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The Pamphlet Collection of Sir Robert Stout: Volume 76

VII.—Judge Backhouse's Report

VII.—Judge Backhouse's Report.

If hopes are dupes, fears may be liars.

We have been studying the working of a unique experiment in labour legislation, the outcome of which is being closely watched by other countries. In New South Wales a bill embodying the principle of compulsory arbitration (but without concliation provisions) passed the Legislative Assembly last year, but was lost in the Council. Now, it is perfectly clear form the expressions used by the then Premier,. Sir W. J. Lyne, that when he undertook the great responsibility of introducing a measure of such tremendous importance he must have been quite ignorant of the real nature and outcome of our act. It is indeed comical, and says little for the statesmanship of New South Wales, and indeed of the other Australian colonies, that their politicians should be so ready to slavishly follow the example of New Zealand in this and other matters. It reminds one of our own action during the last Melbourne boom, when New Zealand was sunk in depression and we thought of nothing but studying and imitating the means by which the supposed marvellous prosperity of Victoria page 20 had been brought about. But it is not merely the supposed success of our labour legislation as a means of advancing the prosperity of the colony that has made it so attractive to Australian politicians, but rather its proved effectiveness in securing for the Seddon Ministry the support of the Labour party, and a long term of office. This is sufficient to account for the New South Wales Industrial Arbitration Bill, and for the infamous conduct of the first Commonwealth Government in introducing into their programme, for the sake of securing the Labour vote, two such momentous measures as compulsory arbitration and old-age pensions. If anything further were necessary to confirm thinking people in New Zealand in their opposition to federation the fact that the first Federal Ministry should consist of men capable of paltering with such subjects should be sufficient. The attitude of Mr B. R. Wise. Attorney-General of New South Wales, on this subject is difficult to understand. Here we see a pronounced individualist and author of an able book against Protection, advocating a measure which involves infinitely more of State interference and regulation of industry than does mere Protection. The position of Mr Reeves, the author of the New Zealand act, was very different: he described himself as "a straightout socialist" (whatever he may be now), and I think it is perfectly clear from the extracts from his speeches given in my first paper that even the socialistic Mr Reeves would never have fathered our act if he could have foreseen that it would be perverted into a system of State regulation of industries; one thing is certain—the New Zealand Parliament would not have passed it in 1894. When Air Mr Wise introduced his bill first he probably intended it, as Mr Reeves intended his bill, merely as a means for the prevention and settlement of strikes, and he was probably not aware of the fact that our act had never been applied to the purpose for which it was intended, when he referred to the success of our act in justification of his action. But he cannot urge that excuse any longer, for he cannot fail to see, even through the opaque medium of Judge Backhouse's, report, that our system is not one for the prevention of strikes. The members of the New Zealand Legislature thought they were enacting a measure "to facilitate the settlement of industrial disputes" (in the words of the preamble); they find they have created a perfect Frankenstein's monster. If, in spite of our experience, Mr Wise persists in the attempt to foist upon his country an act which must inevitably be perverted as ours has been, then great indeed will be his responsibility; but, if by reason of the political exigencies [unclear: of] party he should refuse to read [unclear: the] to be derived from our experience, [unclear: the] terms adequate to characterise [unclear: his] would be such as no statesman [unclear: would] to have applied to him.

Turning now to Judge [unclear: Backhouse's] the first thing that occurs to [unclear: one] strange fact that a judge should [unclear: have] sent upon such a mission rather [unclear: that] experienced business man. It [unclear: shows] that those who selected him [unclear: most] thought that what he had to [unclear: report] a system for the settlement of [unclear: real] and not one for the regulation [unclear: of] It is much to be regretted that [unclear: the] has failed to make it clear that [unclear: be] the difference between what he [unclear: exp] find and what he actually did [unclear: find] omission renders his report not [unclear: only] paratively little value, but [unclear: posit] leading. He refers over and [unclear: over] "the principle of the act." and [unclear: inter] Government and the people of [unclear: the] that in New Zealand "a very [unclear: large] of the employers interviewed are [unclear: is] of the principle of the act"; [unclear: and] nowhere points out the [unclear: divergence] principle in actual practice—that, [unclear: is] of fact, the principle has never [unclear: been] at all. The principle of which [unclear: the] approve is that for which the act [unclear: att]ended, not that to which it [unclear: has] verted. If the judge were to [unclear: return] Zealand he would find that [unclear: the] are only now realising what the [unclear: act] in its actual application, and [unclear: that] as far as possible from [unclear: approving] he would find, instead, that [unclear: the] rapidly spreading in the [unclear: community] the act continues to be abused [unclear: it] come a curse and a [unclear: nuisance] what it was intended to be—a [unclear: ble] the judge had exercised any [unclear: pen] sagacity he could not have failed [unclear: to] that what he found in operation [unclear: is] system for the settlement of [unclear: industry] putes (in the ordinary and [unclear: proper] but one essentially the same as [unclear: that] in Victoria; the differences [unclear: being] Victoria the boards are [unclear: serving], the purposes for which they were [unclear: created] the or for ill), whilst our boards [unclear: and] serving a very different purpose [unclear: hu] for which they were created. And [unclear: the] torian system is much more [unclear: rational] inception than ours. What is the [unclear: rec] our system places a Supreme [unclear: Court] at the head of the Court of [unclear: Arbitration] is simply that his function [unclear: was] to be the settlement of strikes [unclear: and] likely to issue in strikes. Is it [unclear: to] posed that, if the New [unclear: Zealand] had intended to create [unclear: an] regulating all the conditions of [unclear: in] page 21 [unclear: would] have chosen a judge for the purpose? [unclear: There] is no presumption that a judge has [unclear: any] qualifications for the discharge of such [unclear: function]. If Judge Backhouse had realised [unclear: the] real nature of the system he could not [unclear: have] failed to note the absurdity of [unclear: com] to a court of any kind the regulation [unclear: of] industries. As a tribunal for the settle[unclear: ment] of real disputes, a court consisting of a [unclear: Supreme] Court judge and two members [unclear: representing] the contending interests might [unclear: well] enough; but to commit to a single [unclear: individual], merely because he happens to be [unclear: a] supreme Court judge, with an associate [unclear: each] side for the purpose of pulling him [unclear: to] opposite directions, would be a supreme [unclear: art] of folly. This is what we have done in [unclear: New] Zealand, but we have the excuse that [unclear: it] is what we intended; we did not [unclear: foresee] the possibility of the judge having [unclear: to] play the part of Governor-general of In[unclear: dustries], which the unions have imposed [unclear: upon]. Judge Backhouse says: "There is one [unclear: er] about which both sides are emphatic [unclear: ely] the necessity of having a Supreme [unclear: Court] Judge as president of the court, [unclear: and] leaves to be inferred that this is on [unclear: account] of some special fitness in such a [unclear: president]; but the reason is simply [unclear: that] is independent of the Executive. [unclear: That] any Parliament should, with full know[unclear: ledge] of the facts, deliberately follow our [unclear: example] is simply inconceivable. The un[unclear: fortunate] thing is that there is nothing to [unclear: above] that Judge Backhouse realised clearly [unclear: the] significance of the fact that the system [unclear: in] actual operation was some[unclear: thing] different from what he came to report [unclear: upon]; and that he professes to find in [unclear: the] actually existing answers to ques[unclear: tions] regarding a system that has never [unclear: judge says] "the act has pre[unclear: sented] strikes of any magnitude," and the [unclear: ent] will no doubt be seized upon by [unclear: Governagement] as justifying their action; [unclear: point] of fact, the words are meaningless [unclear: relation] to a system that has nothing [unclear: with] to prevention of strikes. The [unclear: statement] is therefore misleading. Again, [unclear: the] Judge says "the act has, on [unclear: the] brought about a better [unclear: relation] employers and employees than [unclear: would] have existed if there were no act. [unclear: Now], if by these words the judge means to [unclear: that] relations are more friendly now [unclear: then] they were before the act, how is he [unclear: in] reconcile it with the fact stated by [unclear: him] that in loss than five years 109 [unclear: dis] have come before the boards, and that [unclear: in] only about a third of them was [unclear: concilia] brought about. Formerly, the [unclear: rela] were generally friendly, but now they [unclear: as] friendly as those of [unclear: litigants]. If the judge means that rela[unclear: tion] are now more friendly than they would be if the act were to be repealed, he is probably right, for the simple reason that under the operation of the act labour has passed from the stage in which it enjoys and appreciates freedom into that in which it has become used to the exercise of tyranny.

If the New South Wales Government had appointed as its commissioner a business man of some perspicacity, who could see the true inwardness of our system for himself, instead of a judge, who merely summarises what he was told, we should probably have received some fresh light upon the subject, and found him arriving at some such conclusions as the following:—
1.That he found in operation a system totally different from that which he expected to find, and from that which the New Zealand Parliament intended to set up.
2.That the same thing will inevitably happen in New South Wales if an act should be passed on the lines of the New Zealand act.
3.That the experience of New Zealand affords no guidance as to the practicability of schemes for the settlement of industrial disputes by compulsory arbitration; but that it shows conclusively that it is impossible to combine in the same scheime conciliation and compulsory arbitration.
4.That a permanent tribunal set up for the settlement of industrial disputes will inevitably be perverted into a means of regulating all industries, if the workers are accorded the right of invoking the intervention of the court in any dispute; and that the way to avoid this is to adopt the Massachusetts system, under which it lies with the Conciliation Board to constitute itself a legal tribunal, in case of the failure of conciliation.
5.That the New Zealand experiment is valueless except for negative conclusions, inasmuch as the period of six years that t the act his been in actual operation has been one of gradually increasing prosperity.
6.That the presumption against the success of any scheme for the arbitrary regulation of industry is fortified by the New Zealand experiment, inasmuch as it has largely increased the cost of living.

It only remains to add that the writer did his best as a member of the Legislature to secure the passing of the act; that he believed it would prove a beneficent measure, and still believes it would have so proved had it not been perverted to improper uses; that he has watched it closely from its inception, hoping against hope that it might yet fulfil its promise and justify the expectations of its author; that he has been reluctantly driven to the con- page 22 clusion that it is proving, and must more and more prove, a curse instead of a blessing; that the best thing that could happen would be the repeal of the act, but that this is impossible because of the domination of organised labour; that the trade unions, by persisting in their abuse of the system by using it as a means of tyrannising over employers and others, will sicken and disgust the community, and that when dull times come the act will be allowed to fall into desuetude. The experiment presents a remarkable illustration of the truth of Machiavelli's saying, "Let no man who begins an innovation in a State expect that ho can stop at his pleasure, or regulate it according to his intention." Judge Backhouse concludes his report upon the act with the following words: "Whatever may be the result, the world owes a debt of gratitude to New Zealand for having [unclear: and] taken the task of demonstrating [unclear: whether] is possible or not to [unclear: settle] troubles by compulsory [unclear: arbitration].' the judge had exercised some [unclear: judgment] perspicacity, he might have [unclear: earned] gratitude of his colony by [unclear: pointing] that, although New Zealand [unclear: undertook] task, she has failed to perform it, [unclear: or] to attempt performance; and [unclear: that], of admitting her failure, she tries [unclear: to] herself and others into the belief [unclear: that] has successfully performed the [unclear: task] undertook : "her faith unfaithful [unclear: makes] falsely true." As to the motives author [unclear: of] the measure there can [unclear: be] doubt, but the outcome shows how [unclear: true] is that the highest motives lead the [unclear: best] men to the most doubtful of policies.

decorative feature

Printed at the Otago Daily Times Office, High Street, Dunedin.