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2 June, 1911.] Commercial Relations and British Shipping. \Uh Day. Mr. PEAECE— cont. brought in the preferential trade relations a condition that the goods which were to get the benefit of the preferential rate should be brought into the Commonwealth by British ships manned by British seamen. The Bill was withheld by the Governor-General for His Majesty's assent, and representations were made, I understand, that the proposition came into conflict with certain treaties which the Government of the United Kingdom had entered into with foreign countries. It is difficult to deal with this subject without bringing in the subject of navigation, but as that is the subject of a separate resolution T will not touch on this more than is absolutely necessary. The CHAIRMAN : If you like to take the subject of the navigation laws at the same time it would be quite convenient. Mr. PEARCE : No, I prefer to take it separately. In dealing with our navigation legislation in the Commonwealth so far we have not yet passed an Act, though the Bill has been before Parliament on several occasions. The Government of the United Kingdom., through the Board of Trade, have from time to time made representation to the Commonwealth Government with a view to inducing the Commonwealth Government to alter the provisions of their Navigation Bill, and they have made representations that some of the clauses in the Navigation Bill pressed hardly upon British shipping. Now we are faced with this position : that round the coasts of Australia there are several very powerful subsidised lines of foreign steamers —very heavily subsidised some of them—and, moreover, they are vessels that are under an agreement with those foreign Governments to be placed at their disposal in the time of war. Some of them, as the result of those subventions and the conditions attached to them, being manned by trained naval reserve men, and the Government of the Commonwealth have thought it their duty, in the interest not only of the Commonwealth, but of the Empire generally, to endeavour to assist British shipping in their competition with this subsidised foreign shipping. Obviously, the only way in which we could assist them was by exempting them from the provisions of our mercantile law, where that mercantile law laid upon them obligations which would entail expenditure. Accordingly it would be unfair to our own ships, because we laid down those obligations upon our own ships, to put our own shipmasters to the expense which it would entail, and if we exempted British shipping from those conditions we would be subjecting our own Australian shipping to unfair competition from British shipping; so that we could not take that upon us. It was with the intention of giving some assistance to British shipping in this unfair competition with subsidised foreign shipping, and assisting British shipping on our coasts, that the Bill I have referred to was introduced, and passed both Houses of Parliament. I may say that the Bill, as originally introduced, did not contain a provision which was put in as the result of an amendment made in the House of Representatives, but it was approved of by both Houses of Parliament with a substantial majority. The only other way in which British shipping could be assisted in the fight for the Australian trade against foreign shipping would be by action taken by the United Kingdom on similar lines to that which is taken by foreign countries. With that we have nothing to do, and nothing , to say to it. That is entirely a question for the Government of the United Kingdom, and entirely a question of policy for them, and therefore we do not make any statement as to our views on that question. But the view we wish to discuss here to-day is this : That the principal difficulty raised as to not giving assent to the legislation which was proposed by the Australian Parliament was that a certain number of treaties with foreign countries stood in the way. I think I am correct in saying that the greater number of those treaties were with small countries, the trade of which was inconsiderable compared with the trade of Australia and New Zealand, and the only obstacle therefore to the Australian law receiving assent was the denunciation of those treaties. The point of view we wish to put is that if the Dominions, by their legislation, desire to assist British shipping, and assist it in the only way open to them, the Government of the

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