2nd Parliament · 3rd Session
Mr. Speaker took the chair at 2.30 p.m., and read prayers.
– I hold in my hand a memorandum in which Staff-Sergeant J. Gourlay, Australian Army Service Corps, certifies to the correctness of an account rendered by Mr. R. H. Henley of Queenscliff, dated 7th May last. The amount asked for is£1 2s. 8d. and is for groceries supplied in April last. As Mr. Henley has been trying in vain for some months to obtain payment, I wish to know if the Minister representing the Minister of Defence will ascertain whether the money will be paid, and if so, when?
– I shall endeavour to inform the honorable member to-morrow.
– Has the Prime Minister heard anything, and if not, will he make inquiries, as to a rumour current in the city that immediately after he moved his preferential proposals the other day the price of Queensland and New Zealand timbers advanced 10 per cent. ?
– No; but I shall cause inquiries to be made.
– In what way is the Board now sitting in Melbourne dealing with the report of the Imperial Defence Committee ? Is it criticising the report of a body which the Prime Minister has assured us is the highest expert authority in the Empire, or is it merely devising means to put the Committee’s recommendations into effect?
– Will the honorable member give notice of his question for tomorrow? I shall endeavour in the meantime to obtain a reply from the Minister.
– Is the PostmasterGeneral yet in possession of information which will enable him to answer the questions I asked last week in reference to the payment of overtime and of tea money to officials in the Government Post Office, Sydney ?
– Yes. The answers to the honorable member’s questions are these -
The Acting Deputy Postmaster-General, Sydney, has furnished the following information : - “1. Officers of the Postmaster-General’s Department in New South Wales are not compelled to work overtime till 9 p.m. and 10 p.m. doing ‘ special ‘ work, and only receive tea money ; when officers are so engaged on ordinary work, they are allowed tea money.
It is not known here what is the ‘ special ‘ work referred to, or officers concerned ; (a) under the Commonwealth Public Service regulations the . Commissioner may grant payment for overtime which from its character or special circumstances cannot be performed during prescribed hours, but no payment shall be made for overtime to officers employed bringing up arrears of work properly coming within the scope of their ordinary duties; (b) the regulations also prescribe that tea money may be allowed where an officer has been specially directed to attend after ordinary hours, and works for at least two hours after the usual hours, but tea money shall not be allowed when overtime pay is given, and where it is practicable, equivalent time off must be granted in lieu of overtime payment.”
See No. 1 and 2. The instance referred to is not known. I may add that the Acting Deputy Postmaster-General, Sydney, has been informed that tea money and time off may both be given in cases where overtime is not paid.
– Does the Prime Minister propose to recognise the Royal Victorian Agricultural Show to-morrow by an adjournment ?
– I recognise it by paying to it the highest possible tribute of praise in the shortest possible time ; but I do not propose to adjourn over to-morrow.
– Is there any objection to laying on the table of the library the papers in the Crouch surrender case?
– I shall inform the honorable member to-morrow.
– On the 31st August, the honorable member for Fremantle asked certain questions in reference to the rates being paid to the men engaged in laying cables between Perth and Fremantle. The information is now available, the answers to the honorable member’s questions being-
asked the PostmasterGeneral, upon notice -
– The following information has been furnished by the Acting Deputy Postmaster-General, Sydney, in answer to questions 1 and 2 : -
The reply to question 3 is -
asked the Minister of Trade and Customs, upon notice -
Mr.DEAKIN. - The answers to the honorable member’s questions are as follow : -
Motion (by Mr. Kelly) agreed to -
That there be laid upon the table of the House a Return showing -
The values each year for the past three years of each line of imported articles -
From the United Kingdom,
from elsewhere, on which a preference is proposed to be granted to the products of the United Kingdom.
The values each year for the past three years of each line of imported articles -
From the United Kingdom,
from elsewhere, on which no such preference is proposed to be granted.
Motion (by Mr. Kelly) agreed to -
That there be laid upon the table of the House a Return showing -
The number of stripper harvesters imported -
From Canada (whether via other countries or direct),
from elsewhere, during each of the last two years.
The number of Australian stripper harves ters produced in Australia during each of the last two years.
The number of Australianstripper harvesters exported from Australia during each of the last two years.
The countries to which Australian stripper harvesters have been exported during each of the last two years.
Mr. DEAKIN laid upon the table the following paper: -
Provisional Immigration Restriction’ regulation, Statutory Rules 1906, No. 70.
The Clerk laid upon the table:
Return to an order of the House, dated this day, showing the imports, manufactures, and exports of stripper harvesters.
Ordered to be printed.
Consideration resumed from 28th August (vide page 3446) on motion by Sir William Lyne -
That in lieu of the duties of Customs imposed by the Customs Tariff 1902 on the items shown in the attached schedule, duties of Customs shall from the 28th day of August, 1906, at 4.30 p.m., Victorian time, be imposed as follows : -
Stripper harvesters, each, ?16.
Strippers, each, ?8.
Metal parts of stripper harvesters and strippers, per lb., 2?d.
Ad Valorem Rates.
Stump jump ploughs; disc cultivators; winnowers, horse and other power ; combined corn sheller, husker, and bagger; combined corn sheller and husker, ad valorem, 25 per cent.
Ploughs, other; plough shares; harrows; chaff cutters and horse gear; cultivators other than disc; scarifiers; plough mould boards; corn shelters; corn huskers, ad valorem, 20 per cent.
The following goods shall be free of Customs duty : -
Manufactures of Metal, viz. : -
Hand-worked rakes and ploughs combined ; hay tedders; maize harvesters; maize binders; maize planters; mould board plates, in the rough, and not cut into shape ; potato sorters ; potato raisers or diggers.
.- I hope to be able within a few minutes to distribute amongst honorable members the information in regard to the importation of stripperharvesters moved for by the honorable member for Wentworth; but, in the meantime, will read a tabulated statement containing figures which had been prepared before notice was given of the intention to move for a return. These figures are as follow : -
It is only since January, 1905, that the imports and exports of harvesters have been recorded separately. Before then, they were included in the figures relating to the imports and exports of agricultural implements. We have discovered that certain agricultural implements are not made in the Commonwealth. Among these are handwork rakes and ploughs combined, hay tedders, maize harvesters, maize binders, maize planters, mould-board plates in the rough and not cut into shape, and potato sorters. Potato raisers, or diggers, are reported to have been made at Colac, Woodend, and at Sydney ; but it is uncertain whether they are now on the market and the extent of the business done in them is not known. The Government, while following as closely as possible the principle of the recommendation of the Tariff Commission, has thought it necessary to impose fixed instead of ad valorem rates of duty on stripper-harvesters, strippers, and metal parts of harvesters and strippers. ‘The wide range of values makes it almost impossible to deal satisfactorily with importations of these machines in any other way. The conflict of opinion which has occurred in regard to values is well known, and seems likely to last indefinitely. We have had official intimation from a British Consul in the United States that there is one obvious means whereby the returns made to us, though correct so far as the transit companies are concerned, may be rendered practically useless. There are so many opportunities for variation in the different methods of production, and also for the evasion of certificates, that the task of fixing fair ad valorem rates is felt to’ be one of increasing difficulty. As fast as correct information is obtained in one respect, some new device is brought into play, and an alteration has to be made in the amount of dutv levied.
– In order to get over that difficulty, it is proposed to inflict a gross injustice.
– No; in order to prevent injustice, we propose -a specific duty as fairest.
– Does not the Minister’s argument show that the valuation placed on the imported harvesters was an improper one?
– The Prime Minister has spoken of the transit charges. Did not the Minister of Trade and Customs make a regulation that the transit charges were not to be deducted from the valuation of the harvesters at the port of shipment ?
– It was urged on behalf of the importers that they were entitled to consideration in respect of the heavy railway charges payable in respect to the conveyance of the machines through America. The British Consul showed, however, that after the implements had been placed on board the train, and had apparently been sealed up they were available at intermediate points. Parts of the implements could be removed and other parts substituted, and, in fact, changes might be made without detection unless we were to employ an army of observers and informers. Under these circumstances, we consider it fair to impose a fixed duty. The Tariff Commission set out the history of the development of the stripper harvester, with which, I hope, honorable members are acquainted. They point out that it is distinctly Australian in origin, and that the local manufacturers have a special claim upon the people of the Commonwealth.
– The report of the Commission does not show that the machine is of distinctly Australian origin.
– A report signed by the Chairman sets out that fact, and the report of the dissenting members of the Commission does not, in any effective fashion, traverse it. In view of these particular circumstances of the case we are asking honorable members, if they accept the principle laid down in the report signed by the Chairman of the Commission, to subject the machines to a fixed duty instead of to the extremely variable duty levied upon an ad valorem basis.
– Are the reports of the British Consul available?
– I am not in a position to say whether, or not, they were laid upon the table, but I have seen them. They relate to individual cases, and come not from a trade rival, but from an official who has no interest in the business. Let honorable members take into consideration the difficulties with which we have been beset, and those which we shall certainly have to face. Thev will then agree with the Government that the proper way in which to deal with these three classes of agricultural implements, and the only, way in which we can avoid conflicts in order to secure protection to the Australian manufacturer is by imposing a fixed duty instead of an ad valorem impost. When we come to the other implements I shall point out that it is proposed to levy a duty upon, the parts of implements at a rate of duty differing from that imposed upon the completed article.
– That is as regardsonly a particular class of parts - malleable castings.
– Exactly. But in the opinion of the officers of the Department it is inadvisable to make a distinction between malleable castings and any other parts. The principle laid down in the Customs Act. and which has been followed hitherto is that all parts shall be charged at the same rate of duty that is levied on the completed machines. By this means difficulties in administration are avoided.
– Is the 2 1/2d. per lb. proposed to be levied on the parts equivalent to the rate of duty levied upon the completed machines?
– I am told that the 2d. rate, taken all through, would work out in some cases at below *£16 per machine, and in other cases at more than that amount, but, taking all the parts, 2§d. per lb. would average out at about £16 per machine.
– The evidence before the Commission shows that it would work out at about £25 per machine.
– That is quite true in regard to some of the parts. They vary in value very considerably, some of them being much more expensive than others in proportion to weight. According to the evidence supplied to me the average is a fair one.
– Has the Minister any information as to the average weight of the machines ?
– lt is not ready to my hand at the present moment.
– They weigh 26^ cwt.
– This is probably the proper time at which to repeat to honorable members the conditions which we propose to attach to the imposition of these duties. In the first place -
With regard to stripper harvesters, the Bill will provide that the cash price of the 5 ft. harvester must be reduced by the end of 1906 to £70, and of the 5 ft. 6 in. harvester to £75, with a further reduction by the end of 1907 10 £f>$ and £l° respectively. Failing such reductions, power will be taken to reduce the import duties by Proclamation or Resolution of the House to an amount to be determined by such Proclamation or Resolution not to be less than one-half of the new duties imposed.
These are very extreme reductions indeed, bringing down the price of the local harvester to the value which has been put upon the imported harvesters. This condition should place it beyond all question that the same treatment - and, indeed, if allowance be made for the selling cost, more severe treatment - is being meted out to the Australian manufacturer as to the importer.
Provision will also be made that additional protection shall be suspended if, after one year from the passing of the Act, fair wages are not being paid.
This is in accordance with the report of the Commission, and is to be embodied in the Bill.
– It is in accordance with one part of the report, but not with the report of the Commission.
– Yes, the honorable and learned member is quite correct. I am referring to the report which was signed by the Chairman. There are two reports, signed by an equal number of the members of the Commission. I do not wish to be misunderstood! and shall in future refer to the report to which I am alluding as the “ Chairman’s report.”
– The Prime Minister should refer to it as one report of the Commission.
– One report is signed by the Chairman and certain members, and the other by other members equal in number. It is further proposed -
Malleable and other castings for agricultural implements (other than stripper harvesters and strippers) will be dutiable at the same rates as the complete implements, under section 140 of the Customs Act 1901. Wooden parts of harvesters and strippers will also be dealt with under section 140 of the Customs Act.
I shall make other information available as soon as it reaches me. I have given honorable members the advantage of the information already prepared, and trust they will see that, under the conditions proposed to be enforced - cutting down of the prices of machines in this drastic fashion, and requiring fair wages to be paid within one year, or else the duty will be reduced by more than 50 per cent. - we shall be afforded an ample guarantee that the . manufacture of the Australian implements will be conducted on lines fait to all those engaged in the industry and to the purchasers.
– How would the Prime Minister define reasonable wages ?
– So far as Victoria is concerned, that point would be decided according to the decisions of the Wages Boards. In other cases, they would be determined according to the current rate of wages paid in the locality, under a power similar to that vested in the Minister of Trade and Customs with regard to the sugar industry in Queensland. The conditions to which I have referred are imposed in connexion with no other industry, and afford the best possible proof that our proposals are made not in the interests of the manufacturers, or of their employes, but of the whole community. The purchaser will be protected in regard to prices, and the employes will be protected as regards their wages. We assess the value of the Australian machines at the gazetted price of the imported article.
– Is the Prime Minister willing to give the employes the benefit of the whole of the proposed increase of duty ?
– Does the honorable member suppose, if that could be done, that we could reduce the price of the implements at the same time? The farmers will obtain the benefit of the proposed new arrangement, because the prices will be reduced to a lower figure.
– The lowest price proposed to be fixed for the local manufactured implements is £2 higher than that at which machines were offered to the farmers of Murtoa four years ago.
– These are not the same machines that were offered to the farmers four years ago. A difference has been made each year, and the improvement effected in four years is remarkable. The machines have been altered in size, their parts have been changed, and they are, in many respects, entirely different from those previously offered.
– The honorable and learned member for Wannon would not know a stripper harvester from a cowbail.
– I fully understand that the honorable and learned member is not speaking from personal knowledge, but has been supplied with information, and that he is not to blame if it is incorrect.
– The information I have given was supplied by the Chairman. of the Farmers’ Union at Murtoa.
– I do not know the gentleman referred to, and I do not refer to that particular person when I say that many of those most active in the agitation against the proposed duties who are connected with farmers’ organizations, have really been acting in the interests of the importers.
– That is absolutely incorrect in regard to the gentleman to whom I referred. It is necessary to be a farmer in order to be a member of a farmers’ union, and this gentleman has never been connected with any importers’ organization.
– The honorable and learned member is not fair. I expressly stated at the outset that I did not know the person to whom- he referred, and went on to allude to others who had been actively agitating, in some cases by writing letters to the newspapers, not signed by their own name’s. The honorable and learned member has stated that it is not necessary to be a farmer in order to be a member of a farmers’ association. I know it.
– I said that it was necessary.
– I know a number of individuals who are members of so-called farmers’ unions who have never been, farmers in any sense of the term. My desire has been to briefly submit the facts that I have had collected in response to the requests of honorable members for information, and to’ explain the conditions which the Government propose to establish in connexion with the levying of these new duties. For my own part - giving my opinion for what it is worth, because I do not pretend to have special knowledge on the subject - after having read the report signed by the Chairman of the Tariff Commission, I am very strongly of opinion that the circumstances of the case are to be met only by the imposition of a fixed duty, and trust the Committee will accept it.
.- I can see plainly that the Prime Minister is under a misapprehension as to the nature of farmers’ unions. They are composed of farmers only, who have united for the purpose of co-operative dealing. The Prime Minister probably had in his mind certain political bodies; but the farmers’ unions to which I refer consist of farmers who have united for the purpose of buying machines and implements, cornsacks, &c.
– The honorable and learned member is quite right; but the organizations to which I referred are called by the same name.
– No; they are all called by a different name. They are absolutely distinct bodies, and the farmers’ unions, so far as I am aware, have no political colour-, but are( merely trade unions. I think that it is a matter for regret that we have not had the privilege of listening to an exposition by the Minister of Trade and Customs of the reasons which have actuated the Government to depart so widely from the recommendations of the Tariff Commission. It seems to me an extraordinary circumstance that whenever we have a full-dress debate upon a matter affecting the Customs Department, the Minister of Trade and Customs is almost invariably absent. When a question of this character is under consideration, it is proper that the Minister, who is charged with the administration of the Department, should be in attendance in the House. It is .greatly to be regretted that, so far, whenever Tariff debates have been in progress the honorable gentleman who presides over the Customs Department has been conspicuous by his absence.
– What about the leader of the Opposition?
Mr. -“ROBINSON.- The leader of the Opposition is not charged with the administration of a Department. When an honorable member is administering a Department, and is responsible for its administration, he should be present in the House when measures affecting his Department are being discussed. It is about two years since the Tariff Commission was appointed to inquire into complaints which were made in various quarters that certain industries in Victoria were languishing! - that they were being strangled-
– The complaints were not confined to Victoria.
– Then I withdraw the word “Victoria” in deference to the wish of the honorable member. It was alleged that certain industries were languishing, and that unless they received, at the earliest possible moment, an increased measure of protection they would collapse. That is why the Tariff Commission was appointed. Its purpose was to inquire into the facts connected with particular trades, to ascertain whether those trades were languishing, and whether it was necessary to grant them extra protection in order to keep them alive. In the case of the distilling industry with which we dealt a few weeks ago, it was conclusively proved - both to the Commission and to this Committee - that unless some measure of protection in excess; of that which they already enjoyed were granted to the manufacturers they could not continue operations. Consequently a unanimous report from the members of the Commission was presented to this House. But so far from the sworn evidence tendered to the Commission disclosing that the industry which we are now considering is a languishing one, an examination of that evidence reveals that it is one of the most virile and prosperous industries, from an employer’s stand-point, that exists in the Commonwealth. At this stage, I intend to saynothing regarding its position ‘from a wages point of view, because there are honorable members in this Committee who are entitled to speak with more authority on that subject than I am. But from an employer’s stand-point the manufacture of stripper harvesters is one of the most profitable and growing industries that Australia has yet seen. ‘ Let us examine the position from the point of view of the growth which Has taken’ place in the manufacture of agricultural implements. I take my information from the latest Victorian figures which were published only a few days ago. Of course, these figures do not differentiate between the persons who are engaged in the manufacture of stripper havesters and those who are employed in the manufacture of other agricultural implements. I find that in Victoria in 1902 there were 789 hands employed in the in-, dustry; in 1903, 1,114; m 1904, 1,496; and in 1905, 1,624. Thus, in an industry which is alleged to be languishing, and to have been more or less strangled through the want of adequate protection, there has been an increase in the labour employed within the short space of four years of more than 100 per cent.
– There were more than that number of hands employed in Victoria.
– I have the figures relating to Victoria in my possession. I arn not like the honorable member, who relies upon his memory for his facts, and upon his imagination for his original illustrations. I hold in my hand the official re-, turns compiled by the Government Statist of Victoria. I find that in 1905 there were in Australia 2,799 persons employed in the agricultural implement trade - a distinct advance upon the number of those who were engaged in the industry prior to that year. When we see such a steady growth of employment in any industry, we may fairly conclude that it is progressing. But T would point out that there has also been a steady growth in the number of these implements exported. According to the figures supplied by the Prime Minister, there were 418 stripper-harvesters of Australian origin exported “in 1905, whereas during the first six months of the present year no less than- 484 of these machines were exported. I come now to the production and sale of the locally-manufactured harvesters.
– What about the imports? Why does not the honorable and learned member give us the figures relating to them ?
– ‘Perhaps the honorable member will permit me to develop my argument in my own way. “I hold in my hand a report of an interview with Mr. H. V.. McKay, of the Sunshine Harvester Company Ballarat-
– Is it taken from a comic newspaper ?
– No newspaper could be half as comic as is the honorable member. The interview is headed “ Australian Industries.”
– In what newspaper was it published?
– The Melbourne Punch. The interview was supplied by Mr..
– But the honorable and learned member must know that the machine of which he is speaking nas displaced another machine, which was doing practically the same class of work.
– I am aware that it has almost annihilated the stripper, and that it has superseded the binder in a great many directions.
– The figures which the honorable and learned member is quoting refer to the total output of machines by all makers?
– Yes. The steadygrowth in the sale of locally-made harvesters is an evidence that the industry is progressing, as is also the fact that more hands are employed, and that more machines have been exported. The figures which I have quoted relate to locally-made machines only. There were no machines imported prior to 1901 or 1902. I wish also to point out that the manager of Mr. McKay’s works informed the Tariff Commission upon oath that last vear he turned out 1,930 of these machines. That fact proves that the manufacturers engaged in this industryhave not been doing too badly. These figures effectually dispose of the claim that the industry is a languishing one. They show that it is a progressive and virile industry, and one of which we ought to be proud. In regard to the sales of imported machines, I find from the figures which were presented to the Tariff Commission that in 1902 - which was the first year during which they were imported in any quantity - there were 160 brought in. In 1903 there were 500 machines imported ; in 1904, 1,700 ; and in 1905, 1,730, of which between 1,350 and 1,400 were sold. If honorable members will look at the imports for 1902 they will see that out of every four machines which were sold only about one was an imported machine. A perusal of the figures relating to 1905 will show that the same proportion is still preserved. Out of every four machines sold, last year only about one was imported, the other three being locally manufactured. I am well within the bounds of accuracy when I say that practically 70 per cent, of the harvesters sold are machines of local origin. The statistics which I have quoted establish the fact that there has been no displacement of locally manufactured harvesters. The machines which have been imported were brought in to supplement the output of the local manufacturers, and were not supplanting them. The fact that the output has trebled within the last few years conclusively proves that the Australian industry has not been supplanted’, and it also evidences that the machines imported were introduced to supply the demand which existed for them. In the absence of a demand there would not have been that importation. The trade of the local manufacturer has trebled within the last few years, and the importation of harvesters from Canada and America has been the means of supplementing the output of the trade, and of giving those upon the land a wider range of patterns from which to choose.
– Nonsense. What was the value of the harvesting machinery which was imported in 1900 outside of binders? It was practically nil.
– I think that the honorable member is wrong. The Prime Minister has stated that last year the imports of agricultural implements, n.e.i., were valued at ^189,000 ; that the harvesters imported numbered 1,730, and were valued at ^114,000; that the binders imported were worth ^14,000, and that the agricultural implements which were imported free of duty, were valued at ;£43..o°°-
– Outside of binders, what was the value of the harvesting machinery imported in 1900?
– I cannot analyze the figures which have been presented by the Prime Minister. It is impossible for any honorable member to do that unless he has the complete run of the Customs Department. The facts which I have presented show that the industry exhibits every sign of virility, that it is character- ized by progress, that it is employing a larger number of hands than it did formerly, and that it is yearly doing a larger trade. I think that an examination of the evidence given before the Tariff Commission shows that, not only has there been a large number of machines made locally, but that their manufacture has proved exceptionally profitable. After reading the evidence I venture to say that there have been of late years few industrial concerns in Australia that have proved so profitable as h’as the manufacture of harvesters. If honorable members will bear with me, I think that I shall be able to substantiate this statement. There is no evidence whatever that the local manufacturers are not making a profit - every shred of evidence is in the opposite direction. In answer to question 16820 Mr. McKay said, “ I can frankly admit that business has increased substantially.” Mr. James Moore, manager of Robinson and Co., also said that “none” - meaning the local manufacturers - “ that I know of are losing.” Again he said, “My firm is not suffering any loss through the Federal Tariff,” while later on he said that they were making “ a little more profit “ than before Federation. All this evidence’ shows that the trade is a profitable one. I do not desire to reflect on any individual connected with the trade, but I wish to mention the name of one of the largest manufacturers, Mr. Hugh McKay, in order to bring out two very striking facts. In 1897 that gentleman offered to sell his plant and business to the Massey-Harris Company for j£ 1 0,000 and a position under the company, and two and a half years later he offered to sell to the International Harvester Company for £32,000. Such an increase within the short period of two and a half years does not indicate that Mr. McKay’s trade was languishing. If any honorable member could secure such a profit within that space of time, I am quite sure that he would be content to “ languish.” In 1899 Mr. McKay’s output, according to his evidence before the Commission, was about 300 machines, and to-day it is somethink like six times greater. His manager says that his output last season consisted of about 1,930 machines. If with an output of less than 500 machines per annum Mr. McKay was willing to sell his business for £3 - > 000 1 short rule-of -three sum shows that he would require something nearer £100,000 for it at “the present time. I do not begrudge him his success; I only say that these facts show that his trade has not been strangled by foreign competition, but that it is, on the contrary, a very profitable one.
– If it were not paying, why did he refuse to produce his books when asked to do so by the Tariff Commission ?
– He was asked again and again to produce his books, but point blank refused to. do so. Witnesses from the Massey-Harris Company and the International Harvester Company offered to produce their books, and to lay the whole range of their business before the Commission, provided that Mr. McKay would do the same.
– His books could be tested, and those of the other firms could not.
– Their books could be tested in a case before the Court to-day, but trie Government are doing their best to prevent anything of the kind.
– What kind of a test could be secured when they sell from themselves to themselves?
– We are dealing with the cost of manufacture, and that may be easily tested.
– It isi not such an easy matter as the honorable and learned member appears to imagine.
– If such, a test could not be made no business man would be able to ascertain whether or not he was carrying on at a profit. The extent of the trade, its expansion, and its. general aspect of prosperity all go to prove that the industry is not languishing. It is within the power of the local manufacturers, who today have 70 per cent, of the trade, to secure 99 per cent, of it, and still make an excellent profit by selling to the farmers at a very much lower rate than they do. If there were any desire to conserve the interests of the farmers, that course would be adopted. The present prices could be substantially reduced without destroying the opportunity of .the manufacturers to secure a substantia] profit. In paragraph 16 of their report the Commission estimate the merchandizing profit on the sale of one of these machines for £81 at a little over £18. I hope to show that that estimate is a very modest one. Mr. McKay now turns out nearly 2,000 machines per annum, and, given a profit of ;£i8 per machine, his annual profit must be something .like .£36,000. That is not a bad return on a business which he was ready a few years ago to sell for ^32,000. We are entitled to ask why these duties should be increased. Is there any reason why we should grant an increased duty to protect a trade in which some persons must be making a cent, per cent, profit? Is there any justification for an increase in the Tariff relating to that trade? If the industry could be described as a languishing one, then the same remark would apply to the shipping industry, the tobacco trade, and other enterprises which are supposed to be very profitable. If the local manufacturers of harvesters require more protection, then other industries carried on by people who in some cases are reputed to be very wealthy also deserve greater protection. The only justification for the appointment of the Tariff Commission was that this and other industries were being strangled, and that it was necessary to make a thorough inquiry into the whole of the facts relating to them, in order that steps might be taken to prevent their being destroyed by foreign importers. The Commission’s estimate that the merchandizing profit on one of these machines is j£i8 is certainly a very low one. It is based upon the assumption that it costs ^41 to build one of ‘these machines here. I think I can show that the cost to some manufacturers carrying on business on a fairly large scale is considerably less. In the first place a Mr. James McGregor, who gave evidence before the Tariff Commission, said that Mr. N. B. McKay had assured him that it cost his firm ‘ *£30 to manufacture and place one of his machines in the field.
– What machine was he referring to?
– He was referring to a statement made three and a half 5’ears ago by Mr. N. B. McKay.
– The machine then manufactured was a very different one from that now being produced.
– The only difference is that machines now being manufactured are of somewhat simpler construction, and cost less to manufacture. Mr. Weickhardt, who was formerly employed by Mr. McKay, said the cost was about £,30.
– Would the -honorable and learned member accept the evidence of a man whom he had had to discharge for his own protection?
– When a witness was sent from McKay’s factory to rebut Mr. Weickhardt’s evidence”’ he was ‘asked whether he proposed to deal with the question of cost, but very wisely declined to be drawn. Mr. McKay has not contradicted any of these statements, but, since some honorable members appear to feel aggrieved when I refer to these witnesses, I shall refrain from making further , quotations from their evidence, and direct attention to the testimony of Mr. Rees Rees, manager for Hawke and Company. This witness was the only man who “ gave the .show away.” When he was asked what was the cost of manufacture, he replied .that it was 3d. per lb. all round, and that the weight of one of his machines was between 26 cwt. and 27 cwt. Assuming that the weight is 26J cwt., 3d., per lb. gives us a total cost of ^37 2s. per machine. Here we have the evidence of a manager of a local manufactory having an output of fifty machines per annum - and with a restricted turnover the cost must necessarily be greater-
– Does the firm in question make any other machines?
– I understand that they make other agricultural implements.
– That is so, and the firm is a good one. We have the evidence of the only witness who was incautious enough to “ let the cat out of the bag,” that it cost 3d. per lb. to manufacture these machines, or £$7 2s. to- turn out a machine weighing 26J cwt. That is a shade less than the valuation fixed by the MasseyHarris Company, but as they -say that it includes ai merchandizing profit in respect of their Toronto house, this estimate is a confirmation of their original valuation. From the evidence of Mr. Rees it may fairly be assumed that a manufacturer in a large way of business would probably turn out these machines at a cost of ^33 or £>M- On the question of the cost of sale there was a conflict of evidence. The International Company informed the Commission that it cost them £12 to sell a machine ; the Massey-Harris Company said that it cost them: ^17 ; whilst Mr. McKay, although be did riot £av definitely what the cost was to him, stated that £21 would cover it. The mean of the three is .£17, and that is a very big price to pay. I am prepared, however, to assume that that is the selling cost, and- when we add it to the cost of manufacture, we find that, any price over .£54 would give a profit to the local manufacturer. These figures show that, as a matter of fact, a man like Mr. McKay, who can turn out these machines at a low cost, would be able to secure a profit at any price over £50; that the whole trade could be secured by a reduction of the selling price to a level which would still afford the local manufacturer a reasonable profit. If these machines were sold at £50 or £55 each, there would be no necessity for the firms concerned to advertise extensively, because it is the price after all that tickles the public fancy. With a reduction to something like £55 per machine a large proportion of the cost of selling incurred by Air. McKay and others would disappear. They would secure the whole market, and it would be unnecessary for them as at present to publish large advertising cartoons in the Sydney press, or’ interviews and paragraphs in every country newspaper. It would likewise be no longer necessary for them to employ artists of great ability to draw, excellent advertising pictures, and in other directions the selling cost would be cut down. If the price were reduced in the way I suggest, there could be a great saving in advertising and other selling expenses, because the reduction would give a most effectual advertisement for which nothing would have to be paid. If the manufacturers were satisfied with a ‘profit of £5 on each machine sold, the sale of 2,000 - which is the present output of one maker - would yield a profit of ,£10,000 per annum. Most of us could exist on an income as large as that. In my opinion, it is possible to reduce the prices of the locally-made machines enormously, and yet obtain a profit of £5 each. That is shown by the particulars as to cost of manufacture revealed by one maker. The cost of selling was variously estimated by several witnesses, but if the mean of the amount so stated is taken, and added to the cost of manufacture, it will be seen, on deducting the total from the price charged to the farmer, that the profit obtained is entirely disproportionate. The evidence put before the Tariff Commission shows that 99 per cent, of the Australian business could be secured by local makers without the aid of additional duties, and even without duties, if prices were reduced to a level which would give farmers the implements they need at a reasonable cost, and would return a substantial profit to the manufacturers. Mr. McKay stated that in 1899 his output was only 300 machines, and the expansion of his industry has taken place under a duty of £5 4s. 7d. a machine. This shows that the local manufacturers could get practically the whole of the Australian trade into their hands and drive the importers out of the market, without getting the duties increased, or issuing a paper called the Dairy Farmer and branding it “ O.H.M.S.,” or resorting to any other devious method, by taking the straightforward course of reducing their prices to amounts which would give them a fair profit. The Minister of Trade and Customs and the Prime Minister repeated to-day that prices are to be reduced. They spoke of this reduction as something wonderful, which would greatly benefit the farmers.
– I am told that some of the manufacturers say that they cannot face it.
– I. shall show how they faced it in the past. The Prime Minister says that the cash price must be reduced to a certain sum, and I therefore ask him what he will do if, of . twenty manufacturers, fifteen reduce their prices and the remaining five do not? Will the duty be increased ? Or will it be reduced ? Or will it remain as it is.?
– The Government have not thought of that yet.
– I regret the nonattendance of the Minister of Trade and Customs when matters affecting his Department are being discussed, because we are entitled to know whether the Government have a scheme to meet this difficulty. What steps are to be taken if some of the manufacturers refuse to reduce their prices? Then, again, suppose that one manufacturer goes a mile or two beyond Braybrook, and evades the conditions imposed by the Victorian Wages Boards, what is to be done? ls the duty to be reduced or is it to be increased ?
– The honorable and le’arned member is looking round for trouble.
– I am showing that the baits which are being held out to the farmers and workers respectively are merely sprats to catch mackerel, because any spry, progressive manufacturer, capable of writing the interviews I have here, could gallop through the proposed restrictions. Such a. man could put on the market what he might call his “ stripper-harvester, 1907 pattern,” selling it at the Government price, but asking a higher price for an “ extra special harvester.” His ordinary harvester might meet the conditions as to price ; but might not be his best harvester. It might, indeed, be a deliberate impairment of his standard, being sold only to those who were foolish enough to buy it because of the price, the first quality machines being pushed and charged highly for. Another point I wish to make is that the proposed concessions are to be given only to those who can pay spot cash. The majority of farmers buy on time, and there is nothing in the proposed conditions to benefit those who have to pay in two or three instalments.
– No doubt, the honorable member is in the happy position of being able to write a cheque for what he buys; but there are many farmers who have to get promissory notes, and to obtain fifteen to eighteen months’ terms when they purchase machines. These persons are to receive no concession. If the Government are in earnest about this matter, and mean to give genuine concessions to the farmers, and to-, secure to the workers that which they have promised-
– That is not their intention.
– I doubt if it is. As regards the proposed reduction in price, I think that I shall be able to show that it is a mere bluff, and a sham of the most hollow character. When speaking on 28th August, the Minister of Trade and Customs said - and his remarks are reported in Hansard, at page 3444 -
The Bill, which I shall not prepare until the motion has been dealt with, will provide that the cash price of 5- feet stripper-harvesters must be reduced by the end of1906 to £70. I wish to emphasize the point that the Tariff Commission recommended that the price should not exceed £81. That, to my mind, would be an outrageous charge.
– Then the honorable gentleman does not think that£65 is a fair price for the imported machines ?
– I have heard that statement so often that it is unnecessary for the honorable member to repeatit.
– But the two things do not fit.
– I have no wish to listen again to a tirade of abuse such as that to which I have been subjected. The Bill will also provide that the price of the 5 ft. 6 in. harvester shall be reduced by the end of 1906 to £75.
– They can be bought for £71.
– The honorable and learned member goes about the country talking in a blustering way of things about which he knows absolutely nothing. I shall show how little he knows of this subject.
That is what passes for debate with the Minister of Trade and Customs. The reduction of price referred to cannot take effect until the 1st January, 1907.
– The honorable and learned member cannot know what is happening to-day. If he did, he would not make that statement.
– The Minister was dealing with cash prices throughout.
– Does the honorable and learned member know that the reduced prices are in force to-day?
– I have here some price lists which will show exactly what the present prices are. The Minister, when endeavouring to show that I knew nothing about this matter, read from the price list of Hugh Lennon, which he said bore out his statements, though, as a matter of fact, it bears out mine. Mr. Lennon’s price for a 5-ft. machine, type A, is£75 if paid for by a promissory note, due March, 1907. That’ was the price the Minister quoted; but he failed to read a footnote stating that if cash in full settle.ment is paid the day that the harvester is started a reduction of 5 per cent. will be made; which makes the cash price £71 5s. Then he told us that the price for 5 ft. 6 in. machines was £80 ; but a similar reduction for cash brings it down to£76. The cash price of a 5 ft. machine is to-day therefore£71 5s., and the Minister next year is going to bring it down to£70, a saving of the immense sum of 25s. Similarly, he is going to reduce the price of the 5 ft. 6 in. machine by the large sum of £1. This is the bait held out to the farmers. Messrs. Nicholson and Morrow charge £70 for their 5-ft. machines, with a reduction of 2½ per cent. for cash within thirty days of delivery, or £68 5s. for cash. For a 5 ft. 6 in. machine their charge is £75 on terms, or £73 2s. 6d. for cash.
– What is the date of the price list from which the honorable and learned member is quoting ?
– I am quoting from the price list now being used by the firm’s travellers. The price fixed by the Minister is£1 15s. more than the 5-ft. machines made by this firm can be bought for, and £1 17s. 6d. more than their 5 ft. 6 in. machines can be bought for. That fact shows the worth of thissop to the farmer. The manufacturers are to have a standard price fixed for them - a price which, in same cases, is absolutely higher than that for which machines can now be . purchased. In other cases, such as that quoted by the Minister, the reduction upon one harvester will amount to 25s. and upon another to 20s.
– When were those price lists issued ?
– Lennon’s price list, which was quoted by the Minister of Trade and Customs the other day, was issued on 31st July, 1906.
– What about the others ?
– I did not intend to discuss the price of every machine. I have taken Lennon’s price list, because the Minister laid great stress upon it, and endeavoured, by reference to it, to show that he was performing an act of virtue in reducing the price of machines, and that he was making an enormous concession to the farmers. But, according to the price list quoted by him, and which he did not read right through, the reduction proposed to be made is absolutely farcical. In 1901, when the manufacture of harvesters had not assumed anything like its present proportions, and when the methods of production were more costly and the article was not so good, Messrs. Martin and Company, of South Australia, advertised in the Kapunda Herald that they would sell their machines for £70 cash. They also quoted to the Murtoa Farmers Union - a union composed of farmers only-
– I think that that was a different machine.
– I stated that the machine had since been improved.
– Yes, greatly improved.
– And the cost of manufacture has also been reduced. Messrs. Martin and Company offered to sell their machines to the Murtoa Union at £63 each, if three machines were taken. Their price was£70, less 10 per cent., or£63. The lowest price quoted by the Minister as that which would be reached in years to come is, therefore, higher than the lowest price charged in the past. In other words, the lowest price to be charged two years hence is £2 in advance of the lowest quotation of two years ago. Thus a nice sop is being offered to the farmers. The attempt to curry favour with them is abso lutely farcical, because no reduction whatever is being made in the cost of the machines. If the object be to confer benefit upon the farmer, the price of the 5-ft. machines should be at once reduced to£65, and, in the two following years, to £60 and £55 respectively.
– Why did the Tariff Commission say that the standard price was £81?
– They stated that at the time they were taking evidence the machines were being sold for£81.
– The Minister stated that £81 was a monstrous price.
– Just so. I believe that each and every one of the statements that I have made, except those relating to the quotations from two or three price lists, is supported by the evidence taken by the Tariff Commission. One of the price lists was quoted by the Minister of Trade and Customs, and can, therefore, be accepted by members on both sides of the Chamber. We find, upon examination of the evidence to. which I refer, that the imported machines have not supplanted the locallymanufactured article, but have merely supplemented the supply furnished by Australian manufacturers, and, further, that the importations have not crushed the local manufacture, which is rapidly advancing, and has been doing so for years past. I think, moreover, that the evidence establishes beyond any. chance of contradiction that the importation of harvesters could be absolutely prevented by a substantial reduction in the price of the Australian machines - a reduction which could be made without. precluding the manufacturers from deriving a good profit.
– At what price are the Australian machines sold in Argentina ?
– That is a difficult question to answer. The natural protection on stripper harvesters is very substantial. In paragraph 14 of the report of the Commission it is stated as a fact that, exclusive of the duty, it costs £14 16s. 6d. to import a Massey-Harris machine, and £12 3s. 6d. to import an, International Harvester Company’s machine. Upon a cost of £38, which was fixed by Mr. Rees, the import charges would represent a natural protection of over 30 per cent., and if we add to this a duty of £16 per machine. which is equivalent to an ad valorem duty of upwards of 40 per cent., the protection that is proposed to be given to the Australian manufacturers will amount to from 75 to 80 per cent. As some compensation for this, the Government are proposing to give the farmers, - what ? - a bounty for the production of peanuts. The wheat grown by our farmers has to be sold for what it will fetch in the markets of the world, and there is no means available to us for increasing the return obtained by them. Our fanners have to take the world’s price, and yet we are proposing to compel them to buy their machines .at the price fixed by Mr. McKay. I do not consider that that is a fair deal. I have taken up a strong position in regard to this question, because repeated requests have been made to me by farmers and farmers’ unions - unions composed solely of farmers - to oppose the duty, and because it has been represented to me that an increase of the duty would be detrimental to the farmers. The consumers should receive our first consideration. The conditions proposed to be enforced with a view to safeguard their interests are absolutely farcical. According to the price , list which the Minister quoted, they are to obtain a reduction of from 20s. to 25s. upon the price of certain machines, whilst in regard to others, the prices of which the Minister did not quote, they are to obtain no reduction at all. I wish to say a word or two with regard to the valuation of imported stripper harvesters, which was increased by the Minister of Trade and Customs from £3% to £65. The Minister declared, bv his action, if not in words, that any man who attempted to import a harvester at a valuation of £38 would be dishonest. .1 do not wish to say anything with regard to the action of the Minister in connexion with the hearing of that case. It is true that he promised to allow the importers to prove their case, but afterwards did has level best to prevent them from establishing the fact that £38 was a fair valuation for their machines.. I think that the report of the Tariff Commission affords absolutely conclusive evidence that the valuation I have mentioned is a fair one, and I defy any man who is accustomed to weigh evidence to read the reports of the Commissioners and say that they convey any other impression.
– It is not a question of weighing evidence, because all the evidence is upon the one side.
– As the honorable and learned member says, ‘ there is practically no evidence on the other side. Manufac turers carrying on operations in different localities gave evidence independently of each other that .£38 was a fair valuation, and there can be no reasonable doubt that their testimony is reliable. The honorable member for Wentworth has just handed to me a return which was supplied in compliance with his request relating to the number of stripper harvesters produced in Australia. From this it appears that in 1905 the approximate number was 2,700, and it is added, “It is believed that the production is increasing.” That does not coincide with the statement made by Mr. McKay. This is an official return furnished by the Government with regard to what is said to be a languishing industry. If the industry is being strangled, as. has been stated, strangulation has a different effect upon the harvester industry than upon any other, because, apparently, it leads to an expansion of trade and more profit. Conclusive evidence as to the impropriety of. the Minister’s action is - afforded by the proposals now before us.
He assessed the value of the imported machines at £65. He therefore assumed that the wholesale price at the port of shipment, exclusive of all charges, was £59. Now he says that the retail price in
Australia ought to be from £65 to £70. Does not that show conclusively that the Minister feels that his valuation of £6$ cannot be sustained. If the selling charges amount to ,£17, whilst the import charges represent an additional £14, it is ridiculous to say that £59 is a fair price to fix a? the wholesale cost at the port of shipment. From whatever aspect this question may be viewed, it must be seen that the action of the Minister in raising the valuation of imported harvesters was most improper, and that his subsequent action in refusing to allow the question of value to be tested was even moire blameworthy. The Prime Minister has referred to the difficulty of arriving at a fair estimate of value. There are difficulties in regard to the valuation of many implements, but the facts which the Minister quoted had nothing to do with the case, because the honorable member for Gippsland, when he was Minister of. Trade and Customs, went fully into the question of transit charges, and arrived at the conclusion that the time had come when we ought to value the machines according to the price at the port of shipment, and that no deduction should be made in respect to” internal transit charges. I do not think such deductions should be allowed, because it is undoubtedly to the advantage of British traders that the internal transit charges should not be taken into account. There is a great deal to be said in favour of imposing a fixed duty. I never thought that the time would come when I should be found advocating specific duties, but after the extraordinary action of the Minister of Trade and Customs in endeavouring to prevent a fair valuation being placed upon imported harvesters, I think there is a good deal of justification for imposing specific duties, which will restrict very largely the powers of a Minister having neither discretion nor judgment. That is the only consideration that would induce me to support a fixed instead pf an ad valorem duty. I think, however, that there is no justification for imposing a duty qf £16 per machine. It is ridiculous to say that it represents the same rate of duty that the protectionist members of the Tariff Commission proposed. Any one who makes such a statement must have a considerable amount of hardihood. Any man reading the report must be an extraordinary individual if he comes to any other conclusion than that £41 is a fair valuation, and that an ad valorem duty of 25 per cent, upon that amount would represent only £10 5s. I am quite prepared - if I can extract the information - to ask those members of the Tariff Commission who signed the report in favour of an increased duty whether they do not consider that ^41 is a fair valuation for these machines, and whether the Tariff which they advocate is not equivalent to £10 5s. per machine? I do not intend’ to advocate a specific duty upon stripper harvesters, though I believe that the imposition of such a duty would save considerable trouble. I do not believe in specific duties, but I do think that if we levied a fixed duty in the present instance the Minister of Trade and Customs would be prevented from branding the importers of these machines as swindlers, and from denying them the opportunity of justifying themselves before a Court of law. To my mind, that is the only thing which would justify the imposition of a specific duty upon these machines. There is absolutely no necessity for an increase in the old rate of duty. The evidence which was given before the Tariff Commission clearly proves that the Government proposal is not necessary to prevent the industry from being strangled. The very return which has been presented by the Prime Minister evidences that it is going ahead, and that it has made great progress. To grant it an increased measure of protection would simply be to grease the fat pig. The local manufacturers of harvesters can obtain the whole trade of the Commonwealth without any increase in the old rate of duty. That being so, I hope that the Committee will not agree to this resolution. It seems to me that the gentlemen who have engineered the agitation for an increased duty are a set of the cutest men who have ever taken part in a parliamentary struggle. I have never heard of an agitation which has been so ably worked.
– The honorable and learned member cannot blame them for that.
– Exactly. . Whether we agree with these proposals or not, we must bear testimony to the great skill and ingenuity which the gentlemen to whom I have referred have displayed in putting their case before the public. They have never lost an opportunity of reviling their trade competitors, of vilifying them, of stabbing them in the back; and they have drawn a “poor mouth” from the very commencement of the agitation. They have consistently claimed that the industry is languishing when all” the evidence goes to show that the profits which are being made in it are enormous, and that it is a growing and progressive industry. The Minister of Trade and Customs in submitting these resolutions of the 28th August said practically nothing in support of the proposal to levy an increased duty upon harvesters. The additional measure of protection which the “Government wish to extend to the manufacturers of these machines will simply be in the nature of a free ‘gift. I believe that there are industries which require an increased measure of protection if thev are to be preserved. Thai was notably the position of the distilling industry. But I say positively that this particular industry would yield the manufacturers a very big profit if no duty whatever was levied upon harvesters. For these reasons I hope that the Committee will not countenance the resolution, but will restore the old duty of ^5 4s. ?d. per machine, which was levied upon these machines prior to the arbitrary and very extraordinary action which was taken by the Minister of Trade and Customs in increasing their valuation for Customs purposes.
– In the first place, I desire to compliment the Prime Minister upon the very moderate and business-like manner in which he initiated this discussion. I am sure that the cause will not suffer through being in his hands. It is not my intention to make such a long and elaborate speech as that which was delivered by the honorable and learned member who has just resumed his seat. Everything which fan be urged in favour of the recommendations submitted by the protectionist members of the Tariff Commission are fully set forth in their report, and I certainly could not improve the statement which is there presented by any speech which I might make here. It is naturally my determination and that of my colleagues who signed that report to stand by it, and to defend it in every legitimate manner. I would point out that’ the report in favour of levying an increased duty on harvesters was signed by myself as Chairman of the Commission representing Victoria, by Mr. Frank Clarke representing New South Wales, by Senator Higgs representing Queensland, and by Senator McGregor representing South Australia. We are the four protectionist members of the Commission. I ‘ would point out that our recommendations commenced with the paragraph in which we suggest -
That in trade between- the States and with other countries combines and agreements between importers, manufacturers, and dealers in machinery and implements in restraint of trade, and fixing or regulating selling prices, be declared illegal, and made a criminal offence.
The reason underlying that recommendation is that in the course of our investigations we found that during 1904-5 there was, an agreement signed by the, leading manufacturing firms in Australia, and also by the International Harvester Company and the Massey-Harris Company under which the selling price of harvesters was fixed at £81. The effect of that agreement was to raise the price of harvesters in some cases from £70 to £81, and in one case to lower it from ^85 to £83 or £82. Mr. McKay had the option of selling his machines at a little higher price than the standard fixed by the combine. We found that that agreement was calculated to be prejudicial to the interests of the public, and the recommendation which I ‘ have read was written long before *he initiation of the Australian In dustries Preservation Bill by the Ministry. As honorable members will recollect, I strongly supported a clause in that Bill which makes the establishment, of combines in restraint of trade an illegal act. Our second recommendation was - (#) That the duty on stripper-harvesters be as follows : - .
Stripper-harvester, existing duty to remain unaltered, ad valorem, I24 per cent.
Additional duty per machine, subject to conditions hereinafter provided, ad valorem, 12% per cent.
That was arrived at by a consideration of the protective duty which was levied under the Victorian Tariff at the time of the establishment of the Federation. Speaking upon my own behalf, I say emphatically that I am not prepared to support a higher duty 0than 25 per cent. ad. valorem upon the ^38 machine. This proposed increase of duty was to be accompanied not only by the prohibition of combine agreements, but also by other conditions which read as follows: -
Provided that if, within two years after the passing of the Act, the retail price of stripperharvesters made in Australia has been raised above £81 ; or if, after the expiration of twoyears from the passing of the Act, the retail price of stripper-harvesters made in Australia has not been reduced to £70; or if, after the expiration of one year from the passing of the Act, the manufacturers of stripper-harvesters in Australia are not paying their workmen a fair and reasonable rate of wages, the GovernorGeneral ma)’, upon the receipt of a joint Address fi om the Senate and the House of Representatives, certifying to the foregoing effect, by Proclamation, suspend the collection of such additional duty of 12^ per cent, for such per 1,) 1 as ni iv be deemed advisable.
In the first place there is a condition that there shall be no increase at any time above the price mentioned in the combine agreement, namely, £81
– Is that combine still in existence ?
– No, it was dissolved towards the end of 1905. But I would point out that, under our recommendations, if the manufacturers at any time proposed to increase the price of these machines above ,£81 Parliament: could intervene to prevent it. But in addition to the prohibition against an increase in the price, a distinct condition isimposed that there must be a reduction inthe selling price of these machines withintwo years after the passing of the Act - a reduction from £8.1 to £70. Originally £70 was the price at which someof the lower class machines were sold..
We suggested that reduction because the manufacturers themselves undertook - if they received additional substantial protection - to reduce the selling price of the machines within two years from £81 to £70. They voluntarily agreed to do so, and some of them offered to sign a bond to that effect. The reduction in question is not a mere arbitrary invention upon the part of the protectionist members of the Commission. We took the manufacturers at their word, and we made our recommendations conditional upon certain guarantees and concessions being made to the users of these machines and to the workmen who are engaged in their manufacture.
– How, is1 the honorable and learned member going to bind the manufacturers to such conditions?
– I will deal with that aspect of the matter presently.
– What was the third condition imposed?
– It was that a fair and reasonable wage should be paid by the manufacturers to their workmen ; otherwise, upon the adoption of a joint address by both Houses of Parliament the additional duties might be suspended.
– What would happen if one firm of manufacturers paid fair wages whilst other firms did not?
– I assume that Parliament would not agree to continue the collection of the additional duties if it found that fair wages were not being paid to their employe’s by the bulk of the manufacturers. If Parliament, upon inquiry, found that the majority of those engaged in the trade were not being paid a fair and reasonable rate of wage, and that the duty was being pocketed bv the manufacturers, it would pass the joint address to which I have referred. I assume that we should take a common sense view of the matter. I now wish to draw attention to a few. paragraphs in the report, in which the reason underlying the recommendations of the protectionist members of the Commission are summarized. The first reason will be found in paragraph 8 of our conclusions, which reads -
That both the Canadian and American companies have imitated and copied Australian-made stripper-harvesters; thai, in so doing, we cannot find any evidence that they have violated any patent rights.
It is proved conclusively that the stripperharvester was invented in Australia - that it was evolved as the result of experience of, and the expenditure of money by, Australian agriculturists and inventors, and that it was copied by the representatives of American and Canadian manufacturers. We found that, as a matter of fact, these foreign firms did nothing illegal in copying these machines, and that there had been no violation of patent rights; but that, since they had taken this action, the Legislature might be fairly recommended to discriminate in the imposition of Customs duties in favour of the local manufacturers of machines that were invented and brought up-to-date here. The next reason for our recommendation will be found in paragraph 18, which reads as follows : -
That notwithstanding the heavy importing expenses, in addition to the duty which the Massey-Harris and the International Harvester Companies have had to pay in order to place their machines on the Australian market, it is quite evident they have been able to enter the field of Australian competition. That they have competed successfully with the Australian stripperharvester makers, that they are gradually gaining ground, and increasing their hold on the Australian market, are shown by the heavy increase in their imports of stripper-harvesters, which in 1900 were nil, while in 1905 they were 1,730. That the explanation of such successful competition is the more favorable industrial conditions in the United States and Canada than in Australia; that in those countries labour, although in some instances more highly paid, is in reality cheaper, being based upon a system of piece-work, or payment by results -
We then go on to show that the raw materials are also cheaper in Canada and America than they are in Australia. The next reason for our recommendation appears in paragraph 20 -
That we are of opinion that the MasseyHarris and the International Harvester Companies make stripper-harvesters at a cheaper rate than the manufacturers in Australia, and that they are able, notwithstanding the natural protection of distance and shipping charges, as well as the duty, to go on increasing their imports to swamp, and eventually capture, the whole of the Australian trade in stripperharvesters; that such a result would be a great calamity to Australian trade, commerce, and industry, and would in its ultimate consequences be most injurious and disastrous to .farmers, who would thereby be placed at the mercy of foreign organizations for their supplies; that such organizations, after having effaced local factories and industries, would be able to dictate terms and to name their own prices without the health) check of local competition ; that we are, therefore, of opinion that the existing duty of I2, per cent, not having proved sufficient to shut out or limit the growing volume of importer! implements and machinery, it is desirable thai there should be an increase in the present duty : at the same time such increased duty should bf accompanied by safeguards and securities foi the protecting of the interest of farmers as well as for the protection of workmen engaged in the manufacture of implements and machinery in Australia.
The last reason is as follows: -
That we are of opinion that .the result of the proposed increased duty will be to reduce importations and to augment local production and output; that the greater the local production and output the less will be the prime factory cost; that therefore the selling price of stripperharvesters will not necessarily, and certainly ought not to, be raised by local manufacturers by reason of such increased duty. They say they do not hope or desire to take advantage of the increased duty, or to raise the price of the stripper-harvesters to consumers.
I do not wish to repeat these arguments. They are already in black and white, and I merely draw attention to them as indicating the reasons on which we arrived at the conclusion that there should be an increased duty. Such being the case, the question arises as to whether the increased duty should be an ad valorem or a fixed one. We arrived at the determination that there should be an ad valorem rate. I frankly admit that the question is a debatable one, and I should not quarrel with the Government for proposing an alternative fixed duty, provided that it was based upon the ad valorem equivalent, and that there was no augmentation of the proposed protection of 25 per cent, ad valorem. The point that we have to consider is whether or not the duty of ,£16 per machine proposed by the Minister is equal to an ad valorem duty of , 25 per cent. I am. strongly of opinion that it is not. The Minister, whilst accepting our recommendation as to an ad valorem rate of 25 per cent., has refused to adopt our finding that, as a matter of fact, the value of these machines in the country of origin - and that is the Customs test-is £38 odd. Twenty-five per cent, on that valuation, with 10 per cent, added, yields, approximately, £10 per machine. I am prepared to accept a fixed duty of £io, which’ is equivalent to the ad valorem rate. I understand, however, that the Minister, while agreeing to the ad valorem rate of 25 per cent., does not accept the valuation of £38 ‘arrived at by us, and wishes the Committee to adopt his own estimate of £65 per machine. There was not a scintilla of evidence given before the Commission to sustain that rough and ready estimate arrived at by the Minister.
– It was a sheer piece of departmental garrotting.
– It was arrived at upon a bare suggestion made to the Minister by Mr. S. McKay, but unsupported by evidence. As a matter of fact, that suggestion has been absolutely refuted by positive evidence. I believe that he told the Minister that machines: were being sold and delivered in Italy by the Massey-Harris Company at £65 ; that statement was embodied in an affidavit which! he filed in the Department, and another affidavit was also made to the effect that Messrs. Moore and Tudor, of Buenos Ayres, had bought a machine from the Massey-Harris Company at an invoice price of £46 4s. 8d. These statements were fully investigated by the Commission, and documentary evidence was submitted to it to the effect- that the Italian selling price of £65 represented what is called the c.i.f. - the cost, insurance, and freight - price of the machine delivered at Genoa, whereas the cash, equivalent at the Toronto factory of that same machine - and only one machine was sold as an experiment - amounted to only £38 os. 3d. That evidence was given on oath, and was not successfully refuted.
– Was any evidence other than that of a representative of the company concerned tendered to the Commission in connexion with this question?
– No; the matter could be only within the ‘knowledge of a representative of the company. It is obvious that ,£65 is not the price in the country of origin. The true test is the price in the markets of the country of origin, and we have evidence on oath that it is £38. We also discovered that the invoice price of £46 4s. 8d., at which a machine was sold and delivered to Messrs. Moore and Tudor, of Buenos Ayres, was the firm’s price, f.o.b., at New York. The transaction was not a cash one - the money was to be paid at some future time.
– Where is the evidence of this?
– I decline to answer questions put to me in that way.
– The honorable and learned member should tell us where we car. find the evidence on which He bases his statement.
– The honorable and learned member could not have been following me. The net cash equivalent at factory of this f.o.b. price of £46 4s. 8d. was £38 13s., or almost the same as the price of the machine sold in Italy. I have given two instances of the way in which the Minister’s estimate was arrived at, whilst another relates to the price at which machines were sold and delivered to Messrs. Clutterbuck and Co., of Adelaide. It was stated that they had bought machines for £40 15s., and that was represented as the value in the country of origin. It transpired, however, that the cash equivalent was only £39 14s. 2d., and that the difference between that amount and the £38 standard represented the profit of the Melbourne agency. Therefore, it appears that in these three cases, in respect of which the Minister had probably been misled by the affidavit made by Mr. S. McKay, the factory value of the machine amounted approximately to £38. The next important piece of evidence submitted to the Commission was a declaration, or statement, made by Mr. F. W. McMichael, chief inspector of the Customs Department, at Ottawa, Canada. An application for a valuation was made to the Canadian* Commissioner of Customs, to whom Mr. McMichael reported in a letter dated 20th October, 1904 -
In respect to the values shown in the invoice attached to the file, viz., 183 dollars, with 2 dollars extra for poles and adjustments, it appears that such values represent the price at which the machines in question are sold at wholesale by the Massey-Harris Company to such countries as require machines of this character, and that this wholesale price has been arrived at on a basis- of similar percentage of advance over factory cost as in the case of other machines manufactured and sold by the Massey-Harris Company to Great Britain and other European countries, South Africa, South America, Manitoba, and the Canadian and Western territories. Upon careful investigation and examination of the books of the Massey-Harris Company, I am satisfied that the invoice price for stripper harvesters, viz., 183 dollars, with 2 dollars extra for poles and adjustments, represents a fair wholesale market value of these machines.
In British coinage, $183 represents £38 2s. 6d. The statement which I have just read seems to supply prima facie evidence that the valuation of harvesters for duty here should not exceed £38 plus 10 per cent., and therefore the members of the Commission are unable to acquiesce in the Minister’s valuation of £65, which is evidently based on inaccurate information. He may be legally justified in what he has done, and may have acted in accordance with his lights. I believe that1 he has invited the -companies affected to take action against the Department with a view to testing the accuracy of his valuation, and that the, High Court or the Supreme Court of Victoria has ordered a commission to be issued directing an examination into the subject in Canada.- It is obvious that unless on cross-examination the information which I have placed before the Committee is upset, the valuation of £38 must be accepted. A duty of 25 per cent, would be equivalent on that valuation to a fixed duty of about £10 a machine. The Tariff Commission say in paragraph 22 of their conclusions that - if the duty be raised from 12^ to 25 per cent. ad valorem on the invoice value of stripper harvesters, then an invoice value of ,£38 odd will yield a duty of £10 gs. 2d. ; but if the present valuation for duty fixed by the Minister of Customs at £65 be sustained, which now yields a duty of £& 28. 6d., this, at 25 per cent., will give £16 5s. per machine.
A fixed duty of £16 per machine is equivalent to an ad valorem duty of 40 per cent, on a valuation of £38, which is practically the Minister’s proposal. I, for my part, decline to follow his lead in this matter. With all respect to him, I say ‘ that the protectionist members of the Tariff Commission whose conclusion I have read have investigated the subject even more closely than he has done. We heard a great deal of evidence, and formed the opinion that, whilst fair and substantial protection .should be given to allow local manufacturers to keep the Australian market, the duty should not be. made excessive. I see no justification for imposing a fixed duty of more than £10 each on machines whose invoiced value is only ^,38.
– What are these machines sold for?
– Before the Tariff Commission commenced its inquiries there was an agreement between the importers and the local manufacturers to sell at £8r. That agreement ceased shortly after the Tariff Commission commenced its investigations, when the Internationa] Harvester Company reduced its price to £70. the local makers continuing to sell, at from £80 to £81. I have been told, that since these proposals have been before Parliament the manufacturers have acquiesced in the conditions provided for securing a: reduction in price. I read with a considerable amount of uneasiness a letter which appeared in the Argus recently, in which it was stated that the proposed extra dutv of 12½ per cent. on harvesters had already resulted in an increase of prices, and that some of the leading manufacturers had raised the price of their machines contrary to the promises made to the Commission. That letter is dated Wangaratta, 21st August, and is signed “ Farmer.” I have, however, evidence which I think is of more value than an anonymous communication sent to a newspaper, in the shape of a letter received from one of my constituents. It is dated Raywood, 30th August, and is as follows : -
Sir, - I notice in the speech of Sir William Lyne in the Argus of yesterday he states that the price of harvesters must be reducedto£70 and£75 by the end of this year, and, in reply to Mr. Robinson, he doubted that Colonial machines could be obtained at £70. I beg to inform you that I have been offered the ordinary sized harvester by one of the leading Colonial makers’ agents a new machine for the sum of £68, payable March, 1907, so therefore I should think that is the true value of same. As you are aware, I am a farmer on a fairly large scale, and, although not a protectionist, think it only fair that the Colonial makers should have fair protection to makeharvesters on the condition that they pay a fair wage to both men and boys. You are at liberty to make whatever use you like of this letter.
I think that the proposals of the Tariff Commission may be submitted in the confident belief that they will not result in increasing the price of harvesters to the consumers. If I thought that the prices to consumers would be increased, I should not have been a party to the recommendation which has been made. I have done my best to surround the concession to the manufacturers with safeguards for the protection of the farmers as well as for the protection of the workmen engaged in the industry. If the recommendation of the protectionist members of the Tariff Commission is accepted by Parliament, the local manufacturers will be put on their metal, and it will demonstrate that protective duties properly adjusted and safeguarded do not tend to the increase of prices.
– They have to be surrounded with a lot of barbed wire.
– I hope that the Ministry will not consider that I have exceeded my proper functions, or that I intend to embarrass them. I desire, however, that the recommendations of the Tariff Commission shall be carried into effect and to give honorable members an opportunity to vote for a duty of 25 per cent., or, rather, a fixed rate equivalent to it, I shall, later on, move the addition to the item “stripper harvesters “ of the words “on and after 5th September, each £,10.”
– The free-traders would have given us that three years ago.
– I supported it then, but I shall not go beyond that rate.
.- The honorable and learned member for Bendigo has put forward as strongly as he could the arguments which prevailed with the protectionist members of the Tariff Commission in recommending higher duties on harvesters ; but those who read the evidence will see that it does not justify their position. Although two reports relating to harvesters have been presented, each signed by four members of the Tariff Commission, it would appear from the statement of the honorable and learned member, and also from the manner in which the protectionist report, recommending an additional 12½ per cent. duty, subject tocertain conditions, has been published throughout Australia, that it is the only report. But, whilst the Chairman and the three protectionist members of the Commission reported in favour of an increase in duty, the four free-trade mem bers of the Commission who had made just as careful and full an inquiry reported in quite an opposite direction. In addition to the report signed by the honorable and learned member for Bendigo and three other1 protectionist members of the Commission, a report, to which I desire to direct special attention, was signed by the four free-trade members of the Commission. I, and those who thought with me, adopted as a summary of the evidence more or less relevant to the scope of the inquiry paragraphs 1 to 88 of the report. Honorable members will see how much these paragraphs embrace. We also adopted as substantially accurate the conclusions derived from such evidence, except 9, 18, 20, and 23, which we rejected -
I do not think that the honorable and learned member for Bendigo or the Prime Minister have in the course of their speeches shown that there is the slightest justification for presenting proposals such as those now under the consideration of the Committee. We urged, moreover, that the facts brought under our notice did not justify the special prominence given to the complaints with regard to the destructive effects of foreign competition upon the stripper-harvester industry. No facts have since been adduced that afford the slightest .ground for the alarmist statements which have been made with” reference to the dumping of foreign harvesters upon our market, and the strangling of the Australian industry. It appears that from beginning to end the agitation for increased duties has been carried on in the interests of Messrs. McKay Brothers. No other Australian manufacturer is interested to any appreciable extent in the proposal to increase the duties upon stripper harvesters. Moreover, I challenge the honorable and learned member for Bendigo to show that any evidence has been adduced that would justify us in making any concessions to Messrs. McKay and Company. What is the position? Mr. McKay is carrying on an industry which it is alleged is undergoing a process of strangulation’ - one of the industries which the Commission was specially appointed to inquire into. Mr. McKay was asked whether he would let the Commission know the position in which the industry stood, and he declined to give us the desired information. We did not wish to publish the particulars, so that the public outside might be made fully acquainted with Mr. McKay’s affairs, but desired the information for our own guidance. I contend that when manufacturers come before the Tariff Commission, and ask for special consideration on the ground that -their industries are in danger of being destroyed, they should be perfectly frank, and tell us exactly how matters stand with them. When Mr. McKay refused to inform us as to the position of affairs. I said, “ If you refuse to let us know the position in which you stand, the only conclusion I can come to is that you are doing so. well that you do not want to let us, or the public, know what profits you are making.” That is practically the position of the harvester industry. Notwithstanding all that has been said by the honorable and learned member for Bendigo, Mr. McKay is making a magnificent harvest out of the “farmers of Australia.
– Why should he not?
– I am delighted to think that an Australian manufacturer carrying on business in Melbourne is doing so well.
– He is not carrying on business in Melbourne, because if he did he would be brought within the operation of the Factories Act, and would have to pay his workmen at rates fixed by the Wages Board.
– That is a matter which I shall leave to the honorable member. I am delighted to know that M!r. McKay is doing so1 marvellously well, but as a representative of the Commonwealth, I object to his being permitted to plunge his hands more deeply into the pockets of the Australian farmer. Our farmers labour under many serious disabilities. They have to sell their products in open competition in the markets of the world, and every additional charge that is imposed upon them in connexion with the purchase of their machinery and other requisites adds to their already heavy burden. So far from the harvester industry being entitled to any further protection, I should be disposed to deprive it of the protection it already enjoys. If the cost of production is, as has been stated, only about £38 or £41 per machine, Mr. McKay must be making a very handsome profit. If he were content to take a fair profit, the Massey-Harris Company and other foreign competitors would be driven out of the market. They were induced to come here because Mr. McKay and others were so greedy, and wanted such a big profit, that a good margin was afforded for outside competitors. I challenge the honorable and learned member for Bendigo to answer me upon the points which I have raised.
– I was very pleased to hear the remarks of the honorable and learned member for Bendigo, because I think that the fact that he .has taken a moderate view of the duties that ought to be imposed affords the strongest possible evidence that could be adduced against the proposal of the Government. It is a significant commentary upon the extravagant demands of some of the manufacturers that the duty recommended by the protectionist members of the Commission is 25 per cent, ad valorem, whilst that proposed by the Government would be equivalent to a 40 per cent, ad valorem impost. Some of the witnesses who spoke on behalf of the manufacturers advocated a duty of 65 per cent. But the strongest possible testimony as to the weakness of th’eir evidence is afforded by the report of the protectionist members of the Commission, because their leanings would naturally be in favour of imposing high duties, rather than otherwise. It i? true, as the honorable and learned member for Illawarra has stated, that we should first consider those industries which do not at present enjoy any protection. Some honorable members seem to entertain the idea that manufactures alone form the basis of industrial prosperity. What, however, would be the position of our manufacturers! if a serious blow were struck at our agricultural industry, or at our pastoral industry, as the result of reciprocal Tariff arrangements or other conditions? Honorable members must agree that it is to our primary industries we must first look for any stimulus to our industrial prosperity. No protection is now afforded to them, although some pretence has been made to confer a benefit upon them by the imposition of import duties. We have an overflowing supply of wheat, and yet a duty is imposed upon that product, which becomes operative only when it “ought to be suspended, namely, when famine prices prevail.
– Two years ago we had to contribute thousands of pounds by way of a duty upon wheat.
– That is my point- that a wheat or fodder duty becomes operative only when it should cease to exist - when a few members of the producing interests derive an immense profit at the expense of the bulk of the consumers. I say, therefore, that we ought not, while desirous of considering them, to be always hammering away at the interests of the manufacturers only. Some honorable members appear to think that the only barometer to the industrial state of the Commonwealth is supplied by the answer which is given to the question “ How are the manufacturers of Victoria getting along?” For instance, in reference to the firm in this State whose operations have been frequently mentioned by honorable members, the question has been asked, “ Why should not its members make a big profit ? “ But the real point is - Why should Parliament be asked to make them better off than they are at the expense of the rest of the community? To my mind, the suggestion of the honorable and learned member for Bendigo that a trial ought to be made of a sort of compromise duty of about £,10 per machine is a very sensible one.
– Why not fix a lower duty ?
– No doubt reason suggests that a lower duty should be imposed, and if the honorable member will move in that direction I shall support him. But in all these matters it seems to me that we must act in a spirit of compromise.
– At the same time, the honorable and learned member admits that the increased measure of protection proposed would represent a free gift to Mr. McKay.
– I do. ‘
– The honorable and learned member for Bendigo cannot justify the position which he has taken up.
– At any rate, I welcome the suggestion as one which he has made in a spirit of moderation.
– He cannot point to any evidence which would justify his suggestion.
– The only light that I have had thrown upon the question has been gained by a perusal of a portion of the evidence tendered to the Commission, and by a careful reading of the two reports which have been presented. It seems to me perfectly plain that the variations of prosperity which have been experienced by the agricultural implement manufacturers are entirely due to the seasons. Since the establishment of Federation, they appear to have done very well. From one of the reports of the Commission dealing with agricultural implements and machinery, including harvesters, I find that whereas in 1899 the total number of hands employed in the industry was 1,580, in 1905 it was 2,799. In South Australia, where some of the electors are pressing for the imposition of a higher duty, there were, according to the report, only 242 hands employed in the industry in 1899, as against 723 last year. It is significant that in South Australia the increase in the number of hands employed has been most marked since the dutv upon agricultural implements was reduced from 15 per cent, to 12
– The farmers cancelled the orders.
– -Exactly. The fluctuations in our imports follow the state of our agricultural and pastoral prosperity. For example, whereas the value of the Victorian’ imports of agricultural implements increased from £111,880 in 1899 to £252,256 in 1904, it declined in 1905 to £118,370. The principal evidence in favour of the imposition of higher duties upon agricultural implements appears to have been given by some Victorian manufacturers.
– And by manufacturers in South Australia and New South Wales. The evidence in favour of an increased duty was obtained in three of the States.
– I quite accept the statement of the honorable and learned member. I read the evidence given by Mr. Moore, and a portion of that tendered by Mr. McKay. Mr. Moore, of Messrs. Robinson and Company was put forward as the representative of the manufacturers of Victoria, if not of the Commonwealth. His evidence justifies the following summary of the position of the Victorian implement makers, which will be found upon page 11 of the Fifth Progress Report of the Tariff Commission.
Victorian implement and machinery makers have derived a great benefit and advantage by the establishment of Inter-State free-trade. Since 1901 the transfer of manufactures of this kind, of Victorian origin, from Victoria into the States of the Commonwealth, has increased by leaps and bounds, and has largely exceeded transfers into Victoria of similar goods from other States.
There is an array of figures given in proof of that statement which I do not intend to quote. They show that in 1899 the value of the Inter-State transfers of agricultural implements into Victoria was £3.301, whereas the value of the transfers from this State to others was £92,861. They further show that though the value of the Inter-State transfers into Victoria in 1905 had increased to £23,563, those from Victoria were valued at £157,689. These figures show a rapidly increasing prosperity in the manufacture of agricultural implements. The report which I have quoted deals with harvesters, but I have been supplied with some figures which ‘are not contained in that report. They were submitted to me by a person upon whose accuracy I think I can rely. The figures show that if the South Australian manufacturers entertain any fear of competition it is not the competition of the importer that they need apprehend, but that of the manufacturers in the other States. The South ^Australian manufacturers, it seems to me, need not fear Inter-State competition, because whilst it is true that a great many machines are sent into their State from Victoria they in turn also export to the other States, and, for enterprise and efficiency, are able to hold them own under conditions of InterState free-trade. The total number of stripper-harvesters sold in South Australia during the years 1900 to 1905 inclusive was 2,972. Of these the South Australian manufacturers supplied 540, the importers 969, and the Victorian manufacturers 1,463. In those years the Massey-Harris Company sold in South Australia 844 machines, the International Harvester Company 125, and the McKay Brothers 975. We are constantly hearing of the competition of the International Harvester Company, which supplied only 125 machines. In view of the proposals which we shall shortly be called upon to consider regarding preferential trade, the circumstance to which I have referred is a very curious one, because we must recollect that duties of this character will strike at the MasseyHarris Company rather than at the International Harvester Company. I will leave it to the Government to reconcile their policy with the figures which I have quoted. What really does handicap some of the exporters of these machines, as between State and State, and particularly the South Australian manufacturers, are the heavy shipping freights between the various ports. For instance, the freight which is levied, say, between Fremantle and Melbourne is actually more than that charged between New York and Melbourne. I know from inquiry which I made about a year ago that the South Australian manufacturers are subjected to a very severe handicap by reason of the stiff freights which are charged by the shipping companies engaged in our coastal trade. If, under a duty of 12½ per cent., which represents£5 4s. 7d. upon a£38 valuation of these machines, conditions of prosperity have been realized by the manufacturers of agricultural implements during the last five or six years, and if those conditions have been maintained even though the imports were slightly checked under the operation of a similar duty upon a £65 valuation, which is equivalent to a charge of £8 2s. 6d., it seems to me that we do not require to levy a specific duty of £16 upon them. We ought, I think, to compliment the chairman of the Tariff Commission upon the fairness of his views as a protectionist. I do not say that his proposal represents the proper deduction from the evidence as to the duty that should be levied; the honorable and learned member for Illawarra has had something to say on that point. But we must compliment the honorable and learned member for Bendigo upon the reasonableness of his suggestion that, even from the point of view of the protectionists, the duty ought not to exceed £10 per machine. Since, on a. valuation of£38, 1 2½ per cent. - the duty prevailing prior to the introduction of these proposals - wouldamount to £5 4s. 6d. ; and, on a valuation of £65, would amount to £8 2 s. 6d., surely the members of the protectionist party will not object to the proposal that a specific duty of £10 shall be imposed. I cannot understand on what ground any reasonable protectionist could object to the amendment suggested by the honorable and learned member forBendigo, although, as a free-trader, I should prefer a duty approximating more nearly to free-trade views of what the evidence suggested. The Prime Minister said to-day that the Minister was forced to propose a specific duty, owing to difficulties experienced in arriving at a true valuation. Those difficulties have been removed by the Chairman of the Tariff Commission who points out that, according to the evidence, the valuation of£38, which was challenged by the Minister of Trade and Customs, ought to be adopted. If the difficulty experienced in arriving at a true valuation is responsible for the action of the Government in proposing a specific rather than an ad valorem duty, why do they not say that they will take the local cost of production as an approximate indication of the cost at the American or Canadian port of exportation ? They could do so if they secured the co-operation of the local manufacturers. Why should not these manufacturers - some of whom are very anxious to supply the Minister with what we are now told was mistaken testimony when their personal interests are strongly involved - in the interests of the Commonwealth, afford some guidance to the Government? We are led to understand that one of the McKay Brothers supplied the Minister with an affidavit suggesting that the value of these imported machines in the country of origin is £65, less the 10 per cent. Let him give the Prime Minister evidence as to the local cost of production. According to the reports now under consideration, the conditions of production here are not so different from those prevailing in Canada or the United States that they cannot be taken as an approximate guide. We are not ‘driven’from sheer necessity’ to adopt the Government proposal. By taking the cost of local production, we can arrive at an approximately correct basis of valuation, and if that were done we should also have the advantage of knowing something of what wasgoing on locally. I am afraid, however, that we shall not obtain this information. I would again remind the Committee of the fact that if we strike an average of the duties prevailing prior to the imposition of the Commonwealth Tariff of 1 901, we arrive at a rate much lower than the specific duty of £10 which has been suggested. I need only refer to the evidence upon that point supplied by the two reports now under consideration. In South Australia the duty was only 15 per cent. ad valorem, whilst in America and Canada the rate was 20 per cent. It would be unfair, however, to refer, for the purposes of comparison, to the duty prevailing in the last-named country, since these machines are not used there, and there is no importation for local purposes. Evidence was given showing that if the duty of £25 were accepted, it would mean prohibition. If the cost of landing these machines in Australia from the ports of exportation on the American Continent is £14 12s. 6d., then a duty of£25,plus that cost, would give a protection of practically £40 in respect of machines which, according to the best evidence before us, can be manufactured locally for less than £40 each. That is a class of protection which, if we were willing to impose it, the it was admitted that some of the specific duties asked for would be very high ; that on a harvester invoiced at ^38 would be nearly 65 per cent, ad valorem, and that on a stripper of the same value would be about the same percentage duty.
It seems, also, that if we impose too high a duty - and I am again viewing this matter from a general stand-point - we might affect the efficiency of the machinery. By the imposition of a duty of ^25 we should remove one of the guarantees of the manufacture of machines of the best class, which is supplied by reasonable competition from all parts of the world. That would not be beneficial to the farmers. Then, again, a severe duty might induce some of the American or Canadian manufacturers to manufacture here. I should like to know what would be the position of some of the smaller manufacturers here who are now asking for a duty of £’25, if, for instance, the International Harvester Company established a branch manufactory in Victoria or in any other State of the Union. That was the result of some of the high’ duties on other articles imposed under the Victorian Tariff. Under cover of those duties manufacturers from abroad came in, established branches here, and successfully competed against’ the local men, with the result that a demand was made for still more protection. As to the general condition of the industry, I would refer honorable members to a summary of the position given at page 36 of the report of the Commission on Agricultural Machinery and Implements. It is stated in paragraph 10 -
That notwithstanding the loss of trade in these directions, the agricultural implement industry in Victoria is not in a languishing condition ; that the representatives of the two largest firms admitted that they have, on the whole, suffered no loss through the Commonwealth Tariff ; that what they have lost in ploughs and other implements they have made up in making harvesters and drills, and in selling other goods; that they have gained by InterState trade; that their principal grievance and cause of anxiety is that they have not extended their business as they ought to have done; that the opposition and competition of foreign trusts and corporations is growing, and year by year is becoming more formidable and dangerous ; that they will before long be overwhelmed, and will go down in the struggle, unless they receive more substantial protection at the Custom House.
The general effect of that paragraph is to indicate a developing prosperity rather
They particularly objected to any increase in the duty on harvesters (see Special Report on Harvesters). They drew attention to the fact that as producers they had to compete in the markets of the world with their produce, that they had to compete with the cheapest labour and the cheapest land, besides being handicapped by having to pay high railway and shipping freights on their produce before it reached the selling market. - (Q. 65956.) They had also to pay high railway and shipping freight on the goods they bought and required for use on their farms. - (Q. 65967.) The farmers themselves had no protection against foreign competition, the duties on imported grain, such as wheat and oats, were practically inoperative -
That is the point that I was endeavouring a few moments ago to impress upon honorable members - as farmers are exporters. They contend that the higher the duties were upon agricultural implements the less they would have available for labour and improvements upon their lands. - (Q.66210.) “On every occasion,” said Mr.. James McGregor, “ when duties have been increased I have found that the price has increased in proportion ; that is my practical experience. I could give you an instance of it in the purchase of a plough. A plough that I could get for £i was, when some years ago the Tariff was raised, increased at once to ^22 10s “ ; and so forth. Two interests were represented. On the one hand, it was said that the farmers would be looted by a duty which would mean prohibition, whilst, on the other hand, a demand was made for that duty in the face of testimony which points in the direction of free-trade, and which has induced the protectionist members of the Tariff Commission to say that the proposal of the Government is practically a monstrous one. In these circumstances, I desire to say with all respect that the moderate members of the protectionist party are in duty bound to support the suggestion made by the honorable and” learned member for Bendigo, that the duty proposed by the Government should be reduced to £10. So far as the free-trade party are concerned, they find that the case they have put forward from time totime for the retention of the present duty has been strengthened by the report of the Commission.
.- But for the fact that I have paired on this question, I should not have risen to address the Committee. I may say at once that I am ready, as I have always been, to accord to every manufacturer in an industry that is worth’ preserving, in the interests of the Commonwealth, as substantial a duty as will enable him to pay fair wages and to make a fair trade profit. But I am not prepared to extend to any manufacturer such a duty as would enable him to levy blackmail upon the primary producer. It certainly does seem to me that the proposal of the Government to increase the duty to £16 per machine comes within that category. I believe, moreover, that we should not have heard of this proposal but for what, in my opinion, was the somewhat arbitrary act of the Minister of Trade and Customs in increasing, on very imperfect evidence, the valuation of the Massey-Harris machines in the country of origin, from £38 to £65. The duty is based upon that valuation, and Parliament is asked to levy blackmail on the primary producer in order to -whitewash a somewhat arbitrary act of the Minister. I am not prepared to do that.
– Does the honorable member complain that protection increases prices to the consumers?
– If duties are outrageously high, they will have that effect. They should be high enough to enable the local manufacturers to make a fair profit; but if they are so high that the local manufacturers can form a ring, and thus create a monopoly, they lead to an increase in prices, just as the importers’ rings formed under free-trade do. When reapers and binders were being admitted to the State free of duty, our farmers were being charged £70 to £So for machines which the farmers in the country of origin could buy at from £17 to £18. While I am not prepared to allow importers to form rings; and thus unduly raise prices, I am also opposed to that being done bv local manufacturers. The evidence collected in the different parts of the world goes to show that the cost of the imported harvesters is about £$& each, which makes the valuation for Customs purposes, after to per cent, has been added, something over £41 each. The evidence submitted to the Tariff Commission was that the cost of producing the locally made harvesters is about £41, so that the cost of produc tion here is practically the same as the value of the imported machines at the time of their importation. But the Tariff Commission also took evidence which shows that the charges incidental to importation are something like £14, which gives the local manufacturer an advantage to that amount in regard to every machine. Surely, if, in addition, we give him a protective duty of 2.5 per cent., that will be enough. I am prepared to vote for that duty in order to encourage local manufacture, but I shall not vote for a higher duty.
– I do not suppose that the Government really desire a higher duty.
– Yes, they do.
– The Government ask for a duty of 40 per cent.
– That is merely “bluff.”
– I am satisfied that the Government .proposal would not have been submitted to us had it not been for the action of the Minister of Trade and Customs in increasing, the valuation of the imported machines from £38 to £65. I do not think that those who have read the evidence will find that the imported machines cost anything like £65 in the country of origin. If they did, and our manufacturers could make! equally good machines for £41-
– Selling them at £65.
– Those facts would be an “argument in favour of having no duty. The evidence that machines can be produced locally for £41 is fairly satisfactory’. At any rate, the local manufacturers are not prepared to rebut it by producing their books, and showing that the cost has been understated. Personally, I think that the Tariff Commission has recommended too high a duty. I have investigated this matter very closely, and no doubt the Commission has also done so. I do not think that I should have recommended so high a duty had I been on the Commission.
Sin John Quick. - The recommendation was made largely because the machine is an Australian invention.
– No doubt that fact justifies us in giving a reasonable advantage to the local manufacturers.
– A little more than the ordinary protection.
– Yes. .But, remembering all the other advantages enjoyed by the local manufacturers, a duty of 25 per cent, seems to me a little too high. However, I have paired for that duty, and I hope that the Prime Minister will see the desirability of accepting it. He must, in his own mind, see that there is no justification for valuing the imported machine at £65.
– Does the honorable member favour a proposal to reduce the selling price ?
– Yes; I think that the present selling price is monstrous. To charge £81 for a machine which can be produced for ^41 is outrageous. The recommendation in regard to the reduction in price goes hardly far enough. I think that the local manufacturers could afford to sell their machines at prices lower than those recommended by the Tariff Commission, and still have a large margin of profit.
– A bigger profit than the man who uses the machine gets.
– Yes. I fail to see that we should place an intolerable burden on the primary producers in order to allow a few manufacturers to amass huge fortunes. The profits of the industry must be colossal, seeing that there is a difference of £40 between the selling price and the cost of production. I agree with the Government that it is simpler and better to have a fixed rate than to charge duty ad valorem; but I hope that they will reduce that rate to £10. Wh’en in office I made careful inquiry as to the cost of the imported machines. I thought that it was understated, and that I should be able to increase the valuation. But, after the fullest investigation, having obtained all the information available in Canada, the United States, the Argentina, and elsewhere, I felt satisfied that £38 was a fair sum on which, plus 10 per cent., to charge duty.
– The honorable member did not wish to make the importers sit up, whereas the present Minister does.
– No; but I thought at first that the value was! understated, and I commenced my inquiries with the intention, should I see justification, of increasing the valuation. After a full investigation I was satisfied that the price stated was a fair one. Th’e evidence advanced to support the action of the Government in making the valuation £65 is of the flimsiest description, and I hope that the Committee will reduce the duty from £16 to £10, which will leave the local manufacturers a big margin of profit, and is as much as the primary producers should be asked to pay.
– I should be glad to believe that the duty recommended by the Tariff Commission would give the farmers the advantage which they should have; but my conviction is that in the importation of harvesters we have another instance of the evil effects of dumping. Imported harvesters are being sold here at a price which gives a ridiculously small profit.
– That is shown not to be the case.
– What machines are dumped here?
– Machines which are brought here to enable their manufacturers to exploit the Australian market. The machines of which I speak were invented in Australia, and, having since been copied in America, are being dumped here in order to destroy the local manufacture. When the importers have done that, and have created a monopoly for themselves, they will bleed the farmers at their leisure. That is the policy of the importers’ trust. Our free-trade friends say, “ Let us take advantage of the surplus wealth which the importers are using and put some of it in the pockets of the farmer.” But we can do that only at the expense of the local manufacturing industry.
– What machines are being dumped ?
– The machines of the International Harvester Company.
– At what price?
– I have figures before me which show that the profits made by the importers are so ridiculously small that the importation would not be continued if the object were not to eventually create a monopoly which would enable them to recoup what they are now out of pocket.
– - What price would the honorable member call a dumping price? >
– Any price which would not give a reasonable return on the capital invested in the producing industry, decent wages being paid ; or1 any price which would enable importers to cut into the local industry, and thus destroy internal competition. There are hundreds of notorious cases in which dumping has occurred, but none is so notorious as that for which the International Harvester Combine is responsible. The existing duty on harvesters is equivalent to 12 per cent, on a valuation of - £65, and the Government propose to increase it to the equivalent of 25 per cent, by imposing a fixed rate of per ma chine, the recommendation of the Tariff Commission being £10. I regard the Government proposal as a fair compromise. It must be remembered that there is more than a difference of 25 per cent, between the _rates of wages and the other costs of production in America, and the rates of wages and the other costs of production here. If it be contended that McKay and Co. do not work under the Factories Act, my reply is that we can compel them to do so. But we have not the means of regulating the operations of the foreigner. If we are going to adhere to the policy of protection, a fixed duty of £16 per machine will be quite low enough to impose upon imported harvesters. I shall vote for that duty. I only wish that it were higher.
– How .much higher would the honorable member go?
– I should be prepared to impose a duty that would insure the fullest! protection to the local manufacturer. Twenty-five pounds might be too high in some instances, and too low in others.
– Why not impose a duty of £50 per machine?
– If such a duty were necessary to ‘protect our manufacturers, I should not hesitate to impose it. We should encourage the agricultural implement industry, because our circumstances are specially adapted to its being carried on with success. If there were any danger of an internal monopoly being created, we could allow outside competitors to come in and operate in the direction of protecting the consumer against oppressive charges. In this instance, however, we know that there are at least half-a-dozen competing firms, and that the farmer will be protected against imposition.
– Could the honorable member say what number of stripper-harvesters were imported into the Commonwealth during the current year?
– I am informed t that 1,720 were imported. Every one of these machines should have been manufactured here.
– If the honorable, member will look at the Government returns, he will find that no machines have been imported during this year to date.
– That does not affect the question. We are here to protect our native industries, and it should be our object to discourage importations as much as possible. If free-traders had their wa- our markets would be exploited by foreigners, and our local industries would go to the wall. Some fault has been found with Messrs. McKay and Company for having evaded the provisions of the Factories and Shops Act. Unfortunately, that Act is not applicable to the locality in which Messrs. McKay and Company’s factory is situated, but there is no reason, however, why its operation should not be extended so as to embrace every factory in the State. We can very easily regulate wages in Australian industries, but we cannot exercise any control over foreign manufacturers.
– We shall never control them by means of a Tariff.
– If we cannot control them, we can keep out their products. Very unfair practices have been resorted to by the importers of stripper-harvesters, in order to induce farmers to take their machines in preference to those of local production. They have given long terms to farmers, and have secured themselves bytaking mortgages over the properties of the purchasers. This is a left-handed way of annexing the country, and such practices should be prohibited. We should encourage the local industry in order to prevent the farmer from falling into the hands of the importers. If the consumers are left to the tender mercies of a ring of importers, they will be bled to a pretty tune. If, on the other hand, a body of local manufacturers create a monopoly, they will also create and take an unfair advantage of those who are depending upon them for their supplies. We can, however, adopt measures to control any internal combine that is operating with pernicious effects upon our primary industries. It is perfectly safe for us to adopt the policy of affording a fair degree of protection to our local manufacturers, because the competition among them will have the effect of keeping down prices. I have paired with the honorable member for Gippsland, but I shall give my hearty support to the proposal of the Government, which. I consider will afford reasonable protection to the local manufacturer, and prevent our markets from being exploited bv foreign rings over which we have no control.
Mr. JOHNSON (Lang) [5.55].- After listening to some of the arguments put forward in support of the Government proposal, I am impelled to condemn it as a scheme for robbing the taxpayer. It is proposed to perpetrate a diabolical outrage upon the primary producers of this country -to commit absolute daylight robbery.
– The honorable member must not refer to proposed legislation in those terms.
– I am speaking of the principle which underlies the proposal, namely, that of taking money from the pockets of one section of the taxpayers, not for the purpose of paying it into the Treasury for public purposes, but with the object of enriching’ another section of the community. That is tantamount to robbery.
– I understood trie honorable member to say that the proposal of the Government would amount to robbery. The honorable member must .not refer to proposed legislation in that wax
– Very well. It maybe unparliamentary to express myself in that way, but my opinion and the facts remain unaltered. Such a proposal could not be justified, even if the evidence given before the Tariff Commission, for the appointment of which some members of the present Government loudly clamoured, showed that the harvester manufacturing industry was in a languishing condition. Ministers have not been even content to adopt the recommendations of the protectionist members of the Commission - and even those recommendations were made in the teeth of the evidence - but have brought down proposals for which not an atom of justification can be found. It is apparent that the desire of the Government is. not to assist a languishing industry, but by hook or by crook to increase the Tariff. Notwithstanding the fact that they have not the slightest pretext for doing so. that the evidence shows ever increasing expansion of business, they are piling up the taxation upon a section of the community which above all others should receive the utmost consideration at our hands. I am speaking of our primary producers, who are necessarily the backbone of the country. Thev have to produce under the most adverse conditions; and they are not able to participate in many of the advantages conferred by civilization - advantages which are within the reach of the secondary producers. If consideration is to be extended to any section of the community, it should be extended to the primary producers.
– By the imposition of a land tax?
– Only that the Chairman would rule. me out of order if I pursued that paint, I could easily show the Vice-President of the Executive Council that under an equitable system of land values taxation, coupled with the reduction of other taxation and railway fares and freights, the farmers would reap a distinct benefit. At the present time, however, I am pointing out that, whilst pretending to be most solicitous for the welfare of the primary producers, the Government are anxious to pile fresh burdens upon them. Apparently, they wish to increase the cost of agricultural implements to the consumers. Why ? Is it to confer a benefit upon the rest of the community? Certainly not. They merely desire to benefit a small section of the community - a section which is almost confined to Victoria. These proposals are intended chiefly to advantage Victorian manufacturers at the expense of the other States. It is high time that the representatives of the other States raised a united protest against legislation of this character. Personally, I shall never cease to raise my voice in opposition to it. We are to be asked to pay through the nose all the time for the gain of Victorian manufacturers.
– No State has made greater sacrifices as the result of Federation than has Victoria.
– I disagree with the honorable and learned member. New South Wales has made greater sacrifices than any State, and Victoria has benefited more than has any other State. The consumers in the other States, and particularly in New South Wales, are continually being bled in the interests of Victorian manufacturers. I sincerely hope that the people of the State from which I hail will speedily awaken to a proper appreciation of their position. Personally, I shall not hesitate to put that position before them in the plainest possible language. The agricultural implement industry has been represented by honorable members opposite, and particularly by the Minister of Trade and Customs, and the Attorney-General, to be in a languishing condition. Yet I find, upon the evidence which is before me, that since ‘the establishment of the Federation, it has been one of the most flourishing industries in the Commonwealth.
– There are fewer men employed in that industry now than were engaged in it prior to Federation.
– I can quote figures from the report of the Tariff Commission which will absolutely disprove the honorable member’s statement. For instance, T find that the total number of hands em ployed in the manufacture of agricultural implements and machinery in the several States increased between the years 1899 and 1905 by 1,219.
– I spoke of the industry in Victoria.
– If the honorable member will turn to page 8 of the Tariff Commission’s Progress Report, No. 5, he will find these particulars -
Honorable members will recollect that 1:901 and 1902 were years of drought - years in which the farmers experienced severe reverses. Consequently it was not to be expected that during that period there would exist a great demand for ‘agricultural machinery. But in T903 and 1904 good harvests were experienced, with the result that the demand for this class of machinery increased to such an extent that the local manufacturers were unable to supply it. The result was a considerable increase in the importations of agricultural implements.
– Who says that the local manufacturers were unable to meet the demand ?
– That statement is based upon the evidence which was submitted by several farmers and others to the Tariff Commission. The excessive importations which took place in 1903 and 1904 were due to the increased demand, and were supplementary to the output of the local manufacturers, which in no way suffered the slightest diminution from such importations. Since those years the local manufacturers have been adding to their plant, and increasing the number of their hands. That fact can be seen by a glance at the table which I have quoted, and imports have declined. Last year the total number of hands employed in the industry in New South Wales was 386, or three times the number engaged in it during the preceding year. In Victoria last year 1,624 hands were employed, as against 1,114 in 1903.
– In Victoria alone, under the operation of the old State Tariff, there were 300 more hands employed in the industry
– I have quoted a table which was prepared by the! Government Statist of Victoria. Surely the honorable member does not question his figures.
– I intend to quote the figures of the Victorian Government Statist with a view to showing that the honorable member has not gone back far enough.
– I cannot go back further than 1901 for Federal figures. I repeat that since 1899 the number of hands employed in the manufacture of agricultural implements in Australia has increased by 1,219. In I 800 the hands who were engaged in the industry in Victoria numbered 1,107, and in 1905 1,624, an increase of 517 for Victoria alone.
– Is there not room for a still further increase?
– That is not the point As a matter of fact, the number of hands engaged in the industry is constantly increasing. The plea was put forward that an increased duty upon agricultural im- plements was required because the industry was languishing, whereas the figures which I have quoted prove that it is making amazing * progress. Instead of increasing the Tariff, we should endeavour to reduce it. As a matter of fact, it has been shown conclusively that Mr. McKay - on whose behalf chiefly these proposals have been submitted by the Government - is now making a clear annual profit of about £30,000. It is an absolute outrage that we should be asked by a Ministry which has not a straight-out following strong enough to .give it an independent majority, to impose these duties, on the eve of a general election, in order to bolster up this industry. Not the slightest reason has been shown by the Government for legislation of this kind, and the electors may well be afforded an opportunity of saying whether they are prepared to still further bolster up an industry which is at present in such a flourishing condition. I propose to show by reference to the evidence, given very unwillingly by the manufacturers themselves, and first of all to that given by Mr. H. V. McKay. that they are doing a satisfactory business. At- page 1624 of the Minutes of Evidence, Vol. 4, we have the following report of Mr. McKay’s examination : -
Can you tell me what was your output of machines prior to 1901 ? - It has “been increasing ever since we began business. If I had received notice, I could have brought the figures.
Perhaps that statement will satisfy the honorable member for Melbourne Ports -
Prior to 1901, was the output more than 200 machines ? - Yes.
Was it much more? - I should say so.
Was it more than a fifth of last year’s output? - Going back, we were doing about seventyfive machines in 1897 - the industry was then working under the high Victorian Tariff - about 150 machines in 1898; and about 301 in 1899.
What was your output last year, in proportion to your output in 1901 ? - I have not given you the figures for 1901.
As that is rather too close to the present time, will you give me, in your own way, some fair comparison of the increase in your output between any year between 1901 and 1896 and last year? - I can admit frankly that the business has increased substantially. It would be a reasonable thing to say tha’t the business in harvesters is three times what it was in 1901. We fully expected all that, because the machine is an exceptionally fine one for the users.
This evidence, given grudgingly by Mr. McKay himself, shows that his business has been on the up grade from the date of its establishment. This is the evidence of the man on whose behalf, above that of all others, we are asked to impose these duties, and he declares that at no time has the industry been languishing. His own evidence is sufficient to condemn the Government proposal.” There is ample evidence from other sources to support that view. Mr. McKay’s manager, Mr. George Bult, in answer to questions 66566-7, pointed out that the output of “ Sunshine “ harvesters in 1905 - a year of comparatively small sales - was 1,930, and was nearly as great in 1904. Mr. James Moore’s evidence on this point was given in reply to questions 15895 to 15901 a, and was to the effect that the average number of hands employed by him under the existing Tariff was greater than under the previous Victorian Tariff ; that this was largely due to his increased Inter-State trade; and that this trade had been profitable. The same witness, in answer to questions 16172-5, stated that the’ general condition of the agricultural implement business in 1905 was considerably better than it was prior ito 1901 - when the Federal Tariff was imposed - and that the profit was also larger. Mr. John Mitchell’s evidence dealing with the improved condition of the industry since the imposition of the Federal Tariff, is to be found in reply to queries 17443-9. It s to the effect that since the introduction of the Federal Tariff his trade has expanded. Then, again, Mr. John A. Bagshaw, of South Australia, gave evidence in reply to queries 48540-2, to the effect that the agricultural implement-making trade is not a languishing industry, but is “very far from it.” Mr. David Shearer, also of South Australia, gave evidence in reply to queries 47069-72, to the effect that his business had generally been increasing during the last three or four years, and that he had been making more profit, and had done a larger turnover. Mr. James B. Garde, representing the Australian Implement Manufacturing Association, gave evidence on the same point. In answer to questions 65896-9,’ he made statements to the effect that in some lines there had been since 1899 a great increase of trade. If honorable ‘ members turn to questions 4791 1-1 2 they will see that Mr. Rees Rees gave similar evidence. This expansion of trade is also admitted in the reports of the Commissioners. On page 36 of report No. 5, paragraph 4, it is stated that during the first two years under the Commonwealth Tariff the number of hands employed in the manufacture of agricultural implements in Victoria fell from 1,151 in 1900, to 789 in 1902 *; that they increased to 1,114 in 1903, 1,496 in 1904, and 1,624 in1 905 ; that in, South Australia there was an increase from 242 in 1899 to 723 in 1905; and that the decline in Victoria in 1901 and 1902 may be attributable in some measure to the prevailing drought and consequent dulness in trade in those years. The expansion of trade referred to has been due to the removal of the Inter-State duties, which has given these firms a. largely increased trade all over Australia. It is as the result of freetrade between the States, and not because of any protective Tariff that this industry has made such rapid strides.
Sitting suspended from 6.28 to 7.30 p.m.
– The honorable member for Gippsland, although a protectionist, has condemned in unmeasured terms the proposal to increase the duty on harvesters. No one can accuse him of leaning towards free-trade. He has confessed that although, when Minister of Trade and Customs, he had every desire to find an excuse to increase the valuation of imported harvesters in the interests of the local manufacturers, he was unable, after the most careful inquiry, to do so, having been thoroughly satisfied that the valuation of£38 was the true one. Since then no tittle of evidence has been adduced to show that that valuation is incorrect. On the contrary, reference to the authorities in Canada and elsewhere has proved it to be correct, and has left the present Minister without a shred of justification for his action in raising the valuation from£38 to£65, or raising it by a single fraction. That increase was made by him on the mere word of an interested trade rival, upon being shown the copy of a copy of a letter alleged to have been written by some one, I think, in Italy. It was not proved that such a letter had been written, and even the copy said to have been sent here was not among the papers placed in the library, a copy of that copy only being produced. Upon evidence which no other man in the universe would have accepted the Minister took this drastic, cruel, and unwarrantable step.
– The machines were selling locally at£81 each.
– That showed that no attempt was being made to dump them on the Australian market.
– A person who is selling a thing for twice whatit is worth should not be an object of sympathy.
– What is McKay doing? The honorable member for Gippsland has shown that he is selling his machines at an enormous advance on the cost of production, nearly, if not quite, double the cost of production and selling expenses, and that the proposed increase of duty will enable him to bleed the unfortunate farmers still more freely, for his private enrichment. Those who have been sent here to represent the taxpayers, and particularly those who represent the farmers, should unite solidly to resist this proposal. But I am disgusted to find some farmers’ representatives voting for these heavier duties. McKay already has more than half of the Australian harvester business, and it would be a dastardly and unforgivable crime to perpetrate such legislation as would increase his monopoly. If the figures given before the Tariff Commission are not correct, why does he not produce his books to show thathis industry needs further protection? As 1 have already shown, his business has been steadily increasing, the increase of late years being beyond reasonable expectations. According to figures placed before the Tariff Commission, his output increased from seventy-five machines in 1897 to 301 machines in 1899, so that it quadrupled in two years, while the output in 1904 was five times that of 1899, being 1,500 machines, and his manager, Mr. Bult, says that 1,930 machines were produced in 1905, an increase of 430 in one year. When a man appeals for more protection, and asks that his industry shall be bolstered up by taking money from the pockets of the people to put into his private banking account, he should produce his books, so that they may be examined, with a view to the substantiation of his complaints about the effect of competition. If a defendant in a Court case refused to produce proof of his allegations, although he declared that he had it in his possession, the jury would at once give a verdict against him. The Minister of Trade and Customs, however, thought that the production of a copy of a copy of an alleged letter was sufficient to justify him in increasing the valuation of imported harvesters, and in proposing an increase of duty which will further entrench McKay in the monopoly which he enjoys at such great profit to himself and at such an immense disadvantage to his customers. I believe that an Australian harvester combine or trust was for a time in existence, and that both importers and local manufacturers, including Mr. McKay, were members of it. It was through his agency, I understand, that the price of harvesters was increased. The trust came to an end because one firm left it, and then the price of harvesters was reduced again. Yet we are asked to pass legislation to assist McKay, who was one of this ring to put up prices to the farmer. With regard to the charges of piracy which have been made against foreign manufacturers, the evidence placed before the Tariff Commission shows that if there has been any piracy, it has been on the part of the Australian manufacturers, who have copied foreign inventions.
– I understand that it is alleged that harvesters of some kind were in existence at the time of Julius Caesar.
– The Tariff Commission’s report quotes a passage from Pliny, in which an invention of the kind is mentioned. I do not blame Australian manufacturers for taking advantage of the brains of the world. But what I do object to is that whilst they are copying the designs of manufacturers in other parts of the world, they are accusing them of appropriating inventions to which they have a prior claim. They are arrogating to themselves the exclusive right to manufacture certain machines, whereas the improvements which they claim as their own existed before they entered into business. Therefore, if there is any piracy, it is on the part of the local, rather than the foreign, manufacturer. Mr. Weickhardt’s evidence showed that the labour conditions that existed in Mr. McKay’s factory were anything but satisfactory. It is well known that, in order to escape from the operation of Wages Boards. Mr. McKay removed his factory beyond the sphere of their influence. Did Re do this with a view to increasing the wages of his operatives? Certainly not. He wished to escape the necessity of complying with fair and reasonable conditions of employment. I propose to quote one or two passages from the statement made by Mr. Weickhardt, given at page 1826 of the minutes of evidence. Mr. Weickhardt says : -
To show how McKay crushes opposition, and gets other people’s brains, I also want to show the Commission the manner in which the farmer has been victimized in being charged extortionate prices for a stripper-harvester, and the way the men employed have been sweated.
This evidence is supposed to have been contradicted by Mr. Bult, and also by Mr. Porteous, but if their carefully-prepared statements are examined, it will be found that the main charges levelled against Mr. McKay are left untouched. Mr. Weickhardt continues: -
The tools and the plant are up-to-date in all respects at the Sunshine Works. Ideas are seized on, no matter what source derived from, and no thanks or recompense to the inventors, so far as my experience goes. For instance, four men employed making cups or buckets for lifting grain at 8s. per day; one boy placing on belts, 10s. per week. I invent a machine to make same on - dispense with the services of three men and the boy, and make the man accept 20s. per week. His name is Francis, sole support of widowed mother. Tom Hale’s case - doing eight screens in eight hours - put him on piece-work, he uses his brains, invents a way of cutting the screws - can make 20s. a day, and better work. Take his idea - sack him, and get them done by a boy, young George Lamprell, at 6s. a week, and a man has to solder them in, and do his own work also. I also had the cups cutout by the bull-dozer, which did more in one day than a man could do in a month. This machine is also the result of another man’s brains - Mr. Moule, who was head pattern maker for Mr. H. V. McKay, attends to all classes of labour-saving appliances and ideas conveyed to him. The Massey-Harris grain box, now in use on the Sunshine harvesters, I made by copying from MasseyHarris machine, at the instigation of H. V. McKay himself, and Mr. Moule assisting me.
Yet this is the man who has the audacity to accuse others of piracy. The statement proceeds : -
Re the men and boys employed, a finer body does not exist. They are smart, active, and intelligent, and the system at McKay’s is equal to any American factory. It is not exactly a wages system or a piece-work one - but the cruellest and most daring robbery of human life that could be devised, and shows the need that exists for factory legislation.
This employer, who wants increased protec tion, according to Mr. Weickhardt, carries on a system of the cruellest and most daring robbery of human life that could be devised. The statement continues : -
The principle is this : Rush the men at top speed, no time to breathe or straighten your back. If you do you are marked ; you get back in your work, the task is set, and must be completed, otherwise you keep the next man waiting. The order is given, six machines per day; they must be done - even if half-finished, they are rushed out of the factory to make room for the next six. When the men get that expert that they manage it, the order comes, try them with eight.
Mr. McKay is not satisfied with turning out six machines per day, but after his employes have been induced to work at a high rate of speed, he gives orders that they are to try and turn out eight machines daily. Thus the work goes on in this den of sweaters in Victoria.
– There is no sweating going on there. Mr. McKay pays as good wages as are given in the Commonwealth.
– Why did he run away from the Wages Board?
– He did not do anything of the kind. He wants to be brought under a Wages Board.
– He shifted his factory to Braybrook in order to get away from the Wages Board.
– Nothing of the kind ; considerations in relation to transport induced him to remove his works.
– I prefer to rely upon the evidence, rather than upon the statements of politicians, who are interested on account of the support that they hope to secure at the next election. Mr. Weickhardt goes on to say : -
Then the rush starts again, all hands get behind, then a man is put on here or there where it is utterly impossible to do the task set out, then it works up to ten or twelve. Then, when you get to twelve by long hours night and day, it is deemed advisable to try and rush “twelve machines through in eight hours instead of nine. Then green timber goes in, and all the tacks fall out, and it is to do over again. No allowance is made on ordinary time if you worked all night. Man or boy the wages is the ordinary rate. Young Harwood, getting ros. per week, of my knowledge, worked from 7 till 6, less 1 hour dinner, 6.30 to 10 at night, and broke down after a few weeks. In packing for the Argentine it was all hours, and exhausted the men, but the pace is set, and stragglers are passed out…..
In sanitary matters the state of affairs in 1904 was beyond all decency, and defies description. It was kept in this state purposely, and also all light excluded, and not sufficient ventilation. The men would suffer almost any pains before venturing into the “ Black Hole of Calcutta.” The firm gains so much time, the conditions are imposed, thanks to the visit of Mr. Duff; but to make up for the loss of the other mode of chasing the men out quickly, the back of the seat is so constructed that you have to back into the seat, and you are kept m a recumbent position, and cannot straighten yourself until you crouch out again.
Mr. Weickhardt also deals with the question of wages, but I do not propose to quote any more of his statement at the present moment. He shows that Mr. McKay is systematically sweating his employes, after having been assisted to carry on his industry by means of high protective duties. This statement was evidently prepared by Mr. Weickhardt without any assistance, because the language is such as to indicate that it was not the production of an educated man. On the other hand, statements made by Mr. Bult, the manager for Mr. McKay, and by Mr. Porteous were carefully prepared; but they do not touch Mr. Weickhardt’s main indictments. Now I wish to refer to the price of the local harvesters. They are sold to the farmers for £81 cash. If the purchaser wants terms, he has to pay a higher price, according to the accommodation that he requires. It is well known that Mr. McKay carries on a very large export trade, and that, after paying freight and insurance, and other incidental charges, he is able to sell his harvesters in Argentina and other parts of the world at lower rates than those charged to local farmers. He has to reduce his prices in other countries to meet foreign competition. It is reasonable to assume that he makes a profit upon the machines that he exports, and to the extent to which he demands a higher price than that receives for the exported machines he is imposing on the Australian farmer. Now, what is the cost of the production? Details are given upon this matter on page 1826 of the Minutes of Evidence- It is shown that the harvesters do not cost more than £30 each. If we allow the large sum of £20 for selling expenses, the gross cost of the machines to Mr. McKay is not more than £50. It is safe to assume that they do not cost anything like that amount; but, even if they did, there would still be the enormous profit of £31 made upon every machine that was sold. How Ministers can submit a proposal of this kind I cannot understand. I am filled with disgust to think- that any body of men can reconcile such a course of action with their own consciences, and with their duty to their country.
– What about the Minister of Trade and Customs, who is not present?
– I suppose that he is engaged in touring his electorate as is customary with him when important Bills are before the House of which he should be in charge. In order to test the sincerity of honorable members who are so solicitous about the welfare of the workmen engaged in this industry, and who urge that a further measure of protection is necessary to enable increased wages to be paid to them,, I move -
That af ter the word “ follows,” line 5, the following proviso be added : - !t Provided that every manufacturing firm engaged in industries within the Commonwealth, the products of which are protected by duties, shall distribute in increased remuneration to their employes the full amount of the duties imposed.”
If it be true that the manufacturers require additional protection to enable them to pay better wages to their employes, by all means let us insist that the increased duty shall find its way into the pockets of the workmen, and not into those of men like Mr. McKay, who already makes £30,000 annually out of sweating his employes. Here is an opportunity for honorable members opposite to exhibit their sincerity. If the amendment be agreed to, I will undertake to say that we shall no longer hear an outcry on the part of manufacturers for increased duties.
– If the Government accept the amendment, will the honorable member vote for their proposals ?
– I am not a protectionist ; but, if I were accustomed to indulge in whining upon the floor of the House and addressing meal-hour meetings of factory employes about the distressed condition of the workers, and the need of protective duties to give them better wages, I would vote for them. I hold, however, that there is no necessity for any increased duty whatever or for any duty at all. I repeat that, if my amend.ment be carried, Mr. McKay will no longer be anxious that increased, duties should be imposed upon agricultural implements. We shall then have no more of the lobbying which has been so sedulously practised by men who desire to obtain access to the taxpayers’ .pockets. I shall oppose the proposals of the Government, because they are not warranted by existing conditions, because they are opposed to the sworn evidence given before the Tariff Commission, because they are opposed to the Commission’s report, and because they involve an unjust burden upon the farmers of Australia.
Mr. JOSEPH COOK (Parramatta) minutes in discussing this matter, although I recognise that it is one of considerable importance to the primary producers. The more I think over it, the more it appears to me to be little less than a political scandal that the Minister who should be in charge of these proposals is so constantly absent from the Chamber when important matters ‘relating to his Department are under discussion.
– Why should another honorable member be canvassing his electorate ?
– What has that to do with the matter? Are other honorable members responsible for the conduct of the Customs Department?
– They are responsible to their constituents.
– But they occupy a very different position in relation to their constituents from that which the Minister occupies in relation to the country at large. He is responsible for the introduction of these proposals. He merely threw them upon the table, and immediately rushed off upon an electioneering campaign, leaving other Ministers to take charge of them. Of course, I admit that they have not suffered on that account so far as their presentation is concerned, because in this House it is not customary to explain any proposals, or even to attempt to defend them. They are simply formulated somewhere else, and are submitted upon the understanding that there is to be no debate upon them, but that honorable members behind the Government are to sit tight until they have been agreed to. This is no longer a deliberative Chamber. It has abdicated that function for some considerable period, and I think it is just as well that the public should be made acquainted with the way in which important proposals are rushed through, without the slightest consideration being given to them by those who are in charge of them. The proposals under consideration largely affect the primary industries of Australia. Yet they were introduced by the Minister in a speech of ten minutes’ duration, and one which occupies only a single page of Hansard. That is all the justification which the Government have to offer for proposing so grave a departure from the recommendations of thi Tariff Commission, which was specially appointed to inquire into this very matter. Some of the members of that body suggested the imposition of an ad valorem duty, which would be equivalent to a fixed duty of about £10 per machine. Others declared that no change in the rate levied under the Tariff should be, made. The Commission were equaly divided upon that point. But the Government, without the slightest attempt to justify their action, now propose to increase the rate of duty from £10 to £16 per machine. In this way are the interests of all classes considered in this Parliament. It would almost seem as though we were playing with toys instead of dealing with the interests of Australia. At the present moment there are only three honorable members upon the Government benches listening to whatever criticism may be brought to bear upon these proposals. This is the way in which these imposts are fastened upon the people of the country.
– We have heard that remark before.
– The honorable member may have heard it before. All that he does is to laugh when these proposals are being considered. Of course they do not concern him, because harvesters are not used- in Tasmania. I venture to say that if they affected that State, he would laugh upon the other side of his face. But because he is not interested in them, he is most unintelligently grinning at a proposal to fasten upon the farmers of Australia a duty averaging 40 per cent, in relation to one of their tools of trade.
– We have heard that statement so verv often.
– I do not suppose that any body wishes to hear the honorable member very often.
– Not upon that side of the Chamber.
– Nor upon any other. I really must advise the honorable member to curb his tongue a little. He seems to have taken upon himself the special task of championing the proposals of the Government, and he does so the more readily because they do not affect Tasmania. Last week, when we were discussing matters which did affect that State, he sang a very different tune. In my judgment, the proposals of the Government are wicked and scandalous. The Ministry has decided, despite the evidence which was tendered to the Commission, to levy an impost of 40 per cent, upon one of the tools of trade of our primary producers. The fixed duty which they suggest is equivalent to an ad valorem duty of 40 per cent.
– I find that I underestimated it. It works out at 42 per cent.
– I am obliged to the honorable member for correcting me. Upon one of the tools of trade of the farmers of Australia it is seriously proposed to levy a fixed duty which is equivalent to 42 per cent.
– - Plus the natural protection, which represents another 25 per cent.
– Of course. I trust that honorable members who represent the great farming constituencies of Australia in which harvesters are used will oppose these proposals as strongly as possible. The operation of the duty proposed to be levied upon these machines will not affect me personally. I could just as readily afford to laugh at the Government proposals as can the honorable member for Bass. I am speaking purely in the interests of others than my own constituents, and I deem it my duty to enter my protest as emphatically as I can against what I regard as a wicked imposition attempted to be practised by the present Government upon the farmers of Australia. So far as we have seen, throughout this Parliament there has been a steadfast adherence on the part of the Government to anything relating to the great centres of population, and a careless, reckless disregard of the primary producers of Australia. who, after all, are the backbone of the Commonwealth, and furnish the basis of all our expanding prosperity. The primary producer in the back-blocks seems to be the very last person thought of by the Government. All their proposals seem to concentre in the interests of those in the centres of population. If there is an industry- in Melbourne employing a dozen hands this Government is ready to rush to its rescue. All that the manufacturers have to do is to say that they want more duty. There is nothing easier than to ask and to receive at the hands of the Ministry. Manufacturers have not even to make out a good case. I believe that no case has been made out for disturbing the dutv imposed on harvesters prior to the introduction of. this motion. So far as I can see all the evidence adduced before the Commission goes to prove most conclusively that if ever there was an industry expanding and flourishing steadily and continuously it is the harvester-making trade. There is nothing to show that it has been strangled - that it is languishing or suffering because of outside competition. There is nothing to show anything, but that it is prospering steadily and growing with the increase in the natural prosperity of the country. There is nothing to warrant the imposition of an increased duty of even one farthing upon harvesters. The local manufacturers al read v enjoy a duty «f per cent.j together with the natural protection, which is a very large item when spread over the importation of these machines. What we have been able to gather furnishes the best of all reasons why no further impost should be placed on them. The Commission has put before us the interesting fact that the harvester manufacturers of Australia are able, not only to hold their own against foreign imports, but successfully to challenge foreign makers in their own markets abroad, and to compete with them there. Last year, Mr. McKay alone exported 419 machines of the value of £30,000, and for the first seven months of. this year he exported 484 machines of the value of £32,000. When a firm is able successfully to compete with its foreign rivals in their own markets- - when it has already begun successfully to invade those markets - surely that fact affords clear evidence that it is not being strangled in its own market, and prevented from earning an honest livelihood under Australian conditions. The moment a firm like that of the McKay Bros, begins to export, and to export successfully - and the number of machines which it is sending away is increasing almost every month - it affords the best of all reasons for the conclusion that it is doing well, and that we ought to let well alone. What is the genesis of this proposal ? One fine morning the statement was made that Mr. McKay, who carried on business in the Prime Minister’s own electorate, had discharged a number of his employes. This immediately gave rise to alarm - an alarm that would have been justifiable had the statement fairly represented the facts of the case. But the inference which some of us hastily drew from that statement proved to be a false one. Men were certainly discharged from the Ballarat works, but it was because the busy season was over. Increasing numbers have since been employed, but the fact that some men were discharged formed the basis of the claim for these increased duties. Mr.
McKay is one of the Prime Minister’s constituents, and, therefore, has ready access to him, and is, no doubt, able to pour tales of distress into his ears. He is able to convince the honorable and learned gentleman that he is being injured by foreign competition.
– I do not know that MrMcKay has spoken to me twice on this; subject during the last year or two. He has been out of the country for some time.
– I presume that he did net require more than a couple of interviews to pump, as it were, all these stories into the mind of +he Prime Minister. If he had any sense, after he had given the honorable and learned gentleman the facts on which he relied, he would keep as far away from him as possible.
– I do not remember a single fact that he ever communicated to me.
- Mr. McKay’s position illustrates the advantage which those living in the cities enjoy in being able to approach the Government. The man on the plains of Australia - thousands of miles away from the capital - is not able to approach the Government as the manufacturers in the towns are able to do. Consequently, his view cannot be poured directly into the ears of Ministers in the same effective way as are the views of those who dwell in the large centres of population. And so it comes about that this proposal had its genesis in Ballarat - the Prime Minister’s own constituency - and was initiated - I was going to say “ engineered,” but I do not wish to use that word - by one of the Prime Minister’s own constituents. I do not think that any one will dispute the cleverness of the McKay Brothers. I have only one feeling concerning them ; I wish to see them succeed to the extent of their hearts’ desire. Nothing would give me greater pleasure than to see them hunt every foreign rival out of the Australian market if they are able to do it fairly; but I do not think it is our duty, as an Australian Parliament, to help them to do that at the cost of the primary producers of Australia. A motion for a duty of 42 per cent, upon an article which is of vital importance to the primary industries of Australia is neither more nor less than an indecent political proposal. That is my opinion, expressed very emphatically I admit, but offered because I believe that it is more in accord with the facts than any mealymouthed or finessing statement would be. May I refer, in passing, to the way in which we have dealt with tools of trade. When the Tariff was under consideration, we made it a rule to exempt, as far as possible, all such tools. It will be found that a. very large number of tools of trade connected with industrial enterprises are on the free list. The House decided almost uanimously that they should not be taxed. I should like to inquire what is! a harvester but a. tool of trade to the farmer ? Does the size of such a tool make a radical difference in the principle to be applied? If small men are to have their tools of trade exempt because they are small, the farmer has a still stronger claim to have his tool of trade, which is large and expensive, and to procure which involves much trouble, free of duty. I wish to revert to another preliminary inquiry : What were the terms of this Commission which was sent upon its duty something like two years ago? It was charged to inquire into the effect of the Commonwealth Tariff on Australian industries and the working of the Tariff generally. That was the inquiry which it was specially appointed to make. I should like to hear some of the members of the Commission deal with this point. One wonders why, among the first of their reports is one concerning an industry which, at the outset, was obviously neither strangled nor laguishing
– It was represented in Victoria to be languishing.
– I dare say it was. That is where the trouble begins. It seems to me that one has only to cry loud enough here, and to be backed up by a certain Victorian newspaper, to force any claim, no matter how unfair at may be, upon the attention of the Government of Australia to the exclusion of the consideration of the general interests and welfare’ of the Commonwealth. One of the very first reports submitted by the Commission relates, not to a strangled industry, but to one which the Commissioners declare to be prospering, and which, therefore, does not come within the category of those into the conditions of which it was appointed specially to inquire. All the evidence available is to the effect that the industry is in a most flourishing condition.
– Mr. McKay is the most prosperous looking man in Australia.
– Is it a crime that an Australian should be prosperous?
– No one grumbles at Mr. McKay’s prosperity. My hope is that he may enjoy still greater success. The question before us, however, is not whether we object to a man prospering, but whether we are going to ask the farmers of Australia, in vulgar parlance, to “ grease the fat pig.” Let Mr. McKay prosper under healthy rivalry and in competition with other Australian producers ; let him go ahead if ‘he can, but when he is prospering and building up a large business - enriching himself, as he has every right to do under fair and free competition - let him not come tq the Federal Parliament with . the story that he is not prospering, but that, on the contrary, his industry is strangled and languishing. The facts show that nothing of the kind is taking place. On the contrary, all the evidence we have is to the effect that McKay’s business is in a very flourishing state, and that he is doing exceedingly well. I believe that, according to his own sworn statement, he, in 1897, manufactured 75 machines; in 1898, 150; and in 1.899, 301. Then came Federation, and, in 1904, his output was 1,500, and, in 1905, 1,930. Those figures do not show that his industry is being strangled. In fact, he seems to be outstripping his competitors. Why, on these facts, the Tariff Commission has recommended that the existing duty be doubled passes my comprehension, and I think that of any reasonable man.
– The Commission has not made that recommendation ; it came from only a section of the Commission.
– I meant the protectionist section of the Commission.
– According to- the Commission’s report, the output for 1905 means a profit of over ^30,000.
– That is a very pleasant way of languishing.
– Is McKay the only manufacturer of whom the members of the Opposition have heard?
– He is the largest manufacturer of harvesters, and is at the head and front of this movement. That is why he has been singled out ; it is because he represents the others. There are makers in South Australia, but I do not think that they would have asked for a larger duty had not McKay led the way.
– The most sensible protectionists in Australia are in South Australia.
– The most sensible protectionists are those who are satisfied with moderate duties. I do not call those who asked for the present duties sensible, and it is my firm conviction that, although this moribund Parliament may impose a rate equivalent to an ad valorem duty of 42 per cent., a more sensible Parliament will subsequently reduce it. According to Mr. John Mitchell’s evidence, McKay’s business has expanded since the imposition of the Federal Tariff. Mr. John A. Bagshaw, ofSouth Australia, gave evidence to the effect that the agricultural implement making business is not a languishing industry, “but very far from it,” to use his own words. Mr. David Shearer, of South Australia, gave evidence to the effect that his business generally has been increasing during the last three or four years, his profits having been greater, and his turnover larger.
– By adopting new lines and patenting a plough of his own.
– Is that a reason why he should ask for higher duties? If he is doing well, he may be let alone.
– He could not manufacture plough-shares until he got a duty, and then he reduced his price from 12s. 6d. to 3s.
– I cannot believe that that is so.
– Protection always works out in that way.
– That is an old gag, but it works out only in Parliament ; it does not work out when one goes into a protected market to purchase. Mr. James B. Garde, representing the Australian Implement Manufacturing Association, showed that upon some lines there has been a great increase since 1899, and Mr. Rees Rees gave similar evidence. Indeed, the members of the Commission had to admit that there has been a great expansion of trade. The facts are so clear of doubt that they were compelled to do so. However much the protectionist members of the Commission might have wished to make out a case for protection, they were compelled to recognise that this business has expanded and is successful. When the Commission was appointed its investigations were intended to discover what in dustries were languishing and being strangled, with a view to their relief, but their inquiries proved that the agricultural implement industry is prospering almost beyond the dreams of avarice. Any fluctuations in trade have corresponded with fluctuations of season. When times have been prosperous the demand has increased, and the falling off in output has been due to bad seasons. Increase and decrease have corresponded with the prosperity or adversity of the primary industries, which shows that the Tariff has not injured this business. On the contrary, there has been a continuous expansion of trade. Mr. J. Moore said that there have been more hands employed, more work to do, and more profit obtained since the Federal duties began to operate than ever before. Mr. John Mitchell admitted that his trade, taken as a whole, has expanded greatly under Inter-State free-trade. Figures have already been quoted to-night to show that the increase of hands in this industry has been considerable. In 1899 there were 1,580 employed, and in 1905 2,799,an increase of 1,219. However this question is viewed, whether in regard to the value of imports, or in reference to the statements of those engaged in the industry as to their output, and the value of their production, it is seen that there is no warrant for interfering with the present duties on agricultural machinery. Mr. McKay, who has so strenuously advocated the increase of duties, apparently with success, has the largest output, charges the highest prices, and pays the lowest wages. The evidence was given on oath, by, I presume, reliable witnesses.
– Whose evidence was it?
– Several witnesses have testified to those facts. Mr. Weickhardt was one of them.
– An ex-employe.
– Does it therefore follow that what he says is untrue?
– No one would take the evidence of a discharged employe
– Is a man who has had the misfortune to lose his employment to be branded as a liar? Because he is unfortunate enough to be discharged must he therefore be regarded as having lost his honesty and integrity?
– His statements were ex parte, and have been contradicted over and over again, as the honorable member knows.
– Not in the evidence before us.
– They have been contradicted by men who are working at the factory.
– Can the honorable member quote evidence to that effect?
– There are in the -evidence much stronger statements than I have quoted, but, inasmuch as they reflect upon Mr. McKay as an employer, I have refrained from alluding to them. I am, however, justified in pointing out that it is stated in the evidence that the man who charges the highest price for his machines, and has the largest output, pays the lowest wages. These facts show that there is no justification for increasing the duty on harvesters. I wonder why there should be such a general desire to impose a fixed duty instead of an ad valorem impost.
– There will be much less prevarication, and perhaps less perjury, with a fixed duty than with an ad valorem duty. That has Been the experience everywhere. I do not refer to this particular case.
– I do not know about that. All that has been urged is that it will be more difficult to collect an ad valorem duty. But I have yet to learn that in order to get over a small difficulty such as that indicated, any Government is justified in perpetrating an1 obvious injustice.
– Most traders prefer fixed duties, because thev then know the exact terms upon which they are competing.
– I should think that those whose goods were of the greatest value would prefer a fixed duty, but that those whose goods were of low value would prefer an ad valorem charge In spite of the fact that there is a wide difference between the values of the harvesters imported, thev are all deemed to be of equal value for the purposes of the dutv. Why should a machine valued at £20 be subjected to the same fixed dutv as one valued at £30?
– They are nearly all of the standard value.
– I do not think that the evidence bears out that statement. It would appear that the Massey-Harris machine is of much higher value than that made by the International Harvester Company. It certainly costs verv much more to make than do some of the other machines. Therefore, this proposal to rough all the machines up, and charge the same duty, irrespective of values, is a species of socialization that I regard , as veryunjust.
– The honorable member has got Socialism on the brain.
– I have it on the brain to this extent : that the expression that I have used seems to be an apt one. Since the honorable member does not seem to like the reference to Socialism, I shall withdraw the term I used.
– I am very much amused.
– The nearer we approach the general elections the more restive the honorable member becomes under any mention of Socialism. It was not so twelve months ago. However, I do not wish to lacerate the honorable member’s feelings. This is a proposal to make equal those things which are unequal. Machines of different value are to be regarded as of the same value for the purposes of levying the duty. The trouble with all fixed duties is that however the price may decrease, the duty remains a fixed quantity. It may seem paradoxical, but a fixed duty is a constantly increasing duty. As the prices of goods decrease, the fixed duties Increase ad valorem. That, of course, is an argument against all fixed duties. When we were discussing the Tariff, we abolished fixed duties as far as we could, and adopted percentage duties which would rise and fall in keeping with the fluctuations in value. Now it is proposed to again resort to the vicious method of adopting fixed duties - duties which in Victoria were the means of fleecing the people of thousands of pounds of their hard-earned money.
– Whom did they fleece, and when?
– The Victorian farmer.
– Give us. a case in point?
– I cannot be bothered with the honorable member; he is not open to conviction. I have a very strong objection to fixed duties of any kind, because thev are vicious, and operate entirely against those who have to pay them. They are not in keeping with the principle which would guide Parliament in imposing a fair duty, because they tend to increase as values are reduced. Two systems of valuation have been adopted in connexion with stripperharvesters - one by the Tariff Commission, and one bv the Minister of Trade and Customs. The Minister says that the ma- chines should be valued at £65, whereas the Commission say that £41 is the true valuation. Notwithstanding that the protectionist and free-trade members of the Commission agree that£41 is the proper valuation, the Government sail airily along and propose to impose a duty of £16 upon a machine which they say is valued at £65. They claim that they are imposing a duty equivalent to an ad valorem impost of 25 per cent. ; but the Chairman of the Commission points out that the proposed fixed duty of £16 amounts to an ad valorem charge of 42 per cent. The Government seem to regard every recommendation of the Commission as radically wrong, and consider it their duty to propose something entirely different. The Government are, in effect, ignoring the work that has occupied the Commission for the last two years, and, of course, they are supreme. They have behind them supporters who do not seem prepared to question anything that they propose. They are quite content to sit tight and permit the Government to take money arbitrarily from the producers and traders of Australia. All the sworn evidence is to the effect that the valuation adopted by the Government is a fictitious one. Neither the Minister of Trade and Customs nor the Prime Minister attempted to explain how he arrives at a valuation of . £65. Their motto is, “ Clap it on, and make them pay,” or, to use the expression of the Minister of Trade and Customs, “ Make them sit up.” It is by such unintelligent methods that unfair taxes are being imposed upon the people. One would have thought that the Government would pay some attention to the sworn evidence given before the Commission with regard to the value of the stripperharvesters. But the Government have absolutely set on one side the report of the Commission, and the evidence which they have gathered so laboriously, and which they have considered on the whole so studiously and so fairly. It is disgraceful that the Commission should have its report thrown back in its teeth in this contemptuous way by a Government which has its own political ends and immediate political purposes to serve. I could understand Ministers questioning interested evidence given by traders, or ignoring testimony furnished in this House or by the press; but they have no justification for setting aside the results of the inquiry so exhaustively conducted by the members of the Commission. Freetrader and protectionist Commissioners alike agree that £41 is a fair value for these harvesters.
– . £38.
Mr.JOSEPH COOK. - Yes,£38plus 10 per cent. Yet, in spite of that, the Government say that the value is , £65, and upon that basis assess the duty.
– The Prime Minister looks sick enough; do not rub it in to him too much.
– I never knew a Prime Minister to be sick whilst he had so stolid and solid a majority behind him.
– The solid position of the Government is what is making the Opposition feel unwell.
– It is time for the Opposition to feel unwell when they see the public money thrown away in this unintelligent and reckless manner. I ask the Minister to show how he makes up his valuation of , £65, in the face of the evidence given before the Commission. If the honorable member for Moira were not sitting behind the Government, he would be the first to see the reasonableness of my request.
– What evidence has been adduced that was not previously in the possession of the Minister of Trade and Customs and his predecessor?
– Does the honorable member suggest that two years ago the Government had in their possession all the information gathered by the Tariff Commission ?
– Judging from the report, the Commission did not obtain any evidence beyond that previouslyin the possession of the Minister of Trade and Customs with regard to the valuation of harvesters.
– Oh, yes we did. We obtained evidence fromBuenos Ayres and Milan.
– If what the honorable member for Moira has said is correct, very little credit is due to the Tariff Commission. I have no hesitation in saying that the Tariff Commission have collected a mass of very valuable evidence.
– That is not the question.
– It is the question. We have a right to (know from the Government why they differ so radically from the Commission in the matter of assessing the value of these machines. We must recollect that Ministers argue that they are adhering to the 25 per cent. duty recommended by theCommission, but that where they differ from the Commission is in regard to the valuation upon which that duty is levied. Since there is such a radical difference as to the valuation of these harvesters, it is only fair that we should ask the Government, before the duty is increased from £10 to £16 per machine, why that difference exists.
– The Government have given no reason whatever.
– Absolutely none. All that we have had in justification of their action is a ten minutes’ speech from the Minister of Trade and Customs, who introduced these proposals, and another ten minutes’ speech from the Prime Minister. This afternoon I described the action of the Government in assessing the value of these machines at £65 as a piece of departmental garotting. I can find no other expression which’ adequately fits the case.
– It is not departmental, but Ministerial garotting.
– That is what I intended to convey. Since the valuation of these harvesters for Customs purposes was arbitrarily fixed by the Minister at£65, nobody has been able to obtain from him an explanation of the reasons which prompted his action. I do not believe that he has one to offer, except that which he gave to the newspaper representatives when he said that he intended to make the importers of foreign harvesters sit up. I am surprised at the action of the Prime Minister in allowing his colleague to ride rough-shod over the recommendations of the Tariff Commission, and over the sworn evidence which that body has collected. I should like to point out that, although Mr. McKay was asked why the duty upon these machines should be increased, he steadfastly refused to give the slightest information as to the cost of their production. He asked for a further measure of protection because he affirmed that he could not compete with the imported machines unless he got it. But when he was questioned as to the reason why he could not compete with them, he replied that he was not at liberty to say. He stated that his firm was a proprietary company, and therefore he preferred not to give any reasons. This fact is made clear by a reference to the evidence. At question No. 16668, Mr. Clarke asked Mr. McKay -
Has your output increased or diminished since the operation of the Federal Tariff?
His reply was -
It has increased.
The witness was then asked -
Has it increased in consequence of an expansion of your trade in the Commonwealth, or because you have exported to other countries?
The reply given by Mr. McKay was -
For both reasons. Both the export and InterState trade have increased. At the time the Federal Tariff was enforced we were in the position of having perfected a very good invention. Our machines had made a name for themselves, and the trade had to follow.
I should not think that that was a reason for the imposition of increased duties but rather a reason against the adoption of that course. If the trade has to go to Mr. McKay at a remunerative rate, why does he want an increased measure of protection? He continued -
The reason for our expansion is that the people in other parts of the world were not then prepared to supply the demand for the right article.
There is the deliberate statement of Mr. McKay that he produces a better article than can be produced elsewhere. That is the evidence of a man who, in the same breath, asks for further duties. It is the testimony of one whom the Government allege ought to be protected to the extent of 42 per cent., against the competition of individuals whom he has declared have already been beaten out of the market. Mr. McKay was further asked -
You particularly refer to the Sunshine harvesters ?
His reply was -
He was then asked -
Can you tell me what was your output of machines prior to 1901 ?
His reply was -
It has been increasing ever since we began business. If I had received notice I could have brought the figures.
These are the sworn statements made by Mr. McKay before the Tariff Commission. I think they should be placed upon record in Hansard, so that the public may be able to see the basis upon which the Government have proceeded in offering him such a huge increase of duty. Later on he was asked -
Can you give me the average proportion of the cost of selling and distributing your machines ?
To that he replied -
I would rather not go too closely into details.
Evidently it might have been a very bad thing for “him to do so. Evidently he had something which he desired to keep back from the Commission. Every other witness who appeared before that body gave the totals of the cost incurred in distributing these machines. Accordingly, Mr. McKay was asked -
Is there any reason why you should be. more reticent than other witnesses have been?
His answer was -
I do not think it is fair that I should expose the whole of my business to this trust which wishes to smother me. ‘
Only a little while previously he had informed the Commission that he had the trust beaten because he produced a better article. To my mind, his statements are not only inconsistent but contradictory. After all this questioning, the Chairman of the Commission inquired of Mr. McKay -
I presume that you will not tell me your prime cost?
His reply was -
I would rather not.
He wanted the increased duty all the same. In my judgment, Mr. McKay acted perfectly within his rights in declining to expose his business, but we are acting equally within our rights in refusing to give him the advantage of increased duties unless he first establishes his case. The Government, it appears, do not require him to do that. They are content to accept his statement that he requires higher duties, and, hey presto, the thing is done. There will be no difficulty in giving effect to his wish in a House constituted as this is. Honorable members have merely to sit tight. I wonder, after all, whether Mr. McKay has favoured the Prime Minister and his Government confidentially with a statement as to the primary cost of producing these harvesters. Maybe there have been interviews between Ministers and private individuals, upon the strength of which these proposals are made to the Committee. The obligation is upon the former to advance some reason to justify their proposals. I do not wish to pursue this matter any further. There is abundant evidence to show that no -further duty is required upon harvesters, which already enjoy a very high measure of protection. I understand, from the evidence given before the Tariff Commission, that the natural differentiation in favour of Australian harvesters averages about £14. 10s. per machine. That is to say, the cost of landing, harvesters in our market amounts to that sum. Mr. McKay already has that natural protection. In addition to that, under the existing Tariff he enjoys a protection amounting to £5 4s- 6d. per machine. In these circumstances he and the rest of the Australian manufacturers of harvesters enjoy a protection of £20 per machine. It that is not sufficient, I for one shall not grant any increase. I do not willingly consent to grant him an increase of even one halfpenny in the protection he enjoys. We must remember that the Australianmanufacturers of these machines are not competing against the” pauper labour of Europe. One of the strongest arguments repeated almost ad nauseum in favour of the imposition of protective duties is that in other quarters of the globe many goods are produced under sweated labour conditions. Honorable members may grant, if they please, that our civilization in these southern seas demands some protection from the products of such inferior industrial conditions, but evidence was given before the Commission that the wages paid in the manufacture of these machines in Canada are higher than those prevailing in Australia. Evidence was given that the cost of iron and steel is not less in Canada than it isi here; that on the contrary the cost of the raw material, and of the workmanship is higher there than here. Under these conditions, and having regard to the fact that the local manufacturers enjoy a protection amounting to £20 per machine, what possible excuse could there be for increasing the existing duty on a machine which is of vital importance to the farmers of Australia? I do not see my way to subscribe to even a fractional increase in the existing duty. If any case has been made out it points to the necessity of reducing, rather than increasing the duty. When we remember that the whole of the grain raisers of Australia have to do with these machines, and that they vitally affect their industrial occupations and productions, we ought to hesitate before increasing the duties for the purpose of enabling the manufacturers to swell their profits. I know that a limit is to be imposed upon the price of these machines. But we have had evidence this afternoon that the price proposed to be fixed from the beginning of next year is that at which they are actually being’ sold by some traders at the present time. Some are selling these machines at only a small fraction in excess of the maximum_ price which we propose to provide by legislation shall be charged from the beginning of next year. This price is to be maintained apparently for all time; the farmers of Australia are not to be allowed to secure these machines Dfc anything below it. Meantime, the local manufacturers will enjoy a duty, if the Government proposal be carried, amounting to 42 per cent, plus £14. 10s., the cost of landing a machine here from the American continent. The farmer has to fight his way in the markets of the world without any of these advantages. Nothing save the rates prevailing in the markets’ of the world can affect the price which he secures for his exports, arid yet a Legislature which is supposed to have regard to his higher and better interests is to fix the price which he shall pay for the implements necessary to enable him to produce his goods at the cheapest possible rate. The sooner a stop is put to the cant we hear about helping the primary industries of Australia by this Government the better. If this is all that we can do for them it is w’Orse than nothing. It would be far better for us to let them alone instead of proposing to keep up the prices that they have to pay in respect of one of their tools of trade. The farmer away in the interior of Australia, who to-day is holding the whole social superstructure above him. is already handicapped sufficiently. His handicaps are natural ones. In the first place, his distance from the markets of the world is a very heavy handicap; in the next place, he has to fight against droughts-
– I am glad to hear it.
– The income-tax returns do not show that the primary producer is struggling in the way that the honorable member would have us believe.
– The least we can do is to take care that we do not increase the imposts which the farmer already has to bear. After all, he is at the bedrock of our social and industrial prosperity. If he is all right, we may very well be certain that our secondary industries are also right, because we may be sure that they, too, are healthy and are expanding in proportion to the expansion of his* industry. He is building, broad and deep, the base of the industrial pyramid, and we should not hamper him with any of these fettering imposts whilst he is engaged in the work of erecting the national superstructure. Let us leave him alone, so far as proposals of this kind” are concerned; let us make his tools sharper rather than blunt them by these unnecessary duties. If we make it more difficult for him to get nearer the range of his market and of his competition in regard to all those things from which he derives his profit, we practically blunt his tools, since he has nothing to protect him from the competition of the world in relation to his finished products. Our very isolation - our distance from the markets of the world - should lead us to give the farmer ‘ every encouragement Ave can, and should cause us to refrain from interfering in this high-handed way with his industry. The prosperity of Australia rests upon the facilities which we afford the farmer for sending his products to market. I shall do nothing that will hinder him in building up his own prosperity, since upon that foundation we may build every kind of secondary prosperity. For the reasons I have given, I feel that there is no justification for the duties which the Government propose, or for those which the protectionist members of the Commission have set before us. The evidence in this regard is in the teeth of their proposal. I prefer to adhere to the evidence which has been furnished, and. making mv own deductions from it, my attitude will be one of opposition to any further increase of these duties.
– I propose to reply to only one statement made by the honorable member for Parramatta - a statement for which he had no possible justification. I am sorry that there should be introduced in this House, in a casual and speculative fashion, allegations that are without foundation. They could not be made by any honorable member having a due sense of his position, and ought not to be, particularly by a deputy leader of the Opposition, unless he has direct evidence on which to base them.
– What are the allegations ?
– The honorable member, on two occasions, more than insinuated that because Mr. H. V. McKay was a constituent of mine he had brought to bear upon me backstairs influence that had improperly affected the decision of the Government.
– I said nothing of the kind.’
– The honorable member distinctly made such .an insinuation on two occasions. I challenged him with the statement that so far as my memory served me Mr. McKay had only waited upon me once, and then publicly-
– The honorable member then said that Mr. McKay had twice waited upon him ; he now says that he waited upon him only once.
– Will the honorable member allow me to complete my sentence. I say that Mr. McKay saw me, so far as I remember, on two occasions only. What I am now stating is that he waited upon me only once in connexion with anything relating to his business. His object was to repel certain attacks that had been made upon him about twelve months ago. He waited upon me in my own office publicly, when I believe one or two other persons were present. I met him on one other occasion, when, so far as my recollection serves me, he made no allusion, except of a casual character, to his interests or business. He certainly made no allusion to their political bearing. He has been absent from the country, I believe, for the last six months, since when I have never heard from or of him. This statement practically sums up my relations in this regard with Mr. McKay. So far as I am aware, he has never, directly or indirectly, approached me, either before or since. The Government proposals have been made without any personal action on my part. I have received one or two deputations, reports of which have been published, but beyond that have had no connexion outside the Cabinet with the proposed imposition of duties upon harvesters or other implements covered by the motion now before the Committee. They have been dealt with bv another Department. The part I have taken has been only that which every other Minister has taken. If the honorable member knew these facts - and they are all that could be known - he had no justification for his’ insinuation. As he did not know them, there was absolutely no justification for his remarks. I hope that in this House the level of debate will be maintained by confining our argument to the merits of the question before us, without making insinuations of this sort. They can be just as easily scattered from this side of the House with at least quite as much justification, if we thought fit to mingle in such tactics.
– Will the Prime Minister explain the justification for the j£6$ valuation?
– I have nothing to explain. I rose to reply directly, emphatically, and at once to the insinuations of the honorable member for Parramatta, in order that they may go no further. Having done so, there is nothing to add.
– - I made no insinuations, and did not intend to make any.
– The Prime Minister appears incredulous.
– I challenged the. honorable member at the time.
– What I said was that Mr. McKay is a constituent of the Prime Minister, and, as his constituent, is able to get close to him.
– That is not so.
– Was that an insinuation? The Prime Minister might as well say that because Mr. Sandford or his manager sometimes see me that something improper occurs.
– I should be the last to do so.
– It is immaterial to me what the honorable and learned member might do. The point I was making was that the men in the interior of Australia cannot get as close to the Government as can the men in the cities. That was my argument- no more, and no less. The remarks of the Prime Minister were so much leather and prunella. He indulged in his customary bathos, detecting meanings which were not intended, and seeing ghosts of all kinds. All I intended to convey was that Mr. Hugh, McKay is his constituent.
– I see as little of him as of any of them.
– As a constituent, he has the right to go to the Prime Minister if he feels that he should
– He has not done so.
– The Prime Minister has told us that he has had two interviews with McKay, and it is almost incredible that McKay did not pour into the ears of his representative a tale of woe similar to that which he addressed to the Minister of Trade and Customs
– He did not do so.
– Why should he not have done so, if he thought fit ? His representative was the person to whom he had the right to go, first pf all, if he believed that he was suffering injustice and wished for a remedy. Is that statement an insinuation ? If so, it is an insinuation which might be applied to every member of the Committee. I protest against the action of the honorable and learned member in making these bathetic appeals, and indulging in bunkum. What he said was quite beside the question. I ask him not to raise false personal issues, but to tell us plainly why the Government has increased the valuation of harvesters to £65 in the teeth of evidence proving, their value to be only £41 ? I challenge him to do so.
– No one ever approached me in regard to the fixing of the valuation, either before or since it was altered.
– Then why was it increased to £65 ?
– If some of the statements of the leader of the Opposition contained a scintilla of truth, few members would be worthy of the positions which they hold. This is not the first occasion upon which I have had to refer to the manner in which imputations are hurled across the Chamber, apparently for no other reason than because the members of the Opposition will not give credit to those who differ from them on the fiscal question for the same honesty of purpose as they claim for themselves. The deputy leader of the Opposition repeated the statement several times to-night that, owing to the policy of the Government, money has been deliberately filched from the pockets of the taxpayer.
– We have the evidence of the Tariff Commission that the manufacturers of harvesters rob the farmers.
– I hope that the honorable member will be able to support that statement better than the deputy leader of the Opposition supported his statement.
– What more does the honorable member want than the evidence taken before the Tariff Commission ?
– Some honorable members will not pay regard to that evidence.
– Although we have on the Tariff Commission a number of reputable men of the best intentions, appointed to report on the evidence submitted, they were evenly divided in regard to the recommendations which should be made. That being so, surely every honorable member has a right to his own opinions as to the effect of the evidence put before the Commission. The honorable member for Grey has no warrant for saying that the farmers have been robbed.
– According to the evidence, they have been robbed of £10 a machine.
– The onus of proof lies on the honorable member.
– My statement is proved by the evidence, and the Chairman of the Tariff Commission, in his speech this afternoon, admitted what I say to be a fact.
– The recommendations of the Commission do not allow of any such conclusion.
– The manufacturers increased the price of their machines from £fi to £&i. If that was not robbing the farmers. I do not know what would be.
– The honorable member will have an opportunity to prove that statement. The deputy leader of the Opposition said to-night that the policy of the Government is to crush out the primary producers. He forgot to mention that the primary producers of Australia are substantially assisted bv the Commonwealth Government and the Government of the States. The statement has been repeated that there is something immoral about the operations of a man who embarks in a manufacturing enterprise in Australia and prospers.
– That was not said, nor suggested.
– We have been told that protective duties should be moderate, whatever is meant by that word. It might as well be said that morality should be moderate. In my opinion, a protective duty is worthless if it is not effective in its incidence. I do not pin myself down to supporting any particular rate in regard to any particular industry. I draw the attention of the members of the Opposition to the fact that no section gets more direct assistance from the coffers of the State than do those who are settled on the land.
– Prove that.
– I shall, and I shall not leave my statement unsupported, as the member^ of the Opposition leave their statements - ready to fall over directly they have made them. In my humble judgment, no section is more entitled to consideration than that to which I refer, and Governments should, and could, do more for it than they have done hitherto. No doubt the members of the Opposition, following their usual practice, will garble my statement if it suits their purpose, to twist it to their own ends.; but I shall not be ashamed of it as it stands in type. Let us see what assistance has been given to the man on the land. In Victoria and in Tasmania he can obtain a freehold on payment of interest for twenty-eight years on the capital cost. _Mr. Poynton. - What has this to do with the duty?
– The leader at whose shrine the honorable member worships has made the statement that the primary producers get no consideration.
– I did not say any such thing. The honorable members sets up bogies in order to knock them down again.
– The honorable member made that statement this evening.
– No, and nothing like it. I did not say anything half so ridiculous.
– In Victoria, the State Treasurer is now paying the Victorian, Railways Commissioners £50.000 per annum - and the amount has ‘been as high as £80,000 per annum - to recoup the loss incurred in the carriage of grain for the benefit of the growers of wheat.
– But the privatelyowned railways of Canada carry grain much more cheaply.
– They have a heavy Government subsidy to help them.
– Another direction in which those on the land get assistance is in regard to the education of their children. They are, of course, entitled to it, and it is desirable that they should have it. If we are to keep in the van of progress, our children must be educated. Those on the land are entitled to more consideration than they have hitherto received.
– Does that justify us in putting their money .into the pockets of the manufacturers of harvesters?
– I shall deal with that point later on. Low as are the Victorian railway rates for farm produce, the New South Wales rates are considerably lower.
– They are high enough in the Illawarra district.
– I speak subject to correction ; but I intend to give a fair statement of the position as it presents itself to my mind. In New South Wales the average rate for goods traffic is 9s. 4d. per tori per 100 miles. The rate for hay, chaff, and straw is 3s. 2d. per ton, or, in other words, one-third of the average rate for all classes of goods ; whilst for grain, flour, &c, the rate is 3s. 8d. per ton per 100 miles.
– I rise to a point of order. I wish to ask your ruling, sir, as to whether the railway rates in New South Wales have any connexion with the Government proposal to impose a duty upon harvesters ?
– I understand that the honorable member is advancing reasons why the farmers can well afford to pay the extra duty that it is proposed to impose.
– The general goods rate in New South Wales is £1 is. 9d. per ton per 100 miles. Therefore, the farmers get their grain carried at a little over one-sixth of the rate that is charged upon general goods, and taking the relative proportion of traffic provided by them they obtained a subsidy from the State during last year equal to £475>o0°-
– The New South Wales Railways Commissioners say that the wheat f armers are their best customers.
– I do not dispute that. I know very well that where there is no production there is no traffic. The most profitable freight that the Railways Commissioners get from the man on the land is what is known as back loading. I do not propose to pursue the argument any further, although I have other facts which I might mention, if it were necessary. The honorable and learned member” for Illawarra seemed to fear that I wa? about to prove too much.
– I am quite satisfied. We have the Chairman’s ruling.
– We have heard a great deal about the extra taxation that would be imposed upon the farmers under the Government proposal, and vet, strange to say, for the first time in the whole of our history we are taking measures to insure by specific provisions on the face of the proposals that the imposition of a further protective dutv shall result in reducing the cost of the article produced.
– Will the honorable member give some evidence in support of his statement ?
– One of the statements made by the Commission is that the selling price of the standard machines in general use is about £it. That cannot be denied. Under the Government proposal the price two years hence cannot exceed the cash equivalent of .£70.
– That is subject to certain conditions.
– Certainly. More than that, those who are most directly identified with the industry that it is sought to develop will for the first time be protected, so far as their wages and conditions of labour are concerned. Thus in connexion with -these proposals positive proof is afforded’ that the imposition of the dutv will decrease the price of the article to the consumer. It has frequently been asserted, and rightly so, too, that a protective duty imposed under proper conditions must always reduce the cost of the article produced. Here we have provision made to that effect in black and white. Yet the deputy leader of the Opposition has talked a lot of bunkum about the increased cost to the consumer.
– The honorable member has forgotten that a similar suggestion was made in connexion with the iron” bonus proposals.
– It was suggested, but it was never carried into effect.
– We have yet to see that the present suggestion will be carried into effect.
– The deputy leader of the Opposition, and other speakers have conveved the impression that the Victorian manufacturer, whenever he embarks upon any enterprise or endeavours to enlarge the scope of his industry, is doing something immoral in connexion with his trade relations with the public.
– I do not think the deputy leader of the Opposition suggested anything of that kind.
– Statements to that effect have frequently been made, not only in connexion with this debate, but at other times, by honorable members opposite. If, however,, they desire to obtain evidence of keen business practices and slimness in dealing with the Customs Department they need only turn to the Commonwealth Gazette. They will find that week after week the same firms of importers are brought up and reprimanded, and fined; this happened times out of number.
– Will the honorable member obtain from Mr. McKay his invoice price for the harvesters he sends to Argentina - we have not been able to obtain if.
– It is very strange that although the Tariff Commission were entitled to make the fullest investigations with regard to valuations, they did not obtain any further information than that which was in the possession of the Minister of Trade and Customs when the latest valuation of imported harvesters was made. It is also peculiar that the Commission, with the knowledge that a case was pending before the Court in connexion with which the most complete evidence could be forced from those who were in a position to “g,ive it. should have presented their report containing a positive declaration as to the proper valuation to be placed upon harvesters. I think that thev acted very improperly.
– The Government opposed the appointment of a Commission to find out what the values were.
– The Commission obtained no further information than that in the possession of the Minister of Tradeand Customs and his predecessor when they raised the valuation of harvesters. The honorable member for Gippsland, when he was Minister of Trade and Customs, increased the valuation of the harvesters imported by the International Harvester Company, and upon receipt of further information the present Minister made another advance in the valuation. What’ was the position of the Commission, and what further information could they obtain from the same sources that were availableto the Government?
– The Government haveset aside the whole of the sworn evidence taken by us.
– Are not invoices sworn declarations, and were not certain invoices proved to be fraudulent? The Tariff Commission have arrived at two entirely different conclusions upon the same set of facts.
– We were all agreed as to the value of the machines.
– I intend to test the value of the sworn evidence given before the Commission. What was the experience of the honorable member for Gippsland when the difficulty arose in the first instance ? He asked that an Arbitration Court should be constituted to determine the correct value of the harvesters, and according to the official papers the representatives of the company replied -
An ordinary engineer would not understand the expense attached to exporting, and would not be able to understand the methods of Canadian manufacturers as compared with those of Victorian.
That is the reason why they would not accept the proposal made by the honorable member for Gippsland. Then the Minister went a little further. He applied to the authorities in Buenos Ayres for information, and ascertained that the invoice price of harvesters imported into the Argentine Republic was £41. These harvesters were imported by one of the Ameri-. can companies. I am not sure whether or not it was the Massey-Harris Company.
– It was the MasseyHarris Company.
– I am not quite sure. The following is the official reply to the Governor-General’s inquiry of the authorities : -
Buenos Ayres, £41 ; agents do not wish values known, and will not give them.
What was the result when we again applied - as we were entitled to do - for official informationfrom the authorities in Canada? The reply which we received reads as follows: -
Ottawa, January 24th, 1905.
Department of Trade and Customs,
I have the honourto acknowledge the receipt of your letter of the 8th ult., respecting the value for duty of a certainbreakfast food known as “Orange Meat.”
In reply, I am to state that the Department is unable to meet yourwishes in this instance, as the Minister decided some time ago that it was inadvisable for officersof the Customs in Canada to undertake inquiries in respect of such matters for Customs purposes in other countries.
Trusting you may be able to get the information which you desire in the case irrespective of the Canadian Customs,
I have the honour to be, sir,
Your obedient servant, (Signed) John McDougald,
Commissioner of Customs.
That sums up the whole position. Inthe face of that official communication the honorable and learned member for Bendigo made a statement which was calculated to mislead honorable members. He based his statement upon a letter which had been received from the Customs authorities in Canada.
– It was from the Chief Inspector of Customs there.
– But his information was only based upon the figures which had been given by the manufacturers without any investigation as to their accuracy. On the other hand, the letter which I have quoted, proves that the policy of the Dominion is opposed to affording any information regarding its own manufactures.
– Does the honorable member think that the Chairman and the other seven members of the Tariff Commission came to a wrong conclusion in respect of the price of these machines?
– I say that they came to entirely different conclusions upon quite a number of matters, but that they arrived at the same conclusion in respect to one small matter.
– The Chief Inspector of Customs in Canada states that he has investigated the whole matter, and that he. has examined the books of the company.
– The letter whichI have quoted is on record in Hansard. It was that information which governed the: action taken by the honorable member for Gippsland when he occupied the position of Minister of Trade and Customs.
– He stated to-day that he satisfied himself that the valuation was a fair one.
– I have quoted official statements which prove that without investigation of the books of the factory, it is impossible to ascertain the cost of the manufacture of these machines in Canada.
– But the Chief Inspector in the Dominion declares that he has examined the books.
– How is that possible in view of the official reply which appears over the signature of the Canadian Minister of Customs, and which declares that it is against the policy of the Dominion Government to disclose such information ?
– Was not the official reply to which the honorable member refers written much later than the report of the inspector?
– It was.
– Is the honorable member seeking to show that we should impose an ad valorem duty and allow the Law Courts to decide the valuation of the machines?
– No. I am endeavouring; to prove that it is not possible to ascertain the correct cost of the manufacture of these harvesters in Canada.
– If it is possible to manufacture harvesters here for £37, why should not the Massey-Harris Company be able to produce them for that amount?
– If the honorable member will read the evidence taken by the. Tariff Commission he will find that when Mr. McKay entered into the business he paid £50 each for the manufacture of these machines, and sold them at from £90 to £100. But in spite of that fact - according to the testimony of a shareholder in the company, who is a pronounced free-trader - the company became defunct. There is another point to which I desire to direct attention. It is admitted by honorable members that these harvesters as they leave the Canadian factory, are not complete machines. The parts have been completed, but they are simply “bunched,” and they are landed here in that form. After their arrival those parts have to be put together. Is it fair to regard the bare cost of manufacturing the component parts of a machine as the actual cost of its production?
– Do not the machines require to be set up here, and does not that give employment?
Mr. KENNED Y. That is not the question which I am arguing.
– Who says that the cost of setting up the machines is omitted from their valuation for Customs purposes ?
– I say that it is kept out of that valuation, and that that is not a proper procedure. I come now to the respective merits ‘ of a fixed duty and an ad valorem duty. If we impose a specific duty upon harvesters we shall obviate all possibility of fraud at the Customs House. I need scarcely point out that in the case of spirits, as well as of farm products, such as grain, butter, cheese, hams, bacon, meat, potatoes, and fruit, fixed duties are already in operation. I do not say that those who are engaged in the importation of harvesters are more immoral than are other sections of the community, but I do urge that we should remove all possibility of fraud by levying a specific duty upon them. For the first time in the history of fiscal legislation in Australia we are now afforded an opportunity of proving that the effect of protection is not to increase the cost of an article to its user.
– The honorable member has not proved that.
– I think that I can prove it. The Tariff Commission admit that the cost of the standard type of harvester to the farmer is about £81. Accompanying their recommendation for an increased duty is a stipulation that within two years from the passing of the Act the cost of these machines must be reduced to £70, otherwise the increased duty will be repealed. This afternoon the honorable member for Wannon purported to quote from a trade circular issued by Messrs. Lennon and Co., with a view to showing that the full-sized machine, which is at present being sold for £81, was quoted by that firm at . £70 for cash and £75 for terms. I challenge him to produce a price list of that firm which shows anything of the sort. I hold in my hand a copy of their price list of last year, which says -
This cancels all previous quotations, and until further notice the following are the various terms on which we are offering the Lennon “ Austral “ latest improved harvester to bond fide farmers on extended terms contract : - (a) £85 ; (b) £90.
I cannot understand why honorable members should persist in making statements for which there is no justification. I cannot imagine that they would do this deliberately, and my only alternative is to assume that they have been supplied with absolutely misleading information, which they have not taken the precaution to verify. Had the honorable member referred to this trade circular he would have obtained the figures I have quoted. By means of a price list he has sought to show that the object which the Government have in view in making these proposals has already been secured. As a matter of fact it has not. The card which he exhibited is really a list which was published after the recommendations of the Commission had been made public. It was known at the time that the Commission had recommended that a higher duty should be imposed, with a view to conserving the market for the Australian manufacture. The publication of that price list bears evidence that the local manufacturers are going to give the farmers some of the benefits which will accrue from the opportunity promised to them to specialize in the manufacture of agricultural machinery. Pointed reference has been made to the position in which the Australian farmer was placed when he ‘had to rely for his supplies entirely upon the foreign manufacturer. I wish to put before the Committee my own personal experience, when, years ago, I used a reaper and binder. I found at that time that a man who attempted to build up a reaper and binder by acquiring duplicate parts had to pay nearly four times the price charged for the complete machine. The same policy is being pursued by the firms who import harvesters to-day. On the other .hand, the Australian manufacturers of those machines and other implements practically supply duplicate parts at the rate charged for those in the original machine. I propose to give some figures, which cannot be questioned, showing the prices charged for duplicate parts by the Massey-Harris Company. If the farmer wishes to replace the three carrying wheels of one of these imported machines, he has to pay, according to the catalogue issued by the Massey-Harris Company, £20 5s. for them, whereas the price for exactly the same duplicates for the Australian machine is £14- The evidence of farmers - free-traders and protectionists alike - who appeared before the Commission was that the Australian-made machine is the better ..one.
– Should not that be an argument in favour of its use?
– I shall deal later on with that point.
– According to the honorable member, there is a difference of £6 between the price charged for duplicate carrying wheels for an imported machine, and that charged for the same parts of an Australian-made machine.
– That is so. We have the evidence of the representatives of the company in support of that statement. The foreign manufacturers say, “ Let us send our surplus stock of binders, cultivators, and ploughs to Australia ; our home market is conserved to us by means of a duty not of i2j-2 per cent., but of 40 per cent.’’ Mr. Lee. - Are not the local manufacturers charging a higher price in foreign markets than they charge here ?
– That is not the question under consideration. The foreign manufacturers say in effect, ‘ 1 We have our home market conserved to us. Let us sell our machines in Australia at the bare cost of manufacture, and we shall make our profit out of the sale of duplicate parts to the Australian farmers.”
– Will not the farmer see through that device?
– Certainly he will; but what will be his position when we have no local manufacturers ? Honorable members opposite, who cry out that they are anxious to conserve the interests of the farmer, forget where they are leading him.
– They will get plenty of manufactures
– The farmer in New South Wales used to a large extent get his implements from Victorian manufacturers.
– The farmers in the Riverina might have done so, but those in other parts of New South Wales did nothing of the kind.
– If they did not,, then they obtained the same class of implement that the Victorian farmer secured prior to the establishment of the local industry - an implement which made it impossible for him to keep in, the van- of industrial progress. I wish, however, to give some additional figures in regard to the cost of the duplicate parts of these machines. An intermediate spur wheel for the imported machine costs £1. whereas such a part for an Australian machine costs 12s. 6d. A spur gear wheel for an imported machine costs 25s., as against a charge of £1 made for exactly the same class of duplicate for an Australian- machine, and a comb, complete, for the imported machine costs £5, ‘ whereas the charge in the case of the Australian article is £4 ros. Then, again, the main axle for an imported machine costs £$ 2s. 6d., as against £2 5s. charged for the Australian axle.
– I suppose the travellers never point out these facts to the farmers?
– The agents for the importers carefully keep them in the background.
– What about the travellers for local manufacturers?
– I am quoting now from one of the lists circulated by -them. The cost of a cavings riddle, complete, for an imported machine is ,17s. 6d., as compared with a charge of .12s. 6d. for a like part for the Australian machine ; whilst the price of a wheat riddle, complete, for an imported machine is 15s., as against 123. 6cl. in the case of the Australian article: These facts prove that in every instance the cost of duplicate parts for an imported machine is much greater than is that of duplicate parts for the Australian machine. I wish now to refer briefly to the practice of those engaged to-day in importing these machines. A good deal has been said as to the way in which Australian inventions have been pirated. Machines have been manufactured abroad from pirated designs, under conditions that are not entirely Australian, and sold here as surplus stock in competition” with Australian productions. As one “who is engaged in farming putsuits, I say without fear of contradiction, that cereal cultivation as we know it in Australia to-day would not have attained its present proportions but for the inventive genius, and the enterprise of the Australian manufacturer.
– Then why do the local manufacturers require such high duties ?
– I have already said that cereal cultivation, by means of uptodate mechanical appliances, in the drier parts of out territory, was rendered possible only bv the establishment of the agricultural implement industry in Victoria and South Australia. As to the standard of morality of those competing with the Australian manufacturers, what do we find? Not only did they carry to America copies of the Australian harvester, but thev- actually took there a copy of the catalogue of the firm that was manufacturing it here.
– Have we never improved upon implements made elsewhere?
– I shall deal_ with that point when reviewing the position in regard to other implements. I arn now discussing what is a purely Australian ma chine, and am attempting to show that those who have devoted so much enterprise and energy to the establishment of this industry have been a material factor in the development of cereal production in Australia, and are entitled to some consideration, although not at the cost of the man engaged upon the land. An Australian designed and Australian-made machine was taken to America and copied there, and the firm which copied it had the audacity to send the copies back to this market under the same name as that of the Australian machine, accompanied with a catalogue which was an exact copy of the Australian catalogue.
– - The Australians! got their design originally from America. The Commissioners draw ‘attention to that fact in their report.
– The honorable member is in ignorance of the true facts. In this catalogue are the printed testimonials obtained by the makers of the Australian machine, it being made to appear by the makers of the American machine that the testimonials relate to that, and not to the Australian machine. Is that the standard of morality which the Opposition supports?
– It was a very dishonest business, and we do not justify it.
– In what year was it done?
– In 1903.
– Was McKay in the combination then ?
– The catalogue tff which I refer was published, not by the Massey-Harris or the International Harvester Company, but by the Union Harvester Company of America. It contained testimonials given by neighbours of mine in the northern district of Victoria to Messrs. Nicholson and Company, of Melbourne, the makers of the Australian Union Harvester. These testimonials were, published by the American firm in such a way to lead the public to believe that they related to the American machines.
– The local firms should have commenced a prosecution.
– What was the name cf the American firm?
– The Anderson Bamgrover Manufacturing Co., San Jose, California.
– What the honorable member speaks of is a fraud.
– Is the existence of such a fraud a reason why the farmers should be required to pay exorbitant prices for harvesters ?
– The statement that they will have to do so is a fallacy to which the Tariff Commission has given credence.
– There is no help for it; the evidence is overwhelming.
– Much stress has been laid on the contention that the agricultural implement industry is not languishing, and that its business has gradually increased, especially in regard to harvesters. I ask however, what was the value of importations of harvesting machinery apart from reapers and binders, in 1900? Not j£i worth was imported.
– What has that to do with the point at issue?
– It has been said that the Australian agricultural implement industry is developing.
– The manufacturers say so - McKay and the others.
– Ten years ago the harvester was not generally used in Australia; but the inventive genius and ability of our people has so perfected that machine that to-day no farmer has any doubt as to its adaptability to his requirements under given climatic conditions. The old method of harvesting has consequently become obsolete and there has been a considerable expansion of cereal cultivation in Northern Victoria and Southern and Western New South Wales. It is only within the last twelve years that the production of wheat has increased in New South Wales. That is due to the improvement of agricultural machinery. Although it has been said that in the pre-Federal clays the Victorian farmer was impoverished by protective duties, the wheat production of Victoria was greater then than that of New South Wales, notwithstanding that the latter State has the larger area of country suitable for the growth of wheat.
– The people of New South Wales were able to make money in other employments..
– The increase of cultivation has been brought about largely by the improvement of harvesting machinery. As soon as foreign firms, whose distributing organizations were largely de.veloped, found that there was a field for their enterprise in Australia, they sought to take advantage of it. The literature of the world relating to protection contains no statement more strongly supporting the beneficial effects of that policy than a proposal made by the Australian representative of the Massey-Harris Company in 1902. It was put forward in connexion with an attempt to bring the manufacturers into line. I do not know that it is necessary foi< me to read the whole of it, because it is printed in the minutes of evidence at page 1853, and is embodied in a letter which was forwarded to Mr. Lennon upon some business matter. It contains the following statement: -
The manufacturers in the countries from which Australian competitive imports are drawn, have already established facilities sufficient for producing all their home requirements in seven or eight months of the year. They have also taken advantage of modern combination, complete organization, abundant capital, convenient and cheap raw materials, long working hours, extensive factories, and the latest labour-saving machinery and appliances, consequently the necessity for seeking new markets, where they can dispose of their surplus stock. Unfortunately, these facts are not generally known.
Under these circumstances, Australian manufacturers, occupy an unenviable position, and need not hope to retain their limited trade, to say nothing of expansion or foreign trade, unless their competitors are checkmated without delay. The great masses of the people have little knowledge and no means of ascertaining the true effect of recent economic changes in rival countries.
The people are trusting the daily press and their representatives in the Federal Parliament to watch the course of events in the outside world, and to indicate and frame legislation required to safeguard Australian interest.
The Australian people, however, occupy a unique position, and now have a splendid opportunity for leading the world on a home productive policy, before the baneful effects of the all-absorbing and unrestricted combines and trusts arc felt and established on our shores.
This statement was annexed to a proposal submitted by the Massey-Harris Company before the formation of the International Harvester Company.
– What is the point ?
– The representative of the Massey-Harris Company was attempting to form an Australian combine for manufacturing purposes, with a view to forestalling the American combine, and controlling the Australian market.
– Was that the combine of which Mr. McKay was a member?
– Frequent reference has been made to the combine with which Mr. McKay was connected, and I cheerfully make honorable members a present of all the capital they cao make out of it. Who were the authors; whence did the original proposition emanate? From the usual source - the importers, who always want to create a monopoly. I have attempted to deal with the assertions that we had no languishing Australian industries, that there was no undue importation of agricultural machinery, and that there was no possibility of undue competition from abroad. I have referred to the fact that at a certain, period practically not £i worth of harvesting machinery, excepting reapers and binders, which were not made here, was imported into Australia. There were no importations of the stripper, which was supplanted by the harvester. The free-trade market of New South Wales was open to the world, but the Americans had not then perfected their organization, and the Victorian manufacturer, operating under a protective duty, was able to sell his machines and implements in the open market of New South Wales for exactly the same prices that he was receiving in the protected market of Victoria. At that time there was not one manufacturer . of that particular class of implements in New South Wales, and there is very little doubt that if it had not been for the fact that the Victorian manufacturer had his home market protected, he would not have been able to establish his industry. We had this advantage over New South Wales, that we were able to provide employment in connexion with the manufacture of implements here, and we were able to develop the manufacture of machinery, without which the cultivation of our arable lands upon an extensive scale would have been impossible. Those who say that there has been no displacement of trade will have to prove that it is not possible for our manufacturers to produce every machine that is required without involving the consumers in increased cost. I venture to say that the proposal of the Government proves beyond a shadow of doubt the soundness of the position that has always been taken up by protectionists, namely, that an effective protective duty does not increase the cost of the article produced. I have here the trade list of a manufacturer of implements which is dated the ist September, 1906, and is intended to apply to machines sold for use in the coming harvest. The machine, which was sold last year for £81, or its equivalent, is offered this year for £,15- Thus a reduction in price -has been made straight away.
– The machines have been sold for £63.
– Of course they have, but are they the same machines? That is where the confusion has occurred. A deliberate attempt has been made to mislead the public.
– The machines sold for £63 cost just as much to build as do those which are sold for a higher price.
– Yes ; but are they as reliable and useful?
– I was referring to the machine made by Messrs. Martin and Company, South Australia.
– Martin’s machine cannot come into competition, with what I may call the standard machines, which have, been selling for £Si. If the local manufacturers act fairly in their trading relations with the public, it follows as a matter of course that the machine which they are selling to-day for £6$ will suffer a corresponding reduction in price.
– Messrs. Nicholson and Morrow were selling their machines in 1902 for £72 13s. 9d.
– But those were not the type of machines which are in use today. When this Parliament reduced the duty which was operative upon harvesters under the old Victorian Tariff, who pocketed the difference? Was ‘any reduction in price made to the users of those implements ?
– There was a combine in existence then.
– No. The first shipment of Massey-Harris harvesters in Australia took place in 1900. We have been told that a reduction in the rate of duty levied upon these machines will mean a corresponding reduction in their price. But what happened when the Commonwealth Parliament reduced the duty which was collected upon harvesters under the old Victorian Tariff? Was the price of that article reduced by a single cent, to the consumer ?
– It was increased by £10 per machine.
– Is not that a splendid argument against the imposition of lower duties?
– Does the honorable member mean to argue that under the operation of a high duty the price of harvesters would be lower?
– Decidedly. Need I remind the honorable member of what happened when the Minister of Trade and Customs increased the valuation of these machines for Customs purposes?
– There was no justification for his action.
– I am not discussing that aspect of the matter. My point is that when the Minister increased the valuation of those machines for Customs purposes from£38 to £65, their price to the consumer was almost immediately reduced by £10.
– If we imposed a prohibitive duty upon them I suppose that we should get them for nothing?
– I am merely dealing with facts. When the Minister’s action was challenged I stated that if the invoiced value of the machines were increased to £100, no evil would result to the farmers of Victoria. But if the argument of the honorable member for Robertson be sound, the price of the machines would have been increased.
– But their price was down to£63.
– It is within the knowledge of every honorable member who has investigated this question that the prices vary to a considerable extent. But the statement of the Tariff Commission, which is based upon the sworn evidence tendered to that body, is that a particular type of machine is now being, sold for about £81. Accompanying the recommendations of the protectionist members of that body is a condition that the price of that particular machine must be reduced within two years from the date of the imposition of the increased duty by £11, or by 14 per cent. The onus is upon those who oppose ‘the recommendations of that section of the Commission to . which I have referred, to prove that the levying of an increased duty upon harvesters would enhance their cost to the farmers. I think that I have given proof positive that it would result in a reduction in price.
– I say that the price of the machines has been lowered.
– Not of the particular type of machine of which I am speaking. I hold in my hand a price list which shows that the cost of the standard machine to-day is £75.
– Is that McKay’s price list?
– No. I have further been authentically informed by one of the leading firms in Victoria that immediately the Government proposals were submitted they advised their customers that in every instance they would give them the benefit of the reduced price for the ensuing harvest.
– The reason is that their increased output enables them to reduce the cost of production.
– Any one who has taken an interest in these matters knows very well that the more one specializes the lower is the cost of production. If these proposals be carried those engaged in the industry here will be able to specialize, and to reduce the cost of marketing these machines. They will have to cater for the market of Australia under a healthy condition of local competition, and will also be able to seek a market in other parts of the world for their surplus production. In these circumstances it is the duty of the Parliament when the opportunity offers to develop industries that are natural to Australian conditions. When an attempt is made, as suggested by the deputy leader of the Opposition, to increase the cost of tools of trade, honorable members have every justification for throwing out a challenge, and closely questioning every step taken in that direction. But in this case it is proposed to provide by law that the price of these machines, within the next two years, shall be reduced by at least 14 per cent. In these circumstances the onus of proving that the Government proposal will prejudicially affect the users of harvesters is thrown upon its opponents. There are many other points to which I should like to refer, but I. do not wish to unduly occupy the time of the Committee. Although in the course of these debates insinuations are sometimes made, I think that they are often levelled at honorable members on the spur of the moment, and sometimes unwittingly. We are prone to allow our imagination to run riot at times. It has been said that, in regard to matters of this kind, we should move in easy stages. I was among those who at the last- general election were practically pledged to fiscal peace during the life of this Parliament. Circumstances over which I have had no control have . forced me from the position I then took up. In giving that pledge, at a time when I did not know that a Tariff Commission was to be appointed, I distinctly stated that if I was forced to take action, my vote would be cast every time for protection. The late Prime Minister appointed a Tariff Commission, which has had a verv serious and responsible duty cast upon it. I respect and admire the patience and ability shown by the members of the Commission, and the sacrifices thev have made. I have no quarrel with their differences of opinion. They al) are men of repute, who have the respect and confidence of every member of this Parliament. Those who challenge the conclusions of any honorable member ought to exhibit that spirit of toleration which they may fairly expect of others. It has been stated’ that the manufacturers and those who support the establishment of manufacturing industries in Australia are, so . to speak, filching money out of the pockets of those engaged in primary production. As one who is employed year in and year out in farming pursuits, I claim to have some knowledge of the industry in two States. I have no pecuniary advantage, to gain from any manufacturing industry, and I repeat, without fear of successful contradiction, that cereal production in Australia would not have achieved its present dimensions but for the inventive genius and enterprise of the Australian implement makers. I go further, and say that that fact is proven bv the public utterances of the leader of the Opposition - one of the ablest exponents of free-trade in Australia - as well as by those made in pre-Federal days by the honorable member for Gippsland. In Victoria and New South Wales we have two farming populations who moved from the same starting point. Divided only by a river, we have soil of exactly similar quality, which was devoted originally to pastoral pursuits, and eventually, as necessity demanded, to agricultural purposes. It has been, and is being, tilled in each State by the same class of people, and the position of those on the Victorian side furnishes an illustration of the advantages which a protective policy confers upon the man on. the land. It is admitted by the leader of the Opposition as well as by the honorable member for
Gippsland, who is a well recognised authority upon the interests of those engaged upon the soil, that in the protective State, land occupied under conditions exactly similar to those prevailing in the free-trade State of. New South Wales, land occupied by the same class of people, enjoying the same facilities for transport, but having in the one case an advantage of 25 per cent.-
– Why is not land in Wodonga more valuable than is land in Albury ?
– I am attempting to deal with exactly similar land in two different States, whereas the honorable member is comparing the relative value of urban land under entirely dissimilar conditions.
– Can the honorable member connect that question with the price of harvesters?
– I am attempting to deal with the statement that the imposition of a protective duty on harvesters will impoverish, the farmer. As a user of agricultural machinery, and as one who knows the conditions of others who use it, I say that the proposed duty will not injure the Australian wheat-grower. It has been said by some honorable members that they are willing to vote for a moderate duty, but, as I interjected, moderation means nothing. We cannot apply that qualification.
– Protection amounting to more than £30 per machine is not a small dutv.
– Unless a duty is high enough to effectively keep the home market for the Australian manufacturer it win be useless. The men who get the benefit of any reduction of duties are the importers, not the farmers. What we require is, not a moderate, but an effective duty. I am not able to say exactly what the rates should be, but if effect is given to the proposal of the Government, and a fixed rate of £t6 per harvester is imposed, it will not increase the cost of these machines to the farmers.
– Protection amounting to £1,0 16s. 66. on each machine cannot be called moderate.
– T do not look at the question from that point of view. I think that the Australian farmer will get his harvesting machines at the lowest possible price only if the Australian market is kept for the Australian manufacturer. I say here, as I have said before my constituents, that I will vote, not for duties of 10 or 20 per cent., but for whatever duties will have that result.
– Then the honorable member believes in the establishment of monopolies ?
– Thanks to the foresight and judgment of the Government, we have on the statute-book a measure which will enable us to deal effectively with any monopolies that mav arise in Australia. The obligation rests upon thos.: who say that the proposed duty will increase the cost of harvesters to the Aus tralian farmer to prove the statement, and to show that the result of the action of the Government will not be to reduce the price. That has been the experience of protective duties in Victoria, and all over the world. I ask those who wish to develop that national sentiment by which alone a great people can - be welded together to consider .this Question from every stand-point. The alteration of a Tariff ought not to be and cannot be undertaken in every session of Parliament. We in Australia have attempted to create ideal conditions for our industrial Deputation. I understand that the Australian worker is in an even better position than is the Canadian worker, his hours being shorter, while the task system is practically unknown here, in the agricultural implement manufacture at least. We desire to do all that is possible to improve the conditions of life in Australia, and to make the country attractive to our people. The experience of the world shows that most progress is being made to-day, even in agricultural production, by protected countries. If we are to develop, we must diversify the avenues of employment, both ok- the land and in the factories, and give fair conditions to those who embark their capital in manufacturing enterprise. Having considered the interests of the manufacturers, the workers, the primary producers, and the consumers in- relation to the proposal of the Government, I feel that I have ample justification for supporting it. -
.- I <3o not desire to give a silent .vote upon this question, because of its great importance to the people whom I represent. ‘ Like the honorable member for Moira. I represent a farming division, and have done so for the last twenty-one years. During that time I have had to fight many elections, and have always been opposed by freetraders. I dare say that I could at times have won more easily as a free-trader than as a protectionist ; but I have always found the farmers ready to concede reasonable protection to the manufacturing industries, even when their own supplies were affected, although it has always been felt that, as the primary producers do not benefit by protection as largely as do other consumers, high duties should not be placed upon their implements and tools pf trade. Under the Victorian Tariff the duty on agricultural implements was 15 per cent., and in New Zealand, so careful have the authorities been that no burden should be placed on the farmers, agricultural implements are admitted dutv free. When itwas feared that foreign competitors would monopolize the local ‘ market, the late Mr. Seddon would not propose a protective duty, but, instead, gave bounties to the local implement makers. The point upon which the whole discussion has turned, and the one that we shall have to settle, is: what is the value of the stripperharvesters? The honorable member for Moira stated that it did not matter what duty was imposed, provided that precautions were taken against the price to the consumer being increased. We must, however, remember that if we impose a duty upon one set df farming implements, and protect the farmer against an increase in price, we may be called upon to levy higher duties upon other materials also used by farmers, but in regard to which we cannot protect them against an increase in the cost. I desire to hold the balance fairly between those who make implements and those who use them. I agree that invention should be stimulated, and that our manufacturing industries should be encouraged, so that we may be able to find employment for our youths. If we adopt that policy we shall provide a larger market for the products of the soil, and thus - give our primary producers that which they most need. The experience that I have gained during my recent travels leads me to the conclusion that those countries which have adopted a protective policy are the most prosperous, and have less poverty within their borders than is to be found in those which .are still adhering to the principle of free-trade. I was inclined early this evening to agree with the Government proposal to impose a fixed duty, but such _ a wide divergence of opinion appears to exist as to the value of the machines that I am beginning to doubt whether that would be the best course to adopt. We should have some idea of the value of the article which is to be made the subject of the duty before levying a specific impost. The Minister of Trade and Customs rather arbitrarily assessed the value of imported harvesters at £65, whereas the sworn testimony given before the Tariff Commission would lead one to the conclusion that the valuation could not be fixed at more than £41. I propose to continue my remarks to-morrow.
Bill’ presented by Mr. Deakin, and read a first time.
Bill returned from the Senate, with amendments.
Mr. DEAKIN (Ballarat- Minister of
External Affairs) [11.26]. - In moving -
That the House do now adjourn,
I would ask honorable members to assist the Government in closing the discussion upon the whole of the proposals in relation to harvesters and agricultural implements as soon as possible to-morrow.
.-I am sure that honorable members will be very glad to help the Government in the manner suggested, but I would ask the Prime Minister to consent to the House meeting at half-past 3 instead ofhalf-past 2 to-morrow. Honorable members will not be able to get out to the show and meet their friends if the House meets at the usual hour.
Mr. DEAKIN (Ballarat-Minister of External Affairs [11.27]. - I should have been very glad to agree to the suggestion of the honorable member, but I would point out that a number of honorable members do not desire to attend the show, and that it will not be necessary for those who wish to go out to the Agricultural Society’s grounds to attend here before halfpast 4, because a division is not likely to take place before that time.
– Will the Prime Minister promise that?
– I think that I can safely do so.
Question resolved in the affirmative.
House adjourned at 11.28 p.m.
Cite as: Australia, House of Representatives, Debates, 5 September 1906, viewed 22 October 2017, <http://historichansard.net/hofreps/1906/19060905_reps_2_34/>.