1933-06-14 13 1 4 SENATE 2274 0 Senate. 1933-06-14 The President (Senator the Hon. P. J. Lynch) took the chair at 11 a.m., and read prayers. 2274 Questions 2274 2274 K1Z 0 0 RAE, Arthur Senator RAE - Has the attention of. the Leader of the Senate been drawn to the following press report in this morning's Canberra Times ? - COUNTRY PARTY. Prime Minister Nails Lie. Melbourne, Tuesday. The Prime Minister (Mr. Lyons) said to-day that his attention had been called to a statement that the Country party in December, 1931, had refused to enter the Commonwealth Government because of its tariff policy, or some alteration in the tariff policy of the leaders of the United Australia party. This statement, said Mr. Lyons, has only recently been made. The claim was never suggested at the time. The persistence in the mis-statement fortunately does not make it true. If so, has he any statement to make to the Senate onthe matter? 2274 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - I have nothing to add to the statement made by the Prime Minister (Mr. Lyons). 2274 2274 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - Will the Lyons Government instruct Mr. Bruce, M.H.R., the Resident Minister in London, to inform the international delegates to the World Economic Conference now sitting in London that the causes of unemployment and the general depression in Australia are: - Private ownership of production and production for profit, and lack of effective purchasing power in the hands of Australian workers. Labour-saving devices, mechanical and organizational, by which a proportion of the population is enabled to supply the needs of the whole population, and the fact that, instead of the labour of all., being reduced, a proportion of the population works as long us, or lunger than, before, while the rest works little or no time at all. Violent fluctuations in trade, due to the anarchy of competitive production with its booms and slumps. Changes in production, e.g., petrol and electricity taking the place of steam-power from coal. The tendency for manufacture to gravitate to the sources of raw material, power and cheap labour! 2274 10000 0 0 PRESIDENT, The The PRESIDENT - Apparently, the honorable senator has forgotten that he may not express opinions when asking questions. I cannot allow him to continue in that strain. 2274 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - Surely the existence of 70,000,000 persons unemployed in the world, and of 500,000 slaves looking for jobs in Australia is a matter of importance! 2274 10000 0 0 PRESIDENT, The The PRESIDENT - There is a proper time for the honorable senator to express his opinions. He may not do so now. 2274 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The answer to the honorable senator's question is No. 2274 2274 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - Has the Minister in charge of development any statement to make in regard to the latest reports from Paris regarding the obtaining of oil from shale, coal lignites, and brown coal? 2274 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - I informed the honorable senator some days ago that Mr.Rogers, the Australian fuel expert, who is at present overseas, had been instructed to get into touch with the Parisian chemist whose investigations have been given prominence, and the results of which were reported to the Government a few days ago by the High Commissioner's Office in London. Yesterday, I released to the press a statement in connexion with this subject; but it had relation only to the earlier tests which took place before those referred to in the recent cabled advice. This matter is receiving the closest attention of the Government. 2275 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - I now ask the Leader of the Government in the Senate whether it would not have been a courteous act on the part of the Minister to make a statement in the Senate as well as to supply information to the press ? 2275 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The Minister has made a statement to the Senate this morning. 2275 JYB 0 0 DUNN, James Patrick Digger Senator Dunn - But not the statement which was supplied to the press. 2275 2275 K7P 0 0 COLLINGS, Joseph Senator COLLINGS asked the Minister representing the Treasurer, upon notice - Is it a fact that, owing to the alterations in the Pensions Act and regulations made last year, greatly increased responsibility and work have been imposed upon all Deputy Pensions Commissioners and their principal officers throughout the Commonwealth? Will the Minister recommend to the appropriate authority the reclassifying of these positions with a view to increasing the salary and status thereof? 2275 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The answers to the honorable senator's questions are as follow:- Yes. This matter is the subject of a report preparedby the Commissioner of Pensions, which will be considered by the Minister on his return to Canberra. 2275 2275 JVF 0 0 DOOLEY, John Senator DOOLEY asked the Minister representing the Minister for Trade and Customs, upon notice - The number of Tariff Board recommendations in customs tariff items that were received by the Minister from November, 1931, up to thelatest date available? How many had minority reports attached? What were the subjects of the minority reports, if any, and the names of the members who signed them? 2275 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The answers to the honorable senator's questions are as follow:- One hundred and seven. None. See reply to No. 2. 2275 2275 JZD 0 0 FOLL, Hattil Senator FOLL asked the Minister representing the Postmaster-General, upon notice - Will he state the reason why the Broadcasting Commission on Friday last reduced the Sydney orchestra from 30 to 24 members? Is it a fact that the commission's share of the revenue last year from broadcasting: licences was over £251,000? Is not this revenue steadily increasing? Have economies been effected by reducing the number of rehearsals, which also affects the salaries of musicians? Is it a fact that the bulk of broadcasting programmes are provided by musicians? Is it a fact that considerable unemployment has been existing in the ranks of musicians due to the advent of talkies, and that the Broadcasting Commission's operations have helped to relieve this? Will the commission have to repay to the Commonwealth Government £17,000 by the end of June, money advanced by the Government? If so, is this the reason for the dismissal of these musicians? Will not the quality of the programmes supplied be seriously affected by this reduction in the size of the orchestra? Will the Minister make representations to the commission not to spoil good music by cutting down the number of instrumentalists? 2275 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - Inquiries are being made, and a reply will be furnished to the honorable senator as soon as possible. 2275 2275 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Minister representing the Minister for the Interior, upon notice - Has any progress been made in the negotiations in connexion with the proposed BourkeDar win railway ? 2275 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE The Minister for the Interior has supplied the following answer: - No 2276 Appointment of Machinists 2276 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Leader of the Government in the Senate, upon notice-. Will the Minister make inquiries as to why another examination for female machinists in the Federal Public Service, New South Wales, is to be held while there are still successful candidates from a previous examination not yet appointed, although these officers have been performing the duties of machinist for periods of not less than six months and as long as eighteen months and are at present performing such duties? If it is a fact that certain officers who passed a traffic officers' examination held on the 26th September, 1927, and also officers who passed a senior mechanics' examination on 20th November, 1926, have had the period of their eligibility extended to the present time; will the same right be conceded to machinists who passed examination No. 1,764 held on the 18th October, 1930, or will a further period of six months to cover their eligibility for appointment be granted? Are there at present any vacancies for machinists in New South Wales? Are certain officers who have passed the necessary examination acting in vacant or uncreated positions? If so, will the matter of their appointment be given immediate consideration in view of the fact that the date of their eligibility expires on the 23rd June, 1933? 2276 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE >The information is being obtained, and will be made available as soon as possible. 2276 Transfer to Canberra 2276 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Prime Minister, upon notice - Has the attention of the Government been drawn to a statement made in the Melbourne Herald of the 2nd instant in which Mr. Cerutty, the Federal Auditor-General, describes as" irresponsible and untruthful gossip " the statement that he defied the Government when asked to transfer to Canberra? Is it a fact, as stated by Mr. Cerutty, that he has never refused to go to Canberra? Will the Government give publicity to Mr. Cerutty's statement, in justice to that officer ? 2276 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE The Prime Minister has supplied the following answers to the honorable senator's questions : - I have read the statement as published in the newspaper, to which the honorable senator refers. Yes, so far as I am aware. It is not considered that any such action by the Government is needed. 2276 Employment of Returned Soldiers 2276 K1Z 0 0 RAE, Arthur Senator RAE asked the Minister for Defence, upon notice - Is it a fact that unemployed soldiers, who are not members of the Returned Sailors and Soldiers' Imperial League, are being refused employment on Garden Island, Sydney, by reason of their non-membership of such league? Will the Minister make inquiries into the matter and ask for a report from the captain in charge of Garden Island? 2276 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE Inquiries will be made, and a reply will be furnished to the honorable senator as early as possible. 2276 2276 K6P 0 0 BROWN, Gordon Senator BROWN asked the Leader of the Government in the Senate, upon notice - Has any copy of the recent trade agreement between Britain and Denmark boon received by the Government? If so, will the Leader of the Government in the Senate place a copy of such agreement in the hands of each honorable senator? 2276 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The answers to the honorable senator's questions are as follow : - Yes. The Government is in possession of only a limited number of copies of this agreement, hut arrangements will be made to place a copy on the table of the library where it will be available for perusal by honorable senators. 2276 Inclusion of Queanbeyan 2276 K6P 0 0 BROWN, Gordon Senator BROWN asked the Minister representing the Minister for the Interior,. upon notice - Is it a fact that there is a movement in. Queanbeyan directed towards obtaining the inclusion of that area within the boundary of the Federal Capital Territory? If so, has any official cognizance been taken of the matter? 2276 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE PEARCE.The Minister for the Interior has supplied the following answers to the honorable senator's questions : - No official representations whatsoever have been made regarding the matter. 2277 miscellaneous 2277 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - by leave - During the first reading debate on the Customs Bill, I promised to have inquiries made in order to ascertain whether any copies of the draft agenda drawn up by the experts preparatory to the World Economic Conference were available. There is some doubt whether we have any right to reprint the document, but I understand that two copies have been placed on the table of the library. I have a third copy, which any honorable senator may see on request. 2277 miscellaneous 2277 Debate resumed from 13th June (vide page 2274), on motion by Senator McLachlan - That the bill be now read a second time. 2277 JRW Queensland 0 0 CRAWFORD, Thomas Senator CRAWFORD . - I have spoken so often on the subject of tariffs, and always to the same effect, that a re-statement of my views should be unnecessary, but I feel that were I to remain silent on. this occasion the reasons for my silence would probably be misconstrued, and I would be placed in a false position. I made my first speech in advocacy of protection in a debating society in Victoria when I was sixteen years of age, and the many intervening years have only served to confirm me in the opinions I then expressed. I can truthfully say that my fiscal faith has never faltered. I have kept the faith, and I hope that, according to my ability, I have fought a good fight in what I believe to be a righteous cause. We are considering this problem at a time when a state of economic uncertainty prevails throughout the world. A great conference is now being held in London, which may or may not have important results. In any case, that gathering has the good wishes of everybody concerned for the welfare of the world, and grievous disappointment will be felt if it fails to find a solution for some of the difficulties which are confronting us. I am not one of those who blame tariffs for the unfortunate position in which the world finds itself. I believe that the root cause is much deeper and more general ; that tariffs are the effect and not the cause of many of our troubles. One of the purposes of the Economic Conference that is at present being held in London is to secure a reduction of tariffs and the removal of the restrictionson world trade. Although most of the countries of the world are represented at this conference, so far only Great Britain and the United States of America have made public expressions of opinion on the subject, to the effect that they hope that the convention will be the means of finding a market for their products. Protective tariffs are not new to Australia. For some years prior to federation, Victoria had enjoyed the benefits of a protectionist policy, and it is apparent that, when the Constitution was being framed by the different conventions, and was subsequently submitted to the State parliaments and the people, a protectionist policy for the Commonwealth was in contemplation. There is no clearer evidence of that than the provision in the Constitution which provided for the retention by Western Australia of the control for a period of duties imposed upon commodities imported by that State. As I have always understood it, the purpose of that provision was to enable Western Australia to establish secondary industries within its boundaries, so that it would be in a position to compete successfully with the products of other States. It cannot be said that Western Australia took appreciable advantage of the opportunity then presented to it, with the result that for many years that State has opposed the policy of protection which a majority of the people of the other States have favoured. 2277 KPQ 0 0 KINGSMILL, Walter Senator Sir Walter Kingsmill - That is not correct. 2277 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - If I am wrong I shall be glad to be corrected by a representative of Western Australia. That State has my sympathy, and I believe that the disabilities from which it suffers under federation require further and fuller investigation. I hope that the results of the Economic Conference which is being held in London will be more favorable to Australia than were those achieved at Ottawa, from which convention we entertained high hopes. I repeat what I have said previously, that I do not blame our representatives who attended the Ottawa Conference for the unsatisfactory results that were obtained. Experience has led me to form the opinion that Great Britain drove a hard bargain with Australia, and that we have not obtained the benefits which we were led to believe would accrue from the agreement which was approved by our representatives, and subsequently ratified by this Parliament. Whether it was a result of that agreement or not, after the pact had been entered into the prices of the products which it principally affects - wheat, meat and butter - fell to lower levels than those which had obtained for years previously. 2278 K09 0 0 PAYNE, Herbert Senator Payne - If it had not been for that agreement we should not have obtained any Empire trading benefits. 2278 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - That is purely a matter of speculation. We expected to obtain from the Ottawa agreement an immediate and appreciable benefit, which has not materialized. What is the cause of our present economic difficulties? I say without hesitation that they are due entirely to the over-production of primary commodities. Throughout the world it has been proved that a buyer's market exists so far as wheat, wool, meat and butter are concerned. 2278 K0F 0 0 PEARCE, George Senator Sir George Pearce - There has been no carry-over of wool. 2278 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - Wool has been sold at a price which, we are told, does not pay the growers, proving my contention that it is a buyer's market so far as that commodity is concerned, just as it is with regard towheat, butter, meat and other products. For months past we have read in our newspapers that there has been keen competition at the wool sales held in Australia, and that prices are rising. Yet, strangely enough, the average price of wool appears to remain at about the same level. 2278 JY7 0 0 DUNCAN-HUGHES, John Senator Duncan-Hughes - During the past few clays it has risen by approximately 15 per cent. 2278 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - Only for odd clips. It is significant that for some months the average price per bale of wool has' not been disclosed by the wool brokers. The Australian wool industry is in its present unfortunate position largely because the buyers have organized to fix prices at a low level. The producers of wool are not wholly blameless. The position was as bad, if not worse, in 1920, when Bawra was established, and when there was a surplus of about 3,000,000 bales of wool. Through the instrumentality of Bawra the producers of wool obtained control of the market and fixed a basic price, as a result of which they waxed fat and dissolved Bawra. They have since repented at leisure. As a result of the wool-broking firms now having assumed control of the position, neither Bawra nor any other selling organization has been formed. It has been mentioned several times during the first and second-reading debates on the tariff that, while the prices of. primary commodities have fallen to unpayable levels, those of goods produced by secondary industries remain comparatively high. After giving the matter a good deal of thought I have arrived at the conclusion that the reason is that the prices of our land products are controlled by the buyers, while those of the products of our secondary industries are, to a large extent, controlled by the manufacturers. The consensus of opinion is that there can be no change in the world prices for primary commodities unless prices or the volume of production are controlled by central authorities. I know that some honorable senators object to Government interference of any kind. A few days ago Senator Elliott referred to the faulty marketing of our butter, for which he blamed the Government, and expressed the opinion that our butter should be put up and sold in Great Britain in pats. Almost in his next sentence the honorable senator objected strongly to any Government interference or control of business. It seems to me that those two statements are incompatible. I am a firm believer in reciprocal trade. I consider that, if everything be taken into account, our purchases from Great Britain are equal to her purchases fromus. Until recently, Great Britain's purchases from Australia have been chiefly of commodities upon which no preference was given, such as wheat, wool, and butter; the goods that we exported had to compete on equal terms with "the products of other countries. In dealing with the volume of our trade with Great Britain, I propose to advance what I believe to be an entirely new contention; that is, that the many millions of pounds that we pay every year to British bondholders by way of interest, ought to be included in the figures relating to our trade with the Mother Country. In my opinion, money is a commodity, and ought to be treated as such. We have purchased the use of over £500,000,000, and when we discharge our interest commitment, we pay for a commodity in the same sense as when we pay for the goods that we import. 2279 JYB 0 0 DUNN, James Patrick Digger Senator Dunn - Why not preach the reduction of interest? 2279 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - That, I believe, is imminent. I cannot see how the British bondholders can refuse the request for a reasonable reduction of interest. I was astonished to learn that the Chancellor of the British Exchequer had objected to- the flotation of a substantial conversion loan. I could have understood an objection to a proposal to raise new money; but a conversion would simply be from one rate of interest to another, and comparatively little money would change hands. 2279 K0F 0 0 PEARCE, George Senator Sir George Pearce - A substantial amount of new money might have to be raised. 2279 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - In the last loan floated there was 41 per cent, of new money. 2279 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - That would mean the release of the amount which the new money replaced. In the aggregate, the sum available in Great Britain for other purposes would not be lessened, because the one would balance the other. The position in regard to money borrowed in Australia is quite different from that in regard to money borrowed overseas, ' because the local lenders are, for the most part, heavily taxed to provide the interest on their own money, whereas we can levy no taxation whatever on the £30,000,000 that we pay annually to our creditors overseas, where the interest rate varies from 5 per cent, to 6-£ per cent. In the present position of the money market of the world, such interest rates are extortionate, and, in common fairness, they ought to be promptly reduced without the slightest demur. I read in the press recently statements by the ex- Agent-General for Victoria, and Professor Wallace, of the Sydney University, from which I gathered that the people of Australia are most unpopular in Great Britain. 2279 KS9 0 0 MACDONALD, John Valentine Senator MacDonald - So are our cricketers. 2279 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - So were their cricketers when in Australia. Why should we be unpopular in Great Britain '? I believe it is largely because of the character of the men who have represented Australia in London. I was pleased indeed to read recently , that Mr. Bruce had put in a good word for Australia and Australians. I. hope that whoever may represent Australia in London in the future, will be a thorough-going Australian, who will not be afraid to speak on our behalf at every opportunity. Professor Wallace says that it would be to the advantage of this country if we had a better opinion of ourselves. I think so, too. I have, heard many adverse opinions in regard to Australia expressed during the debate on this measure,, especially in regard to our manufacturers - their equipment, their methods, even their character. I had the opportunity, while associated for a couple of years with the Department of Trade and Customs, of meeting many manufacturers in Sydney, Melbourne and other centres. The opinion that I formed from personal contact was, that they are all honorable men, who are rendering a great service to Australia, and ave worthy of our confidence and commendation. The position to-day is, that hundreds of thousands of our people are unemployed. But things are no worse in Australia than elsewhere, and our chances of recovery are better than those of countries which devote themselves mainly to primary industries. For many years New Zealand was cited as an example of what could be accomplished in a country that depended upon its land products. In the early months of the depression there were those who contrasted the position in Australia with that in our sister dominion, but the general opinion now of those who speak and write with authority, is that conditions are much worse in New Zealand than in Australia, and that her recovery will be more difficult and longer deferred. Prior to the depression, the per. capita purchases by New Zealand from Great Britain were the highest in the world. In 1929, they amounted to £14 10s. a head, the Irish Free State coming next, and Australia being in third place. The latest figures relating to New Zealand that I have been able to obtain are for the year 1931, in which her purchases from Great Britain droppedto £8 a head. New Zealand has recently appointed a board to inquire into what new industries may be established to provide work for her unemployed. I am sorry to say that the latest figures show that 60,000 adult male workers are registered as unemployed in that dominion. Its published statistics do not include unemployed women and youths. I am sure that no honorable senator can sec any virtue in unemployment. I hope we have not in this country, as apparently they have in the United States of America, people who think that cheap labour is of advantage to industry. I was interested therefore in an article that appeared in the Saturday Evening Post of the 10th December last, from which I quote the following passage: - The twin sister of the cheap labour myth is that which demands a considerable permanent floating supply of idle workers. According to this latter belief, industry cannot flourish unless there are constantly so many idle hands that those who do have jobs can be hold down to low wages through fear of being turned off and ofbeing replaced by others, whose necessity is so great that they think any wage is better than none at all. Beliefs such as this have made a few men rich, and many men poor. Private greed of this sort always creates a public debt that some one must pay. A few for the time may win; society in the long run always loses. I am confident that our experience confirms that statement. Men and women who are fit and willing to work, but who are unemployed for long periods, feel that the world has treated them badly, and consequently have a grudge against Society. That was recognized long ago, and I should like to quote a few lines from Macbeth upon the point. Macbeth is inquiring into the qualifications of two persons whom he wishes to hire as assassins, and they reply to his questions as follows: - Mur. I am one, my liege, Whom the vile blows and buffets of the world Have so incens'd, that I am reckless what Ido, to spite the world. . Mur. And I another, So weary with disasters, tugg'd with fortune, That I would set my life on any chance To mend it, or be rid on 't. That quotation is apropos of a series of articles which appeared recently in the Melbourne Argus to the effect that there were 60,000 unemployed boys in Victoria, and that a substantial increase had taken place in the number of youthful criminals. That statement reveals a serious condition of affairs. I learnt recently from a Melbourne newspaper that a number of University students with Engineering Degrees were working as" labourers at Iron Knob, in South Australia, and that a number of others with Arts Degrees were learning shorthand and typing in the hope of being able to obtain casual employment. That shows how every class of society, and every section of the community, is affected materially and morally by the present position, and it shows us the danger with which we are likely to be faced unless we solve the problem of unemployment and put our people to useful work. It is regrettable that a great many of our citizens who hold responsible positions appear to be more concerned about finding employment for men and women in Bradford, Sheffield, Glasgow and other industrial centres overseas than they are about providing employment for the workers of our own country. It has been urged time and again that in imposing, protectionist duties we need to be careful lest we offend the authorities and citizens of other countries, but I do not think that any other country, in framing its tariff, considers whether offence may be given to us. When Great Britain proposed to change over from freetrade to protection, a number of countries protested, and Mr. Runciman, on behalf of the British Government, answered those protests in a speech which he made in Rome. I regret that I cannot quote his actual words, bur in a communication from London, dated t,ho 4th of December, and published in the Sydney Morning Herald, appeared the following statement - Mr. Runciman virtually warns France that Britain will not hesitate to depend upon her own people. It is a further gesture to interImperial trade unity, giving foreigners their own medicine. In the same article, under date the 5th December, appeared this further statement - The tariff problem was referred to in a speech by the Chancellor of the Exchequer at Newport last night when he said that Britain must claim the right exercised by other countries to direct her fiscal policies according to her own interests. We should follow the example of Great Britain. We, as a people, have tremendous responsibilities. We have a greatcountry, capable of supporting a large population in comfort, and we should not fail in our obligations as a nation. Some persons contend that Australia cannot, support a population of more than about 20,000,000; but such a contention is ridiculous. I am satisfied that Australia can easily support a population of 100,000,000. Our population can be limited only by the quantity of food and raw materials that we are capable of producing, and that quantity is considerably greater than has been previously estimated. Take the position of Italy under the dictatorship of Mussolini. That country is comparatively small, and a great part of its area is not arable; yetlast year it produced 275,000,000 bushels of wheat, or double its production of only a few years ago. The annual consumption of wheat in Italy is 300,000,000 bushels, and at one time that country had to import more than half of its requirements. It is now probable tha', within a year or two Italy will be able to supply the whole of its requirements of wheat. Something of that nature is taking place in almost every country of the world, including Great Britain. Speaking in the House of Commons a few months ago on the question of unemployment, Mr. Ramsay MacDonald said that Great Britain would have to look for the solution of its unemployment problem more to the land than it had hitherto done. Mr. Lloyd George said that instead of paying the dole to people capable of working on farms thb Government should subsidize farmers who were willing' to employ them. According to statistics, the area of land under agriculture in Great Britain to-day is 3,000,000 acres less than it was a few years ago; so we can realize the possibility in that country of a vast increase of primary production, with a consequent restriction of the market upon which wo chiefly depend. 2281 K1Z 0 0 RAE, Arthur Senator Rae - Great Britain carries about 60,000,000 sheep. 2281 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - Yes, and over 5,000,000 head of cattle. Every European country is endeavouring to produce its own foodstuffs. France at one time was a large importer of wheat, but last year its production exceeded its consumption. It is very evident that we shall stand on the brink of national disaster if we attempt to depend solely or even chiefly upon our primary production. It has been contended that high protective duties tend to increase prices, and the match industry has been quoted as an example. I understand that the offence of the match companies was that they charged 2d. per gross of boxes more than was considered a fair price,- and that the price has now been reduced, to that extent. I do not know whether matches are cheaper than they were. 2281 K1Z 0 0 RAE, Arthur Senator Rae - They are dearer to-day. 2281 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - If they are not cheaper, the extra profit which the manufacturers previously made is now being absorbed by the distributors. It has been proved that the whole of the excess profit of the match companies was expended on the extension of their premises and equipment. We have been, in the habit of comparing the price in Australia with that charged by the great match combine of Europe, but recently we learnt that that combine was able to sell matches cheaply only because of the fact that its principals had defrauded the people of Europe of £100,000,000. So black was the case against these men that Mr. Kreuger committed suicide, another principal fell- out of an aeroplane while it was crossing from England to France, and a third- was recently sentenced to twenty years' penal servitude. There has been circulated as an example of exorbitant duties a leaflet entitled Mystic or Tinsel Mitt. This article is part of. the ordinary kitchen equipment, and I made it. my business to inquire into the effect upon its price of the allegedly high duty. I was told that those purchased for use in my own home, when they first came on to the market, were bought at 8d. a piece. Later the price was reduced to 6d., but when the increased duty was imposed, and the article was made in Australia, the price fell first to 4d., and then to 3d., or five for ls. My experience has been that, when manufacture of an article begins in Australia, the price is immediately reduced to less than that at which it had been previously imported. The other day I had occasion to buy a chemical preparation which I use. I asked the chemist for it, and when he handed it to me he said " ls. 6d., please." I said " Is this the same article for which I used to pay 2s. 6d., and is the 'bottle the same size? " " Oh, yes," he said "it is exactly the same in every respect." "Why, then," I asked, "has the' price been so greatly reduced?" He replied that the article used to be imported from America, but that now i't was made in Australia. I think it is the experience of most of us with regard to a great many articles that,' since importations were excluded under the high tariff imposed in the schedule that has now been partly withdrawn, and manufacturers felt that -they were assured of the Australian market, prices have come down, and we have kept money in the country to the benefit of every one, producers and consumers alike. 2282 JNM 0 0 BADMAN, Albert Senator Badman - Does that apply in all- cases? 2282 JY7 0 0 DUNCAN-HUGHES, John Senator Duncan-Hughes - Does it apply to harvesters? 2282 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - I did not say that it applied in all cases; it has applied in very many cases, and sometimes, when prices have been increased in Australia, they have increased also overseas. There has been a marked change in public opinion on this matter recently. Many business people, and some of the leading business houses, are now boasting that most of what they sell is of Australian manufacture. Recently, the chairman of directors of Buckley and Nunn, Melbourne, stated at the annual meeting of shareholders that originally they had been an importing firm, and most of the good's they sold were procured overseas. . At the time of when he was speaking, however, just a few months ago, 70 per cent. of . the goods sold by the firm were made in Australia, and only 30 per cent, were imported. I do not think that I am wrong in saying that Buckley and Nunn are noted for the high quality of the goods they sell. We all know something of such establishments as Woolworth's and Coles. It is the boast of Woolworth's that over 70 per cent, of what they sell is made in Australia, and we know what an infinite variety of commodities they stock. This must of necessity mean a great deal of employment for our people, and we should hesitate before we do anything in the least calculated to supplant Australian products by imported goods. Such action must lead to industrial, economic, and - what may concern some of us - political disaster. I do not want to see the fiery cross raised accompanied by slogans such as " Work for the Workless ", and " Australian Goods for Australian Markets ". The Ottawa agreement has changed very materially our relations with the Mother Country. Previously, those relations rested to a very great extent on a sentimental basis, but now they rest on a business basis, and there is a very general feeling in Australia that such a basis is not satisfactory to us. I hope that I am a loyal Britisher; I think and feel that I am, and I should regret exceedingly if anything were done which would strain our relations with the Mother Country. We must remember, however, that the percentage of Australianborn is becoming greater every year, and, therefore, the population of this country is becoming more Australian and less English, Scotch or Irish. That is a factor which has to be taken into account when we consider what the future holds for us. Owing to that change in the composition of our population, we are more likely to resent any unfair treatment whether in our business, in our politics, or even in our sports. I am convinced that the only safe policy for Australia is selfcontainment so far as is possible. No country can be entirely self-contained, but scarcely any other country can be so self-contained as Australia, because we can produce somewhere in this island contitent practically everything we need. We have every class of soil, every productive range of climate, and our people have abilities equal to those of the people of any other country on the globe. I know that in this connexion a special plea has been made for what are called the weaker States. They are weaker only because their populations are smaller than those of the three eastern mainland States. If those three eastern mainland States had formed a federation excluding the other three, they would have had a bigger population to-day, that we have in our "six States. They have so much in common that they could have agreed upon a policy which would have been in every respect satisfactory to all. In my opinion, South Australia has very little to complain of, certainly less than has either of the other two States - Tasmania and Western Australia. I remind honorable senators that South Australia gave to this Parliament Mr. .Kingston, one of the staunchest protectionists that we have ever had. The position of Tasmania is different from that of Western Australian and South Australia. In the first place, it is separated from the mainland, and, in the second, its area is small, and much of it, though beautiful to look upon, is unproductive. I do not think that any disabilities have been imposed on Tasmania by federation, but the people of that State are few, and we of the mainland are many. The obligation of the many to help the few is very strong, and I arn sure it is one which will not be shirked. I do think that Tasmania has u claim for a better shipping service, and it is the duty of the Commonwealth Government to see that the shipping companies, which are protected by the Navigation Act, provide a proper service to Tasmania. 2283 KOF 0 0 HAYES, John Senator J B Hayes - It would be much better to repeal the coasting trade provisions of the Navigation Act. 2283 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - That is something which I do not think will ever come about. When I was a delegate to a conference of the associated chambers of commerce in Sydney last year, I was the only one who spoke against a motion seeking the repeal of those provisions. The same motion was submitted in Hobart recently, and a majority of those present were against it, so that it is evident that 'public opinion on this subject, even among members of chambers of commerce, has changed very materially during the last few months, just as it has changed with regard to the policy of protection. As a rule, the members of chambers of commerce in every country are freetraders. 2283 JZD 0 0 FOLL, Hattil Senator Foll - That is absolute nonsense. 2283 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - Nowhere is that more pronounced than in the country in which the honorable senator was born. From time immemorial we have heard of the Manchesterschool. Whenever one wanted to refer to extreme freetraders, one spoke of the Manchester school. Yet it was the Manchester Chamber of Commerce which led the way in asking the British Government to introduce a policy of protection for Great Britain. That was followed by requests by the London and Liverpool Chambers of Commerce. Prior to that, the members of the British section attending the conference of the International Chambers of Commerce held at Washington last year reported when they returned that the only way to establish trade equilibrium was by the imposition of customs duties or prohibitions against importations. I was speaking about the disabilities of Tasmania, and I should just like to add- 2283 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - I rise to a point of order. In discussing the second reading of the Customs Tariff Bill, is the honorable senator in order in referring to the disabilities of the States or the repeal of the coasting trade provisions of the Navigation Act? I submit that the honorable senator's remarks are not relevant to the motion before the Senate. The PRESIDENT (Senator the Hon. P. J. Lynch). - The honorable senator is somewhat straying from the subject before the Chair, but I presume that he is following that line of argument in order to illustrate his opinions on the fiscal policy of the Government as embodied in the bill. 2283 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - But for this slight interruption I should have finished what. I had to say with respect to Tasmania. My speech may contain a few irrelevancies, but the speeches of some honorable senators have been almost wholly irrelevant. I trust that the shipping and telephonic communications between Tasmania and the mainland will be improved. 2284 10000 0 0 PRESIDENT, The The PRESIDENT - The honorable senator must connect his remarks with the subject-matter of the bill. 2284 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - If those communications are improved, a great many of the disabilities which the Tasmanian people think are imposed upon them by the Commonwealth customs tariff will be removed. 2284 JZD 0 0 FOLL, Hattil Senator Foll - Tasmanian people believe in the imposition of an embargo on the importation of potatoes. 2284 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - I think that all believe in protection for what they have to sell, while some advocate freetrade in those goods which they have to purchase. During the debate I was accused, by interjection, of being a little Australian. 2284 JZD 0 0 FOLL, Hattil Senator Foll - By whom? 2284 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - The honorable senator should ask himself that question. I should be sorry to say or do anything which would lay me open to that accusation. I feel that I am a citizen of a country which is at least potentially great. I have a good opinion of Australia, and of the Australian people, and I am anxious to serve this country, and also to serve my fellow citizens, but I think that that can best be done by establishing industries in .Australia, and maintaining, those industries already established, in order to give employment to our own people. If that were done it would make Australia a better market for Britsh producers than it is at present. An impoverished country is of no use to its own citizens or to- the pf to nlc of any country who wish to trade with it. I believe that the policy of freetrade would impoverish this country, and destroy the market which at present exists for British goods. I have lived most of my life in country districts. I was brought up on a mixed farm in Victoria, upon which we produced almost everything required for table use. We lived particularly well; hut the people of to-day are not prepared to live in the same way as did the small farmers 50 or 60 years ago. During recent years many millions have been spent - much of which has been wasted - by the Commonwealth and the States in settling people on small areas. To endeavour to settle a large number of persons on the land in the present economic condition of this and other countries can be attended only by disastrous results. The opinion is held in some circles that any one can become a successful farmer; but that is an opinion which I do not share. A man must be instinctively fond of farming, or he will never succeed in rural work. I have never known of a person who thought farming work irksome become a successful farmer. I am afraid that, if more people are diverted from the cities to the country, they will become a greater burden on the State than they are at present. 2284 JZD 0 0 FOLL, Hattil Senator Foll - What nonsense! 2284 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - I am speaking as the result of a great many years experience on the land, and I know that at least 40 per cent, of those who engage in farming pursuits fail. 2284 JZD 0 0 FOLL, Hattil Senator Foll - No. 2284 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - I know that they do. I speak from experience. I have been living amongst those engaged in farming, and I submit that they do not fail because they are unable to obtain reasonable credit. I have known more to fail because credit was too easily obtainable than because it was difficult to secure. In the crisis through which I hope we have, passed, the banks have been ever ready to help those whom they felt they could safely assist. There are many aspects of this subject with which I have not dealt; but I trust that in considering this measure .every honorable senator, regardless of his political beliefs, will realize that his first duty is to Australia. 2284 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN . - During the four years in which I have been a member of this chamber, I have , heard many interesting speeches; but that of Senator Crawford, who had ministerial experience in a previous government, shows that he is a big Australian. Although Senator Crawford belongs to a different political school from that of myself and my colleagues, it is interesting to note in this instance that at least one honorable senator opposite is not prepared to support the anaesthetical freetrade policy advocated by so many honorable senators. As a Labour senator, I desire to repeat what 1 have said on former occasions that tariff reform in itself will not bring about the final emancipation of the class which I represent in this chamber. 2285 JZD 0 0 FOLL, Hattil Senator Foll - What class ? - 2285 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - The working class - a class of which I am not ashamed if the honorable senator is. The policy of new protection is embodied in the Labour party's platform ; in fact, it is one of its chief planks. I recognize that tariffs are mere palliatives in the class struggle, and that in. Australia they can take us only a certain distance along the road to the real objective of the Labour party; but it is from that angle that I wish to debate this measure, and I believe that my views will be supported by other Labour senators and the loaders of the Labour movement throughout Australia, whose objective is the emancipation of the workers. What we are up against to-day is the power of the press. In the main, our newspapers arc published for profit, and not for use, and until such time as these press dope machines are prepared to tell the truth to the workers we cannot expect to .make much progress. When I refer to the workers I include, not only those engaged in the mines, factories and fields, out also the great mass of people- who have to work for a livelihood. It is true that there are certain doctors of law in Australia who have not a clear conception of the purpose of an instrument used as a political or industrial palliative, and of it's effect upon that large body of workers who are marching along the road to their emancipation. In the main, the people of Australia find that they have a very hard row to hoe. Of course, we have our friends the doctors of law in all the States. 2285 K2Z 0 0 BRENNAN, Thomas Senator Brennan - They are not so common as that I 2285 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - I do not know why Senator Brennan should interject; I was not addressing him. 2285 K1L 0 0 BARNES, John Senator Barnes - Perhaps Senator Dunn meant horse doctors. 2285 JY7 South Australia 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES . - We may assume that the tariff schedule now before us will be the only one of any size that will be tabled by, this Government during the lii & of this Parliament, for the period for which the Parliament was elected has nearly half expired. Minor alteration* of duties may be made in schedules that will be tabled later; but this schedule will, undoubtedly, be the main tariff product of this Government. It is, therefore, incumbent upon honorable senator* to consider whether it gives adequate expression to the tariff policy put forward by supporters of the Government during the last election campaign. In my opinion it does not, and one of the strongest arguments in support of that opinion is that the items which elicited the. greatest interest and provoked the keenest debate when the schedule was before another place, were those relating to matches and tobacco, the production of neither of which, by any stretch of the imagination, can be regarded as essential to the community, or looked to for the promotion of prosperity in our primary industries. Before proceeding to discuss the schedule, I wish to recapitulate, briefly, the general attitude of the great men of this and other countries towards high tariffs. By quoting the views of leading economists and publicists outside Australia, I do not desire it tq be assumed that I think all the great men are necessarily outside Australia - indeed, I shall quote some Australians. . But the tariff views that have been expressed in the last few years by outstanding men, some of whom have visited Australia, should be worthy of our careful consideration. There can be no doubt that the opinion is widely held among people who are qualified to speak with authority that Australian duties had become too high, even before the large increases were made by the Scullin Administration. I do not intend to make a historical disquisition of our tariff history from the inception of federation - it would be too lamentable a story from my own point of view. I shall quote first the following motion carried at the Economic Conference held at Geneva in May, 1927: - This conference declares that the time lias come to put an end to increases in tariffs, and to move in thu opposite direction. That was a fairly bald and definite statement, from which it is not easy to get away. 2286 K7P 0 0 COLLINGS, Joseph Senator Collings - A lot has happened since then. 2286 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - That is true. Tariffs here and elsewhere have gone much higher since that time. I do not suggest that tariffs alone are responsible for the condition in which we find ourselves to-day; but it is instructive to realize that many of the countries now calling for a downward revision of tariffs were formerly highly protectionist. I refer honorable senators also to the report of the British Economic Mission, though I shall not quote from it in detail. It will be remembered that the conclusionsof that body were, briefly, that the Australian tariff had been pushed probably to its farthest economic point. In 1929, an investigation of the tariff was made by Professors Brigden, Copland and Giblin, and Messrs. Dyason and Wickens, and their findings were published in the book, Tha Australian Tariff. These five scientists approached the consideration of the subject more tolerantly than most of the other investigating bodies had done, and endeavoured to come to a sound economic decision. While I shall not quote extensively from their book, I think the following extracts are not an unfair statement of their opinion: - The evidence' available does not support the contention that Australia could have maintained its present population at a higher standard of living under freetrade. I make my friends of the Labour party a present of that quotation. But these scientists also stated that - The total burden of protection should not be increased. They also said - The adoption of a considerable but not unlimited amount of protection is justifiable on economic ground in the circumstances of Australian industry, but the extreme application of the tariff has undoubtedly been a cause of net loss. Further extensions may involve a more than proportionately increased loss. This is the opinion of experts trained to consider statistical information, and form conclusions from it. I remind honorable senators also that these findings were made before the immense increases in the tariff were made by the Scullin Government. 2286 KPQ 0 0 KINGSMILL, Walter Senator Sir Walter Kingsmill - The total amount of protection includes exchange ? 2286 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - That is so; but there have been immense increases of duties in consequence of legislative action. In these circumstances, the reductions provided in the schedule now before us are not, in my opinion, nearly sufficient. I direct the attention of honorable senators also to statements made by Sir Otto Niemeyer at the Melbourne conference held in July-August, 1980. That gentleman said - So long as the sheltered trades of Australia insist in taking so large a share of the national dividend, and even an increasingly large proportion as the national dividend drops, the difficulties of unsheltered export trade can only increase. He also said - The secondary producer can attempt to moot this price situation by increased tariff protection, hut this simply means that this protection is achieved at the cost of primary production. The primary producer can attempt to meet the situation by a further depreciation in the exchange. But he went on to say that - Increasing tariff prejudice the primary producer, rising exchange rates prejudice the whole fabric of national finance. Had Sir Otto Niemeyer's advice been followed to a. greater extent and in greater detail, Australia would be in a better position than she is in to-day. I shall refer only briefly to the annual reports made by the Tariff Board, especially in 1931 and 1932, iu which it is stated, in effect, that the attempts to build up inefficient industries by enormous duties tend to encourage the adoption of retaliatory measures by other countries. I shall say something more oil this point later. Those reports embody the views of men who are not in any way antagonistic to the development of secondary industries in Australia. But these men felt compelled to point to the abuse of the tariff system. Their criticism will require a good deal more answering than has been given so far. I also direct the attention of honorable senators to the views of certain prominent publicists. I suppose the two outstanding books which have been written on Australia during the last three or four years are Australia, by Professor Hancock, and The Economic History of Australia, by Professor Shann. These two books are being read in every part of the world, and are likely to continue to be read. The conclusion of both writers is undoubtedly hostile to the present exaggerated and inflated tariffs. I shall not quote extensive extracts to support this statement, but the following remark in Professor Shann's book, which deals with the post-war era, is interesting: - In this access of wealth, Australians one and all talked of making their country more self-reliant. It is a comic thing that while we are ostensibly seeking to make our country more self-reliant, we are actually making it more reliant upon the Government than it has ever been. Bitting suspended from 12.45 to 2.15 p.m. 2287 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - Before the luncheon adjournment, I quoted a sentence from Professor Edward Shann's Economic History of Australia. The quotation continues - Clever men stampeded the democracy into measures seemingly designed to make our economy a hermit one. The coalition of parties in political power during the post-war decade piled tariff upon tariff in favour of local secondary industries, and ' sponsored crude plans to exploit the Australian market in favour of struggling export industries. . . . The more the policy of a hermit Australia succeeded, the more surely would it bring slothful, intellectual standards, and, as a consequence, material decay, until, with scorn, some sea power from the world where necessity had maintained knowledge and energy knocked in the closed door. That, I suggest, is a quotation which might well be taken to heart. It expresses the opinion of a professor who, so far as I know, has no pronounced political views,' but has considered the whole subject broadly. My final quotation will be from the communique which was issued at the close of a meeting of the organizing committee of the World Economic Conference, which met at the Foreign Office on the 12th May last. At that gathering a resolution to the follow ing effect was unanimously agreed to: - The Governments of the United Kingdom, Germany, Belgium, United States, France, Italy, Japan, and Norway, convinced that it is essential for the successful conclusion of the conference that measures pf all kinds which at present misdirect and paralyse international trade be not intensified pending an opportunity for the conference, to deal effectively with the problems created thereby recognize the urgency of adopting, at the beginning of the conference, a tariff truce, the provisions of which shall be laid down by common agreement. The said Governments, being further convinced . that immediate action is of great importance, agree and strongly urge all other Governments participating in the conference to agree that they' will not, before 12th June, nor during the proceedings of the conference, adopt any new initiatives which might increase the many . varieties of difficulties now arresting international 'commerce. I have said enough to show that the Opinion of the leaders of thought in Australia, and throughout the world - speaking apart from politics - is to the effect that the tariff war has become a general menace, as, indeed, I believe it to be", not only to trade, but also to world peace. When. I say this, I am rather diffident about giving my own views on these matters, having regard to the talents of the men whose opinions I have already quoted. Nevertheless, it is the duty of a member of Parliament to come to his own conclusions. I am speaking as one who for many years has been a reasonable tariffist. I know that the word "reasonable " will be cavilled at, and that a definition will be . sought ; but I have always believed that it is not desirable that Australia should be entirely filled with primary producers. We should have our industries reasonably and widely distributed. We should not adopt the line that we are simply to produce primary products and raw materials for use overseas, and not manufacture any of them in our own country. I shall give a number of reasons why I am opposed to high tariffs in general, and why I consider that the present tariff, in particular, is altogether too high. In the first place, it seems to me that Australia's tariff is not fair to the Mother Country. 1 always approach' the tariff question remembering that, in the last resort, we are dependent for our very existence on the great country from which we have sprung, and on the force which it has had for so long, and which it knows so well- no country, indeed, knows better - how to use as a means, not of offence, but of defence. Only the other day we had word that five vessels of a destroyer flotilla had been lent to us by Great Britain, thereby saving us the expense of providing ourselves with similar vessels out of capital. That loan was welcome, and it was spoken of as a generous act on the part of Britain.I suggest that it is not sufficient to talk of generosity, because such an action on one side deserves response of a similar nature on the other. I think that this tariff schedule is not in agreement with the spirit of the Ottawa Conference. I am not saying for the moment that it is not in accord with the letter of the Ottawa agreement. That contention can, and, no doubt, will, be advanced later; but I remind honorable senators that, when our delegates went to Ottawa, they said they were not in a position to come to any definite arrangement as to details, so far as their country was concerned, and the eventual result was that Great Britain made a number of concessions in regard to individual items. We, on our side, entered into a sort of general agreement which is set out in writing for the sake of convenient reference, but, in itself, is so general that it may, and probably does, lend itself to differing interpretations. In other words, some of the concessions that we obtained were in the nature of extensions of the ranges of goods to which the British preference applied, and others were in the nature of increases of the preference. We pledged ourselves to adhere to certain general principles, and I suggest that it is idle, in these circumstances, for us to say, " We consider that, under the agreement, we have done what is a fair thing." The very fact that these arrangements were so general throws upon us the responsibility of showing that we are really giving Great Britain a fair deal. If we do not do so, the inevitable result will be a certain amount of criticism, in not only the British Parliament, but also the British press, which is, indeed, already being heard. It is not likely that the British Government will make a public statement that, in its opinion, we have failed to perform our part of this agreement; but we shall probably find that it will be impossible, or, at least, exceedingly difficult, to renew it, let alone extend its scope in the future. I deplore the habit, which I notice iscommon, of looking up an article of this agreement, and saying, " We consider that what we are now doing is in accord with article so and so of the agreement." What we have to do is to show that we have carried out the agreement in such a way that, taken by and large, we have given Britain a fair deal. By our tariff we have provoked a rather marked hostility on the part of foreign nations. It is unnecessary, I suppose, to go into details concerning the resentment to which it has given rise in France and Germany, and of the retaliatory measures to which those countries have resorted. Nor, probably, need I refer to the fact that Belgium is not altogether pleased, for instance, with our attitude to its glass. I suggest that we should take the trouble to look up the statistics, and find out whether we are not exportingto countries such as Belgium, Japan and New Zealand - as, of course, we are - a great deal more than they are sending to us. In 1930-31, New Zealand exported toAustralia merchandise to the total value of £775,000, but the goods which Australia exported to New Zealand ware worth £2,975,000. Our imports from Japan in that year were worth £2,379,000, but we exported to that country goods to the value of £9,500,000. We purchased from Belgium goods to the value of £312,000, yet we exported to Belgium products worth £4,195,000. 2288 JZD 0 0 FOLL, Hattil Senator Foll - Principally wool. 2288 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - Yes, but that fact does not in any way qualify or weaken my argument. What has to be considered is the balance of trade. It seems to me to be the height of unwisdom, where we have such a tremendous balance of trade in our favour, for us to seize an opportunity of levying an embargo, for instance, on potatoes coming from New Zealand, or to put a very high tariff on glass, even to the point of an embargo, against Belgium. In the case of Japan, we have, apparently, so irritated that country, that it was suggested the other day that a restriction might be placed on the entry of our wool into Japan. 2289 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - The embargo on New Zealand potatoes was imposed, not by the Customs Department, but by the health authorities. 2289 JY7 UAP 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES -HUGHE S. - That is true, and I am not discussing whether that action was justified; but it has resulted in New Zealand imposing an embargo upon Australian oranges., The agitation which was worked up for the exclusion of New Zealand potatoes from Australia was certainly, to a great extent, political. The object was to exclude such potatoes because they were Now Zealand goods, and the balance of trade between the two countries was not taken into account at all.We recently sent a ship to Eastern seas, and to Malaya, for the purpose of trying to extend our markets there; but how can we expect success in that enterprise? The ship visited Java, whose sugar we do not buy, and found half the sugar mills in Java closed. Is it natural to suppose that Java will have kindly feelings towards us? I do not know whether the ship went to Fiji, but I read in the press the other day that great irritation has been occasioned in that country because of the way in which Australia has observed the terms of the Ottawa agreement with respect to bananas. While with our high tariff we are not doing what I regard as a fair thing to the Mother Country, we are, at the same time, following out the hermit policy of which Professor Shann speaks, and estranging ourselves from the goodwill of the world at large. This is mainly because of our tariff. Two or three years ago, I read in the press that a Labour gentleman named Crofts, I believe, had been to Geneva, and that on his return he said that it was extraordinary to notice that everybody there seemed to be antagonistic to Australia. He added that they appeared to be rather pleased than otherwise to hear that this country was in the throes of depression. There must be some reason for this, and I suggest that it is not far to seek. 2289 JYH 0 0 ELLIOTT, Robert Senator Elliott - Many who attended the Ottawa Conference came back with the same story. 2289 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - When I was in Vienna three years ago, a gentleman, whom I regarded as a respon sible man with some knowledge of public affairs, who would not talk lightly about such subjects, asked me if I could explain why the people of Australia seemed to be more hostile to other countries than those of other parts of the world. Clearly he had the impression that we were definitely hostile to a number of European countries. Whether his opinion was based on our attitude to migration, on our White Australia policy, or on our general tariff policy, I am unable to say. 2289 JVF 0 0 DOOLEY, John Senator Dooley - Possibly, he had heard about Mr. Lang. 2289 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - I doubt it, because great as may be the fame of Mr. Lang, in both Australia and Great Britain, he would hardly have been so well known in Vienna three years ago. Another objection to this high tariff is its serious effect upon the industry of the primary-producing States ; but I shall not dwell upon this aspect of the matter now, because during the last week or two, a good deal has been said about it. Still, we cannot ignore the drift towards secession, which, I am informed, has gathered momentum in my own State, even in the few weeks since the Senate recommenced its sittings. We cannot disregard the fact that population is moving from the smaller and primary-producing States to those States which are benefiting from our tariff legislation, or from government subsidies to an undue extent. To indicate how definite is this movement of population, I may state that the representation of South Australia in the House of Representatives will, probably, be reduced by one member as a result of the forthcoming census, and that additional representation will be given to one of the more powerful and richer eastern States. Any one who wishes to. ascertain to what extent the various States are directly affected by the tariff, need not look further than the report of the Australian tariff economic inquiry which I quoted this morning. In Appendix W of this tariff investigation report, there appear these comments - . The effects of the tariff upon different areas, and especially upon the States, are so important that a summary statement is called for . . . The unequal effects between States are probably the most embarrassing consequences of the tariff . . . The established producers in these areas and States have, undoubtedly, been penalized by the tariff. Prom the point of view of the States themselves, the consequences are not less important . . . It is natural that the harmful effects of the tariff should express themselves most acutely as difficulties of State finance . . . The effect of the tariff on States is just as important as its effect on individual industries. Lately, rural industries have been forced to appeal to the Federal Government for some form of assistance, because of the detrimental effect of the tariff. For a similar reason, several State Governments have been practically compelled to ask the Federal Government for what appears to be a favour, but, on the showing of the report from which I have quoted is merely the return of something which has been taken from them by legislative action. Then we have to consider the load on the primary producers, due to the operation of the tariff. South Australia, as honorable senators are well aware, is essentially a primary-producing State, though it is not the only State that depends almost wholly on primary production. I understand that the position of the farmers in western New South "Wales is, if anything, worse than that of the farmers in my own State, and, therefore, their need for assistance is quite as urgent. We may be told that the Commonwealth Government has done a great deal for them. That, no doubt, is partly true, and as I do not wish to look a gift horse in the mouth, I admit that a certain amount of relief has been given. For example, there have been remissions of sales taxation; but mostly, I should say, of a rather small order. There has also been a reduction of the land tax. This is not a negligible concession, but its beneficial effects are felt even more by city property-holders than by country landowners, so it cannot be regarded as a special concession to the man on the land who is producing wealth for export'. 2290 JZD 0 0 FOLL, Hattil Senator Foll - The tax does not fall upon the small fanner. 2290 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - That may be true, but it has its effect, nevertheless, on all the rural industries. Then there was the special grant for wheat-growers, over £3,000,000 being provided by the Scullin Administration, and over £2,000,000 last year by the present Government. It is hard to get exact figures dealing with the cost of the tariff to our wheat-farmers, but it works out, possibly, at something like 5d. a bushel; so if the Government gives back to the farmers, in the form of a bounty, 4£d. a bushel in one year, and 3£d. a bushel in the following year, it cannot be contended that this act of justice, for it is no more than that, puts him in any favoured position. It is only making up to him, partially and temporarily, what has been taken from him permanently, with the possibility of the exactions beingincreased. Is it fair to inflict such liabilities on those who are producing the wealth of this country, forcing them, eventually, to appeal to the Government for exemptions on the ground of hardship? I venture to say that, at the present moment, owing to the tariff, while practically every primary producer in Australia could, with complete justice, claim exemption from some portion of this burden at all events, on the ground of hardship, the majority do not care to exercise their right because of pride, or the possession of a certain amount of capital reserve, or for some other reason. 2290 KOF 0 0 HAYES, John Senator J B Hayes - The dairymen and fruit-growers in Tasmania are just as badly hit by the tariff. 2290 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - I certainly do not suggest that the two industries which I have mentioned are the only ones that are suffering from our tariff legislation. I emphasized their difficulties because they represent that section of our primary producers who produce by far the greatest part of our overseas wealth. What I should have expected, and what one might reasonably have expected in the circumstances, keeping in mind the knowledge that our manufacturers have presumably been doing very well under the high tariffs imposed in recent years, and hearing in mind also the dreadfully low prices that have been ruling for primary products, was provision in this schedule for relief in respect of the duties on the requirements of primary producers. Even if this provision were of a temporary nature, to operate only during a time of real stress, such as that through which we are now passing, it would have been gratefully acknowledged. If necessary, the secondary industries concerned could have been assisted by some form of bounty. For years past, it has been repeatedly urged that the bounty system as a means to assist industries, is more equitable than an increase of tariff protection, because for one thing, bounty payments are more easily checked. In this tariff, no attempt is made to consider those articles which are required by primary producers, and their chief expense in the production of our export wealth. Then we have to consider the position of the consumers, who have always been, but I hope will not continue to be, unorganized. How does this tariff press on the ordinary consumer and the man on a fixed salary? To indicate more clearly bow it affects such persons, I direct attention to two or three items which, perhaps, are not the most important in the schedule, but, nevertheless, may be regarded as typical examples. Take, for instance, the ad valorem duties of 30 per cent. British, and 40 per cent, general on medicines, pharmaceutical preparations, including pills, tablets, and even medicines for animals! At a time like this, when so many people are in financial difficulties, and are obliged to go to public hospitals for medical attention, is it. fair to impose a high tariff on medicines, even those required for animals? Then there is the duty on perambulators and go-carts. ^ suppose that every mother, unless she has one already, requires a perambulator for her child if it is of tender years. Is it reasonable to impose a tariff on perambulators of £1 each, or an ad valorem duty of 30 per cent. British and 50 per cent, general, whichever rate returns the higher duty? No one will suggest that the manufacture of perambulators is essential to the future welfare of Australia. I agree that the more perambulators there are in use in Australia, the better it will be for this country ; but it is not essential that they should be manufactured here. To show how unbiased I am in this matter, I do not even know where perambulators are made in Australia, and what is more, I do not care. It is a gross injustice to penalize in this way every Australian mother who presents an additional child to this country at a time of such great financial difficulty. I turn now to the duty on rabbit traps. This may not appear to be an important item, but I assure honorable senators that it is by no means unimportant, because I know, from personal experience, that during the last year or two, rabbits have been increasing to such an extent that, in some country districts, they have become a perfect plague. A great many men who are unable to secure employment, not only in country districts, but also in our cities, have quite wisely decided that it is better to go trapping rabbits and selling them than to remain in populous centres, monotonously drawing what has been provided by Governments in the form of sustenance relief. One could mention a number of items, including cotton and. wool textiles, agricultural implements, and boots, on which the duties are too high. At a time when so many people are almost without boots, why is there an ad valorem duty of 45 per pent. upon boots from Britain? That duty should be removed, even if compensation had to be given hi some other way. I am not advocating a radical scrapping of duties; but I say that the Government would be justified in suspending the tariff on the things which the primary producer requires, even if that meant paying a bounty to keep certain manufacturing firms going. An ad valorem duty of 45 per cent, on boots is absurd. I have already mentioned some of the classes of persons who do not benefit from the high duties. Who does benefit from them? It may be said that the manufacturers and their employees reap advantage from a high tariff, and, therefore, it is only right that we should consider what part they play in the community. That can be calculated adequately only by ascertaining what they add to our common wealth by their exports. 2291 JZD 0 0 FOLL, Hattil Senator Foll - It is questionable whether the manufacturers benefit, because high tariffs induce so many to engage in manufacturing that they are, as it were, forced to cut one another's throats. 2291 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - That remark would apply to the primary .producers as well as to the manufacturers, except that for every protected manufacturer who is forced to the wall there are probably three or four primary producers who fail. I shall not weary the Senate by quoting a lot of figures; but I point out that, in 1913, Australia's exports of primary products were valued at £73,000,000, compared with less than £2,500,000 in the case of manufactured products. Seventeen years later - in 1930-31- the respective values were £86,750,000 and under £3,500,000. During the ten years from 1920-21 to 1929-30, agricultural products comprised 24½ per cent., pastoral products 52 per cent., and manufactured products 3½ per cent. of our total exports. In the light of those figures, what justification is there for increasing the already high protection given to that section of the community which produces only 3½ per cent. of the country's wealth, especially when by so doing we place the 56½ per cent., represented by the agriculturists and pastoralists, in a most iamentable position ? One could continue to expose the inequities of the present system, but I shall leave that subject for the present. The Tariff Board's reports show clearly that many manufacturers have been greedy of profits, and have sought excessive rates of duty. I do not suggest that Australia is without manufacturers who are both good and capable; but I am concerned that our fiscal policy is altogether out of balance, and it ought to be righted more rapidly than it is. While the smaller primary producer makes greater demands and indulges in a certain amount of log-rolling, the wool-growing industry remains unprotected. The Wool Committee's report has scarcely been mentioned of late. The wheat-growing industry is in a similar plight. Many of our primary producers are only able to eke out a bare living, and others can scarcely do that. Those who are carrying on are able to do so only by reason of the assistance afforded by country storekeepers, State moratoriums, debt adjustment acts, farmers' relief acts, and by using up what little capital they have acquired. I shall not, however, make the story too long or too sad, although, every week, properties are becoming more and more encumbered, and the smaller men particularly are experiencing greater difficulty in borrowing money to enable them to keep going. Improvements are being neglected, or are deteriorating, rabbits are increasing, and land to a great extent is unsaleable. The result of all these, things is that little or no opportunities exist in rural districts for giving work to others. At this stage I pause for a moment to refer to the idea which is becoming more and more accepted - and which I suggest is encouraged by this schedule - that the way to overcome our difficulties is by increasing the number of employees in urban industries, notwithstanding that those industries have to receive State protection in order to exist at all. That is not the thing to do. Were it not that the man on the land has been placed in an almost impossible position, through no fault of his own, he would be able to provide more work than is now possible. Unfortunately, the policy of the country seems to be that the primary producer shall bear the burden, and accept the risk of prices rising in time to avert disaster. I now turn to the printed Record of the Lyons Government. So far as I am aware, it does not contain any statement of the Prime Minister's policy speech; but it does set out the seven points which were announced by Mr. Lyons and published in the press on the 28th March, 1931. Speaking generally, those were the points which I emphasized when I spoke in various parts of the country prior to the last election. Among those seven pointswere the following: - The restoration of a balanced national budget on a basis of equality of sacrifice, to be progressively effected as the financial capacity of the community permits. Economically sound tariff policy with effective preference to Great Britain and inter- dominion reciprocity. He-employment of the people by the encouragement of productive enterprise. Are we to assume that only the secondary industries are productive enterprises? That is not how I have interpreted the term. The last point of the policy announced by Mr. Lyons was - Immediate assistance to the man on the land by providing real money, to be expended on keeping Australian landin profitable production. I read those four points, and then I look at this schedule, and, try as I may, I cannot regard the latter as an adequate carrying out of the former. I welcome the decision of the Government to afford the Senate an opportunity to discuss the protective incidence of exchange and primage before this bill is finally disposed of. We should be better equipped to discuss that subject were we in possession of the Tariff Board's report on it. Personally, I should prefer to have the board's report before us now. Should the schedule pass through the Senate practically unaltered, there will probably be a claim that the schedule is approved, and that therefore there is no need to make effective any reduction of exchange which the Tariff Board might have suggested; and, alternatively, in the event of the Senate deciding that some duties should be reduced, it might be suggested that that result should render unnecessary some concession in the matter of exchange. I hope that the Government will consider the suggestion made by Senator Kingsmill last night. Since I have not yet had time to consider carefully either the abbreviated account of the contents of the report, or the Government's proposals, I content myself with saying that at this stage my concern is largely that we shall not be held guilty of acting shabbily in regard to British preference. If the Government decided that any revision of the exchange should apply only toitems under the British preferential part of the tariff, a tremendous amount of juggling with foreign exchanges would be saved, and, in addition, Great Britain would be given a slight preference over all other countries, except, perhaps, those with which Australia had entered into trade agreements. Some one has asked whether exchange is really a part of the tariff at all. It is, at least, a sideline of the tariff. In the Melbourne Argus of the 9th June, it is reported that the New Zealand Government, in appointing a commission to investigate the customs tariff of that dominion, included as one of the items of reference, " The relations of the tariff to rates of exchange ruling in New Zealand and other countries". No one will deny that these subjects are interlocked. Where are we travelling in industrial matters? In my opinion, an industrial community is not the best community to have in any country. Whatever the misery that might have existed in England before the great industrial revolution there, and although the revolution brought wealth to the country and alleviated some of its distress, I suggest that a really happy and prosperous country is one in which the people live, not in masses in the cities, working in factories, but in more healthy surroundings in rural districts. Australia is not a country in which the population must necessarily be congested and thrown together. Because of its immense area, Australia's natural development should be in the country districts rather than in the towns and cities. I suggest that these high tariff schedules, which are placing a great burden upon the primary producers, are steadily driving men out of the country into the cities. From an examination of statistics dealing with South Australia for the last ten years, I find that in only about three country towns of that State has the population increased during that period, two of them being what might be termed fashionable resorts. People are being attracted to the city because of the amenities offering in urban centres, greater advantages for education - those, fortunately, are now also being carried into the country - and, because of the unfair distribution of the gains which may be made. I was reading recently an address on SirWalter Scott by Sir Mungo MacCallum. Scott, as honorable senators opposite will recollect, was a tory and there are some who will say that a tory must necessarily be wrong in his opinions. However, Scott was not always wrong, and I give this view for what it is worth. The extract reads - He (Sir Walter Scott) detested political change, and that with greater vehemence because of the upheaval in France. He eyed industrial progress askance, as in his view it meant the triumph of machinery and competition over friendly use and wont and comradelike give and take. The only feature of contemporary Scotland with which he had hardly any sympathy or acquaintance, was the growth of her manufacturing and trading centres. . . The following sentence from one of his private letters might have been written by the author of the Fors Clavigera - "Manufactures are transferred to the great towns, where a man may assemble five hundred workmen one week and dismiss them the next, without having any further connexion with them than to receive a week's work for a week's wages, nar any further solicitude about their future than if they were so many old shuttles." {Extension of time, granted".] Is that the sort of Australia that we wish to evolve, or that it is desirable to evolve; a country in which tremendous areas of land are available, although we force our people into congested city areas, to work in offices and factories? Is not Australia a land of open spaces and immense distances; a land where any man of our people can go out and take the advantages IIi at it offers, and where something of those qualities which are to be found in the seaman or the man who has lived all his days in the country, may be his, too? 2294 KUP Tasmania 0 0 MILLEN, John Senator MILLEN .- £ listened to the speech of the Minister with a great deal of interest, and particularly to the extracts which he quoted from the draft annotated agenda which lias been submitted by the preparatory commission of experts for the monetary and economic, conference that is now being held in London. There were many things which the honorable senator read with which I agree; I am sure that the honorable senator would have read many other extracts to us had time permitted him to do so. I, too, should like to quote from this annotated agenda some of the views that have been put before the World Economic Conference whose deliberations, I hope, will have a great bearing on the economic welfare of the world. At page 23, section 1b, there appears the following passage: - Restrictions on international trade, whether they take the form of prohibitions or of quotas or licences, have in recent years become exceptionally widespread, and are so numerous that they now constitute an almost insurmountable barrier to international exchanges. They have brought about an unprecedented reduction in international trade and threaten it with complete paralysis. There are many matters in the document which I should like to read; but I shall just pick out a few of the high spots. At page 26, dealing with "Tariff and Tariff Policy" the agenda reads - The tariff policy which has been followed by many countries in the past has been greatly aggravated in recent years. This tendency has contributed largely to the disorganization of world conditions. In respect of tariff policy and treaty policy, as in the case of import restrictions, the conference must seek to modify existing practices and to secure the adoption of more liberal methods. While at page 27 this statement occurs - The object of the conference, as far as tariff policy is concerned, must, therefore, be to reach a general agreement for the reduction of tariffs, and to maintain more moderate tariff policy in the future. At page 28 these -words deal with "Reduction of Tariffs" we read - To bring about a general reduction of tariffs, two ways are open, the advantages and drawbacks of which have 'been exhaustively studied by the Economic Committee of the League of Nations - the system of reduction by percentages, and the system of reduction to a uniform level. I shall give one other short extract which appears at page 29, and is as follows: - The objects which States should have in view are, as has been indicated, the reduction of their customs tariffs, and the adoption of a more moderate policy. No more important statement of the case for a reduction of tariffs could have been produced than this document, nor could the' opinions of this responsible body of men have been couched in more arresting language. My mind goes back to the 1927 conference, which was held in Geneva, to deal with a similar condition of affairs. Nearly all the leading countries were represented, and all were agreed on the general principle that tariffs were altogether too high; thai drastic reductions must be made; that there should be uniformity in customs classification; that prohibitions should be abolished, licences, quotas, and such like set aside, and that these matters should be controlled by way of tariff. Then I come to the Tenth Assembly of the League of Nations, at which the two predominant notes were Pan-Europe and tariff peace. It will be remembered that " the Right Honorable William Graham, who was at the time President of the British Board of Trade, gave a practical turn to the debate when he propounded a plan for the reduction of customs duties by the conclusion of a tariff peace convention. The suggestion caught the attention of all who were at the conference, and it was decided to hold such a convention. That was done, the gathering beginning on the 17th February, 1930, and concluding on the 24th March of the same year. It was attended by the leading statesmen and the great economists of the world. It was felt by all that, by continually erecting high tariff walls, the nations of the world were creating an economic cataclysm; that economic nationalism had practically gone mad. As a result of that convention, a commercial treaty was signed on the 24th March, 1930, by the representatives of the principal nations of the world. Unfortunately, matters altered in 1929, and began to get worse in 1930, so that circumstances worked against the proposal, and practically nothing has been achieved by the convention. I am afraid that a similar condition of affairs may again come about.I do not think that the majority of the nations will reduce their tariff walls unless they are forced by desperation to do so, but I think that economic factors are appearing that will, in the near future, compel them to do that which is so urgently needed for the benefit of the world. Then will the nationsbe released from economic bondage. I come again to the economic conference that is being held in London, and I shall read from the introduction to the draft annotated agenda, which puts the position as these men of international fame see it. 2295 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan -Will the honorable senator read the list of the nations that are represented at the conference? 2295 KUP 0 0 MILLEN, John Senator MILLEN - The list of members of the preparatory commission of experts is given at page 35, and includes Germany, Belgium, the United Kingdom, China, the United States of America, France, India, Italy, and Japan. In addition, there are present at the conference other experts who had been invited by the preparatory council to attend, and certain international organizations which have taken part in the work of the preparatory commission. After serious consideration of world affairs, those representative men describe in the follow ing words the conditions with which we are faced: - Before setting forth the problems which require solution, we wish to call attention to the gravity of the situation with which the world is confronted. Unemployment has recently been estimated by the International Labour Office as involving at least 30,000,000 workers. Even this huge total, which does not include the workers' families or other dependants, is probably an underestimate. The burden of suffering and demoralization resulting from unemployment of such proportions is appalling. Wholesale commodity prices - expressed in gold - have declined since October, 1929, by roughly a third; raw material prices on the average by 50 to60 per cent. In the middle of December, at Winnipeg,the price of wheat fell to the lowest level recorded in any primary market for wheat during the past four centuries. Such price-declines have produced profound disturbances in the economic system. They have thrown completely out of adjustment prevailing costs of the various factors of production, have made business enterprise generally unremunerative, and have seriously disorganized practically all the world markets. World stocks of agricultural products and of other raw materials continue to accumulate. The index of world stocks for 1932 was double that for 1925. Huge accumulations thus overhang some of the principal markets and burden the processes of orderly price re-adjustment. Industrial production has been drastically curtailed, particularly in those trades producing capital equipment. The depths which have been reached in some instances are illustrated by the position of the United States steel industry, which, at the close of 1932, was operating at only 10 per cent. of capacity. It is obvious that those gentlemen have come to the conclusion that matters are in a desperate position. Half of the agenda deals with tariffs, tariff walls, tariff restrictions, and prohibitions. That makes one pause for a moment, and think. The ideology of the high protectionist can be classified into two main series, which have been taken up by the masses, and have become an effective means of propaganda in favour of protection. The first is, security; and the second, naturally, social considerations. On the question of security, it is averred that, without sufficient tariff protection, it is not possible to maintain the manufactures that are necessary to the welfare of any community, and that we should be subject to the vagaries of an outside market. I do not think I need argue that point, other than to say that a man who does not grow fruit may still purchase it from a fruiterer. On the question of social considerations the argument is that, unless manufacturers are protected against the low-wage countries, they must go to the wall; that we must make customs duties so high that they balance, not only the wage rate, but also the whole costs of production. This argument cannot stand criticism, but the important thing is that it sounds comprehensible and is accepted by the masses. Let us assume that we have to compete with countries in which low wages are paid. What about the obverse side of the medal - the primary producer, who has to sell his commodities in competition in markets which are supplied by those lowwage rate countries? If the secondary producer has to be protected against those who labour in lower social conditions than exist in Australia, surely the primary producer also must be protected, because he has to sell his products to such people. 2296 K7P 0 0 COLLINGS, Joseph Senator Collings - That is being done to a very large extent in Australia. 2296 KUP NAT; UAP from 1931 0 0 MILLEN, John Senator MILLEN - I have not found it to be so. 2296 JRW 0 0 CRAWFORD, Thomas Senator Crawford - That is the main purpose of the Economic Conference which is sitting in London to-day. 2296 KUP 0 0 MILLEN, John Senator MILLEN - I have read several extracts in relation to the proceedings of that conference, and not one deals with the point raised by the honorable senator. It surely is obvious that if we maintain high tariff walls, a balance must be preserved by giving to the primary producer a certain proportion of the money that we receive as a consequence of the maintenance of the status of our secondary industries. If we restrict trade, if we interfere with the flow of goods, surely we shall be in serious trouble before long. It is said that tariffs make for greater employment. Is not that a fallacy? Is it not perfectly obvious that inadequate markets make for unemployment? To me, an adequate market is one that absorbs a volume of the production necessary to enable every one to maintain a decent standard of living, and has little to do with the tariff. If we had a tariff wall as high as it is possible to build one, the manufacturer still would not be able to carry on unless he had an adequate market in which to sell his goods. Therefore, if world trade is restricted and kept within the confines of the different countries, Australia and the rest of the Empire will be placed in a difficult position. 2296 K7P 0 0 COLLINGS, Joseph Senator Collings - It is in that position now. 2296 KUP 0 0 MILLEN, John Senator MILLEN - I agree with the honorable senator ; and we must do something to get it out. I sincerely trust that the Economic Conference, at present sitting in Loudon, will sign an agreement that will induce the different countries represented at it so to reduce tariffs that there will be a freer flow of trade and the markets of the world will be open to all the peoples in it. 2296 JVF New South Wales 0 0 DOOLEY, John Senator DOOLEY . - I have listened attentively to the speeches of Senators Millen and Duncan-Hughes, and am at a loss to follow the line of argument they have adduced. The Leader of the Senate (Senator Pearce) also referred to the question of exchange, and said that no country in the world had yet attempted to deal with it. I cannot see that that furnishes a reason for our neglecting to take action; but I am content to let the matter rest until the report of the Tariff Board on the protective incidence of primage and exchange is made public. All that I and my party are concerned about is the welfare of Australia. We desire to create in this country an Australian sentiment, and, to do that, we must offer an inducement to the people to buy locally-produced goods. If it is not possible to convince them of the wisdom of purchasing goods, in the production of which employment is provided for their fellow Australians, it must be made impossible for them to buy what is imported from foreign countries. There should be sufficient warrant for a tariff that will prevent the purchase of cheaper goods by those who are disinclined to help their own country. We realize the difficulty of putting such a policy into operation ; because, while the present paltry living wage continues, some persons must naturally buy in the cheapest market, even though the goods they purchase are inferior to those produced in Australia. Another aspect of the tariff question is our trade balance abroad. We have committed ourselves to certain interest payments. We have assured those of other countries who have sent their goods to Australia that we shall pay our way. We have also pledged our word to the payment of every shilling of interest that we owe. We cannot pay in gold, consequently we must find other means, and the only means which offers is the export of our surplus primary production. I realize that not many of our secondary products are exported. But I also know that this is a very young country, which has made wonderful strides in its production. As a matter of fact, with the exception of three or four commodities, we produce all that we require. One of the exceptions is petrol and oil products; and it was proved beyond the shadow of a doubt, while the Scullin Government was in office, that petrol can be produced at Newnes for8d. a gallon. Senator McLachlan smiles. 2297 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - I wish that the honorable senator were right. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - I say to the honorable senator, do as the Scullin Government did - give it a go. 2297 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - It will be " given a go ", but on sound lines on this occasion. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - Under the Scullin Government, it was on sounder lines than those on which the honorable senator proposes to place it. The Government has endeavoured to hand over to private enterprise the control of the Newnes project. The Scullin Government proposed to expend£1 for every £1 expended by private enterprise. 2297 JZD 0 0 FOLL, Hattil Senator Foll - The Commonwealth went into the Commonwealth Oil Refineries Limited on a fifty-fifty basis, with disastrous results. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - That is the responsibility of the Government, whose duty it is to see that a fair deal is obtained from its own concern. 2297 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - That matter is now being investigated. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - When it was previously proposed to appoint a royal commission to inquire into the petrol industry generally, I expressed the belief that no result would be achieved. In the present case, I say that we are only sending good money after bad. 2297 JZD 0 0 FOLL, Hattil Senator Foll - We ought to be able to obtain all the information we require from the Commonwealth Oil Refineries Limited. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - Exactly, and the Government will fall down on its job if it does not obtain that information. The Scullin Government was defeated because it would not appoint a royal commission to do what could be done by a departmental inquiry. We have in the public departments men who are capable of performing this service. If the representatives of the Commonwealth on the Commonwealth Oil Refineries Limited are not capable of learning the facts, it is the duty of the Government- to recall them. The biggest part of our petrol and oil supplies comes from the United States of America, with which country our trading positionis so serious as to warrant any action by the Government to counteract it. Another commodity that we cannot produce in this country, so far as I know, is tea. 2297 K7P 0 0 COLLINGS, Joseph Senator Collings - Tea can be grown in Australia. 2297 JVF 0 0 DOOLEY, John Senator DOOLEY - As, with a couple of exceptions, we can produce all necessary commodities, we may live entirely without the assistance of the outside world. I consider that Australia is a child of the British Empire, and every child which fends for itself has the approval of its parents. But we are waiting, not only for the parent, but also for our enemies, to tell us what we should do, and to see what they are doing. Exchange is a factor which favours the present Government, but did not favour the Scullin Government from the outset of its career. When the Scullin Administration endeavoured to increase the flow of money in this country, by releasing credits, the party that now comprises the Government was opposed to it; but, immediately that party obtained control of the treasury bench, it agreed that the banks should increase the exchange rate, and that had the same result. When we proposed to take similar action, Sir Robert Gibson was called to the Bar of the Senate, and was asked if there were no other way out. That, at all events, was the excuse offered by the then Opposition, who knew in their hearts that they were doing wrong, and that they had no case. 2297 K2L 0 0 REID, Matthew Senator Reid - Was not that action taken in order to obtain information? 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - The questions to be asked were handed toSir Robert Gibson before he reached this chamber. 2298 JZD 0 0 FOLL, Hattil Senator Foll - No. 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - The then Leader of the Opposition (Senator Pearce) admitted that he gave Sir Robert Gibson some idea of the questions that he would be asked. Honorable senators know perfectly well that in view of the straitened financial position of Australia at that time, the Scullin Government had no alternative but to increase the tariff in a desperate attempt to rectify the adverse trade balance. 2298 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - It was panicstricken. 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - There was no panic. The Scullin Government did more than this Government has done to provide employment for the people. This country cannot turn the corner to prosperity until the problem of unemployment is at least partially solved. The tariff can be used to some extent to relieve unemployment, but it is merely a temporary palliative. Although we have hundreds of thousands of people unemployed, imports are still flowing into this country. If we are to provide employment we must manufacture our own requirements, and by increasing the wages bill, more money will be put into circulation, and additional employment will follow. The tariff must be so framed as to give an impetus to Australian manufacturers. Only in that. way can it be of benefit to Australia. 2298 JZD 0 0 FOLL, Hattil Senator Foll - What goods are being imported that can be made here ? 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - Many of the imports that are entering this country could be manufactured here. All of our requirements, with the exception of one or two articles, could be manufactured by our own people. Unless the tariff is used to encourage our secondary industries, it merely provides employment for people in other parts of the world.We should not send a pound of greasy wool out of Australia. Our wool before it is exported should be scoured in order to save the freight on the grease. It is said that a suit of clothes contains 7 lb. of wool. The actual worth of so much wool at1s. a lb. is only 7s., whereas we pay £7 or £8 for the complete suit. 2298 K2L 0 0 REID, Matthew Senator Reid - The overseas manufacturers of wool will not purchase scoured wool if they can obtain greasy wool. 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - They make a greater profit by doing their own scouring. 2298 JZD 0 0 FOLL, Hattil Senator Foll - They do not. They prefer to do their own scouring. 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - I have heard some honorable senators say that wool is sold on the open market, and is subject to genuine competition, but I contend that there is no competition, because, usually, the wool is sold in split lots. I am against sending either greasy or scoured wool out of Australia. We should manufacture woollen clothing and export it overseas. I come now to the question of the trade balance and the payment of our overseas obligations, particularly to Great Britain. For the eight years during which the Bruce-Page Government held office, our adverse trade balance averaged £14,000,000 annually. The Scullin Government had every justification for taking drastic action to rectify that enormous adverse trade balance.In order to rectify the trade balance, and, in addition, to meet our overseas commitments amounting to some £50,000,000 annually, that Government found it necessary to place a tariff barrier round Australia. Any country which requires our wool and wheat will buy those commodities, no matter how high our tariff wall may be. Sentiment does not enter into business, and that was clearly shown when Great Britain bought wheat from Russia merely because the price was lower than that of dominion wheat. We have in Australia a great opportunity to expand our home market. We have 100,000 men and women unemployed and not in a position to purchase Australian manufactures. They cannot even afford to buy boots. In prosperous times, Australia was able to manufacture in six months its requirements of boots for twelve months. And what would happen to the local boot manufacturers if imported boots were allowed to enter this country free of duty? 2298 JZD 0 0 FOLL, Hattil Senator Foll - Who has suggested that imported boots should enter Australia free of duty ? 2298 JVF 0 0 DOOLEY, John Senator DOOLEY - Honorable senators who support the Government are complaining that the duty of 45 per cent, is too high. They say that the rate should be a fair one, but they do not suggest 20 per cent., 10 per cent., or 5 per cent. Do they think that we can compete on an equal basis with low-wage countries, and, at the same time, maintain our standard of living? 2299 K7P 0 0 COLLINGS, Joseph Senator Collings - They will not be happy until our standard of living is reduced. 2299 JVF 0 0 DOOLEY, John Senator DOOLEY - They will.be most unhappy if ever this country is called upon to compete on an equal basis with low-wage countries. 2299 JZD 0 0 FOLL, Hattil Senator Foll - As a matter of fact, it was the present Government which prevented Japanese gum boots from being imported into Australia. 2299 JVF 0 0 DOOLEY, John Senator DOOLEY - It took this Government a long time to make up its mind whether it would continue the embargo placed, by the Scullin Government on the export of our stud sheep to Russia. As a loyal Australian, I am prepared to do everything within my power to make this nation prosperous. Our duty is to put the interests of our own manufacturers before those of foreign manufacturers. If we are to maintain a favorable trade balance, and meet our commitments abroad, we must send out of this country at least £15,000,000 worth of goods over and above the value of our imports. The only way in which we can meet our overseas obligations is by the export of gold or goods. The Scullin Government changed an adverse trade balance of £14,000,000 annually into a favorable trade balance of £11,000,000. That was a tremendous achievement of which the Labour party is justly proud. But if we fill the warehouses of this country with imported goods, we shall, within a few years, find ourselves in the position which faced the Scullin Government when it took office. We shall have an enormous adverse trade balance, and practically no money in the Treasury with which to meet our commitments. We shall then be forced to use that money for the purpose of paying interest to those who have accumulated the credit, and the burden will be heavier than before. I have here some figures prepared by the Commonwealth Statistician showing how our trade has gone against us over a number of years. 2299 JYH 0 0 ELLIOTT, Robert Senator Elliott - Will the honorable senator also give the employment figures in secondary industries over the last few years ? 2299 JVF 0 0 DOOLEY, John Senator DOOLEY - There has been an increase in unemployment, I do not deny, but I am not for a moment endeavouring to trace a connexion between bur overseas trade balance and our domestic unemployment situation. The honorable senator knows very well, if he would admit it, that the tariff is not responsible for unemployment, or for driving the people from the country to the city. The fact is that there is little employment offering in the country for our people. Some mention was made of rabbittrapping, and perhaps if the Government would pay a bounty of 2d. or 3d. a pair on rabbits, more trapping would be done. The figures prepared by the Statistician are as follow: - It will be seen, therefore, that our adverse trade balance has averaged £14,000,000 a year over this period, equal to a deficiency of ll£ per cent, on our imports. That was the position which confronted the Scullin Government when it assumed office, and that was one of the reasons why the tariff was raised. Even at that time the warehouses throughout Australia were full of imported products. Employment might have reacted more quickly to the measures taken by the Scullin Government had it not been for the stocks of accumulated goods. The manufacturers in Australia could not get going properly because, while those accumulated stocks remained to clog the market, there was not sufficient demand for the locally-made article. . Had it not been for this, the Government's hope that employment would be immediately found for 100,000 people might have been realized. For the two years following the appointment of the Scullin Government, the trade figures were as follow : - That is the justification of the Scullin tariff. It is necessary that we should do even better than that if we are to balance our national budget, and meet our interest commitments abroad. That is the allimportant question facing Australia today. Everybody agrees that our troubles are largely caused by the enormous interest bill we have to pay, and the taxes levied to meet it. 2300 JYH 0 0 ELLIOTT, Robert Senator Elliott - Taxation represents 28 per cent, of our production. 2300 JVF 0 0 DOOLEY, John Senator DOOLEY - That is so. If we now reverse the Scullin Government's tariff policy, our overseas indebtedness will continue to pile up. We shall have to fund our overseas indebtedness, and the interest on that money will be added to the interest bill we already owe. How, then, can we ever hope to get" out of our difficulties? I believe that Great Britain would appreciate any move we could, make with a view to coming to some satisfactory arrangement for meeting our obligations. We have no desire to repudiate our debts; but if Great Britain, or any other country, is going to make a dumping ground of Australia for its surplus products, we shall have to repudiate. We shall be forced into such a position that it will be impossible .for us to pay. That is one reason why we should preserve the essentials of the Scullin tariff; the other, of course, being that it is necessary to provide employment for our own people. 2300 JYH 0 0 ELLIOTT, Robert Senator Elliott - What about reversing the process, and looking for secure markets for our products ? 2300 JVF 0 0 DOOLEY, John Senator DOOLEY - I appreciate the difficulty of finding markets, but the honorable senator evidently loses sight of the important fact that most countries in the world to-day are looking for markets abroad just as we are. They are all seeking some place in which to dump their surplus products. Because - of the improvement of machinery, and of production methods due to amalgamations, &c, goods are being produced in larger quantities, and at cheaper prices, than ever before, and all the producing countries are desperately seeking a market for their output. We realize, of course, the stupidity of trying to sell wheat to Argentina, or rice to China, although we already have a surplus of rice in this country after only a year or two's production. Even Great Britain has at last decided to erect a tariff wall, a fact that is causing a good deal of anxiety to other countries. She has determined that she no longer will be a dumping ground for goods from other countries. I was reading in the press the other day that, since Britain had taken measures to protect her local primary producers, the price of pork had increased by 50 per cent. Britain is learning that she can produce a great deal more from the land than was thought possible. That brings me to the subject of placing people on the land in Australia. From the speeches of some honorable senators, it would appear that, in order to solve the unemployment problem in the cities, it was only necessary to tell those who are out of work to pack up their kit and get on the land. I remind honorable senators that, even the country towns of New South Wales, and probably of the other States too, are, to a large extent, land-locked. The big land-owners control the land right up to the doors of the towns, and, even if the small man is willing to go on the land, he can do so only by paying so high a rent to those who own it that it would not be worth his while. If honorable senators really wish to know what the position is in regard to land, let them note the number of applications received whenever blocks of land are thrown open for selection. They will then realize how many thousands are anxious to get land, and how little land is available. The Labour party realized years ago that it was necessary to break up the large estates. With that end in view, it imposed the land tax, which resulted in the breaking up of large holdings, and the placing on the land of many persons who previously had no hope of ever getting there. If the Government wishes to get people on the land it should make land available on which they can settle. If it will not do anything to improve the lot of the man on the land, there are many "ways in which relief can be given. It should tax land-holders who are not producing. There is no need to find a market for the commodities now produced. There is already a market here, but the Government should make it possible for the Australian people to purchase the goods they require. The only way out of the difficulty is to provide them with profitable employment. The protection of our secondary industries is a means by which employment can be provided. I support the second reading of the bill, because I realize that the duties which it imposes do not differ very materially from those imposed by the Scullin Government. If I had my way I would prohibit the importation of all goods that can be manufactured in this country, and in doing so I would be rendering a great service to Australia generally, and to the working class in particular. 2301 KMK Tasmania 0 0 GRANT, Charles Senator GRANT . - I make no apology for quoting from the draft annotated agenda prepared by the preparatory commission of experts for the World Economic Conference now sitting in London, to which reference has already been made by the Minister in charge of the bill (Senator McLachlan) and Senator Millen. I regard this draft agenda as a document of great importance. It should be published in full, but I regret that that is impracticable. 2301 K0F 0 0 PEARCE, George Senator Sir George Pearce - It is not the property of the Government. 2301 KMK 0 0 GRANT, Charles Senator GRANT - I understand that that is the position, and that to publish it in full would be a breach of faith. It is advisable, however, that certain extracts from the report should be incorporated in Hansard, particularly in connexion with tariff matters which we are now debating. When discussing tariff matters we should not restrict ourselves to particular customs duties such as are embodied in this bill, but should also consider the manipulation and regulation of exchange, quotas, embargoes, bounties and subsidies, all of which could, I think, be covered by this bill. I shall endeavour to confine my remarks to one or two of these subjects. According to a statement on page7 of the agenda to which I have referred, the main questions for the conference as set out in the. Lausanne resolution of 15th July, 1932, were as follows : - Financial questions - Monetary and credit policy. Exchange difficulties. The level of prices. The movement of capital. Economic questions - Improved conditions of production and trade interchanges, with particular attention to tariff policy. Prohibitions and restrictions of importation and exportation, quotas and other harriers to trade. Producers' agreements. On the same page the following paragraph appears: - In stressing the necessity for concerted action, we do not wish to suggest that nothing can be accomplished before the conference meets. On the contrary, the success of the conference will depend in a great measure upon the vigour with which the participating governments enter upon preliminary negotiations in the meantime. The prospects of substantial all-round success in the necessarily complex and multilateral conference discussions will be greatly enhanced if, in the intervening months, preliminary negotiations have cleared the way for reciprocal concessions. This document was issued on the 20th January, 1933, but what has happened since then? Many countries have raised tariff and other barriers in order to give them something with which to bargain at the World Economic Conference. Germany, for instance, has declared a moratorium on all debts due before 1931. France has imposed many quotas, especially against British goods, in order to provide her with some bargaining powers at the conference. The United States of America seems to have deliberately devalued the dollar for the same purpose, and Japan has also devalued the yen to such an enormous extent that at present it is worth something in the vicinity of ls. 3d., instead of its normal value of approximately 2s. sterling. 2302 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - It has been down to ls. 2d. sterling. 2302 KMK 0 0 GRANT, Charles Senator GRANT - The devaluing of the yen has been the means of attracting a tremendous amount of foreign trade to Japan. During the last few weeks I have passed through several foreign countries and some towns in which there is practically free trade. In Port Said, Aden and Colombo, I found that practically all the goods sold were of Japanese manufacture, and that the prices were so ridiculously low that trade with other countries had practically ceased. This is likely to continue so long as Japan or any other country obtains trade by the artificial means of manipulating its currency. I also had the privilege of attending an important international conference held in Rome early in April of this year, at which many of the subjects mentioned in the agenda were discussed. The decisions reached at that conference, which consisted of delegates from 28 countries, were sent on for further discussion at the British Economic Conference now being held in London. At the conference in Rome it was found that customs barriers, and, in fact, all barriers to international trade, constituted a difficult problem. It was rather peculiar to hear the views expressed 'by some of the delegates as to what they considered the right way in which to obtain some benefit or improvement in world conditions. They all had the same idea of getting as much as they could, and of giving away as little as possible. I am very much afraid that we shall find a similar policy adopted at the World Economic Conference now being hold in London. It will be practically impossible to reach an agreement on many vital questions, owing to the fact that all countries, with, perhaps, the exception of Great Britain, who is prepared to place all her cards on the table, will adopt the attitude that they are entitled to get as much as they can. I fail to see how it will be possible to reach an agreement on many of the subjects to be dealt with at that conference. In quoting further from this document, I shall confine myself to the manipulation or stabilization of the exchange, as the other points which I intended to mention with regard to tariff barriers have already been ably dealt with by Senator Millen. On page 21 of the report, it is stated that- Thus,- exchange restrictions, and clearing agreements which often follow, constitute an almost .insurmountable obstacle to the circulation of capital, and represent one of the main causes of the falling off in international trade. A return to normal conditions presupposes their disappearance, which is itself conditional, in each of the countries concerned, on the permanent restoration of equilibrium in the balance of payments. On page 23 the following appears: - Restrictions on international trade, whether they take the form of prohibitions or of quotas or licences, have in recent years become exceptionally widespread, and are so numerous that they now constitute an almost insurmountable barrier to international exchanges. They have brought about an unprecedented reduction in international trade, and threaten it with complete paralysis. This document has been prepared by a committee of international experts,' representing different countries whose names have already been quoted. This is a matter which concerns, not only the British Empire, but the whole world. On page 25 the report states that - During the last few years, the situation has been aggravated by the existence, side by side with the system of trade restrictions, of various measures of foreign exchange control. These 'measures fall essentially within the monetary and financial sphere. But in practically all cases they constitute one of the most serious impediments to the exchange of goods, by restricting international payments. Exchange restrictions have also led to the adoption of a large number of clearing, compensation, and barter agreements, and the like. The object of such agreements originally was to enable trade to continue in spite of the restrictions in force; but they have since been given a wider application. Sometimes they operate so as to divert trade into artificial channels, to give artificial advantages to producers in the countries employing them, and to involve discrimination in the discharge of accumulated and current debts, as between creditors of different nationalities. These clearings and compensation agreements have a particularly disruptive influence owing to their tendency to give a purely bilateral character to international commercial and financial relations, and they should be promptly abandoned if normal conditions are to be restored. The advice seems to be that if 'at all possible there should be a more extensive flow of international trade, which during recent years has been severely restricted. In this connexion, we have noticed that every country is endeavouring, as far as possible, to keep trade within its own boundaries. Even the small European countries, which a few years ago had to import practically the whole of their foodstuffs, are now nearly self supporting. I allude, for instance, to Italy, a country which I had the privilege of visiting a short time ago. Until recently, Italy had to import practically all the wheat required to feed the Italian people, but at present every little block of land throughout Italy is being cultivated to the utmost extent, and that country, in the matter of foodstuffs, is now almost self contained. 2303 K6P 0 0 BROWN, Gordon Senator Brown - Would the honorable senator suggest that that production be discontinued? 2303 KMK 0 0 GRANT, Charles Senator GRANT - No, but perhaps with a larger measure of international trade we could take more from Italy of the products she manufactures, and Italy in return could purchase from Australia those commodities which we can produce more economically. I also noticed to my surprise that rice is being produced in Italy. I believe that the Italian people are growing enormous quantities, and I believe economically. 2303 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - In Lombardy? 2303 KMK 0 0 GRANT, Charles Senator GRANT - Rice is being grown in Lombardy and in Picardy. It is being produced on small blocks by means of intense cultivation, as in Eastern countries. It will therefore be seen that, to a certain extent, Italy is becoming self supporting in regard to those commodities essential to the people. We have to consider the cost of production, and the capacity of the world to consume. After all, the fact remains that the prices of certain commodities have been so low that it has been impossible for the producers to purchase to the same extent they did a few years ago. If it is possible to raise price levels to the point at which they stood a few years ago, say in 1929, we should do it, for that would increase the purchasing power of the people, and enable them to buy larger quantities of goods. This would, undoubtedly, help the people on the land, as well as those in the cities. I am in general agreement with the tariff policy of the Government, but, naturally, I reserve to myself the right to criticize certain items, and to vote against them if I think it necessary. I should like to see some of the duties reduced, especially those applicable to articles needed by the primary producers. As our primary producers must sell their products on the markets of the world at world prices, we should make the goods they must buy available to them at the lowest possible price. I shall support the motion for the second reading of the bill. 2303 KS9 Queensland 0 0 MACDONALD, John Valentine Senator MacDONALD . - I wish to discuss certain statements made by the Minister in charge of the bill (Senator McLachlan), which seem, so far, to have escaped the attention of honorable senators. I have had passages with Senator McLachlan on various occasions, but I congratulate him upon the excellent second-reading speech which he delivered. As he said, the tariff is one of the most important subjects which we could discuss in existing circumstances, and we should do everything possible to deal with it in such a way as to relieve the existing economic strain. The Minister, and also Senator Millen, stated that tariff barriers which caused too strong an emphasis to be placed on economic nationalism were one of the main causes of the difficulty which the world is now facing. I contended in the speech which I delivered on the motion for the first reading of this bill, that our greatest trouble originated long before France began the depreciated currency race. It began when the bondholders, whose activities are centred principally in New York and London, commenced a deliberate squeeze with the object of bringing about a higher return or favorable re-adjustment in regard to the huge amount of interest payable on the thousands of millions of pounds invested in loans to other countries. The second main cause of our troubles - there are, of course, contributory causes - was the cessation of lending by the creditor countries. 2304 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Is not the root cause the war ? 2304 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - It was one of the main causes, because it increased the debts of many nations, and so increased the interest bill. The war undoubtedly caused a revolutionary change in the position of many nations, and converted some debtor nations into creditor nations. It has been said, with truth, that while it took Great Britain 100 years to accumulate a credit of £4,000,000,000 in her world trade, it took the United States of America perhaps fifteen years to convert her debt of £2,000,000,000 into a credit of £4,000,000,000. In other words, in the short period of fifteen years or so, the United States of America was changed from a heavy debtor nation into a strong creditor nation. There are, of course, other creditor nations, like France; but iri consequence of the wai", the financial authorities of the United States of America took the box seat, and became a leader in a race for financial supremacy. At present the United States of America is actually in the position of a world dictator on finance. Undoubtedly New York and London control the position. This view is supported by men of such standing as Professor Walter Murdoch, who, in a recent address to the members of the Perth Rotary Club on " The Art of Swindling ", declared that the basic swindle of our time and the cause of the present distress was the banking system, which could create and destroy money at the will of a, small group of men who had become the irresponsible lords of the world. Professor Murdoch is a respectable and honoured citizen. He is uncle of a much younger man who was honoured with a knighthood early -this month. Professor Murdoch is not an economist, but a literary authority of undisputed ability. In the course of his address, he quoted from a leading article of the London Times, to the effect that the economic experts had expressed so many conflicting opinions and had given such contradictory advice that it seemed to bc time to turn to men not professing to be experts and consequently unhampered by preconceived theories. Some honorable senators opposite seem to think that we should offer worship at the feet of the so-called economists of the present day; but I disagree with that view. The mere fact that a man has won the degree of bachelor of the science of economics or has proceeded even to the degree of doctor of that science, is not a sufficient reason for accepting his statements holus bolus. We all know that many of the economists of the 19th century who, in their day, were regarded as outstanding leaders, lived long enough to see their pet theories discredited. Some of them swallowed their most dogmatic utterances. John Stuart Mill, as we all know, became practically a socialist. There is no reason, therefore, why we should accept without question even the words of the economists who prepared the annotated agenda for the World Economic Conference from which the Minister in charge of this bill quoted at' considerable length. 2304 K2Z 0 0 BRENNAN, Thomas Senator Brennan - To whom docs the honorable senator think we should look for advice? 2304 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - We should look to those who have passed through the mill of practical experience. They are often able to give a better reading than university professors, who deal in theory and not practice. 2304 JZ6 0 0 O'HALLORAN, Michael Senator O'Halloran - W - We should certainly apply our %own common sense to the advice that the economists give us. 2304 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - That is so. Experience is the best teacher. I do not want to deal with extraneous subjects, but I must say that I have been amused to read some of the comments on the happenings at the recent test matches between England and Australia, by persons who did not see the matches. Those who played the game and saw it played know very well what happened; and they also know the effect of body-line bowling. So I suggest that those who pass through the mill of practical experience in our financial and economic world know exactly what is happening. At present, a veil hides from the general public the happenings in the banking parlours of the world. With all due respect to those who prepared the annotated agenda for the World Economic Conference, I say that we shall not solve the [problems which confront us unless we bring practical experience to the consideration of them. That is the point that Professor Murdoch made in the address which he delivered. I hope I shall not be charged with seeking to curry favour with the Government when I repeat that, in my opinion, the Minister in charge of this bill delivered an excellent address in moving the motion for the second reading of the measure; ho gave us much information and thoughtful comment on the various solutions offered for the removal of the present world disaster. No one, of course, will agree with all that he said, for no two senators will think exactly alike on those subjects. I shall quote, briefly, extracts from the Minister's speech on which I wish to enlarge. The honorable gentleman, in dealing with debtor and creditor nations, said - It may perhaps be said that the foundations are now being laid upon which, ultimately, some new superstructure may be erected by the forcible and even temporarily disastrous process of levelling the too great inequalities between debtor and creditor nations. The surpluses of the creditor nations arc being destroyed; the debtors are, by default, by accommodation with their creditors, or by a reduction of imports, striving to bridge the gap in their debit balances. 2305 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - The experience of the United States of America affords a good illustration of the destruction of the surpluses of creditor nations. 2305 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - That country so managed its currency as to help it to get upon its feet again, and is still quite strong enough to get along without outside assistance, but there is no doubt that the debtor nations are suffering. When that policy was put into operation, the people of the United States of America necessarily suffered, too, and the effect of the policy was felt throughout the world. When creditor nations ceased to lend, development was arrested, and world industry was almost brought to a standstill. A few years before the world crisis came to a head - about the end of 1928, or the beginning of 1929 - about £150,000,000 was being lent annually to other nations by the United States of America, and when that stream of capital ceased to flow, the effect on development was tremendous. A whisper went through the banking" parlours that development was not to be undertaken ; in other words, that deflation was to take place. Proof of this is found in the fact that Australia was unable to borrow from Great Britain, although plenty of money was available there. The private banks in England are bursting with it, and they have earned large dividends in recent years, even as high as 18 per cent. That, I maintain, is one of the reasons why the nations have been forced by deflation into the fierce battle of raising tariffs, one against the other. While the Minister's statement admits the lending policies of the great creditor nations as one of the considerations to be discussed, it proceeds as follows : - There is no way of escape by lending more money to nations already too deeply in debt - like individuals, they must live within their means - but in the urgent necessity for- finding this new equilibrium, all nations have been forced to accept a lower standard. I shall make one quotation from The Sydney Sun and Guardian, of the 4th June, 1933. The financial editor of that newspaper, Mr. W. J. Jackson, states, as the Minister rightly said, that the origin of the world trouble is mainly the war. He remarks - The origin of the world's present troubles is the war. The original trouble has spread like cancer until each branch - tariffs, quota, prohibition, lending policy, debts and currency - is quite capable of killing the world economic body. This writer emphasizes the importance of the lending policy, but I place it second only to the deflation order that was sent throughout the world by those who control the credit system. Mr. Jackson goes on to speak of the " erratic " currencies of the world, but I do not wish to deal now with that matter. The Minister further stated - Democracies like short cuts and simple remedies. It is comforting to them to believe that the disasters that have overtaken the world are the inevitable outcome of private enterprise, rather than of war and its aftermath, and that the path to recovery is through a wider and wider extension of governmental and other bureaucratic activities! Was not the war the result of private enterprise?One of the suggestions of Mr. Davidson, the general manager of the Bank of New South Wales, in his latest circular, was a recommendation that one way out of the trouble was investment of money in public works. He considered that the time was ripe for the consideration of this matter as one means of assisting to overcome the present internal difficulty. 2306 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Did he mention the particular activities that should be proceeded with? 2306 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - No. 2306 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - None of them does. 2306 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - But those who have read Mr. Davidson's circular know that the suggestion did not originate with him. I think that he said that an extensive public works policy would provide a means of getting money iinto circulation. During the debate in this chamber last year, I suggested that we should control our internal loans and our internal currency to the extent of launching a big programme of public works, and I mentioned such proposals as the unification of railway gauges, which was estimated to cost £57,000,000, the construction of a railway from Queensland to the Northern Territory - this has since been supported by a private syndicate, who asked the Federal Government to give them the right to build such a line - and also harbour improvements. I do not suggest for a moment that I have exhausted the list of works that could be profitably undertaken. Various suggestions have been made to me since, such as land-settlement propositions, which are excellent in their way. I was much amused, on reading the Canberra Times, when an honorable member in another place spoke on the subject of the need for uniformity of railway gauges in Australia, which I had suggested as a necessary public work which would provide a means of useful employment, that this was regarded by that journal as a new constructive suggestion. The writer was, apparently, unaware that I had mentioned that matter and other constructive proposals for our present troubles in this chamber. We should take a hand in the matter of assisting internal recovery, as Mr. David son remarked, by government investment. That gentleman may not be in agreement with the Labour party as to the best means of giving effect to that policy ; but, if the Government of the day would adopt an extensive public works policy, it would ease the position in Australia to a large extent, and indicate to the World Economic Conference that Australia, at any rate, considers that the policy of deflation, which has been practised for the last three or four years, should come to an end. Further on, the Minister said- The true escape lies in an increase of prices, in a solution of the short-term debt problem, and in the adjustment, where necessary, of the long-term indebtedness. An increase of prices connotes inflation. The Scullin Government proposed an internal loan, or, if money could be obtained at the old rates, the borrowing of it from creditor countries such as Britain and the United States of America. The fact seems inescapable that we must have an increase of prices, for otherwise we shall continue for a long time to suffer the terrific injustice of paying interest on our war debt at rates which would make it necessary to produce two bushels of wheat where one was previously sufficient to meet our liability. Undoubtedly, some adjustment of our long term indebtedness is required. The Minister's statement includes the assertion - Exchangecontrol cannot be withdrawn before the return of confidence, and confidence waits on the withdrawal of exchange control. I ask the Minister, who destroyed confidence? He cannot blame the workers or the producers for that, and I do not imagine that he will blame any section of the Australian people, not even the secessionists of Western Australia. I regard the secession movement in that State as an evil manifestation of the process of deflation which was begun at the other end of the world. I regard Senator Johnston as a true Australian first, and as an imperialist afterwards, but, owing to the world trouble, like his State, overwrought. The Minister said a little later - It is generally conceded by students of economics that one of the principal causes of the continued deadlock in the world depression is the discrepancies between costs and selling prices. Opinions differ as to the host means of breaking this deadlock. Two alternative lines of policy, in particular, are being widely discussed. So far as the discrepancy between costs and selling prices is concerned, the workers have received their share of the kicks due to the reduction of costs, for their wages have gone down by at least 30 per cent., even where they have been in constant work, while those who have been unemployed have suffered frightfully. They have lost their homes, and any savings that they may have accumulated. Personally, I have had the bitter experience of suffering loss on account of the present depression. Undoubtedly, the workers have had more than their share of the misfortunes consequent upon it. I believe that the problem is capable of solution ; but those who control the financial situation will not be satisfied until the workers' standard of living is so depressed that the workers are carrying the whole burden of the £40,000,000 of war costs. The Minister then dealt with other measures that he considers should! bt adopted in order to restore equilibrium. The decline in commodities prices, due to the policy of deflation that has become general throughout the world, has been directly responsible for an enormous increase of unemployment in all countries, and ha3 imposed on the working classes a burden heavier than that on any other section of the community. The Minister went on to say - At the moment there is little sign of any agreement upon a single heroic effort- - I like that word " heroic " ! - either to raise the average price level, or to scale down costs. While prices for commodities were high, and while creditor nations, such as England and the United States of America, continued the export of capital, Australia, in common with other debtor countries, was able to carry the load of world debt without, perhaps, undue effort. But, in recent years, there has been- a remarkable change in the situation, duc to the adoption of the policy of deflation. Doubtless, it will be within the memory of even Senator Hardy, who, I understand, first undertook the serious study of politics in 1929, and, I may add, is making a very good fist of it, that there was a boom in prices for several years after the war. It is true that there was a slight recession in 1921-22; but, generally speaking, the world appeared to be in a prosperous condition until about 1928, when those controlling the "money power, to bring about a certain result, conceived the grand scheme of depressing prices and checking the flow of credit. It is thus apparent that the war was not the immediate cause of the widespread depression. 2307 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - It would have been better if all nations had shortened sail immediately after the war. 2307 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - -I agree with the Minister that nations, like individuals when they incurred debts, should then have shortened sail; in other words, they should have cut unnecessary expenditure in order to discharge their obligations. That happens to be my position at the present time. But the nations did not take that course. Instead, they continued their wild career of lavish expenditure, believing, doubtless, that the good times would last indefinitely, and it is true to say that, for a number of years after the war, certain sections of the people in every country had a very good time. Now all nations have to face the realities of the situation, and make up their minds what they were going to do about it. In the controlling of world monetary policies, governments have not nearly so much power as they are popularly supposed to possess. Were it otherwise, I should be inclined ' to berate the Government more fiercely than I have hitherto attempted to do in this chamber. We are all, more or less, agents for particular forces, and, when things go wrong, governments, like individuals, have not that full power to right them which many people suppose that they have. Despite the heavy debts incurred by all countries during the war, financial difficulties did not appear to be imminent until 1928, when those in control of the money power began to restrict credit, throughout the world. What happened in Australia was part of the general scheme. It has been suggested tha_t this country, which appeared to be the most prosperous of the nations about that time, was the first to' feel the shock of this changed monetary policy, when those who were responsible for it thought, probably, that their interests would 'best be served by a. deflationary movement, which would have the effect of depressing commodities prices and wage standards. The Minister went on to say - But -the probability becomes clearer that there will.be no single panacea. As on the field of battle, so in times of peace,- when grave difficulties confront a country, many causes, other than strategic skill, may be responsible for victory or defeat. It seems clear, on all the evidence) that the relaxing of the grip of world money power on world industry, arid' the continuing of credit by the only nations that can give it, would at least be a very substantial step towards bringing the world back to the position it occupied a few years ago. The Minister quoted at some length from 'the annotated agenda of the World Economic Conference, prepared by a body described ' as a preparatory commission of' experts'." I am hopeful that the pressure of the bondholders and the money power' against 'governments will soon be relieved./' If it is not, complete disaster is ahead for all countries. Australia cannot for much longer continue with its present army of approximately 400,000 unemployed persons. Every father of a son who is out of work knows how serious is this menace. The young people of this country are being ruined through the lack of employment in the most formative period of their lives. I heard recently that one nursing institution had received hundreds of applications from young women for the few positions that were vacant. The same thing is happening in practically every industry in this country. On every hand the surplus of labour is enormous, and since the vast majority of the unemployed are young people, they are not having a fair chance at the starting point of their lives. The Minister, referring to the work ahead of the World Economic Conference, quoted the following from the annotated agenda : - In essence, the necessary programme is one nf economic disarmament. Economic armaments in all countries have been rapidly increasing, because of the stoppage of credit and export of capital, with the resultant damping down of prices. Even in this partly developed country we had to prohibit the importation of many commodities to prevent complete disaster. The Scullin Government, which imposed embargoes and raised the tariff on many items, had this objective in mind. Had there been in power a freetrade government like the Bruce-Page Administration, it would not have given effect to a legislative programme necessary to save Australia. At that critical period of our history the need was, not for protection in the case of any particular tariff item, but for the actual prohibition of importations of many commodities in order to prevent the country from becoming bankrupt. The annotated agenda emphasizes the importance of the greater creditor nations of the world. Dealing with tariff reform, the committee which prepared the agenda states - Positive action in this direction is assured of important support. Countries compelled to dispose of a large proportion of their products, whether agricultural or industrial, on the world markets are most deeply interested in checking the increase of tariff barriers, and in securing their reduction. An improvement in the world economic situation would be facilitated if the debtor countries were enabled to pay their debts by the export of goods and services, and if the creditor countries framed their economic policy in such a way as to maintain the capacity of debtor countries to pay by these means. These creditor countries can expect to collect interest and principal only if they so adjust their financial and commercial policies as to make payment by the debtors possible. This the creditor nations have not clone. They have practically a mortgage of enormous dimensions on debtor countries. If the world is to recover, they must undoubtedly release their grip, and modify their lending and commercial policies. They should give the " Word " - investing it with the full scriptural significance - to their agents throughout the world to ease the onerous conditions that lie so heavily on debtor nations. No one will deny that this monetary dominion is exercised mainly by financial interests in New York and London. Homer Lee, in his well-known book, The Day of Hie Saxon, published some years before the war, pointed out that, because of his ruling world position, the Anglo-Saxon of New York and London controlled the destinies of the world. The Slav danger and the Teutonic menace are now in the background. The day of the Anglo-Saxon has arrived, and all the evidence goes to show that his exercise of the money power must be tempered with discretion, because, if used unwisely, it will bring ruin, not only to the world generally, but also to those who abuse their power. Dealing with tariff policies, the committee which prepared the annotated agenda states - Tariff policy can obviously not be dealt with in isolation. An effective and lasting return to greater freedom of trade cannot be looked for unless -it is accompanied by a general and durable improvement in financial and monetary conditions, any more than a permanent improvement of the financial and monetary situation can be looked for so long as international trade is not freed from it3 chief obstacles. I have not seen the complete copy of the annotated agenda, so I depend for my information upon the long quotations made from it by the Minister in his speech the other night. I am glad to note that it emphasizes the responsibility resting on the great" creditor nations, which, for some years, have been in the world's financial saddle. To bring about an improvement, we must first have a definite alteration of world financial policy. Those in control of it are comparatively few. Probably half a dozen persons, at the most, use this enormous power of deflation throughout the world with its attendant miseries for so many millions of people. Every year, the .advance of science brings the world closer together. It now takes no longer to travel from London to Australia or from Australia to New York than it took to go from Edinburgh to London one hundred years ago. Economically, as well as geographically, the world is being brought together, though racially and linguistically its countries may still be far apart. It is some satisfaction to me to see in this annotated agenda some of the things which I have emphasized in former speeches. Any one who takes the trouble to study the facts and the indiscreet remarks of various important persons from time to time, must realize that the present position of the world has been brought about by a vast organization of capital on the other side of the world. The total population of Australia is not greater than that of some of the English counties. Despite its size, Australia is not so important to the world as is the State of New York in the United States of America - a State that, alone, has over 10,000,000 people. The remarks of Senator DuncanHughes regarding the British Empire were interesting. Australia is a part of that Empire; but what would have been its position had the Great War destroyed the Empire? This country must seek protection outside its borders; and if that protection 'were not forthcoming from the source to which we have looked for it in the past, we should probably have sought it from the United States of America. Australia owes a great debt to the Empire to which it belongs, and, because of that, the people of this country are inclined to swallow without question the policy of Britain. Australia is a grown-up nation, and it should say definitely to the Motherland and to the United States of America that their domination has continued long enough. Although a strong protectionist, I should like to see international freetrade throughout the world, so long as it was properly controlled. The adoption of such a policy would solve the world's troubles, and avert a war every hundred years or so. In dealing with the tariff schedule, I shall do my best to protect Australian industries, with a view to making Australia as self-contained as possible; but I hope that the World Economic Conference now sitting in London will do something for the benefit of humanity in general, so that the workers and producers throughout the world will no longer be ground down by the money forces which now dominate all nations. 2309 K3X Western Australia 0 0 CARROLL, William Senator CARROLL . - This tariff debate is not different from other tariff debates to which I have listened. Whenever a tariff schedule is before the Senate, those who believe in the highest form of protection describe as freetraders who are out to smash Australian industries those who advocate a moderate tariff. Unfortunately, that cry is repeated in a large section of the press of Australia. That accusation is generally directed against the members of the Country party, which is said to be "the most' one-eyed' section in the community,which wants everything possible for itself, but is unwilling to allow other sections of the community any privilege whatever." That that view is not held by all the people of Australia is evident from the fact that this Parliament contains a member of Country party members. In my opinion, there is no such person as a hundred-per-cent. protectionist. Every protectionist whom I have known believes in the highest possible protection for the particular industry in which he is engaged, and in absolute freetrade in the raw materials which he uses Australian manufacturers of cloth would not hesitate to buy their wool outside Australia, if they could get wool of equal quality at a lower price. Yet they howl to high Heaven, and to this Parliament, to protect them against their brethren in England from whom, as it were, they obtained their mother's milk. 2310 K7P 0 0 COLLINGS, Joseph Senator Collings - That is true of everybody. 2310 K3X 0 0 CARROLL, William Senator CARROLL - At the moment I am speaking of protectionists. I hope that in this matter I am as impartial as is any other man. The cloth manufactured in the Australian factory goes to the tailor, or to the manufacturer of ready-made clothing, who, in turn, appeals to this Parliament to provide him with cloth free of duty for manufacture by him into clothing, while, at the same time, he asks that the highest duty possible shall be placed on made-up garments imported from other countries. And so the process continues. I have yet to meet a man who genuinely believes in the principle of protection all round. Like the pious editor of whom James Russell Lowell wrote - I don't believe in princerple But, oh, Idu in interest. 2310 JRW 0 0 CRAWFORD, Thomas Senator Crawford - I know a man who is a one-hundred-per-cent. protectionist. 2310 K3X 0 0 CARROLL, William Senator CARROLL - The honorable senator would make a fortune if he exhibited that man throughout the country. The people would like to see him. SenatorCollings. - No one would dare to show a one-hundred-per-cent. freetrader in Australia. 2310 K3X 0 0 CARROLL, William Senator CARROLL - Senator Crawford gave a novel and extraordinary reason for the inclusion in the Federal Constitution of the sliding scale by which Western Australia was to benefit for five years. The honorable senator said that that provision was inserted in the Constitution in order to enable Western Australia to establish its own industries, so that that State would not be at the mercy of the eastern States. Senator Crawford is, I think, the first man to offer that explanation. 2310 JRW 0 0 CRAWFORD, Thomas Senator Crawford - I have been first in many things. 2310 K3X 0 0 CARROLL, William Senator CARROLL - Unfortunately, the man who is first is not always right. If Senator Crawford will cast his mind back to the time of the framing of the Constitution, he will realize that Western Australia with a handful of people, had a man-sized job on hand. It is to the credit of that State that, instead of giving up the task, it accomplished so much. Senator Rae said that the people in the country should not run away with the idea that a high tariff benefited only the people in the cities. I shall not ask Senator Rae to accept the word of a " semi-freetrader," as I am described, on this subject, but shall read what was said by Sir Henry Gullett when he was Minister for Trade and Customs on the occasion when he introduced the Ottawa agreement in another place. I say quite openly that on whatever other matter Sir Henry and I may disagree, I am in hearty accord with this statement. 2310 JRW 0 0 CRAWFORD, Thomas Senator Crawford - The honorable senator is quoting Sir Henry Gullett with approval? 2310 K3X 0 0 CARROLL, William Senator CARROLL - Yes, because I believe that his utterances on this occasion were honest and sincere. Sir Henry Gullett said : - The agreement will benefitall sorts and conditions of people, and it will make stronger both the Commonwealth and the United Kingdom in a collective sense. That which makes Australia stronger in a general sense and adds in a general way to the strengthof Britain must commend itself to this House, and to the Australian people. But the Australian Delegation, with the full support of the Commonwealth Government, aimed for something nearer and more tangible than a general benefit either to Australia or to the United Kingdom., From the beginning of the preparation for Ottawa until the conference closed, we worked for benefits for our primary producers. We worked in the belief that in the fashioning of tariff in this- country the man on the land, and his employees, have 'hitherto come off second best. They have been given, it is true, compensatory duties and arrangements in an endeavour to balance them up, and, with respect to the local Australian market, that policy has been attended by some success. It will be noticed that Sir Henry does not say that the policy has been attended with complete success. He goes on - But with respect to the great export surplus of primary production the man on the land and those who work for him have been, to state it mildly, somewhat overlooked by this Parliament. It is scarcely an exaggeration^ to say that, hitherto, this Parliament has been in tariff and industrial legislation a twostandard Parliament - a standard for the cities and another standard, very much inferior, for the country. This Ottawa agreement, which I now submit to the House, makes an attempt, belated it is true, but a sincere, constructive and comprehensive attempt to adjust that unfair balance. It proclaims in the first place the inherent right of the country people of Australia and their industries to equal economic consideration with the city people and secondary industries in this Parliament. Next it recognizes the desperate plight of all who are engaged in primary industry at the present time, and their imperative claims to assistance and relief. It is an acknowledgment, too. of the plain, unchallengeable truth, that had it not been for the magnificent fortitude and industry of our farmers and pastoralists, and their unprecedented production and export during these years of adversity, there must have been a total collapse of our whole financial and industrial structure, with a calamitous further increase of unemployment and money available neither for its relief nor for the maintenance of our great social services. We owe our financial, industrial and economic salvation during this crisis to the man on the land. This agreement has been drawn in aid of the man on the land, but it has the supreme merit that, if we aid the man on the land, we aid every agency of industry and business, and employment in the Commonwealth. This charter of rural aid could be a thousand times justified if it carried in it the curbing of other Australian interests to the advantage of primary industry. And then he adds - but does not reduce the protective level of our Australian tariff. That is the considered opinion of one of the leaders of protectionist thought in Australia, and I commend it to the attention of those honorable senators who say that the man on the land is getting all the plums, while the unfortunate worker in the city is being ground to death by the producer. 2311 JRW 0 0 CRAWFORD, Thomas Senator Crawford - "Who said that'? 2311 K3X 0 0 CARROLL, William Senator CARROLL - It has been plainly and openly said in this chamber. A good many honorable senators have quoted from the Ottawa trade agreement in an endeavour to prove that it confers no benefit on Australia, but makes many ^concessions to Great Britain. I have not heard any honorable senator who holds such opinions .quote article 4, which reads - His Majesty's Government in the United Kingdom undertake that the general ad valorem duty of ten per cent., imposed by section 1 of the Import Duties Act 1932, on the foreign goods specified in schedule D shall not be reduced except with the consent of His Majesty's Government in the Commonwealth of Australia. I should like to ask whether, in any part of the Ottawa agreement, Australia has given the British Government the right to ask whether we shall or shall not impose a duty on any article. 2311 JRW 0 0 CRAWFORD, Thomas Senator Crawford - No ; we have left that to the Tariff Board. 2311 K3X 0 0 CARROLL, William Senator CARROLL - I remember that when Senator Crawford was Assistant Minister for Trade and Customs he was one of the warmest admirers and supporters of the Tariff Board. I do not know what has occurred to cause that body to fall from grace in his estimation. I assure honorable senators, if such an assurance is now necessary, that the Country party does not believe in- absolute freetrade. Belief in a revenue tariff is one of the planks in the platform of the Western Australian association to which I belong. A tremendous amount of duty may be collected under a revenue tariff, and some of the duties imposed for the purpose should be high enough to please anybody. What we object to is an excessive tariff which places a burden upon the rest of the community. Some honorable senators will claim that there are no excessive duties, and that no exploitation of the community is taking place. To enlighten them I shall read a report which appeared in the Sydney Morning Herald of the 1st June last, of a case which was heard in the Arbitration Court in Melbourne. It is as follows: - Arthur W. Briggs, secretary of Yarra Falls Limited, Abbotsford, which employs 1,200 hands, said, in evidence, that a reduction of hours to 44 a week would increase wages and overhead costs by from 0 per cent, to 8i per cent. Mr. Sheehan. Your company last year made ?30,000 profit from other investments. Has it ?25,000 invested in the Globe Worsted Mills, ?50,000 in Julias Kayser Proprietary Limited, ?50,000 in Australian Knitting Mills Limited, and ?25,000 in Australian Silks and Cotton? 2312 Were those investments made from accumulated funds?- Partly. I suggest that that word " partly " means 99 per cent. If that is not an excessive profit to be made by an industry that is enjoying great benefit as a result of our protective tariff, I should like a precise definition of the word " excessive ". 2312 K7P 0 0 COLLINGS, Joseph Senator Collings - The honorable senator has never objected to the excessive profits which have been made by foreign companies trading with Australia. 2312 K3X 0 0 CARROLL, William Senator CARROLL - Our only control over foreign exploiters trading with the Australian public is through the medium of the Industries Preservation Act, whose sections the Minister may bring into force without consulting Parliament by imposing a heavy dumping duty on the goods which those exploiters are landing in this country to the detriment of our manufacturers. 2312 JZ6 0 0 O'HALLORAN, Michael Senator O'halloran - W - What was the original capital of the company to which the honorable senator has referred? 2312 K3X 0 0 CARROLL, William Senator CARROLL - I have no idea. That has nothing to do with the case. I am speaking of surplus profits that have been invested in other companies after the parent concern had paid a dividend of S? per cent. 2312 K7P 0 0 COLLINGS, Joseph Senator Collings - The honorable senator has never objected to the profits that were made by the BritishImperial Tobacco Company. * 2312 K3X 0 0 CARROLL, William Senator CARROLL - I have already stated that I object to excessive profits and the exploitation of the people by any company, whether it be the BritishImperial Tobacco Company or any other concern, and I do not retract one word of that statement. I am prepared to give a fair and reasonable tariff protection to any industry that is of benefit to Australia. Objection has been taken to article 9 of the Ottawa agreement, which reads - His Majesty's Government in the Commonwealth of Australia undertake that protection by tariffs shall be afforded only to those industries which are reasonably assured of sound opportunities for success. Surely no reasonably-minded person can object to that! Would any honorable senator advocate that protection should be lavished upon 'a number of abortive industries which have no chance of success, merely as a means of squandering public money ? Anybody who knows anything about farming and pastoral pursuits is aware that a farmer will not rear a defective animal that has no hope of developing into a useful beast, but will knock it on the head, and thus save futile expense. According to those who object to article 9, we should rear and spoonfeed defective industries which, because they are cripples, want more coddling than does a healthy organization. 2312 JRW 0 0 CRAWFORD, Thomas Senator Crawford - Not at all. That clause is an insult to our common sense. 2312 K3X 0 0 CARROLL, William Senator CARROLL - It is plain that those who drew up the agreement on behalf of Australia and Great Britain were aware that, in the past, indiscriminate protection has been lavished on good and bad alike, and that many industries, which could not possibly give a return on the money invested, have taken heavy toll from the people of Australia. As a further instance of the way in which the primary industries have been dealt with, I shall quote from a report of the Tariff Board on butter and cheese, which was issued on the 28th of November, 1927 - The whole of the evidence tended to show that the butter industry is in a stagnant and unpayable condition, and without exception, witness after witness described the lot of the dairy farmer as a constant struggle to make ends meet, and that it was only possible to continue in the industry by utilizing the labour of the wife and family of the dairyman and working unduly long hours. Whore labour is employed it is undoubted that it is paid extremely low wages, and even under the above conditions, it was maintained on all sides that the dairy farm hardly paid its way and did not give anything like a fair and adequate return to the dairy farmer. 2312 K0F 0 0 PEARCE, George Senator Sir George Pearce - The price of butter was then higher than it is to-day. 2313 K3X 0 0 CARROLL, William Senator CARROLL - It was considerably higher. The report goes on to say- After hearing .the evidence, the Tariff Board has arrived at the conclusion that the dairying industry in Australia ' is being carried on under conditions involving long hours to the dairy farmer; that in very many cases the farmers are utilizing the services of the women and children of the family, and that when labour is employed it is receiving an extremely low remuneration, and that even under these conditions the farmer himself is not receiving an adequate return either in wages to himself or interest on his capital. It is useless for any one to say that customs duties have not been increased. It is too painfully evident to all that a small reduction of the duties on tools of trade and the machinery necessary for the production of wheat do not adequately offset the lowering of the price of that commodity by at least 75 per cent. Had the reduction of duties been commensurate with the decline in the return to the wheat-grower, a different story would have been told by Australian manufacturers. This country cannot be righted by inflicting an injustice upon one section, to the advantage of another. Any action must benefit the whole of the community. If the purchasing power of the people is lessened, costs must be reduced correspondingly. I wish to correct the impression in the minds of our friends .opposite, that the primary producer is dependent for a market upon the workers in secondary industries in the cities. The exact opposite is the case. I have nothing to say in disparagement of the home market, which is good so far as it goes; but it falls far short of the requirements of the primary producers of this country. I would remind our friends that the primary producer has the choice of two markets; that he may export what bo cannot sell locally; but that the secondary manufacturer is limited to the local market, and would be in a bad way if it did not absorb the whole of his production, because, so far, he has shown himself utterly unable to compete on the markets of the world, as the wool and the wheat grower have to do. So I suggest that the Government should do its level best so to fix duties that those upon whom Australia really is dependent shall have a fair chance of working out, not only their own salvation, but also the salvation of the rest of Australia. 2313 JZ6 South Australia 0 0 O'HALLORAN, Michael Senator O'HALLORAN . - Having heard the tariff policy of the present Government expounded during the last eighteen months, and having paid particular attention to the proposals incorporated in the bill now before the Senate, one is forced to the conclusion that on this, as on every important matter, the Government is either incapable of making up its mind, or has no mind to make up. The speeches that have been delivered upon the bill probably furnish the reason for the lack of decision, and the hesitation displayed by the Government. The only vital vote so far taken, and the speeches of government supporters^ - whether they be real or nominal supporters remains to be proved by the success or the failure of the Government to pass this legislation in the form it desires - an indicative of a hopeless confusion of thought. In the old days, when 'great forensic battles on fiscal questions were waged in the Commonwealth Parliament, and in the parliaments of the States before federation was established, there was in variably a distinct division of opinion, one element believing in freetrade, and the other favouring protection. Usually, the freetraders advanced other proposals, which in their opinion were better suited to the development of this country; invariably, they were advocates of land value taxation. To-day, however, the charge which Senator Carroll levelled against the protectionist section of this Parliament, and the advocates of protection in this country - that they are not 100 per cent, protectionists - is pertinent to the honorable senator himself, and to many of his colleagues. They are not 100 per cent, anything; they believe in freetrade, free land, and probably, at the bottom of their hearts, free labour. Their code, in its application to the conditions governing the development of industry, is only slightly different from the slave code. Is it to be wondered at that a Government which depends for its support upon persons with such confused ideas, drawn from a party which produces such a multiplicity of opinions that lead nowhere, should be unable to make up its mind on this or any other important subject? During this debate, and on the motion for the first reading of the bill, the domestic quarrel between the two sections that support the Government has been intruded, and another chapter has been added to the famous controversy that has waxed more or less warm for the last fortnight. At the risk that always accompanies interference with domestic quarrels, I consider it wise that at this juncture some observations should be made from this section of the Senate. What took place during the negotiations between the United Australia party and the United Country party has been confused by the welter of assertions, denials, and counter-denials with which the Senate has been regaled for the last fortnight. The story of the quarrel, and of the attempt to patch up a truce between chose two sections, should be permanently embodied in Hansard. But any one who reads the story, which becomes enlarged with each additional testimony, must be hopelessly bewildered as to what was the basis of the agreement. The other evening, Senator Foll, the Government Whip, read at great length a number of extracts from newspapers, which purported to show what had been said by Senator Hardy, Sir Henry Gullett, and Mr. Latham. The excuse that he offered was that he desired to have those statements permanently incorporated in Hansard. I presume that the honorable senator was present at the famous private deputation, which is now said not . to have been private, that took place before Sir Henry Gullett and the other Commonwealth delegates left Australia for Ottawa. As, I presume, Senator Foll was present at the meeting, it is strange that he did not enlighten the Senate and the public generally about what actually transpired there. It is also strange to observe the silence of other honorable senators on this subject. Why have they not given their version of what transpired, and Sir Henry Gullett's reference to the negotiations which took place prior to the election between the United Australia party and the United Country party? Those negotiations must have some bearing upon the tariff bill which we are now discussing. Honorable senators who belong to the United Australia party say that it was arranged that a certain tariff policy should be adopted, but Senator Carroll arid ex-Senator Colebatch say that the arrangement was totally different. The Government denies that it has committed a breach of faith. Senator Brennan, in his excellent contribution to the debate, defended the Attorney-General (Mr. Latham), Sir Henry Gullett and others, but now we find that the apologists for the Government are shifting their ground. First they said that there was no agreement at all, but when it was clearly shown that an agreement had been entered into, they said that it was not ratified by the parties concerned. When it was shown that the Country party did ratify the agreement, the apologists for the Government replied that it had not been proved that the United Australia party had accepted the agreement. 2314 10000 0 0 PRESIDENT, The The PRESIDENT - I remind the honorable senator that reference to that agreement has been disallowed previously in this debate. 2314 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I a I am referring incidentally to the agreement, in leading up to another point. I am concerned, not with the negotiations which took place between the two parties supporting the Government, but with what occurred prior to the last election. I am concerned with the position' of the great manufacturing industries of this country, and the deliberate breach of faith on the part of the Government in framing its present tariff policy. That, ,1 think, is relevant to the bill under discussion. What were the people of Australia led to believe would be the tariff policy of this Government? On that subject the Melbourne Age published a pertinent article on the 3rd September, 1932, much about the time when an important schedule,which is incorporated in this bill, was tabled by the Government. That article reads - Anxious misgivings were yesterday expressed on behalf of manufacturers affected by the latest reductions in the tariff, who view with considerable apprehension the prospect of increasing importations of competitive products from overseas and foreign sources, with consequent disastrous increase of unemployment here. The action of the Lyons Government, and its general attitude to the tariff measures taken by its predecessors in office, are being discussed from many angles. Manufacturers trusted implicitly in the assurances of Messrs. Lyons, Latham and Gullett prior to the December elections, that the party led by Mr. Lyons stood for adequate protection through the tariff for Australian industries. The manufacturers were assured by the present Prime Minister, the Attorney-General, and Sir Henry Gullett that if their party gained office it would . provide adequate tariff protection for Australian industries. The article continues - lu view of the repeated tariff reductions, and the express indications of Ministers that the action already taken represents only a first instalment of a continuous process, with heavy further downward revision of duties, there is now a feeling among manufacturers who trusted these pre-election assurances, that theY have been badly " let down." That article correctly summarizes the position. Behind the back of the Country party the United Australia par tj' made a promise to the manufacturers of this country in order to win doubtful seats like Maribyrnong, Corio, Ballarat and Batman. But this Government, so soon as it gained office, broke its promise, not only to the Country party, but also to the manufacturers, and to-day, it stands discredited in the eyes of every section of the community. Of course, wc can expect nothing else from a government the members of which belong to the United Australia party. Until the people recognize that no matter what name this party masquerades under, it is still the same old conservative gang Ave shall continue to have repetitions of these disgraceful episodes in the political life of this country. 2315 K2Z 0 0 BRENNAN, Thomas Senator Brennan - Can the honorable senator supply instances in which the manufacturing industries have been imperilled because of this Government's tariff policy? 2315 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I s I shall give instances as J proceed with my .speech. Let me quote an extract from the Age of the 5th September, 1932. 2315 K2Z 0 0 BRENNAN, Thomas Senator Brennan - That was before the schedule was introduced. 2315 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - No. No. This article was published after one of the most important tariff schedules, now incorporated in this bill, had been introduced into the House of Representatives. As a matter of fact, it was the second or third schedule introduced. The first schedule, which was practically innocuous, provided for several minor amendments and the removal of some of the prohibitions which had been imposed by the previous Government, but not for the 'purpose of protecting Australian industries. The Age, in a leading article, stated - As far as the tariff is concerned, the Lyons Ministry won the election on false pretences. It is true that some of those who are now Ministers spoke mildly of "tariff reform", but .it required these successive schedules to reveal the political treachery veiled by the seemingly innocuous phrase. One of the oldest, and possibly one of the soundest, of the press organizations of this country made that scathing condemnation of the action of the government of the day, and I shall show justification for that statement when the specific items in the schedules are under discussion. One of the worst features of the Government's tariff-making or tariff-breaking policy is the uncertainty of its future intentions. This comprehensive schedule was discussed for weeks in the House of Representatives, but before ' honorable senators have reached the discussion' on the items the Government has stated that, at the committee stage, the Senate will be asked to agree to many tariff- alterations. How long is this uncertainty to exist? How long are the workers in the secondary industries and the manufacturers to be kept in suspense as to whether they are likely to be ruined or not as a result of this Government's tariff policy? Surely the people of this country should know where they stand on tariff matters. A notable example of the lack of decision on the part of the Government was furnished only yesterday, . when, prompted by the refusal of the Government to disclose the nature of the Tariff Board's report on' the protective incidence of primage and exchange, Senator Hardy moved the adjournment of the Senate to enable him to ventilate a grievance. 2315 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Senator Hardy did not move the adjournment for that purpose, and that would have been known to the honorable senator had he been present in the Senate instead of travelling on the train. 2315 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I - I confess that, owing to the inadequate train arrangements between South Australia and Canberra, I was unable to attend the Senate yesterday, and that my only knowledge of what transpired during the debate was gained from this morning's press. Prom that I formed the opinion that Senator Hardy had threatened to take certain steps if the Government did not climb down from the position that it had taken, and that the Leader of of the Senate (Senator Pearce) said, in effect, "Don't shoot, we will climb down ". In other words, the white flag of surrender was hoisted by the Government, and a promise was made to Senator Hardy and his colleagues that, before the bill was finally passed, the report of the Tariff Board on primage and exchange would be made available to honorable senators so that they might, if they so desired, move further amendments to the tariff. The strange silence observed by honorable senators occupying the ministerial bench shows unmistakably that my conclusions are correct. Although the Government has had the report of the Tariff Board under . consideration for at least three months, it has not yet been able to come to any decision upon it. It is hinted, of course, that after the Government has considered the subject for another month or two it may develop a policy in regard to it. We may then have some more, drastic amendments of the tariff. With such uncertainty, how can it be expected that those engaged in secondary industries will develop their enterprises? Even companies that are prepared to extend the capacity of their plant, increase the number of their employees, and add to the output of Australian manufactured goods, are not likely to do anything of the kind while they are uncertain of the tariff position. Why should exchange be seriously considered in relation to the protective policy of the country? The people of Australia are overwhelmingly protectionist in outlook. They believe that Australian primary and secondary industries should be organized under a well-ordered tariff policy. Their development should proceed along parallel roads. To put it in another way, their development should go hand in hand, for there is undoubtedly an affinity between primary and secondary industries in a country like Australia. Surely we are justified in believing that protection is the permanent policy of this nation ! The exchange rate is a fluctuating quantity which should not influence tariff considerations. In the final analysis is it not a fact that just as the exchange places another rail on the top of our tariff wall, and so helps to prevent the undue importation of foreign goods into Australia, it also automatically increases the prices of primary products in Australia, and so helps to add to the cost of the raw material which the Australian manufacturers use? In my opinion, one condition about balances the other, and this makes it unnecessary for us to consider the exchange in its relation of protection. A notable feature of this debate has been the absence of adverse criticism of the tariff policy of the Scullin Government. Prior to the last election, the Minister in charge of this bill (Senator McLachlan), the Leader of the Government in the Senate (Senator Pearce) and other honorable gentlemen opposite thundered forth denunciations of the Scullin tariff policy. Extracts from their speeches were cabled overseas, and telegraphed to all parts of Australia. After such a furore then, it is remarkable that there should be such a strange silence now. The fact is, of course, that the Scullin tariff was sound, and that it did what it was designed to do. 2316 JYH 0 0 ELLIOTT, Robert Senator Elliott - We have 1,200 fewer factories to-day than we had two years ago. 2316 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - S - Statistics are queer material. Classifications are changed from time to time. I remember that on one occasion a certain government in South Australia, which desired to convince the people that the State had progressed under its administration, provided that butcher shops should be reckoned as factories. In consequence, the figures showed that the number of factories as well as the number of employees had increased enormously. 2316 JYH 0 0 ELLIOTT, Robert Senator Elliott - We have 131,000 fewer persons employed now than when the Scullin Government was in office. 2316 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - T - That change has occurred in the last two years, during eighteen months of which the present Government has occupied the treasury bench. 2316 JYH 0 0 ELLIOTT, Robert Senator Elliott - We are paying £35,000,000 per annum less in wages now than we paid then. 2317 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - The The honorable senator's interjections all support my argument. The Scullin tariff policy corrected our adverse trade balance, but in the last eighteen months this Government has been engaged upon a tariffreduction . and industry-wrecking policy which has had the consequences indicated by the honorable senator's interjections. The Scullin tariff policy was intended to effect two main purposes. Duties were imposed in order to protect our secondary industries, so that they should become permanent, and prohibitions and surcharges were imposed to correct an adverse trade balance which, we hoped, would be only temporary. We wished to check the flood of imports which had proceeded almost without interruption while the previous Government was in charge of the affairs of the country. Illuminating figures were quoted bySenator Dooley this afternoon, showing the fluctuation of our exports and imports of merchandise. I wish to examine the position in respect to the balance of trade and the payments against the trade balance. If these two items are considered together, they provide a reliable barometer of national solvency. During the eight years that the Bruce-Page Government was in office, our adverse balance, all items included, was £62,380,000 - that is on the trading side of the ledger, after allowing for the export of gold, bullion, and specie; but in the same period the Commonwealth and State governments became liable to oversea interest payments which totalled £193,445,520. So Australia went to the bad during the eight years of the Bruce Page régime to the extent of £255,825,520. This was the calamitous position which faced the Scullin Government when it assumed office. Immediate steps were taken to correct the position, and in two years the adverse trade balance was converted into a favorable trade balance, all items included, of £65,100,000. Oversea interest payments in the same period totalled £56,000,000. This left a surplus in favour of Australia of £9,100,000. This result was achieved under most disadvantageous circumstances. During the eight years of the Bruce-Page regime the prices of our primary products were relatively high; during the two years of the Scullin régime the prices of all our export commodities, except dried fruits and wine, touched the most disastrously low level ever recorded. In spite of this fact, the Scullin Government rectified the adverse trade balance, and placed Australia in a solvent position. This Government has lifted many of the prohibitions and surcharges imposed by the Scullin Government, and I have no quarrel with it for doing so. Had the Scullin Government remained in office, these imposts would have been lifted immediately they had served their purpose. But this Government has gone much further than that. It has reduced our protective duties to such an extent that our trade balance has been disturbed despite the increase in the price of our export commodities. This increase is, of course, in no way attributable to this Government, but is the result of world conditions, which have been discussed during this debate, and which I do not now propose to describe. Although the national income has increased materially, the tariff policy of this Government has seriously interfered with our favorable trade position. Some interesting figures recently released by our statistical department reveal that, for the ten months from the 1st July, 1931,to the 30th April, 1932, the balance of exports over imports, all items included, was £34,422,000, whereas for the ten months from the 1st July, 1932, to the 30th April, 1933, the favorable balance was £36,193,000. These figures seem to be favorable until we discover that the returns for this year include exports of gold from the gold reserve against our note issue, estimated, in sterling value, at £11,265,636. In other words, a raid has been made on the national savings. Of course, this export of gold cannot be repeated next year. There has, therefore, actually been a serious falling off in Australia's favorable trade balance with the outside world. Sitting suspended from 6.15 to8 p.m. 2317 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I d I desire briefly to quote from one more authority to show the dangerous condition into which Australia is drifting in regard to its overseas trade as a result of the policy of the present Government. I have here a report published in the Adelaide Advertiser, of the 30th of May last, contributed by the Business Conditions Committee of the Melbourne University Old Commerce Students' Association. It states - The debit on the balance of payments for the year will therefore be approximately £1,000,000 stg. We have frequently stressed the seriousness of such a position following upon several good seasons. The position is undoubtedly serious. Nature has been kind to Australia during the last three or four years, and prolific production has, to some extent, counteracted the effect of low prices. I referred earlier to the danger to Australian industry from the dumping of goods in the Australian market by overseas manufacturers. Several countries are making attempts to increase their export trade by depreciating their currency, and granting subsidies On exports. Press reports published during the last month or two have made it clear that in Great Britain steps are being taken to counteract the menace. The Australian Government, however, has evinced no disposition to protect Australian industry. I have been twitted with refraining from making any reference to the effect of the tariff on primary production. I have no desire to evade the issue, and I am convinced that the detrimental effects on the primary industries which are alleged against a protectionist policy are merely so much political propaganda. In the various States, primary industries have been assisted by the construction of non-paying railways, and non-paying water works. These undertakings are not furnishing sufficient revenue to pay the cost of their construction, and the balance has to be made up by taxation. The manufacturing and working sections of the community are thus paying their fair share towards the assistance and development of the primary industries, but the secondary industries have conferred a more direct benefit on those engaged in primary production by furnishing an increasing market for quantities of primary products. I can never understand the mentality of those alleged representatives of the primary producers who favour a policy which would compel the producers to pay freight on their products to convey them thousands of miles to markets in other countries when, by a properly co-ordinated system of development, we could provide a. market in this country for the greater part of what we produce. In order to show to what extent the establishment of secondary industries has already assisted the primary producers, let me compare conditions as they existed in 1907, when the first real attempt at protection was undertaken, with those which existed in 1930, the last year for which complete statistical data are available. In 1907, Australian primary products to the value of £57,646,000 were consumed in Australia, while in 1930, the value had increased to £138,748,000, an increase of £81,102,000. Prices for primary products were practically the same during both periods, so that it will be seenhow tremendous was the increase of consumption during that time. To whom were those primary products sold? For the most part, they were sold to those employed in Australian manufacturing industries, and no better market could possibly exist. Certainly it is an infinitely better market than that which we supplied under the old free-trade policy of importing our requirements From overseas, and trying to induce the people living in low-wage countries, from which we imported, to purchase our primary products. During this period, the consumption of dairy and farmyard products, which are of a particular type, increased from £12,720,000 in 1907, to £40,855,000 in 1930. In addition to that, on £9,000,000 worth of butter exported from Australia in 1930, the Australian public paid, in the form of a bounty under the Paterson butter scheme, approximately £2,000,000 to the dairy farmers. These are facts, not the rhetoric used by the members of the Country party to tickle the ears of the voters at election time. The truth is now recognized by every intelligent primary producer in the country, and in these times all primary producers are intelligent men. The old days when the farmer was not educated, is past. We have now to deal with primary producers of a new type. They have been emancipated, largely as a result of the policy inaugurated by Labour governments, which has resulted in the creation of better conditions and better local markets. The old days of moleskins and German print have gone, as has the time when the farmer went in fear and trembling to the local bank or the local storekeeper, wiping his boots on the mat before entering the august presence. The majority of the farmers in these days realize which fiscal policy is better suited to their interests. Reference was made by Senator Carroll to the cost of agricultural implements. I am in possession of facts which prove that the tariff has not resulted in increas ing the cost of agricultural implements to the farmers. Why did not the honorable senator quote the price of such implements in freetrade countries, or in those overseas British possessions such as East Africa, where there is freetrade? 2319 JNM 0 0 BADMAN, Albert Senator Badman - Why not quote prices which prevailed in 1914? 2319 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I - I propose to quote prices in 1921, and those which prevail under the present tariff. They are as follow: - [Extension of time granted.] It has been said that the products of our secondary industries comprise only 4 per cent. of the total value of our exports. That is not true. A great many commodities classified in the statistical returns as primary products should really come under the heading of manufactured goods. For instance, butter, metals, &c., which have gone through expensive processes in Australia, are just as much secondary products asis the cloth from a woollen mill. I have here a list of about 200 items of this kind, all of which have been processed before export. Their total value is no less than £23,315,484, representing 26 per cent. of the value of our total exports for the year 1930-31. For that year the value of our exports in Australian currency was £89,056,000, of which approximately £65,000,000 represented real primary products. Included in this list is butter, valued at £8,120,165 ; cheese, £244,066; flour, £3,513,573; other cereal manufactures, £419,717 ; preserved fruits, £610,779 ; and lead manufactures, £2,424,808. It is obvious that each of those items has been subjected to an extensive and, in most cases, an expensive manufacturing process before leaving Australia. This shows that Australian industries can be built up under a protective tariff, because these products have to be sold in open competition in the world's markets. "We have the finest lead-smelting works in the world at Port Pirie, in South Australia. These works were established, and have been maintained, under our protective policy. The mines at Iron Knob and Hummocky Hill, in that State, export iron ore in competition with other countries. From £400,000 to £500,000 worth per annum is sent to various parts of the world, and last year substantial consignments were despatched to the United .States of America,- in the teeth of world competition. That disposes of the fallacious argument of the opponents of the protective tariff of this country that only primary products can be exported from Australia under such a policy. This, Government has already done sufficient harm by the amendments of the Scullin tariff which it has made. "Why allow the doubt which exists in the minds of manufacturers and their employees to-day to continue as the result of statements which come from authoritative sources, and are never corrected by the Government, to the effect that this is only the first instalment of its tariff policy? During the course of this debate, we have heard ample quotations from the agenda of the World Economic Conference, showing that honorable senators are at least aware of the fact that, during the next twelve months,, vast and far-reaching changes in the economic position of the world may be made. While the present possibilities remain, we should pursue a stable fiscal policy. Such a policy was implemented by the last Government, and it accomplished the object which that Government set out to achieve. I urge this Ministry to allow fiscal matters to stand until world conditions have become more stable. We could then overhaul our tariff, and see whether it is necessary to increase or reduce duties, so that Australian industries may be carried on efficiently, and so that there may be well-ordered development. We have had an appeal from Senator Duncan-Hughes that we should look to the wide horizon. The members of the party to which I belong claim that they are associated with the only party that, considers the tariff problem from a purely Australian point of view, unfettered by the clamorous demands of any particular section for recognition. We realize that the best interests of the workers, the primary producers, and the manufacturers would be served by a wellordered fiscal policy, which would protect efficient Australian industries, the majority of which are increasing in efficiency, and are well worthy of protection. That would help Australia to become the great country that it is destined to be. 2320 JYH Victoria 0 0 ELLIOTT, Robert Senator ELLIOTT . - My contribution to this debate will be brief. We have been called together to discuss the tariff measure of this Government. We are now in the fourth week of that discussion, and we are still considering the second reading of the bill. The tariff has been debated from every possible angle, and I fail to see that it can be further talked about without a repetition of arguments that have already 'been advanced. It seems to me that the issue was settled last week, when a vote was taken on the amendment proposed by Senator Johnston. There the die was cas.t, and we saw the source from which the Government was receiving support for its tariff policy - from both, sections of the Labour party, and from that honorable senator who has proclaimed from Perth to Sydney that nobody in the Federal Parliament is nearer than he is to being a freetrader, but, having changed his outlook, will stand with the two sections of the Labour party in support of the measure brought down by this Government. The Government has the numbers, and it must shoulder the responsibility for this measure, with all its shortcomings, before the voters of Australia. In view of these circumstances, I wonder why we should continue to waste the time of the Senate, and the resources of the country, in prolonging a debate on an issue that, to all intents and purposes, has been settled by the vote taken here last week. Why waste time in debating the tariff in detail, as, I am afraid,, it will be during the next few weeks? Such a proceeding will be futile If we quickly conclude this debate, we shall remove from the minds of business men the doubt which must be occasioned by its continuance, and we shall give those men an opportunity to understand! the conditions under which they are supposed to try to develop their businesses, and the resources of this country. Then they will be able to concentrate on their own affairs. I shall not say more than that; but I should like honorable senators to consider whether it will not be wasting time to repeat arguments that have already been presented. It should be remembered that the industries of Australia can be graded in order of their prosperity, importance, and permanence, and it will be found that those qualities are in inverse ratio to the amount of government support and attention that they have had. I again appeal to honorable senators, and suggest to them that, as practically the issue has already been settled, we should finish the tariff as quickly as possible, and let the Government take the responsibility for the measure. 2321 K09 Tasmania 0 0 PAYNE, Herbert Senator PAYNE .- Every honorable senator is not gifted to the same degree as Senator Elliott, with ability to condense his remarks effectively ; but I hope that I shall not occupy sufficient time to weary any honorable senator in my contribution to the debate on this most important measure. One has to recognize that, in view of present world conditions, no more important matter than our fiscal policy can be discussed, because on the fiscal policy of the world depends its fate. Much as we in Australia have prided ourselves in the past on being a self-contained country, we are now compelled to realize that we are, and always will be, dependent on the goodwill of other nations. Anything done to maintain the fetish set up by certain sections in Australia will only react to the disadvantage of the Commonwealth. I refer to the fetish which my honorable friends opposite call " protection ", but which i.s more accurately described as "prohibition of trade with any other country ". Under that policy Australia is prepared to sell to other countries, but not to buy from them. Wherever possible, it insists on other nations taking our produce and paying the highest possible price for it. I am pointing out, not the futility of the past action of honorable senators opposite, but the necessity for regarding this matter from a reasonable point of view. 2321 JVF 0 0 DOOLEY, John Senator Dooley - It is a pity the honorable senator does not reason on the same lines as those followed by Senator Elliott. 2321 K09 0 0 PAYNE, Herbert Senator PAYNE - I hope to be able to convert even the honorable senator who now interjects. Those who criticize the Government on this bill are charged with being freetraders; yet I have had no freetrade leanings throughout the whole of my political career. I have always regarded myself as a sound protectionist, but I am careful always to explain the difference between protection anil prohibition. To-day the Government is being assailed by honorable senators on the Opposition side on the ground that it has introduced a low tariff policy, and to justify them in this attitude, they assume that Australia, during the last three years, has had a tariff which has the approval of Parliament. The tariff that has been in operation during that period has never received the approval of this Parliament; it was never submitted to the Parliament by the Ministry which introduced it. That Government acted illegally, because it brought down resolutions providing for a much higher tariff than that now in operation without reference to the Tariff Board, and thus it was imposed contrary to the law of the land. Senator Crawford is a disciple of high protection; no tariff can be too high for him. On tariff matters he takes his place with those honorable senators who are associated with the Labour party. He referred to the Ottawa agreement in such terms as to bring it into contempt. He said that the British representatives drove a hard bargain at Ottawa, and he would have us assume that the people of Australia had been victimized to some extent by the agreement; but it is too early to criticize it, because the ink is hardly dry upon it. We have had no proper opportunity to test it; yet Senator Crawford is prepared to condemn it as being one sided. Personally, I believe that it is one sided, to a considerable extent, and that it favours Australia. Under the articles of the agreement, although provision is made for an increase of our British preferential rates, we find that many of the duties on British goods are high enough to be characterized as ' prohibitive. Yet our primary products are being admitted to Great Britain at preferential rates of duty ranging from 1\ to 10 per cent. Will any honorable senator deny that that provision is in the best interests of Australia? Senator Crawford endeavoured to show that we were not reaping any practical advantages from this arrangement owing to the decline in the prices of our primary products. Surely no one will attribute the drop in commodities prices to anything that was done at Ottawa, or by the British representatives at that gathering. Consequently, statements of that character, made by Senator Crawford this afternoon, if intended as criticism of the work of the conference, are hardly worth considering. The honorable gentleman also went on to say that Australia had always been more or less a protectionist country, and supported his argument by mentioning the development that had taken place in protectionist Victoria prior to federation. I have taken the trouble to examine the Victorian tariff of 1893, and have compared the duties imposed by it with duties on similar items in the present schedule. On one item the Victorian ad valorem duty was 35 per cent., whereas the duty in the present Commonwealth schedule is 110 per cent. ; on another item the Victorian ad valorem duty was 45 per cent., and the present Commonwealth duty is 175 per cent. If, on this basis, the Victorian tariff was regarded as highly protectionist in character, what can be said of the present Commonwealth tariff schedule ? When I spoke on the first reading of the bill I made special reference to the prevailing high duties in the Australian tariff, and endeavoured to show that they could not be defended on the ground that they were necessary for the maintenance of the manufacturing industries concerned. The views which I then expressed are fully supported in the supplementary report of the Tariff Board, issued on the 8th December last, dealing with piece goods, woollen or containing wool. Reference to two or three specific items will be sufficient to show how foolish is the policy which successive Commonwealth Governments have been following. . I cite first the duties on worsted materials for men's wear. The Tariff Board's report shows that while the f.o.b. cost of such material in GreatBritain in 1932 was 6s. 9d. a yard, the landed duty-paid cost, under the Scullin tariff of 2s. per square yard, and 35 per cent, ad valorem, but excluding primage and exchange, was 13s. 4d. a yard. As the Australian manufacturers' selling price for comparable material was 6s. 6d. a yard, the landed cost of the British material, under the Scullin tariff, which honorable senators opposite are defending, was twice the price at which the local article could be sold to yield a reasonable profit in Australia. Another item was woollen material used for ladies' dresses. The landed cost under the Scullin tariff was 9s. Id. a yard, whereas similar material was manufactured in Australia and sold at 5s. 5d. a yard. In the face of these figures, can any one say that the Scullin tariff was reasonable protection? 2322 K7P 0 0 COLLINGS, Joseph Senator Collings - The honorable senator would not object to that margin of profit if it went to British or Japanese manufacturers. 2322 K09 0 0 PAYNE, Herbert Senator PAYNE - I am not objecting to the Australian: manufacturers making a reasonable profit. I am merely endeavouring to show the folly of continuing to worship . this, fetish of so-called protection which, in the cases I have cited, makes the landed cost of British goods so high as to be prohibitive. Such tariff-making is midsummer madness. 2322 K7P 0 0 COLLINGS, Joseph Senator Collings - We should shut out altogether articles which we can make here. 2322 K09 0 0 PAYNE, Herbert Senator PAYNE - I like honorable senators to come out into the open. Senator Collings has just informed us that he would shut out imports altogether. 2322 KOZ 0 0 HOARE, Albert Senator Hoare - Yes, importations of everything which we can manufacture in Australia. 2322 K09 0 0 PAYNE, Herbert Senator PAYNE - What would be the attitude of honorable senators opposite if other countries, upon which we depend for the sale of our surplus primary products, adopted the same fiscal policy and decided to close their doors against importations from Australia ? 2322 KOZ 0 0 HOARE, Albert Senator Hoare - If the prices charged for our products are right, other countries will take them. 2323 K09 0 0 PAYNE, Herbert Senator PAYNE - I am afraid that my honorable friends opposite will have to change their views on tariff matters if we are going to get anywhere worth while. I listened attentively to Senator O'Halloran, who dwelt upon the increased consumption in Australia of locally-grown products during the last 23 years, his purpose being to show that the home market was the most profitable one for our primary producers. The honorable member overlooked, or ignored, the increase of population that had taken place during that period, which accounted for the larger absorption of local production, and also forgot to mention that he and his party have, for many years, set their faces definitely against the admission of migrants. How he can reconcile his advocacy of the development of the home market with opposition to immigration proposals, is beyond my understanding; because, obviously, it would be impossible, without a very large addition to our present population, to absorb any considerable increase of local production. Apparently honorable senators opposite forget the stock from which we have sprung, and overlook the fact that we owe so much to the courage and enterprise of the pioneers who came from the Mother Country to Australia. Senator Crawford, who spoke forcibly, and at some length, to-day, suggested in an interjection when Senator Carroll was speaking, that he had never been enthusiastic about the appointment of the Tariff Board, and, so far as he could remember, had not taken part in the debate on the proposal to set up such a board. The honorable gentleman was correct if, by that, he meant that he had not contributed to the second-reading debate; but he did speak on an amendment moved by Senator Wilson to limit the functions of the board. To-day the honorable gentleman suggested that the Government was allowing Australian tariff policy to be dictated by a board, which, he added, was really superseding Parliament, his general attitude on this question conveying the impression that he did not believe in the Tariff Board having any power whatever. As a matter of fact, the board's function is limited to inquiry and report upon matters referred to it. The act provides that before any alteration is made in the tariff, either by way of increasing or decreasing the duties, or by the insertion of a new item, the proposal must be referred to the board, which, after inquiry, submits its report to the Minister, who may thereupon take the necessary action. As the heavy additional duties levied by the Scullin Government three years ago were imposed without reference to the Tariff Board, they were imposed illegally. On the 27th July, 1921, Senator Crawford spoke to an amendment moved by Senator Wilson, the effect of which was to restrict inquiries by the board to items submitted to it by the Minister, instead of being allowed to make inquiries on its own initiative. I take the following from what the honorable senator said on that occasion: - I regard this clause as vital to the bill. In considering the amendment. I ask honorable senators to pay due regard to the obligation which is imposed upon the board by a subsequent clause, to report comprehensively to the Minister each year concerning the operation of the tariff and the development of industries. I cannot see how it is possible for the board to do that unless its members are free to make such inquiries as they may deem to be necessary. If the clause lie amended in the manner that is proposed, or if it be omitted, we shall divest the board of every particle of independence, and practically reduce it to" the level of a political body, which possibly will deal only with such matters as the Minister may consider desirable for party or other purposes to refer to it. . . . If we amend the clause as now proposed, we shall make it impossible for the board to render useful service to the community. Could there have been a more ardent advocate of the principle underlying the Tariff Board Act than Senator Crawford? Yet the honorable senator suggested this afternoon that, because the Tariff Board is carrying out its functions as set out in the act, it is exercising a power greater than that possessed by this Parliament. On the occasion to which I have referred, Senator Crawford objected to any curtailment of the powers of the Tariff Board. He then contended that the board would be a most useful body - just the very thing the country required - but since it has been in existence, the honorable senator has expressed entirely opposite views. When I spoke to the first reading of this bill, I was not feeling well, and since then I have had eight or ten days' illness. In my earlier speech, 1 made a statement which I have since found was not in accordance with fact. I shall not rectify my error now, but shall do so when the item concerned is under discussion in committee. I hope that the proposal contained in this bill will be accepted by the Senate, for 1 believe that the Government has been actuated by the best intentions. It has had to deal with a situation which has never before arisen in Australia - a tariff schedule imposed on the people contrary to law. Under that illegal act - I use the term advisedly - many new industries sprang up, and others were extended, with the result that there was an over-production of manufactured goods, and the surplus could not be exported. On taking over the reins of office, the Government could not immediately have taken action to make the then existing duties ineffective. We must make the best of the situation which confronts us; we must pay the penalty for the illegal action of a previous government, but as speedily as possible repair the damage done. Let us do it in a commonsense way; let us give a reasonable measure of protection to those industries which need it, and remove from the schedule anything which will tend to create a monopoly. I admit that, at present, many of the things manufactured in Australia are being sold at reasonable prices, and their manufacture here may, in some instances, have reduced, rather than added to the cost of living; but I visualize the possibility in more prosperous times of these monopolies becoming a menace to the community. For that reason, and because I feel that it is essential that we should enter into the spirit of the world to-day, we should revise the schedule in such a way that we shall be able to face the world and say that all that we insist on is a reasonably protective tariff in order to conserve and encourage industries which are vital to the existence of the Commonwealth. 2324 K7P Queensland 0 0 COLLINGS, Joseph Senator COLLINGS . - I wish ,to offer a few remarks in rebuttal of some of the statements of Senator Payne. The honorable senator said that we on this side of the chamber would have to alter our fiscal outlook if we were to get anywhere worth while. I assure the honorable senator that if the position of the world to-day, which is due to the policy believed in by Senator Payne, is " anywhere worth while ", we have no desire to alter our fiscal outlook. The last thing that we want to do is to repeat the disastrous performances which have brought the world to its present condition. The honorable senator went on to say that we on this side had set our faces against immigration. I assume that neither the honorable senator himself, nor the party to which he belongs, has done so. Any one who would suggest bringing one solitary immigrant into this country when 300,000 good Australians are compulsorily idle is an anti-Australian of the worst possible kind. 2324 K09 0 0 PAYNE, Herbert Senator Payne - I rise to a point of order. The honorable senator has misrepresented me - perhaps innocently. I did not suggest that Australia should embark on a policy of immigration at the present time; I said that the honorable senator and his party had set their faces against immigration when immigration was necessary in Australia some years ago. 2324 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - The honorable senator did not use the words "when immigration was necessary". He said that the party opposite - meaning the party to which I belong - had set their faces against immigration. Another remark made by the honorable senator was that we must repair the damage done by the illegal action of a previous Government. Similar damage to that which is apparent in Australia has been caused in every country in the world. It is for that reason that at this moment an economic conference of world leaders is sitting in London to face problems of great magnitude. The honorable senator would attempt to delude this chamber into the belief that only the "illegal fiscal action of a previous Australian Government " had placed this country in its present unsatisfactory position. . In common with other honorable senators opposite, Senator Payne disclaimed the statement that the Tariff Board is the supreme authority in fiscal matters in this country. No one who is capable of understanding the meaning of English can make me believe anything to the contrary, or that he himself believes it. 2325 K3L 0 0 SAMPSON, Burford Senator Sampson - Does the honorable senator think that the Tariff Board is superior to Parliament? 2325 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - It is a superparliament placed over this Parliament. 2325 K3L 0 0 SAMPSON, Burford Senator Sampson - Nonsense! 2325 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - Article 12 of the Ottawa agreement reads - His Majesty's Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed, and no existing duty shall be increased, on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal. Yet honorable senators ask us 'to believe that, on that point at least, the Tariff Board is not to be supreme over Parliament. On behalf of the party to which I belong, I protest most vigorously against the Tariff Board being made a superparliament. I object to any body being set up by this Parliament, and given authority to do things which Parliament itself ought to do. The Australian national parliament, meeting in Australia's national capital, and acting on behalf of the electors of Australia, should be the supreme authority in this country; but honorable senators know that it is not the supreme body, and that many of its members are merely puppets who dance to the tune called by the super-parliament set up by this legislature. We have the High Court, the Privy Council, royal commissions, Premiers conferences, the Loan Council, Sir Robert Gibson, the Tariff Board, economists, professors and experts, all of whom offer advice which is accepted in preference to the common-sense and intelligence of the men who comprise the national parliament of Australia. A World Economic Conference is now sitting in London, yet the members of this Parliament do not know what instructions have been issued to Australia's delegates to that conference. Notwithstanding the weighty problems which will be dealt with at London, the Parliament of Australia as awhole is ignorant of the attitude of the Australian Government towards them. We have, however, a shrewd suspicion of the Government's views. A tariff schedule is a matter of national policy affecting, not only the rates of duty on imported goods, hut also the even bigger question of a White Australia. The present Government's fiscal policy, as contained in this bill, strikes a blow at Australia's national policy of a White Australia. So far as the welfare of the Commonwealth is concerned, there is no essential difference between admitting coloured labour into Australia, and allowing the products of low-wage coloured labour to come in and compete with the products of white labour in Australia. Half a century ago, when I was employed behind a grocery counter, practically everything used in the community was imported, either from England or from some foreign country. The Senate has to decide where it stands in regard to the policy of protection. The Labour party has taken a definite stand on this matter. Some surprise was expressed by honorable senators because, in a recent division, Labour senators supported the Government, and opposed the Country party. The reason was that they had to make their choice between Labour's ideal of a high tariff, the Government's ideal of a low tariff, and the Country party's ideal of no tariff at all. We on this side do not underestimate the serious complexity of this problem. I think that it was Mr. Justice Higgins who, in referring to the tangle of industrial awards in Australia, said that they had got into a " Serbonian bog" of difficulty. That is exactly the kind of mess that we are getting into in connexion with tariff matters. The only comforting thought is that the difficulty is manmade, and it should be possible for the genius of our people to find a way out of the morass. Honorable senators opposite . have quoted quite a galaxy of professors in support of their contention, and, incidentally, one honorable senator challenged members of the Labour party to cite an economist of standing who will champion the arguments which weadvance. I accept the challenge, and quote J. A. Hobson, who says - The world is in effect a single economic system and the improved or impaired productivity and consumption of every part affects every other part. Closer and more effective international movements for such improvements in the distribution of income as will enable world consumption to keep pace with and stimulate improvements in production, form the foundation of the progressive economy and the humaner civilization of the future. I do not expect honorable senators opposite to be able to grasp the splendid idealism that is contained in those words. We on this side are being continually accused of being merely destructive critics. However, as we indulge in our destructive criticism, we rarely fail to substitute a constructive policy for the faulty one which meets with our disfavour. Quite naturally, we have to support a destructive policy, because we believe that the world has ; been brought to such a state of misery and despair that matters can be set right only by first destroying the existing order of things, and then constructing our ideal in its place. One writer uses these words, which epitomises the position admirably: "We produce so much of everything that we have not enough of anything." It is not often that I find myself prompted to compliment Senator Pearce on his utterances, but I must express my admiration of his brief speech, which gave us a splendid insight as to the complexity of the problems of exchange. The complexities of the fiscal position are not one whit less. During the last few days I have made a number of extracts from the press, and, while I shall not have sufficient time to read all of them, I shall select some which should assist to support my contentions. One extract reads - Mr. W. C. S. Thomas, the chairman of the Dried Fruits Board, when interviewed by the Australian Press Association, said that he had already found that conditions for the selling of dried fruits were worse than on previous seasons. This was duo to the heavy stocks of foreign imports. The foreign fruits poured into Britain in 1932 in anticipation of the Ottawa Treaty. This year's total of foreign arrivals was double that of 1931. " The Australian crop is particularly large - almost a record," he said. "The board is now planning a vigorous and continuous selling campaign, in the hope of attracting buyers to view the good Australian values offering." However, no improvement in the commodity prices could be expected as long as the present over-production continued. He strongly depreciated the planting of further areas for dried fruits. Another extract reads - 2326 miscellaneous The latest interpretation of the benevolent Ottawa agreement is from New Zealand. Under this it is announced that the sister dominion is about to raise its tariff wall against a considerable number of Australian products. The new increased duties on imports from Australia cover the following: On and from 1st June, cut and plug manufactured tobacco; on and from 1st August, confectionery, fresh apricots, cherries, grapes, peaches, plums, tomatoes, cigarettes, spirits, floor coverings, apparel, and hosiery, fur skins and made-up furs, glass bottles, and jars, china ware, fancy goods, sporting requisites, toilet preparations, motor vehicles, sashes, and doors. In making the announcement Prime Minister Coates said it was not the settled policy of New Zealand that duties on Australian products should be below those from the United Kingdom, except in the case of special good; such as timber and fish. A telegram from Calcutta, which was received in Australia a week ago,states that India has imposed a dumping duty against certain textiles which are produced by Japan. I notice that, two days later, the following report was published : - The Indian duty increases during the week are evoking excited meetings of the Japanese Trade Association. Resolutions have been passed, demanding reprisals, including a boycott of Indian cotton. Those happenings go to indicate how complex is the problem. 2326 K2Z 0 0 BRENNAN, Thomas Senator Brennan - The honorable senator will remember that I told him as much during the last session, and he resented my information. 2326 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I do not remember having ever resented anything that was said by the honorable senator, because he never says anything that is worth while. Further elaborating my argument, I shall quote from a volume which I have obtained in the Parliamentary Library, entitled, Soviet Trade and World Depression, and written by a man with a world-wide reputation, Mr. H.R. Knickerbocker. It is a remarkable book, and I recommend honorable senators to obtain this copy from the Library and peruse it. It opens up with the following remarks : - - Largest department store -on earth, the ' Soviet Union Foreign Trade Monopoly, is conducting the greatest permanent bargain sale in history, and in 52 lands its agents to-day are offering a thousand varieties of wares at prices that bring despair to their competitors. What these offers mean first of all to America, one of the Soviet Union's chief competitors for the European market, is a principal object of this investigation of Soviet trade in Europe's chief industrial cities, ports and capitals, an investigation undertaken on the eve of the spring and summer export campaign of the Soviet Union that is expected to bring increased quantities of Soviet goods on a market already groaning from over-supply. I hope that I shall have the opportunity to talk of doing something of that nature in Australia a little later on. When this book was written in 1931, the trade of Soviet Russia was expanding in an astonishing fashion. This is the description of an exhibit at Milan - Here at hand in the flesh, in the can, in the bale, and in the bolt, is a visible part of the inventory of the biggest sales organization in the world, ready to furnish anything from worm medicine for overfed lapdogs to marble gravestones and linen doilies, ready to meet and cut anybody's price from cotton to coal! lt is an astonishing exhibition, and Soviet macaroni in Italy is only one of its revelations. There in a corner is a stand taller than a man, brilliantly lit with thin-necked globular electric light bulbs. They are for sale. They are Soviet products. Three years ago the best the Soviet Union could do in the way of producing instruments, of illumination was to turn out with the help of Swedish concessionaires poor-quality kerosene lanterns. Today they are exporting electric light bulbs indistinguishable to the layman from the most modern products of American or German factories. Patents, it may be remarked, are one of the least of Soviet worries. . . . Here are wheat, 39 varieties, and flour, four kinds, for white bread - last seen in Russia in 1928. Here arc six sorts of cornmeal, eleven of benns, and four grades of sugar. Last autumn in the considerable city of Dnepropetrovsk we could find no sugar. Distribution difficulties were to blame, we were told, and it is true that sugar was available everywhere else en route through the Soviet Union. But distribution runs smoother when the outlet is abroad and foreign currency the goal. Here are 20 sorts of peas and seed vegetables, barley, oats, rye, and, finally, the macaroni. Not just macaroni though, but all calibres in between, from finger-thick noodles to hair-fine vermicelli. In this department is material for every sort of nutriment, from French pastry, to mast for swine. Every department has its director, anxious to distribute literature, ready to explain that the objects on exhibition arc only a fraction of those the Soviet Union could supply. . . . One whole section is devoted to petroleum and every conceivable variety of petroleum product, and another to lumber and wood products, now the largest Soviet export. Here are parquet floorings, plywood, ready-made doors, sashes, sawn timber, planks. Upstairs are rugs, antique and new; 41 kinds of bristles; 18 of feathers; 12 sorts of sausage casings; 24 samples of hemp goods, including ropes, mats and nets; 25 kinds of horse-hair; 05 of furs; 150 examples of fine porcelain; two shelves full of common crockery; a whole department for peasant handwork - toys, dolls, embroidered linen, balalaikas and mandolins. Downstairs, on the other side, we came up short before three bales of Russian cotton. In 1928, the first year of the five-year plan, the Soviet Union imported nearly 500,000 bales of cotton, 300,000 of them from the United States of America. A short distance from the baled cotton stand cases of textile samples. More than 300 varieties of Soviet cotton and linen goods are offered for sale. We hurry along past 30 kinds of hides :ind leather; waterproofing oil; wax; vermifuge for dogs; 93 kinds of chemicals, prepared and raw; 15 sorts of granite and marble; a case of semi-precious stones; and 45 kinds of other minerals; and pause once more before a corner full of silk - raw silk and silk cocoons. There is much to learn in the Soviet trade exhibit. Lost year Italy bought more than £200.000 worth of cocoons and about £40,000 worth of raw silk from the Soviet Union, where a pair of silk stockings is rarer than white bread. I could continue to quote from this book for quite a time, for there is a great deal more that is of interest in it. The point that I wish to make on this matter of vital policy is that the nations which are assembled at the World Economic Conference in London will not do anything that will be of value to Australia. With Australia, those nations are faced with the tremendous flood of exports which will come, not only from Russia, but also from every other highly industrialized country .that is engaging in a policy of intense economic development and nationalism, and is becoming less and less dependent on other countries. Yet we sit in this chamber and try to deceive ourselves and those whom we represent that, along orthodox lines, we shall find a way out of the difficulty. If evidence were required as to the futility of our methods and the fallacy of pinning our faith to the World Economic Conference, it is to be found in the description of the opening of the proceedings of that conference which appears in to-day's Sydney Morning Herald. At that gathering 66 nations arc represented, and 267 delegates are sitting; but within a few hours of its opening no notice was taken of any but the most prominent personages. The newspapers comment that no concentration of thought is possible at the conference, as nobody seems to be able to do any individual thinking, because smoking is not permitted in the conference room. Despite the dreadful tragedy of present day conditions, and the destruction of so much that is dear to most of us, we have presented to our notice a picture which would be farcical if it were not so tragic, of the elect of the peoples of the world sitting in solemn conclave at that Economic Conference unable to concentrate their thoughts because they are not allowed to smoke, while millions remain unemployed and, even in this wonderful continent of ours, hundreds of thousands go hungry. 2328 JYH 0 0 ELLIOTT, Robert Senator Elliott - "Will the honorable senator now support Empire economic unity to the full? 2328 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I wish to show that they live in a fool's paradise who try to persuade themselves that Senator Elliott's panacea for all the ills to which flesh is heir - economic and otherwise - may be solved by some indefinable specific that he is pleased to designate " Empire unity." And to indicate how much that is likely to be worth in the days that are to come, I have obtained from the Parliamentary Library a work that was written quite recently entitled America Conquers Britain. Apparently, the world regards with admiration the Prime Minister of Great Britain, Mr. Ramsay MacDonald, because he went across to the United States of America, and held goodwill parleys with President Hoover- 2328 K2Z 0 0 BRENNAN, Thomas Senator Brennan - Does not the honorable senator refer to President Roosevelt ? 2328 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I was alluding to Hoover; I was not referring to the recent parleys. According to this work, Lieutenant-Commander J. M. Kenworthy, M.P., says - " The danger of Anglo-American conflict is as real as was the danger of war between Britain and Germany in 1905. We are heading straight for the same tragedy as 1914." Field-Marshal Sir William Robertson, former Chief of the British General Staff, frankly compares the United States to the Prussia of 1914. I should like honorable senators to pay particular attention to this, because it furnishes reasons for the refusal of those who sit on this side of the chamber to accept the time-worn platitudes of' our friends opposite. It goes on to say - In the midst of the Hoover-MacDonald friendship negotiations the MacDonald Government officially and directly was fighting two special trade battles against the United States, and the Hoover Administration officially was trying to force through Congress a higher tariff law deliberately designed to exclude many British products from this country. The MacDonald Government sent the official d'Abernon mission to the Argentine Government and obtained an agreement giving Britain many millions of dollars' worth of trade which had been going to the United States, and which Mr. Hoover hoped to retain on the strength of his Argentine tour a few months earlier. While Mr. MacDonald was nearing New York on his visit to the President, his Cabinet colleague, Mr. J. H. Thomas, was boasting of having taken a large amount of Canadian coal and steel trade away from the United States. Mr. Thomas in making to the Brighton Conference of the Labour party the first official announcement of the result of his Canadian mission, said, " I found that Canada was importing from the United States 15,000,000 tons of bituminous coal every.year. I convinced the Canadians that some of that should come from England and Wales, because every 300 tons mined in this country means enough work to support a miner and his family one year." - and he, might have added, means work taken away from American miners of whom tens of thousands are unemployed, and other tens of thousands arc on part time. 2328 K2Z 0 0 BRENNAN, Thomas Senator Brennan - Does not that refer to the previous MacDonald Ministry ? 2328 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - It refers to the present Ministry. It also says - This does not mean that the Prime Minister and the President in their goodwill negotiations and statements were hypocrites. But it does mean that the trade war at the same time is increasing with a force which sweeps Prime Ministers and Presidents along with it. That is the point 'that I wish to make. We mouth time-honoured platitudes as though nothing new had happened in the world, when within the last decade, in fact, within the last three years, there have been such wonderful occurrences that all pre-conceived notions are to-day inexpressible futilities. What is the problem that we have to solve, and which every other country so far has found unsolvable? We have a wonderful opportunity to solve it, but we cannot do so by putting into practice what every other country has already tried. Every avenue, everyby-way, every high-way along that track has been explored time and again, until today all the world's great authorities admit that a solution is not to be found in such directions. What is the problem? I have taken some extracts from the public press, and in no case shall I quote from a Labour organ. The following is from Western Australia, that State which sends to this chamber so many of our ablest senators: - 2329 miscellaneous "Treated as Human Scrap." 2329 At a meeting at Bunbury, the Rev. R. J. C. Butler severely criticized the treatment of unemployed single men. " The plight of the single men is about the worst feature of the depression," he said. "That hundreds of young men should be forced to live on charity and be free from discipline and training for work during the most important years of their lives is nothing less than a tragedy." This is the point that I wish to emphasize - " If war broke out to-morrow these same young men would be drafted into camps, fed, clothed, given wages, and trained for destruction, and no talk about shortage of money would hinder this being done. "To-day these young men are being treated literally as human scrap. Such a policy is going to result in our nation reaping a terrible harvest. Every citizen with a sense of justice should demand that something be done to enable these young men to be trained for the constructive work of peace." Lord Melchett, writing in the London Sunday Chronicle, says - There are legions of young men, intelligent, honest, and patriotic, who are face to face with the fact - not the fear, but the fact - that under the present system they may never be employable in any circumstances whatever. Not even if they stand in queues for fifty years, and answer advertisements by every post! Yet we sit in this chamber, facing with equanimity the terrible holocaust that has been prepared for us, and do nothing except mouth the time-honoured platitudes that have salved the legislative conscience and kept the crowd over-awed during the last 100 years. What are the facts concerning the United States of America, that country which has fallen perhaps to a greater extent than others, on the principle that the higher one climbs, the further one falls? One of its latest returns, compiled in April of this year, says that there are 12,000,000 unemployed, 9,000,000 working part time, and 45,000,000 living in poverty. Thus in the richest country in the world some 40 per cent. of the population live in poverty, many millions of them in absolute destitution. Yet we are sneered at by honorable senators opposite because we voice some original ideas, stress our desire to get down to fundamentals, and definitely refuse, and will continue to refuse, to be bulldozed by the trash which the Government, and those who stand for it, attempt to put over us. Here is another view of the American situation - Tens of millions hardly know where their next meal is to come from. Industrial equipment worth tens of billions is rotting and rusting in idleness. Food to support millions is eaten by maggots, weevils, and . rodents, while children go hungry. Millions of bales of wool and cotton glut warehouses, while patched overalls are becoming the fashion for both men and women. Side tracks are crowded with idle engines and cars, while every highway is crowded with footsore hitch-hikers. The whole thing is an insult to intelligence, a challenge to civilization, an affront to ordinary horse-sense and common decency. I have a further authority which I am confident that my friends opposite will accept as worthy of some attention. This reads - In an address at West St.Kilda yesterday, Archbishop Mannix said he was not a Communist or a Socialist, but he could understand how people were driven to extremes in times like the present. Millions of people in all lands were starving, while the world was full of wealth. The first line of defence against Communism and Socialism was to acknowledge humbly and sorrowfully that the system under which they were living had been a complete failure. My desire in submitting this evidence is that, in our fiscal policy, we shall not be guilty of perpetuating further the programme that has brought disaster to the other countries of the world. We are told that we must practise economy. That term has been worked overtime. What is the meaning of the suggestion which has been the burden of the song of all honorable senators who have spoken during this debate, except those 'who belong to the party of which I am a member? They have all said that we must reduce production costs, that we must be able to compete with the other countries of the world with our export surplus. Carried to its logical conclusion, what does that mean? We have the finest and the richest country in the world, a country in which we ought to be able to, and can, produce much more than we can consume, even under favorable conditions; yet we are merely asked to allow Australia to enter into a poverty competition with the other peoples of the world, in which the prize can go only to the country that is willing to submit to the lowest conditions. Mr. J. M. Keynes is an authority that our friends opposite sometimes accept, and whom they have actually quoted in this chamber during this debate. They will not agree with the following quotation from ope of his works: - If we carry " Economy " of every kind to a logical conclusion, we shall find we have balanced the budget at nought on both sides, with all of us flat on our backs, starving to death from a refusal, for reasons of economy, to buy one another's services. I was interested in the very fine speech delivered by the Vice-President of the Executive Council (Senator McLachlan) in opening this debate. He said - Upon election to office the present Government introduced, in February, 1932, a tariff schedule which gave effect to its pre-election promise. Summarized, its tariff policy was - Efficient industry as an essential qualification for tariff shelter. When are we to decide the stage at which an industry that is proposed to be started; or that is already started, becomes an efficient industry within the meaning of that paragraph? The honorable senator knows perfectly well- that an . industry must be given a trial. We have heard from honorable senators opposite about backyard industries, abortive industries, and all that kind of thing. MacRobertson's confectionery business, which to-day is the largest of its kind in the southern hemisphere, began in a backyard. At what stage should iV have become necessary ta decide whether that industry was efficient or not? The next paragraph reads - A competitive, as distinct from a prohibitive, tariff level. When are we to decide the point at which a tariff becomes competitive, and when it ceases to be competitive and becomes prohibitive? One honorable senator has said that he has never yet met a 100 per cent, protectionist. Let me introduce him to at least one honorable senator who is a 100 per cent, protectionist. I hold the view, and my party also, that a tariff which brings in revenue is not a protective tariff, and that the more revenue it brings in, the less protective it is. When it can be demonstrated that we can produce in Australia a commodity equal in' quality to the imported article and sell it at practically the same price, it should be made a penal offence to bring the im-' ported article into this country. By importing articles which can be made effectively in Australia, we give employment to people overseas instead of to the people within our own shores. The third point in the present Government's tariff policy which, as- Senator McLachlan has stated, was promised at the last election, is - Tariff making through the Tariff Board, and not by arbitrary ministerial action. What will be the attitude of the people of Australia when their representatives in this Senate tell them that the Government has decided that tariff-making, which finally decides what standard of comfort is to be enjoyed by the community, what shall be on the breakfast table of the working-class families, and what standard of prosperity the primary producers shall enjoy, is to be taken out of the hands of this Parliament and placed unblushingly in the hands of the Tariff Board? Honorable senators are paid a salary for doing this kind of work, and that salary is increased when an honorable senator becomes a cabinet minister. Why should we who are paid to frame the tariff policy of the country be everlastingly transferring our responsibility to outside bodies which are in no way answerable to the electors for their actions, thus shirking our own responsibilities? Later in his address, Senator McLachlan said - The policy of this Government, as expressed at the last elections and endorsed by the people may be briefly summarized as being, " Protection for efficient and. economic industries on a competitive, as distinct from a prohibitive, level," and, " The Government will be guided largely by the recommendations of the Tariff Board, and will not, generally speaking, engage in tariff making by arbitrary ministerial action." First of all, the Minister stated that tariff making would be undertaken through the Tariff Board, and not by arbitrary ministerial action, but afterwards, he obviously became doubtful of the wisdom of announcing such a clear-cut tariff programme, and he watered it down by saying that the Government would be "guided largely by the recommendations of the Tariff Board." But the Ottawa agreement provides that no existing duties shall be increased on the United Kingdom goods to an amount in excess of the recommendation of the Tariff Board. The Government, therefore, must, in certain instances, accept the recommendation of the board. The Minister also stated - lt is most remarkable that we should bc considering a tariff schedule at the present stage, and particularly on the eve of the World Economic Conference, at which the tariff policy of each government will be submitted to the most searching scrutiny. It is to be hoped that, at this conference, the futility of adopting prohibitory tariffs and trade restrictions will be fully appreciated, and that future world policy will be in the direction of freeing the channels of trade from the obstructions designedly, but in good faith, placed upon them. What does that statement mean? It means that we are to adopt a policy which will remove restrictions of trade brought about by the operation of the tariff. Such an action would be entirely opposed to the will of the people, and to the election promises of this Government. The Minister made use of this pregnant remark - It is of no use to blink the fact that the world is passing through the greatest crisis recorded in its history. Yet, when Labour senators were addressing this chamber on this important subject, the Senate was practically deserted, there being few members of the United Australia party and the- United Country party present. 2331 K2L 0 0 REID, Matthew Senator Reid - And few Labour senators were present. 2331 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - -The honorable senator's power of mathematical calculation has evidently deteriorated since I first knew him, because, when, by interjection, I drew attention to the state of the Senate, I counted the members on this side of the chamber, and, out of a possible attendance of ten members, six were present. Obviously honorable senators supporting the Government are trying to blink the fact that the world is passing through the greatest crisis recorded in its history. The Minister continued: - In Australia we may flatter ourselves that we have surmounted our worst difficulties. Everybody knows that Australia is a long way from prosperity. We can easily persuade ourselves, comfortably placed as we are, that the worst is over, but it would be extremely difficult to persuade the people who are suffering, because of the un-Australian policy of this Government, that the worst is past. Even if prosperity should return to certain sections of the community, it would mean nothing to the people who are sheltering in shacks which let in the rain, and shivering because of the winter's cold, and whose women and children are ill provided for. We cannot tell those people that the corner has been turned, and that the worst is past. Prosperity will never return to Australia unless we adopt a prohibitive fiscal policy, and place round this continent a tariff wall which will make it self-contained, and enable the people at least to live under decent standards, and free altogether from the frightful and horrible competition of Japan, Great Britain, Denmark, the Argentine, Czechoslovakia, and other countries, which are pouring their products into this country. We cannot blink our eyes to the facts, and no amount of soft talk will persuade the people who are suffering that anything like prosperity has returned to Australia. Senator McLachlan continued - We should ask ourselves how the position is likely to affect, not only civilization, but also the future of. the British race. Our first consideration should be for our own people. The provision of employment for them is a big enough problem for us to tackle, and, when we have solved it and actually brought prosperity to Australia, then it will, be time enough for us to interest ourselves in the welfare of other members of the British race. Senator McLachlan went on to say - Are we to fall to the level of other nations, who to-day, by means of depreciated currencies, economic practices of which we do not approve, and the adoption of standards of living which we could never adopt, are gaining markets from us, and may eventually place us on the " outer " from the economic view-point. We cannot have a lower standard of living than we have in Australia for those who are unemployed and hungry, and the Minister's reference to the lowstandards of other countries seems to me to be the worst kind of political hypocrisy. If other countries are gaining markets from us, we must do something to help ourselves. The Minister stated - When nations see their way to make both ends meet in regard to their external obligations, and to release exchange control without the collapse of currency, most of these barriers will disappear. Australia has never failed to make both ends meet. When we borrowed millions of pounds from Great Britain that country possessed a yardstick by which our indebtedness to it at that time could be measured; but since then, and without reference to us, that yardstick has been considerably lengthened. Instead of being 12 inches to the foot, it is now 23 inches to the foot. That calculation has been worked out from statistics. As I have said previously in this chamber, we are to-day paying in respect of our liabilities to the bondholders, three hales of wool where previously one sufficed. Australia has been able to pay what it justly owes to other countries, and Great Britain has nothing to complain about in that respect as I shall show later. The honorable senator continued - The dilemma is the usual vicious circle. Exchange control cannot be withdrawn before the return of confidence andconfidence waits on the withdrawal of exchange control. That remark may be a pearl of wisdom, but after searching it inside and outside so far as my intelligence has permitted me, I cannot find anything in it except that we have become involved in a vicious circle, and that there is no escape from it except by leaping out of it and adopting a policy different from that which placed us in that vicious circle. The Minister continued - Like individuals, they must live within their own means - but in the urgent necessity for finding this new equilibrium, all nations have been forced to accept a lower standard. What is this "new equilibrium" at the back of the mind of the honorable senator ? There is no specific remedy for the confusion into which the world has been thrown, yet the direction in which relief must be sought is clearly apparent. It is by a movement towards the liberation of private enterprise, industry, and commerce. That is the first sign of any constructive capacity in the whole of the Minister's speech. Now we know exactly what the remedy is, and before I resume my seat, I shall submit a remedy in contradistinction to his. At last we have had a clear declaration from the Minister in charge of the bill to the effect that we can only attain salvationby a movement towards the liberation of private enterprise, industry and commerce. I should like to ask the Minister, in all reason, who or what policy is responsible for this vicious circle. It cannot be anything else but private enterprise. Government control has never operated in any country in the world except the one, some facts regarding which I quoted earlier in my remarks. Private enterprise, industry and commerce are exactly the things that have got us into the mess we are in. It is hypocrisy, and an insult to our intelligence, merely to throw across the chamber to us one constructive thought in the midst of columns of talk, and that merely a suggestion that to continue the same policy that has got us into our trouble will get us out of it. That sort of necromancy makes no appeal to me.' 2332 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - The New Australia movement did not do very much, either. 2332 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I shall have a word to say on that subject on another occasion. The honorable senator does not know anything about the New Australia movement. I do know something about it, because I was the Queensland agent for it. The men engaged in it were all personal friends of mine. I know the history of it, and the only regret I have, Mr. President, over your elevation to the proud position you now enjoy, is that it deprives me of the opportunity of convincing you, as well as Senator Herbert Hays, of the truth regarding the New Australia movement. The Minister in charge of the bill went on to say that "every debtor nation, in order to meet its obligations as far as possible, and to save its currency from collapse, had to limit its imports, knowing full well that those imports were its neighbour's exports." That was exactly what the Scullin Government did. That Government limited imports for two reasons. If it did not, the volume of our export surplus would not have been sufficient to correct our adverse trade balance on the other side of the world. But it 'also limited imports - which were our neighbour's exports - for another reason: Every time we make an article in Australia, we have the article and the money it costs to make it, inside the country ; but every time we buy an article from another country, we have the article, while the other country has the money and the employment. One honorable senator, in his hysteria, referred to the "illegal fiscal acts of the Scullin Government," which, he said, had got Australia into the mess it is in to-day. The Minister in charge of the bill said that, until the cost of production in secondary industries was scaled down to a point more in relation to the price of raw materials, there could be no real improvement. What does that mean ? It is always a good thing, when examining the speeches of somebody opposed to you, to try to visualize his point of view. There are two sides to every argument. That was said at a political meeting not long ago by a candidate who was anxious to ingratiate himself with the electors whose votes he was seeking. He recognized, he said, that there were two sides to every question, and his hearers were entitled to their own opinions. A wag at the back of the hall called out that there were two sides to every flypaper, but it made a great deal of difference to the fly which side he landed on. The Minister in charge of the bill said that there could be no real improvement until prices were scaled down. Well, how far down? There is only one meaning behind that statement. In his opinion we must get our production costs down to the lowest standard existing in any country that produces the same article. [Extension of time granted.] We must get our costs down so as to compete with that country which has the lowest standard of living and of production costs. Senator Crawford commenced his speech by saying that we all had high hopes of Ottawa. I desire to wash my hands of that statement. I expected nothing from Ottawa; I got nothing from Ottawa, and Australia has got- nothing from it. It does not matter how much honorable senators opposite may try to deceive themselves, and persuade the primary producers that they got something out of Ottawa; the producers themselves know that ,they got noth-ing out of it. The honorable senator also said that he had high., hopes of the World Economic Conference, now meeting in London. I make, this prophecy : Nothing will emerge from that conference except talk; because not one of the delegates dares to go. ''back to. his own country, and tell those who sent him that the only way out of the difficulty is to adopt the Labour party's policy. That policy provides that, instead of production, distribution and exchange pf wealth being carried on for private profit, we should reverse the process, and carry them on for the public benefit. None of the delegates is game to go back and make that statement, but salvation exists nowhere else. None of them, will go back and say that at last the people should have intelligence and moral courage enough to demand that the finance of their country should be taken away from the criminal control of private enterprise, of private dividend-mongering, ' profit-making banks and other financial institutions, and that the nation's credit should be used for the nation's needs, so that it may do good work for the whole of the community. 2333 K3L 0 0 SAMPSON, Burford Senator Sampson - A nice old mess the Labour party made of things in Queensland. 2333 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I do not expect Senator Sampson to understand what I am talking about, and my remarks have not been addressed to him. I never attempt the impossible. I am addressing those honorable senators opposite who have taken part in this debate, and have endeavoured to give the Senate some evidence of a glimmering of latent intelligence. Senator Crawford went on to say that our interest payments should be accounted to us as part of the value Australia is to Great Britain. As a matter of fact they are so accounted now. They are not paid in cash : they are paid in goods, and we get full credit for all the goods we sent to Great Britain. The honorable senator spread himself out and looked like Ajax defying the lightning, while he spoke as though he had discovered something original. We can expect no originality from those who are chained to the wheel of a system which has done so much damage in the world for the last century or more. We have been told by other honorable senators that it is all a matter of export. In my opinion, the sooner we concentrate on exports for the purpose only of discharging existing liabilities, and not for the purpose of buying abroad goods which can 'be produced in Australia, the better it will be for all of us. How long do we intend, to produce tons and tons of goods, much of which we could consume ourselves if we were given an opportunity, but which now, in the final analysis, have the effect merely of reducing the standard of living of the primary producers? But how else are we to pay our overseas debts, honorable senators may ask? Let us decide, now that Australia's jamboree has lasted long enough, that we have been living in a fool's paradise long enough, borrowing money long enough, and too long piling up burdens for posterity. State and Commonwealth Governments went on gaily year after year borrowing money overseas. We said, with a magnanimous wave of the hand, "We must pass some of this on tu> preterity." Unfortunately, we are posterity; we are experiencing the bitter aftermath, the morning after the night before. If we are to be honest to posterity let us decide now that we shall put the peg in. Let there be no more borrowing abroad. Let Australia be a self-contained nation. Some of us may have to go short of some of the things which we have been educated to believe are necessities, but which, in reality, are not. We m'ay have to get back to a less complex form of existence, but let us get back to it. Then, in a little virile, this nation, proceeding along right Lines and giving the common people a cil mee,' will be able to produce, not only the necessities, but also those things which are called luxuries. Honorable senators have spoken about our duty to the Empire. I do not know of any other part of the Empire which has discharged its duty in that respect better than Australia has done. I wonder how many honorable senators opposite know, or will admit, that Australia is Britain's second best customer. The Victorian Agent-General, Mr. W. Leitch, now Sir W. Leitch, discussing this matter, is reported "as follows: - Dealing with some British people who complained that Australia would not buy British goods, and pointed to the tariff to support their contention, Mr. Leitch rather crushingly pointed out that Australia, with 6,000,000 people, bought £54,000,000 worth of British goods a year, and was Britain's second best customer, first on the list being India, which country, with 320,000,000 people, bought £78,000,000 worth. Further than that, over six years' trading, to 1930, Australia was the only country in the world to give Britain a credit balance. What an effective reply to the croakers in this, country! 2334 K3L 0 0 SAMPSON, Burford Senator Sampson - We have been saying that for years. 2334 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - If . the honorable senator has known it for years, why does he support a fiscal policy which will have the effect of continuing us in bondage to a country of which we have been, in the past, such an excellent customer ? I was interested, on entering the chamber the other evening, to hear Senator Kingsmill expatiating on brotherhood. L do not know whether it was my patriarchal and benevolent appearance that prompted Senator Kingsmill to refer to me as " the elder brother ", but I accepted the remark as a sincere compliment. If there is one thing that I believe in more than another, it is brotherhood. I waited to hear the words that Senator Kingsmill had to say on the subject of brotherhood, but I waited in vain, for he did not utter them. I ask honorable senators opposite whether brotherhood is possible to-day? It becomes less and less possible. The Golden Rule is an impossibility, because brotherhood has been made impossible. To-day, in consequence of economic insecurity and the problem of not knowing where to-morrow's dinner is coming from, nation is competing against nation, State against State, town against town, and individual against individual. The tens of thousands of young men and women of whom Lord Melchett said, that "if they stand in queues for 50 years and answered advertisements by every post " they would not find work, for they would be unemployable, know all too well that brotherhood is a dream that cannot be realized. If honorable senators would exercise some constructive statesmanship we might be able to improve things a little. Senator Duncan-Hughes, in railing against high tariffs, asked why we should impose a duty of 45 per cent. against boots made in Great Britain, thus preventing the down-at-heel people in this country from buying them. Does not the honorable gentleman realize that these people cannot buy Australian boots made of Australian material by Australian workmen in Australian factories? How then could they buy British boots? The honorable senator must know that they could not do anything of the kind. The same honorable gentleman said that we should never lose sight of the importance of the primary producers who are mainly responsible for our export business. Honorable senators of the Labour party do not lose sight of the primary producers. We are interested in them, not only because of the exportable goods which they produce, but also for other reasons which I have already mentioned. We say that this country should stop borrowing abroad, for that policy only increases the load of debt which we have to carry, and which we are expected to pay off, not by the yardstick of 12 inches, which was in use when the money was borrowed, but by the yardstick which, without any authority from this country, has been increased to 23 inches. Senator Duncan-Hughes who is always courteous, if not always logical, asked by interjection while Senator Brown was speaking, what we would do with our. wool and meat. There has been an ad misericordiam appeal for weeks by honorable senators opposite on behalf of the wool and meat producers of this country. The Government has been besieged with requests to do something for the wool producers, and to stimulate the meat industry. But what is the good of talking about increasing our exportable surplus when our producers arefinding it increasingly difficult to produce at a profit? I believe it is true that some of them are to-day producing at a loss. The fact is that the nations of the world are becoming less and less dependent uponus for wheat and meat. Wool is the only thing that Australia is now producing that the nations of the world must buy from us, and it will not be long before they will be able to do without our wool. They are doing without our wheat, butter, cheese, and meat to an ever-increasing extent. Senator Badman also interjected while Senator Brown was speaking, and I believe that he was sincere when he said that the men engaged in secondary industries were not pioneers, but were protected, and that the men engaged in primary production were pioneers, but were not protected. I cannot imagine Senator Badman being insincere in anything, but that remark almost tempts me to test the strength of the honorable gentleman's sincerity. 2335 K3X 0 0 CARROLL, William Senator Carroll -"Yield not to temptation." 2335 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - If I could yield to this temptation I should be happy, but there are sound and sufficient reasons why I should not do so. If Senator Badman had exercised common sense hewould not have made such an interjection. He and his colleagues seem to confine their attention to effects. Honorable senators of the Labour party devote their attention to causes. I should like to test the sincerity of some honorable senators opposite. I should like to see what Senator Payne would do if a proposition were made to withdraw protection from the hop-growers of Tasmania on the ground that they are not pioneers. Of course they are pioneers. I should also like to see what senators from Victoria would do if an attempt were made to withdraw protection from the potato and oniongrowers, and the butter producers, of that State. If the duty of 6d. per lb. on New Zealand butter, and the assistance given to the dairy-farmers by the Paterson scheme, were withdrawn there would be trouble. Senator Brennan, who usually prefaces anything of a particularly caustic nature that he has . to say to honorable senators on this side of the chamber, with the words " with all respect to my friends ", would be very annoyed if any move of the kind that I have suggested were made. 2336 K3L 0 0 SAMPSON, Burford Senator Sampson - What about peanuts ? 2336 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - This Government has already laid its devastating hand upon the Queensland peanut, pineapple, banana, tobacco, and rum industries, and I and my colleagues on this side of the chamber who represent Queensland will have something to say on those subjects when the specific items are under notice. I should also like to offer a. word of advice to my innocent young friend, Senator Foll, who, I regret is not in the chamber at the moment. I do so with all kinds of Brennan-like respect. The unsophisticated speeches which Senator Foll delivers might lead people to think that he is anything but the knowing gentleman that he is. He told us that the primary producers have "got it in the neck ". He used much more elegant language, but that is what he meant. He suggested also that the arbitration awards which apply to the working class should be policed. I assure' the honorable senator that when the Labour party comes into power again in about eighteen months' time- 2336 K3L 0 0 SAMPSON, Burford Senator Sampson - Is the honorable senator a prophet? 2336 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - I am prepared to stake my political reputation on the prophecy I have just made. Several honorable senators opposite who are adepts at interjecting will not be in this chamber very much longer to use such bait. The political axe will fall upon them. My advice to Senator Foll is that he should advocate the policing of primary production. In the platform of the Labour party there is a plank which reads " New protection ". When we get an opportunity, it will be our duty to put that plank into operation. We shall not allow manufacturers to exploit the consumers, behind the shelter of the tariff wall. In reply to the charge which has been levelled against us with sickening iteration, that under the tariff there is danger of exploitation of the consumers, all I have to say is that if we are tq be robbed at all, it is better to be robbed by Australian manufacturers, who will spend the proceeds of their robbery in the Commonwealth, than by overseas manufacturers who never come near us. 2336 K3L 0 0 SAMPSON, Burford Senator Sampson - Why be robbed at all? 2336 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - When ye have an honest government, it will see that the people are not robbed. Oliver Wendel Holmes once said that there are only two classes in the community - those who go ahead and do things, and those who merely stand off and criticize. I think that he was about right. But another author, less eminent in the literary world, has said that the only two classes in the community are those who do the work, and those who " do " the workers. That is true in Australia to-day. On the fiscal issue, gibes are thrown at us by honorable 'senators opposite. It is incorrectly stated - and all their gibes are inaccurate - that by the " worker " we mean only the man who wears bowyangs, and has corns on his hands. Let us hear no more of that unfair charge, because the Labour movement's definition of a worker is, " Every member of the community who is rendering useful service to the community, no matter what the nature of that service may be ". 2336 JY7 0 0 DUNCAN-HUGHES, John Senator Duncan-Hughes - He has also to be a member of a union. 2336 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - No ; he merely needs to be a citizen who is rendering some useful service. The definition includes the farmer. No member of the community works harder than the primary producer, and none is robbed more of his wealth. He has never had a chance in any country, let alone in Australia. Many authorities have been quoted by honorable senators opposite in an attempt to substantiate their arguments. The following is a statement by J. K. Bellerby. professor of economics at. the University of Liverpool : - 2336 miscellaneous It would be no use giving the money to those who are playing the safety v game. If the Government, receiving the credit from the bank, handed it over to those whose desire is to save every penny they receive, then the result would be nil. We must avoid this plague of safety seeking. As a sheer necessity for trade revival, we must give the money to those who are so needy that they will rush to the counter with it, for they are the only people who can be relied upon to spend the money and create new trade. There is only one sure way we can escape national bankruptcy - that is, to print notes and give them, not to those who now seek safety, but to the destitute, the unemployed and pensioners. An increase of 10 per cent. in all State allowances, old-age pensions, widows' pensions, unemployed benefits, public assistance, and allowances for children would be a wise beginning. That authority supports one of the planks of the Labour party's platform. The next authority that I shall quote gives another explanation of the Labour party's remedy for our financial ills. Arthur Kitson, a British economist, states- BRITAIN'S REAL RULERS. It is only within the last50 years that the sinister influence of the Bank of England has become so apparent and so dangerous to the welfare of Britain. The Bank of England is nowan international trading company controlled by 25 directors, eight of whom represent American interests and four represent German interests, with Montagu Norman the Governor-General. Britain's real ruler is neither King George V. nor Parliament; the ruler is the man or men who control the bank, who cause trade to boom or stagnate, as they wish. That writer was quoted several times by Senator Brennan. 2337 K2Z 0 0 BRENNAN, Thomas Senator Brennan - No. I quoted Mr. Kitchen. 2337 K7P 0 0 COLLINGS, Joseph Senator COLLINGS - Another authority referred to fondly by honorable senators opposite is Henry Ford, who, in the following statement, showed that he believes in high wages: - A manat two dollars a day has no surplus spending power, and is not a factor in the market. But a man at eight dollars has spending power and creates more. The wages of the workman are more important to the community than dividends. Our working class must become our leisure class if our immense production is to be balanced by consumption. The party on this side of the chamber will put forward every effort in its power, in accordance with the Standing Orders, to force the Government to increase duties ; but we shall not, inany circumstances, support those who desire to reduce them. Our objective is slowly, but surely; to make Australia a self-contained country, and to have within its shores a self-reliant people. We desire to preserve for all time the national policy of a White Australia, and adequate fiscal protection to enable that policy to be maintained. 2337 K3L Tasmania 0 0 SAMPSON, Burford Senator SAMPSON . - To employ a term used by my honorable and loquacious friend, Senator Collings, "with all respect " I suggest that we get off the soap-box and consider realities. In the first place, I propose to read some idle thoughts that I have just penned. Whenever I think of this debate, it will remind me of - That old man I used to know, Whose hair was whiter than the snow; With eyes like cinders all aglow, Who seemed distracted with his woe; Who rocked his body to and fro, Who snorted like a buffalo, ' Whose words like lava used to flow, Those winter evenings long ago, When the. tariff was debated. As the hour is late, I ask leave to continue my remarks. Leave granted; debate adjourned. 2337 bill Assent to the following bills reported : - Australian Antarctic Territory Acceptance Bill. Canned Fruits Export Control Bill 1933. 2337 adjournment 2337 Motion (by Senator Sir George Pearce) proposed - That the Senate do now adjourn. 2337 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN .- On Friday last, prior to the adjournment, I directed the attention of the Leader of the Senate to a report that the unemployed at Darwin were in such a desperate plight that they were forced in some cases to depend on the charity of Chinese residents of that town, and the right honorable gentleman stated that he would have inquiries made. 2337 K0F 0 0 PEARCE, George Senator Sir George Pearce - I have sent a copy of the honorable senator's remarks to the Minister for the Interior. At present he is not in Canberra, but will return within a day or two. I shall then be able to furnish the honorable senator with his reply. 2337 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - There is one other matter which I wish to bring to the notice of the Senate. I refer to the following cabled report which appears in the Labor Daily, Sydney, of to-day's date: - Although the World Economic Conference is only in its second day, the proceedings are completely overshadowed by the possibility of the British default in the payment of the £19,000,000 instalment of the war debt due to America on Thursday. Disturbing reports are . current in London that the United States Government has rejected the British offer of a small - or token - payment. A semblance of authority is given to the reports by the summoning of a special meeting of the British Cabinet immediately following the dinner given to the 267 delegates to the conference last night. The Cabinet was called after the Prime Minister, Mr. Ramsay MacDonald, had received a despatch from the British Ambassador to Washington, Sir Ronald Lindsay. The result of the Cabinet meeting was not disclosed, but it is known that some Ministers are urging default if America adheres to its refusal to accept the token payment. Such a course undoubtedly would receive the support of the majority of the delegates to: the conference. France has already defaulted in the payment which was due last December, and it is regarded as certain that she will againdefault in the June payment. The main topic in London to-day was concerned with the manner in which' Mr. MacDonald took the war debts bit in his teeth at the opening of the. conference yesterday. Notwithstanding the fact that the leader of the American delegation, Mr. Hull, stated only on Friday last that the war debts could not be a matter for this, conference, Mr. MacDonald emphatically declared that " the question must be dealt with before every obstacle to general recovery has been removed, and it must be taken up without delay by the nations concerned."; As we have in London aResident Minister without portfolio leading the Australian delegation at. the World Economic Conference, I endeavoured, this morning, to ascertain if the Government had given instructions, as to the attitude to be observed by that gentleman towards this important issue, but Senator Pearce, with his usual adroitness, gave what I regarded as a " wipe-off " to my question. I. do not in tend to take such treatment lying down. SenatorRae and I, as the representatives of the Australian Labour party of New South Wales in this chamber, were elected by the people of New South Wales, and we are in exactly the same position as is the right honorable gentleman himself, as a representative of Western Australia. To-day we have been obliged to wait approximately twelve hours for the opportunity on the motion for the adjournment of the Senate, to bring to the notice of the Government matters which we consider should be ventilated. If the, right honorable gentleman thinks that he is going to treat us always as I was treated this morning, I tell him plainly that, on every possible occasion, we shall take full advantage of the Senate Standing Orders to ventilate our grievances. We are entitled to information as to the attitude of the Government to the World Economic Conference. It is all very well for the Leader of the Senate and his colleagues to sit smiling on the front bench- Attention called to the state of the Senate. There being no quorum present - The President adjourned the Senate at 10.30 p.m.