied the outbreak of war, they will see that I showed how the trade routes should be kept clear for our primary producers. The purchase of the Commonwealth steamers aroused a great deal of criticism, and I admit that my lips were not silent at the time, but today I am proud of the fact that we own these vessels, and I want to see the Line continued. Is there anything more absurd than is to be seen in Sydney to-day T The whole of the city tramways come to a point at Circular Quay, and private companies are then permitted to take the traffic across the harbor to link up with the tram lines on the North Shore. But that is just the sort of absurdity the honorable member' who represents Flinders-lane has enunciated to-night. He advises us to sell these steamers at whatever price we can get, even at £5 per ton, although, they may have cost £30 or £40 per ton. He, as a keen business man in his own warehouse, would certainly not do that with his 'own stock. He would hold on for better times. It would be interesting to get the truth lying at the back of his head about the 100 per cent, profit the' warehousemen have been making on tweeds which, they were able to buy in Geelong for 5s. 6d. and 8s. 6d. per yard. 13353 10000 0 0 TEMPORARY CHAIRMAN, The The TEMPORARY CHAIRMAN - Order ! The honorable member is not dealing with the question before the Chair. 13353 KLM ALP; FLP from 1931; ALP from 1936 0 0 MALONEY, William Dr MALONEY - No. I shall expose the operations of Flinders-lane at another opportunity. Senator Guthrie has already done it in another place. The honorable member for Flinders may have had figures prepared on an actuarial basis by a good accountant, but there was too " much comparing of tonnage about them, to my way of thinking. Let us come to bed-rock upon the issue. Many attempts have been made to buy the Governmentowned railways 'of Australia. The answer is to be found in our Library in the time-tables of the British and European railway companies. Despite the recent increase in fares in Victoria, one can travel from Melbourne to Brighton - 9i miles - on a first-class ticket at a cost which is less than the price of a third-class ticket for the same distance on an English railway. I am out for Governmentowned ships. In London our Line is controlled by Mr. Larkin, one of the best judges of shipping matters Australia has ever produced, and I have ample confidence in his business abilities just as I have in that of Mr. Eva, who controls the office in Melbourne. These gentlemen are endeavouring to carry on in a business-like way; but if we choose to sell the ships, the Combine will very speedily hit up the primary producers. I have made a close study for the last fifty years of the operations of Combines, and I think I know what I am talking about when I prophesy that this would come about very soon. I hope that honorable members will take advantage of the rate of exchange with Germany at the present time so that we may be in a position not only to wipe out our war debt, but also to provide money with which to secure, if we so desired, the finest fleet of vessels that has ever sailed any ocean, because we would have £150,000,000 to spend on then*. 13353 KDZ Grampians 0 0 JOWETT, Edmund Mr JOWETT .- It is a little unfortunate that the debate should have ranged over so many different .subjects. Honorable members have discussed the history and origin of the Commonwealth Line of Steamers, and. whether we were justified in buying the vessels or not. The question of the continuance of shipbuilding in the Commonwealth has been debated, and also the question whether we should sell the Commonwealth fleet to the owners of the Conference Lines or to any one else. Whilst a great deal of attention has been given to each of these matters, the question which is of the greatest importance to the people of Australia at the present moment has hardly been touched upon. That question is whether the Commonwealth Line of Steamers should fix excessive and crushing rates of freight in accordance with those of the Shipping Ring of the world, or should fix its rates of freight to meet the needs of the people of Australia. That is the iSSUe to which I propose to confine my remarks, in the interests of the primary producers of Australia, and of many of our secondary industries as well. I should like, however, to say that I am totally opposed to the present proposal that we should sell the Commonwealth Line of Steamers. I am strongly in favour of the objects for which the steamers were purchased and the Line established. The purpose then was to serve the people of Australia, and I deeply regret that it should now be entirely lost sight of, and that the Commonwealth Line of Steamers should be run, not in the interests of the people of Australia, but;, so far as freights are concerned, in conjunction with the Shipping King of the world. I shall be able to give ample proof that this is the case before I sit down. I wish to bring under the notice of the Committee the deplorable plight in which our primary producers find themselves to-day. It is due to many causes, but one of the principal causes is the excessive and crushing overseas freights fixed by the Commonwealth Line of Steamers in conjunction with the Shipping Ring. In April last I had occasion to move the adjournment of the House, to consider the excessive and crushing overseas freights that were being charged. There was a consensus of opinion at the time that everything possible should be done to have those freights reduced. But with the exception of some very trifling reductions in the freights on wool, practically no reduction in freight has been made since April last. I was not at first able to understand why it should be so difficult to secure a reduction in overseas freights. But within the last three weeks, in common with the rest of the people of Australia, I have become enlightened as to the obstacle in the way. I am now satisfied that this obstacle is that the Commonwealth Line of Steamers, instead of being run in the interests of the people of Australia, is fixing, freights in conjunction with the Shipping Ring. I wish, first of all, to compare the present position, so far as oversea freights are concerned, with the position before the war. It is necessary to remind the Committee of the crushing nature of present freights, bearing in mind the fact that the values of our primary products are gradually declining to pre-war rates. There are some of our primary products the values of which, are higher than they were before - the war, but some have already declined to pre-war values. 13354 K4M VFU; CP from 1920 0 0 COOK, Robert Mr ROBERT COOK - Some are below. 13354 KDZ 0 0 JOWETT, Edmund Mr JOWETT - As my honorable friend reminds me, some are below prewar values. I have prepared a statement showing how present overseas freights compare with pre-war rates. The present freight on beef is three and a quarter times the freight in May, 1914; on mutton, it is three and one-seventh times; on lamb, three times; on pork, three and one seventh times. The freight on wool is 75 per cent, higher than it was before the war. On rabbits the freight to-day is two and one-third times the freight charged in May, 1914; on preserved meat it is three and a half times; on jam and fruit in cases it is three and a half times. I shall have something to say later, in connexion with the fruit industry of Australia; but at the moment I emphasize the fact that to-day the freight on jam and fruit in cases is three and a half times what it was in May, 1914. On tallow the freight to-day is three and a half times the freight in 1914, on hides it is three and one-third times, on sheepskins three times, on leather, the product of a very important secondary industry, it is three times, and on basils - tanned sheepskins* - the freight to-day is four times what it was before the war. I now give the comparison in full : - 13354 JNV 0 0 BAMFORD, Frederick Mr Bamford - If freights were reduced, would that not cause the ships to be run at a loss? 13354 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I ask my honorable friend whether they are now being run at a profit, or, rather, whether he thinks they are being laid- up at a profit? We have a vast amount of capital sunk in these ships, and as they arrive in Australia one after another is being laid up. 13354 JNV 0 0 BAMFORD, Frederick Mr Bamford - I wished to know, as the honorable member belongs to the Economy party, whether he considers that a reduction of freights would be economical. 13354 KDZ 0 0 JOWETT, Edmund Mr JOWETT - Yes; I can fully justify my claim that the present excessive freights should be reduced from the point of view of that true form of economy which considers the interests of the whole of the people of the Commonwealth. It is not a sound economic policy to keep ships idle by demanding excessive freights and to thus restrict production of foodstuffs and other goods needed by the world. At present, owing to the excessive freights charged, ships are being laid up all over the world. I have some quite recent figures given by a high authority, Sir Frederick Lewis, chairman of Furness, Whithy, and Co., at the annual meeting of the company. He made the statement that out of a total of 54,217,000 tons gross shipping, there is, eliminating wooden vessels, 11,703,000 more gross tons afloat than in 1914, and there is laid up in the world's ports 10,000,000 tons gross. According to the latest information, the tonnage of shipping laid up is being increased; and we know 'that the Commonwealth steamers are being laid up as they arrive in Australia. It is quite true that the Australian Wheat Board was able to charter one of our ships to carry wheat .to the other side of the world, but only one, so far as I can ascertain. The prospects are that our steamers, as they arrive, will be laid up. ' 13355 KFP 0 0 FOSTER, Richard Mr Richard Foster - I believe that some more of our steamers are going to take wheat. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I hope they are. I see no reason why any sane people should prevent those steamers being chartered by the Australian Wheat Board at reasonable rates of freight for the transport of our wheat. 13355 KFP 0 0 FOSTER, Richard Mr Richard Foster - They ought to take our wheat, even at bare cost. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - Of course, they should. As a matter of fact, they should take all Australian produce at bare cost rather than that the ships should be laid up. 13355 KNP 0 0 MAXWELL, George Mr Maxwell - Does the honorable member say that high freights mean excessive profits? 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I do not suggest, that ship-owners are now making excessive profits. 13355 KNP 0 0 MAXWELL, George Mr Maxwell - They cannot carry on at lower rates, according to the honorable member. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - This I cannot admit. It does not follow that the ships would not make profits if reduced rates of freight were charged. They can only make profits at all by carrying goods. They cannot make profits if they are laid up. I suggest that the Shipping Ring is still determined to impose high freights, and the result is that one-fifth of the shipping of the world is laid up. 13355 KNP 0 0 MAXWELL, George Mr Maxwell - I understood that it was because there were no goods to be carried. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I totally disagree with the contention that there are no goods to be carried; but if excessive charges are made in connexion with any business that business falls away. I say that the excessive rates of freight that are at present being charged are killing business and destroying trade. 13355 JNV 0 0 BAMFORD, Frederick Mr Bamford - Would lower freights help the meat industry at present? 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - Unquestionably they would. 13355 JNV 0 0 BAMFORD, Frederick Mr Bamford - I saw from the Brisbane Courier a few days ago that Queensland meat is now being offered at 3d. per lb. less than Argentine meat. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - There are various grades of beef and .mutton, and I am not quite sure that the honorable member's information is correct. I say that one of the results. of the excessive ocean freights at present charged is that they are killing business. The only way in which a man can revive his business is to meet the needs of his customers. Lf a manufacturer finds that he cannot sell his goods at the prices he has fixed, he must endeavour to meet his customers, and, by lowering his prices, induce them to purchase. 13355 K6S 0 0 CORSER, Edward Mr Corser - Not at a loss. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - It all depends whether the loss which he will sustain by lowering his prices will be greater than the loss which he must suffer if he is not able to sell his goods. When a trader realizes that his goods are priced so high that he cannot sell them, he has to cut his prices to get rid of his over-priced stock. 13355 K6S 0 0 CORSER, Edward Mr Corser - But not the whole of his stock. Freights are the whole of the stock in a vessel, and if they are cut too low it must be laid up. 13355 KDZ 0 0 JOWETT, Edmund Mr JOWETT - Apparently that is the position which has been reached in consequence, not of low freights, but in consequence of the very high ocean freights which are charged to-day. I say this because one-fifth of the tonnage of the world is at present laid up. If trade continues as at present, there is no doubt that more steamers will be laid up. There is only one way in which oversea trade can be revived, and that is by making it profitable for people to ship their goods. The Shipping Ring, however, seems determined to keep up high rates of freight. The natural result of this is to prevent people shipping their goods. 13356 KNP 0 0 MAXWELL, George Mr Maxwell - But the honorable member contends that high freights do not mean excessive profits. What would be the effect, on the profits of shipping, of a reduction of freights ? 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - The first effect might be that the ships would make some losses, but every one in business must take that risk at times to attract custom. If all the ship-owners of the world are determined that they will not run their vessels except at a present profit, and if the rates which they are at present charging are so high that the public will not, because they cannot, pay them, the result must be an end to trade. 13356 KFP 0 0 FOSTER, Richard Mr Richard Foster - There have been periodical slumps in which only a very few of the shipping companies have continued to paydividends. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - That is so. The only way out of such a difficulty is for the shipping interests to reduce freights and so encourage trade once more. There is not less material in the world to be transported overseas than there was at the height of the boom period; but the decisive fact is that it does not pay to ship many goods owing to excessive freight rates. The short-sighted and superficial view may be taken that it pays the shipping interests to insist upon high freight charges, even though the effect be to reduce the volume of business. But the sound view is that one of the most effective means by which the trade of the world can recover is by ship-owners deciding to charge such freights as will encourage business ; that is to say, to charge such prices as will make it worth while for producers to consign their goods. 13356 KNP 0 0 MAXWELL, George Mr Maxwell - Or such as will pay the ship-owners to run their vessels. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - It may not pay them to continue to run under present conditions, in which, owing to. the rates existing, the public are discouraged from consigning their produce. It is not common sense to maintain excessive charges on the ground that it will not pay to run ships at lower rates. 13356 KMU 0 0 MARKS, Walter Mr Marks - I understand that the fact of the Commonwealth Shipping Line being in existence will bring about a reduction of freights, as from the 1st January next, upon fruit exported from Australia. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - That, I think, is the direct outcome of pressure- 13356 KMU 0 0 MARKS, Walter Mr Marks - By the Commonwealth Line. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - If such a reduction of freight comes about as from the new year it will be due to the agitation of primary producers and their representatives, who have demanded lower rates. 13356 KMU 0 0 MARKS, Walter Mr Marks - And to the pressure of the Commonwealth Line upon the Combine. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - Yes; and the pressure put upon the Commonwealth Line, owing to the realization that the Australian people will no longer endure the Commonwealth Line being part of the Shipping Ring, so assisting to maintain high freights. 13356 KYD 0 0 POYNTON, Alexander Mr Poynton - If the Commonwealth Line has been working with the Combine to maintain high freights, why does the Combine wish to buy out the Commonwealth Line? 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - The Prime Minister furnished the answer to that question. The right honorable gentleman indicated his belief that the object of the owners of the Conference Lines was to secure complete control of the shipping of this part of the world, and to prevent the Commonwealth Line from competing with the interests of the Combine in the future. 13356 K6S 0 0 CORSER, Edward Mr Corser - As it does now. 13356 KDZ 0 0 JOWETT, Edmund Mr JOWETT - No; the Commonwealth Line does not now compete with the Combine in the matter of freight. But the purpose of the owners of the' Conference Lines in seeking to buy the Commonwealth Line is probably to prevent it from competing with the Conference ships in the future. It is true that the Commonwealth Line has not been competing with the Shipping Ring ; but surely it is equally obvious that these gentlemen in London have been fully advised of the tread of public opinion in Australia and of the pressure of that opinion upon the Commonwealth 'Government snipping management. They have seen that the people of this country will no longer permit Commonwealth vessels to remain part of the Ring. 13357 KMU 0 0 MARKS, Walter Mr Marks - In other words, Lord Inchcape has heard of the Country party. 13357 KDZ 0 0 JOWETT, Edmund Mr JOWETT - If he has not, he cannot be as well advised of what is going on as I credit him with being. It is due to the determined efforts of the Country party that the prospects of a reduction in freights are more hopeful. That party has placed the position before every producer in Australia. It has pointed out that the Commonwealth Line, for a very long time, has served the interests, not of the people, but of the Shipping Ring. Alive to the significance of the change in public opinion, it is natural that the Ring should be anxious to purchase the Commonwealth vessels, so taking care that their management shall not break away and endeavour to reduce freights. The question has been raised to what extent, if any, excessive rates have discouraged or destroyed trade. I have received a statement from a responsible representative of the fruit-growers of Tasmania. My correspondent is one of the highest authorities upon the subject-matter generally. He says - Through high freights and shortage of shipping last season (1921), Tasmanian apple-growers had to leave in their orchards tens of thousands of bushels of fruit to rot on the trees and in the orchards. It is estimated on the very best and reliable authority that over 1,000,000 bushels could have been shipped to overseas markets last year, whereas only about 580,000 cases were consigned. This is practically a loss of, approximately, £500,000 to Tasmanian growers alone. Think of this great loss .to that State and the Commonwealth in the way of revenue from income tax. I desire to give further facts concerning the extent to which excessive freights have discouraged the shipment of goods and produce and so tended' to destroy trade. The following was issued to its clients by a firm of stock and station agents in Melbourne: - With the big supplies of lamb indicated ahead for the next month, which is being offered to the public at reduced prices, the prospects are not likely to improve. Therefore, in view of the abundance of feed, an owner cannot lose anything bv holding back cattle. A few days ago a deputation of authorities in the meat trade waited upon the State Premier of Victoria to discuss the heavy reduction in values of meat. 13357 K4F 0 0 CONSIDINE, Michael Mr Considine - Was that deputation from the Meat Ring! 13357 KDZ 0 0 JOWETT, Edmund Mr JOWETT - There is no Meat Ring in Australia. Prom a Melbourne paper of 12th November I extract the following : The deputation pointed out that, owing to the congestion in Great Britain and the low market price ruling for stock, it was advisable that producers should not forward stock intended for export to meat works until a recovery in price had taken place, or a substantial reduction in freights had occurred. I wish to give another instance from one of the best authorities- 13357 10000 0 0 TEMPORARY CHAIRMAN, The The TEMPORARY CHAIRMAN (Mr Fleming - The honorable member's time has expired. Proposed vote agreed to. Postponed division 25 (Com,monwealth Government Line, of Steamers), £46,200. 13357 KFE Dampier 0 0 GREGORY, Henry Mr GREGORY .- I have not the slightest desire to delay the Committee, but I want to get a vote on the question of the continuance of the Commonwealth Shipping Line. The matter has been discussed at very great length by the honorable member for Flinders (Mr. Bruce), and there may be others who wish to put their views before the Committee. I have no desire in that direction, nor do I wish to traverse the arguments of the Prime Minister (Mr. Hughes) in his reply to the honorable member for Flinders other than to say that I cannot agree with his contention in reference to the offer that was suggested. I feel quite satisfied that the offer was made in good faith, and, in my opinion, if accepted, would result in advantage to the people of Australia. I think the Government would be wise to get rid of the shipping business. I have no faith in Government interference in commerce, and I have had many years of experience in connexion with Government trading concerns. 13357 L4X ALP 0 0 MOLONEY, Parker Mr PARKER MOLONEY - The honorable member's statement could be applied to the Australian railways. 13357 KFE 0 0 GREGORY, Henry Mr GREGORY - It does apply to Government-owned railways to a large extent. Lf the honorable member can show me one railway system in Australia that is a paying concern I will withdraw.. I do not think my amendment will be carried, but I want to make my position clear. I want to get a promise from the Government that if they carry on these commercial concerns in the future they will give the fullest information to Parliament as speedily as possible after the end of the financial year. Even those honorable members who favour Government trading should support such a proposal. Surely if a concern is not being worked properly the sooner the facts are disclosed the better, so that criticism may be directed at the fault with a view to remedying it. I have in my hand a report of the Melbourne and Metropolitan Board of Works. This Board supplies the people of Victoria with a full account of its operations. I do not ask the Government to furnish a report as full as this one, but Parliament ought to have a fair and square balance-sheet, with full details of the year's operations, as soon as possible after the end of each financial year. For years past I have been asking for a balance-sheet of the Small Arms Factory, at Lithgow, I offered to bet £50, and to give the money to charities, if my statement was not correct that rifles made at Lithgow cost over £11 each, after it had been guaranteed that they were being made for £3 19s. Statement after statement was made, in this House that the Factory was a paying concern, but the Government declined to state what the rifles were costing, because, they said, it would be giving undesirable information to outside persons. Now we find that the rifles are costing over £16 each. Surely it would have been a good thing to have had that information much earlier. If the Government are going to continue conducting commercial undertakings, Parliament is justified in demanding that full and complete balance-sheets should be presented at the earliest possible moment. I move - That a reduction of £1 be made in the first item - general Manager, £3,000 - as an intimation to the Government that the continuation of the Commonwealth shipping service is not Advisable. I am not going to discuss the matter further. We have had plenty of talk, and honorable members have made up their minds on the question. 13358 KDZ Grampians 0 0 JOWETT, Edmund Mr JOWETT .- I am sorry to have to detain the Committee a little longer, but this is a matter of vital importance to every primary producer in Australia. I want to emphasize the importance of a Commonwealth Line of Steamers breaking away from the Shipping Ring and being allowed to fix their own rates of freight. 13358 KFK NAT 1 0 GROOM, Littleton Mr GROOM - The amendment is in favour of discontinuing the Commonwealth Line. 13358 KDZ 0 0 JOWETT, Edmund Mr JOWETT - 'As I am not in favour of discontinuing the Commonwealth Line, I feel justified in making a few remarks. Amendment negatived. 13358 KDZ 0 0 JOWETT, Edmund Mr JOWETT .- Some members of the Committee are evidently not anxious to hear further argument on this question; but representing, as I do, a constituency of primary producers, I feel it my duty to put the case for them against the Shipping Ring of the world. I must, as they say in the marriage service, speak now or for ever hold my peace. When this item has been passed there will be no other opportunity, short of moving a vote of want of confidence in the Government, of discussing the question. Therefore, I consider that at this juncture the question should be fully debated by every member of the Committee who has any views on the subject at all. I intend to put the case for the primary producers, not only against the Shipping Ring, but, incidentally, against the Commonwealth Line of Steamers. I have no desire to see the Commonwealth Line discontinued or sold. The question has been raised as to what extent the present excessive rates have discouraged the trade of Australia, and to what extent a reduction of freights would encourage it. I have a statement from one of the best authorities in the meat trade of Australia with regard to the position in Queensland. He says - One of the results of the excessive rates of freight is that during the season now closing - one of the best ever known - very large numbers of fat cattle, instead of being killed in 1921, have been left on their pastures. It is estimated that in Queensland alone from 100.000 to 200,000 more cattle would have been killed had prices been reasonable and ocean' freights lower. These cattle are now on their pastures, and it may be that many of them wil/ not become fat again. The cattle, instead of being killed, were retained upon, or sent back to, their pastures; and, if a dry season comes, many of them will never go to market again. When cattle once get fat, that is the time, and the only time, to sell and kill them. If the season passes they fall away, by natural processes, and it takes a long time to fatten them again, if ever they do fatten again. 13359 K6S 0 0 CORSER, Edward Mr Corser - While the honorable gentleman advocates that the Commonwealth steamers should not be tied up because they are losing money, he also says that the stations are to tie up their cattle. 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I do not advocate that. I regret it deeply. I think it is most deplorable that any one should have been advised or induced to keep cattle back 'because exporters are hoping for lower freights and better prices in future. The honorable member must know that I would not advocate such a preposterous thing. Here is another letter which I think should interest the honorable member for Wide Bay. It relates to hides, and is dated from a station near Clermont : - I have not sent a hide to the market lately. The last lot I sent showed no profit after deducting commission and carriage. I have also a letter from a firm of Brisbane wool-brokers, dated 4th October, whose comments should interest the honorable member for Wide Bay : - The pelts of earlier consignments of sheepskins treated on account of the company's stations and clients were pickled and returned to store with very unsatisfactory results, as there was not sufficient demand to warrant this expense. Consequently all pelts have since been destroyed. Even with the recently improved tone, fellmongers are still finding it inexpedient to pickle any but the choicest butchers' skins. I have already shown that hides and leather are paying about three times the freight charged prior to the war, and that basil made out of these pelts is at present paying four times pre-war rates. I could quote many other instances, all proving conclusively that the present excessive ocean freights are destroying our export trade. An important way, in my opinion, and in the opinion of almost every man in Australia who understands the position, to recover our lost trade in primary products overseas is to take such action as will bring about a substantial reduction in these freights. 13359 JNV 0 0 BAMFORD, Frederick Mr Bamford - Would a reduction enable the exporters to market hides and pelts ? 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - A reduction in freights, together with a reduction in other forms of transport aud distribution would materially help. The honorable member for Herbert (Mr. Bamford), who, I know, has been a keen student of economics for a long time, knows perfectly well that the real trouble in the world to-day is to be found in the high costs of production, transport, and distribution. But for this undesirable state of affairs the trade of the world would be going on as it was prior to the war. I am amazed that any honorable member should defend the present system of control by a monopoly as against free and open competition. The Commonwealth Line of Steamers should be freed from the domination of any Shipping Ring. Freights should be settled by competition and a revival in trade encouraged. 13359 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - Does not the Commonwealth Line pay higher wages than the Conference Lines? 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I do not think that has any bearing on this question at all. 13359 JMG 0 0 ATKINSON, Llewelyn Mr Atkinson - Yes, it has. How can they give reduced freights if they pay higher wages? 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I am not prepared to discuss that question at the moment. Of course, it is easier for any man in business to become a partner in some great monopoly than for him to face competition with his fellows. Hence, probably, the desire of the management to remain in the ShippingRing. 13359 K4F 0 0 CONSIDINE, Michael Mr Considine - The honorable member does not want cheap freight at the expense of low wages. 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I have never suggested that course of action. I want cheap freights to restore our trade. 13359 KFF 0 0 FOLEY, George Mr Foley - If hides were tanned in Australia would there not be a better opportunity to export the manufactured product ? 13359 KDZ 0 0 JOWETT, Edmund Mr JOWETT - I am deeply grateful to the honorable member for the suggestion, because it happens that one of the organizations that approached me and asked me to move in the direction of securing a reduction of ocean freights, is the body representative of the master tanners of Australia. If the present excessive freights on leather were reduced, the tanners in Australia would be better able to find a market for their leather abroad. I do not desire to labour this question. I shall conclude by stating that the primary producers are in favour of the Commonwealth Line of Steamers reducing freights and thus being run in the interests of the whole of the people of Australia. Proposed vote agreed to. Postponed division 26 (Port Pirie Wharf), £1,291 ; postponed division 27 (Cockatoo Island Dockyard), £30,000; and postponed division 27a (Naval Dockyard) agreed to. Treasury Department Proposed vote (postponed), £1,207,280. Upon which Dr. Earle Page had moved as an amendment - That the proposed vote be reduced by £100,000, such total reduction to be made by the Treasurer upon such items and sub-items and in such manner as he shall deem consistent wilh economical and efficient administration. Amendment negatived. 13360 KLG Dalley 0 0 MAHONY, William Mr MAHONY .-I notice that gold to the amount of £750,000 has been exported to America, and I should like some explanation, in view of the fact that private individuals or companies are not allowed to export, or passengers to take gold out of Australia. This exportation appears strange, when we remember that the trade balance is in favour of Australia. If it were the other way, we could understand it. 13360 KFK 0 0 GROOM, Littleton Mr Groom - For some time past the Government have allowed the export of the current production of gold, to enable the miners to get the advantage of the increased price. Proposed vote agreed to. Progress reported. 13360 22:30:00 House adjourned at 10.30 p.m.