8th Parliament · 1st Session
Mr. Speaker (Hon.. Sir Elliot Johnson) took the chair at 2.30 p.m., and read prayers.
– Is it the intention of the Government to introduce this session a Bill to provide pensions for tubercular soldiers?
– Very full provision exists in our present legislation for the payment of pensions to tubercular soldiers.
– I have received an intimation from the honorable member for Grampians (Mr. Jowett) that he desires to move the adjournment of the House to discuss a definite matter of urgent public importance, namely,” The excessive and crushing rates of ocean freight now being charged upon the exportable products of Australia.”
Five honorable members having risen in their places,
.- In giving notice of my intention to move the adjournment of the House to discuss the present excessive and crushing rates of ocean freights on Australia’s exportable products, I thought I was doing my duty in taking what seemed to me the best opportunity available to draw public attention to a very serious and urgent matter. In addition to giving you, Mr. Speaker, and the members of the Ministry, notice of my intention to take this action, I thought it only courteous to make a similar intimation to the Chairman of the . Overseas Shipping Companies and to the press, and I was a little surprised to read in a Melbourne newspaper yesterday a telegram from its , Sydney correspondent stating that - resentment is expressed by the representatives of the owners of overseas shipping at the report from Melbourne that Mr. Jowet, M.H.R., intends to move the adjournment of the House to discuss the excessive and crushing rates of ocean freights now being charged upon the exportable products of Australia.
I do not feel in the slightest degree hurt or discouraged by the resentment thus expressed, especially since the paragraph in which the words I “have read appear is headed “ Overseas freights reduced from to-day,” and contains details of some reductions that have been made. If the Overseas Shipping Committee will make substantial reductions in freights every time that I incur their resentment, I shall be prepared to continue to incur it daily for the rest, of the year.
This motion of adjournment is not to be regarded as reflecting in the remotest degree upon the Government or upon any member of “it; because for some considerable time past Ministers have done everything possible to bring about a reduction of freights. There has been correspondence on the subjectbetween the Pastoralists Association and the Government.. The latter replied, onthe 16th March, to a communication sent to them by the association, and, on the4th April, Mr. Deane, the Secretary to the Prime Minister, wrote -
I desire to inform you that urgent representations have been made to the Ministry of Food upon’ the matter, and cabled advice has now been received from the High Commissioner - and so on. I quote this passage to show that the Government have done everything in their power to bring about the most necessary reductions in freights. In my opinion, the reductions which’ have been announced during the past few days, and of which a great deal has been made, are totally inadequate, as I think honorable members will agree when I have given them a brief summary of the overseas freights ruling before the war compared with those of the latest date. In order that no injustice , may be done to the overseas shipping authorities, I have arranged that, should they make further reductions this afternoon, before I have finished my speech - which is not unlikely, remembering their promptness of the last few days -I shall announce them to the House. The following is a comparison of ocean freights before the war and at latest dates of 1921 : -
I now wish to draw the attention of the House to the great fall in prices with which the producers of the world, including the producers of Australia, are now faced, for that is the real question at issue. One accompaniment of the war was an enormous increase in the prices of commodities, an increase which continued without ceasing until about twelve months ago. This, of course, was due to many causes, one very potent cause, in my opinion, especially since the war ended, being the enormous increase in the paper currencies of the world.
– Is it not also due to the scarcity of commodities?
– To some extent that was a cause of high prices during the war, but I am not so sure that it has been the cause since. One unfortunate result of the increased prices due” to the enlargement of the currency is that, like the daily or hourly dram of the drunkard, the enlargement has to be increased more and more in order to have the usual effect; it would be necessary to go on inflating the currency to even keep prices where they are. Somewhere about July or August of last year prices - and I am speaking solely of wholesale prices - probably reached their maximum, and the world is now faced with the inevitable reaction. I refer to the lower prices which the producers, and to a lesser extent the manufacturers of commodities, are now receiving.I do not propose to deal with the somewhat more complex and difficult matter of the increase of retail prices which has resulted from “ passing on “ by various distributors. Speaking generally, the whole of the articles which I have enumerated, with, perhaps, one exception, have fallen to pre-war rates, and in some cases below.
– Do you say that freights ought to depend, or do depend, on the value of the commodities carried?
– The Prime Minister has raised a very important point, and my reply is that this is not so much, to my mind, a question of ethics-
– I am not talking about ethics. This is no place to talk about ethics.
– I do not agree with the honorable member as to that, but I shall confine myself to economics. I say that the producers of Australia are faced with a world-wide fall in prices of the commodities they produce ; and if the cost of transportation from this country to other parts of the world is not adjusted, to a reasonable extent, in relation to the prices of products, the outcome must be an enormous falling off in the production of those things which are the life-blood of our industry and finance. I shall give instances as I go along, showing how already, in certain directions, production has become unprofitable on account of the high costs of production, including excessive charges for transportation. I need not deal further with that point just now, except to remind honorable members of our enormous liabilities abroad, and of the colossal requirements of our people in the way of imported commodities, which cannot be produced here, but which we, so long as our present state of civilization is maintained, will continue to demand. I refer, however, particularly to our obligations abroad, and contend that the only way in which these outside obligations can be met, and our imports paid for, is by the exportation of our own primary and secondary products. If we reach a stage at which it does not pay to produce and export, the financial and industrial position of the people of Australia will, indeed, be very serious.
– Do we not accentuate the position when we get no back loading?
– That is a very pertinent question, but I suggest that the better time to discuss it will be when the Tariff is before us. The freight on frozen meat has been increased by 238 per cent., namely, from 9-16d. per lb. in May, 1914, to 1 9-10d. at the present time. I am in a position to give some very definite information as to the relative value of beef in May, 1914, and at the present time. A contract was made in March, 1914, for a large parcel of frozen beef at 27s 3d. per 100 lbs. ; whereas, in March, this year, a sale of beef, in exactly the same condition, and from the same properties, was made at 25s. 6d. per 100 lbs. I am now dealing with our products that are exported, and not with local or retail prices. It has to be remembered that in addition to other increased costs freight alone has advanced by 238 per cent. I now come to another item of very considerable importance, that of rabbits and rabbit skins. As honorable members are aware, one of the greatest pests that has ever troubled Australia is the rabbit.
– It is not a pest.
– If my honorable friend says that the rabbit is not a pest, I must differ from him as to what a pe3t is.
– I have heard persons in this Chamber called pests.
– When- it comes to the personal application of that statement, I might even disagree with the Prime Minister also. One of the means by which the rabbit pest has’ been kept ‘down has been the enterprise and industry of the people who trap rabbits for a living. The reward for their arduous labours and privations has been the price received for carcasses and skins. I find that the freight on rabbit skins has increased 200 per cent., and on frozen rabbits 205 per cent. In other words, the freight on the products of the men who earn a living by trapping rabbits has been trebled. As showing what rapid changes have been made since the end of last week, when I gave notice of this motion, I find in this morning’s paper the following cable from London : -
The Australian ship-owners have agreed to reduce the freight on rabbits to 168s. per ton. The importers asked for a further reduction, but the ship-owners replied that this was impossible.
My calculation of an increase of 205 per cent, was based on that reduced figure mentioned in this morning’s cable. I have received the following letter, which I think it only fair to read to the House : -
The rate of freight on rabbits is 184s. per ton, to be reduced, according to the newspapers, to 168s. per ton. Pre-war it was 5§s. per ton. It then cost about 2Jd. to land one pair of rabbits in England; now it costs about 7Jd. per pair.
Exporters have asked for a rate of 130s. per ton meanwhile, in order to make business possible. The shipping companies suggest the reduction be gradual, though when increases were being made they were not made on a gradual scale; but the request for a rate of 130s. meanwhile shows the exporters of this section are prepared- to recognise a gradual reduction. At 130s. the rate would still be 136 per cent, above the pre-war rate.
At 130s. it is believed business could be done, and this would mean employment for some hundreds, if not thousands, of trappers and others,- as well as being a source of revenue to the country. Perhaps more important still is that, through the cessation of trapping, rabbits will largely increase, and by next year prove a greater menace than ever to many land-owners. Not only has trapping ceased for the export carcase, but rabbit skins have fallen to such a price that trappers have discontinued trapping for the skin also.
– That figure relates to 1914. The Commonwealth Line has done magnificent work, but it has not kept the freight on. rabbit skins down to 55s.
– The honorable member is correct.
– I now turn to the items of jam and fruit in cases. There is no more important industry in Australia at the present moment than fruit-grow ins, the success of which is dependent upon a profitable export trade in jam and tinned fruits. The freight on jam and fruit in cases has been increased from 30s. a ton in May, 1914, to 120s,, although I am under the impression that the reduction from 120s. to 105s., made on the same day as the ship-owners expressed’ resentment at my action, applies to fruit in cases.
– It does not.
– If that 13 so the position is even worse than I have said. I have based my calculation on . the reduction to 105s., and that shows an increase in the’ freight of 250 per cent, from the rate ruling in May, 1914. Only last week a deputation of fruit-growers waited upon us, and told us that the freight on cased goods was now £6 per ton as compared with 30s. or 35s. before the war, and also that refrigerated space for fresh fruit was costing them 8s. per case as against 2s. 9d. to 3s. before the war. One deputation assured us that they are so disheartened by the prospects that in their district many of them will not prune their apricot and pear trees this year, although they will lightly prune their peach trees.
As time is limited I must leave this subject, and pass on to the question of wool, which in respect of total value and volume of output is one of the most important of all the Australian products. The present freights charged on wool are more than double those charged before the war. Owing to the chaotic condition of the wool markets of the world’ it is impossible for anybody to say what relation present prices for wool bear to those ruling before the war; so much of the wool is unsaleable that it is idle to say that it is worth a. certain price if a buyer cannot be found. At all events, there are some kinds of wool, not of the best quality, which are now worth much less than they were before the war. Every practical farmer knows that, however good your sheep may be, and however much you look after them, the actual value of a pound of wool is very largely determined by the district in which it is grown, the nature , of the soil, and the season. Sometimes the richest land is so infested with trefoil burr and seed that it grows what from the manufacturing point of view is the most inferior wool. Nobody should say that a man ought to grow better wool if the best quality pays ; every man grows as good a class of wool as he possibly can. I have some startling information brought Co my attention only this morning. Fortunately, publicity was given to the fact that I intended to move the adjournment of the House to-day upon this subject, and, as a consequence, I had already received voluntarily a great deal of information from most reliable people. Further communications came to hand this morning from an undoubtedly reliable source. Sixty bales of scoured and fellmongered wool, shipped in November last per s.s. Ulysses, according to the account sales just to hand, were soldin London at an average price of 41/4d per lb. Quite apart from the price paid for the sheepskins, it cost the shipper of these 60 bales, in fellmongering, scouring, and in freight, 63/4d. per lb.; so that he sold the wool at 21/2d. per lb. less than it cost him to fellmonger it and ship, it.
– When they put that wool into the manufactured article, it costs 4s. 6d. per lb.
– The honorable member is perfectly right. In spite of the fact that some Australian wool-growers are receiving practically nothing for their wool, it is impossible for any one in the worldto buy clothes at a reasonable price.
The increased freight on sheepskins is apparently one of the most crushing of all. Before the war, the rate was 75s. per ton; it is now 297s. per ton, an increase of 296 per cent. Sheepskins are not included in the reductions recently announced. It is certainly highly desirable to have our own sheepskins fellmongered before export, providing that the sheep farmer gets the world’s parity for them; but, from the example I have just given, it is quite apparent that, at present prices, they cannot be fellmongered locally. Furthermore, obviously the. sheep farmer must look to the sheepskin exporter to obtain some recompense for the trouble of treating the skins, and for the cost he incurs in sending them to market. In regard to sheepskins, the Sydney correspondent of the Argus says -
In the case of hides, skins, tallow, copra, and certain other lines of cargo, it hasbeen represented to the ship-owners that the rates of freight have prevented business. Shippers have not complained that the rates were unreasonable, but that, owing to the great fall in the prices of their commodities, they cannot do business unless there is a great reduction in the freights. The Ship-owners’ reply has been, “ Show us what rate of freight you can do business at, and we will consider reducing it for you.” Where this had been done the ship-owners have reduced the rate accordingly, and, in one instance, space was actually offered free. It is asserted that the policy of the ship-owners right through has been to assist traders. Answering allegations about a Combine controlled by Lord Inchcape, which is slowly squeezing Australian shippers to death, the owners state that no such Combine exists.
I have made no reference to any Combine, but, as this matter has been introduced into the reply sent to me by those persons who resent my taking steps in this direction in the House, I think I am justified in introducing it now. The article proceeds : -
The number of companies under the direction of Lord Inchcape does not account for more than a decimal fraction of the tonnage trading to Australia.
The information brought to me yesterday from a most reliable source - from people who understand what they are talking about- does not bear out the view taken by this writer. This is what they say in regard to the statement that there is no Combine -
Mr. Jowett intends to move the adjournment of the House to consider the excessive and crushing rates of oversea freights now being charged upon the exportable products of Australia. We have been moving in this matter for some weeks past, without success. Inquiries made by us among individual shipping companies go to show that if the Combine would give them permission they would willingly reduce the freights at the present (time for firm offers of cargo made to them. As a matter of fact, we have offered big parcels of freight provided the rate is reduced, but there are no takers. The position, as you know, particularly with hides and sheepskins, is that vast quantities are practically valueless, for the reason that excessive freight rates prohibit export. Our company alone would purchase hundreds of thousands of sheepskins and export them if the rate was anywhere within reason. Such skins would be unsuitable for local fellmongers, even if they got them for nothing. We want you to make a point of seeing Mr. Jowett before the matter comes up for discussion in the House, and; if necessary, show him the enclosed letter. Please wire us promptly if you have been successful in interviewing Mr. Jowett, or otherwise, as we wish to act promptly in the matter. We would much prefer, however, that the handling of this matter remains with him.
– The honorable member’s extended time has expired.
– While I regret that the honorable member for Grampians (Mr. Jowett) has not been able to conclude his remarks, I think he has placed sufficient facts before the Chamber to enable honorable members to discuss the matter intelligently. It is a question which affects the whole community very seriously. Australia depends upon the sale of its products overseas for the income upon which its people live. The honorable member claims that freights are exorbitant, and that they prevent the exportation of goods that would otherwise find a ready sale. He has quote.d sheepskins and fruit, and given us the impression that what he has said in regard to these two items applies to all commodities. At any rate, it applies to rabbits, because the honorable member emphasized that point. I propose to deal with the question without reflecting in any way upon the shipping companies who are engaged in this trade along with the Commonwealth Line. I have expressed my own view on the matter very plainly on many ‘ occasions, and the extent to which my views have been supported in the press is perfectly well known to every honorable member. This position, however, is an almost negligible factor when it comes to determining the rate of freight from Australia to the United Kingdomor other parts of the world. I shall deal with the matter, as far as I can in the very limited time at my disposal, by a reference, to figures. The honorable member for Grampians (Mr. Jowett) has sought to show, both by direct statement and by inference, that, as the prices of the commodities which Australia produces fall, so ought freights to fall. That contention, however, will not bear examination for a moment. In order to judge what should be the rates for carrying goods from here to the markets of the world, we must have regard to the cost of running the vessels upon which those goods are placed. We have to consider what is the relative cost of taking goods from here to England now as compared with the cost in 1914.. The value of the goods carried is material only in so far as it affects the producer. It is not a ground upon which to found a charge of exploitation against the shipowner.
– I did not do that.
-Very well. Firstof all, let me say that I have used every means at the disposal of the Government to secure a reduction in freights, and to secure freight for refrigerated produce. The honorable member has given me some credit for that, and I think I am entitled to read the following letter, which I sent to the chairman of the Oversea Shipping Representatives Association on the 7th inst. : -
It has come to my knowledge that your association, which controls rates from New Zealand as well as from Australia, contemplates a reduction in freight from the former country to) the United Kingdom. I shall be glad to have an assurance from you that, in the . event of such reduction, Australian shippers and primary producers will not be placed in ‘a position less favorable than the producers of New Zealand.
On Tusday last I received a reply to the effect that the association had decided that the reduction made in the case of New Zealand should apply to Australia.
Every honorable member who has applied to me, either directly or through my office, knows that I. have not wasted a moment in making application, nor has my application lacked emphasis or force, The position, however, has to be looked at from the stand-point of the shipowner. I shall not refer to the Commonwealth Line. I shall say nothing at all about it. It speaks for itself. I cannot rise to deal with a question of this kind as if I were a petty hucksterer wishing to advertise my particular wares at the expense of any one else. This is a great national question, and I want todeal with it on that basis. I think I may say, however, that it may be taken for granted that the existence of the Commonwealth Line has not been the means of increasing freight.
Let us consider what are the charges incidental to the running of a vessel now as compared with 1914. Taking as an example the operating expenses of a recent round voyage as compared with prewar rates on the same steamer in 1914, the percentages of increase are as follow: - Port charges, 137 per cent. ; cargo charges, 165 per cent.; coal, 172 per cent. ; wages, 166 per cent. ; other running expenses, 255 per cent. The aggregate operating expenses of the same steamer in connexion with a recent round voyage as compared with 1914, just prior to the war, show an increase of 197 per cent., or £3 to-day for every £1 during the prewar period of 1914. As against this, the earnings of the same steamer show an increase of only 165 per cent, as compared with the earnings in 1914 just prior to the war.
It will therefore be seen by honorable members that, from the ship-owners’ point of view, their running expenses have gone up to a very much, greater extent than is counterbalanced by the freights. The honorable member for Grampians has to face that position. I need not remind him of what he will know: that to-day the ports of Britain are crowded with vessels. I am no defender of combines. It is alleged that there is no combine, so that we need not attack that which does not exist; but Britain is surrounded by competitors who, if they destroy her mercantile supremacy, will inflict upon us here infinitely more harm than even a combine could do. I have always been an opponent of combines. I am now, and I have erected what in my opinion is the only effective means of dealing with this particular combine ; but I am not condemning that combinefrom the stand-point of British shipping. Where the charges are high they must show us that they are justified by their running expenses. Nothing less than that will satisfy us. If they do that, then of what avail is it to say, “ We want a reduction” They, too, like us, must live.
I come now to the cost of provisioning the vessels. The British Chamber of Commerce has compiled official statistics which I commend to the attention of honorable members. These official statistics show that on nine voyages made by steamers during the year 1913-14 the cost of provisions totalled £1,984, whilst for the year 1919-20 the cost was £7,667. In running, exclusive of’ management and depreciation, it cost £46,165 in the year 1913-14, and £77,505 in 1919-20. Thus the total cost of running and provisioning covering nine voyages in 1913-14 was £48,149, as against £185,172 for nine voyages in 1919-20. On the earning side the increase may be taken as 165 per cent, in 1920 over 1913, while the increase, adding provisions and running costs together, was 285 per cent. We must judge by comparison whether as a matter of fact we are paying more than what is fair.
Ma. McWilliams. - ‘When the combine supplied these figures-
– They were not supplied by the combine. They are official statistics compiled by the British’ Chamber of Commerce. Let me now deal with freights. From the Argentine to the United Kingdom the rate for frozen beef is 11/4d. per lb., and from Australia to the United Kingdom17/8d. per lb. Seeing that the mileage from Australia to the United Kingdom is nearly twice as great as that from the Argentine, it cannot be said, comparatively speaking, that the Australian rate is excessive, or that it puts us out of the running in our competition with the meat of the Argentine. The ship-owners are not to blame because the price of frozen beef is low, or because the wool market is disorganized. A steamer trading between the Argentine and the United Kingdom will make two and a half voyages to one made by a steamer trading between Australia and the United Kingdom, so that the Australian rate to be the equivalent of the Argentine rate would have to exceed it by l1/4d. per lb. I merely mention the fact that Australia has a Commonwealth Line of Government steamers, while the Argentine has not. The freight to Java on general cargo is 75s. and on flour 50s. It cannot be said that there has been no reduction in freight to the East. Recently all lines reduced the rate on flour by 33 per cent. It was 75s. The grain rate to the United Kingdom was in 1920 for wheat, 120s., and is now 57s. 6d. ; for barley, 140s., and is now 68s. ; and for oats, 160s., and is now 88s. According to the Auditor-General’s report for 1920, the ascertained profits to 13th September, 1919, on all the overseas voyages of the controlled shipping lines was £261,347, and the loss on coastal trade £301,189, a net deficiency of £39,842. The Shipping Control Committee’s expenditure for the half year was £7,356, and the net loss for the period £212,554. The Auditor-General says that on the 23rd August, 1920, it was reported that, with the exception of one vessel, all the ships requisitioned had been handed back to their respective owners. On 31st March, 1920, the profit on oversea voyages was £260,461, and the loss on coastal voyages £371,208, the net loss for the half year being £110,747. Archibald Kurd, writing in the London Daily Telegraph, says that the extent to which rates have been recently reduced may be shown as follows : -
Time charter “general,” six months, March, 1920, 30s.; September, 13s.
If time permitted, I would go into this matter at greater length, but there is one point that stands out: the cost of running a vessel has, like everything else, gone up, and short of a subsidy to the primary producers which would place them in their pre-war position, there is no way out of the present difficulty unless and until vessels can be run at a lower cost. Neither wool nor wheat can be produced for the prices at which production was possible before the war.
. -I am pleased that this matter has been broughtbefore the House and the country. It is refreshing to find the. honorable member for Grampians (Mr. Jowett) a champion against the shipping companies.
– He always has been.
– I have regarded him and the members of his party as owing their support largely to those behind the shipping companies, and I would be pleased to know that I have been mistaken. I am glad that he is no longer a champion of the shipping companies.
– I never was.
– I am pleased to know it; I thought the opposite. The honorable’ gentleman spoke of the grievances and injustices which the primary producers of this country suffer at the hands of the shipping combine - the hugest combine in the country to-day. Those with whom I am associated have always pointed to the menace of this combine. I regret that the honorable member did not mention a remedy for the evils that he spoke of.
– The time allowed to him was not sufficient.
– The chief thing he should have mentioned was the remedy for these evils.
– You state it.
-I can only state the remedy which stands in the Labour party’s platform.
– The facts the honorable member made public will be of service to Australia.
– Yes ; but I should like to know what the honorable member proposes to do about them. To my mind, there is only one remedy, and that is for the Commonwealth to embark upon a comprehensive scheme of shipbuilding, and to charter vesselsin order that it may make sea transport a State enterprise.
– More Cockatoo Dock scandals.
– The interjection is not to the point. Faulty administration is no argument against a right principle of policy. The only remedy against the depredations of the shipping combine is Government competition so long as there is a Government administering on proper lines.
– Was not the scale of freights of the Commonwealth line- arranged in . harmony with those of the private companies?
-If so, that accounts for the defence, of the Prime Minister.
-I do not know that anything said by the Prime Minister to-day would lead one to think that he was fighting the shipping combine. That there is a combine is indisputable. The shipping companies of the world are to-day members of acombine of which Lord Inchcape is the head. The honorable member for Grampians showed how powerful is this combine, and how large its profits. The Prime Minister replied that a comparison, of running expenses showed that their profits were not so great to-day as in 1914. The question, however, is, Were their profits too high in 1914? They were then making undue profits, and it is no defence to say that because their working expenses are now larger their profits are not so great. They were too heavy in 1914, and are too big now. It is general knowledge that the shipping companies have been making enormous profits. . The Prime Minister said not long ago that the profits of the Commonwealth ‘ steamers were so great that in three years they wiped off the capital. cost of£2,50.0,000. What, then, must have been the profits of the private companies? Mr. Bonar Law said in the House of Common’s that, having purchased 8,000 shares fromtwo shipping companies, he received in two years dividends equalling the original purchase money.
– He said also that 80 per cent, of what he received would go to the Government.
– The amount, he mentioned was what he received after paying 60 per cent, excess profits tax.
– Yes. It does not matter what else Mr. Bonar Law said. What we have heard to-day, combined with what we know ourselves, is a complete answer to the Prime Minister in his attempt to show, on behalf of the shipping companies, that they are losing instead of gaining.
– Is this not the crux of the question - whether the profits we are making to-day onour trade will sensibly affect the position which has been put to us to-day?
– In the little- time at my disposal, I cannot deal with the. matter more than in a general way. I should like to read the following from the Age of 21st February, 1916-
The Cairn Steam-ship Line has declared a dividend and bonus equivalent to 30 per cent., compared with 10 per cent, in 1915. The Moor Line announces a dividend of 25 per cent., compared with 121/2 per cent, last year. The profits amounted to £374,248, exceeding the paid-up capital. The Statist estimates shipowners’ net gains, last year at 575 per cent, higher than in 1913, after paying half their surplus to the Treasury.
– Are all the big increases to the shipping companies’ fleets made out of their losses?
– The facts are so well known as to need no emphasis. I thought it well to quote the statement of Mr. Bonar Law, for it has remained in my memory as an illustration of the immense profits that the shipping companies make.
– Mr. Bonar Law was ashamed of the dividends.
– Exactly. I do not know of anything more important to the great bulk of our producers than the question we are now discussing; and I dare say that there is not an honorable member but who is desirous of seeing an end of the present state of affairs, and some tangible remedy found. Some years ago the Western Australian Labour Government chartered a line of steamers, which was called a State-owned; line, to trade with the northern parts of that State; and there are irrefutable figures to show that one result of this venture was a great reduction in freights to the primary producers. At that time hardly any one outside of the Government concerned had a good word for that line -of steamers, although the result of its creation was what I have stated. Then, in Queensland lately, the Government have chartered vessels to carry produce to and from the north ; and there, again, we find a reduction in freights, very gratifying to the primary producers of that State. In my opinion,it is along these lines that the remedy lies. I admitthat it is not ah easy problem to solve, but if we desire results, we must get down to “ tintacks.” It would, of course, be useless or impossible to get another section of private enterprise to step in and compete with the present companies, for we all know what the inevitable result would be- a re-formation of the happy family. The only remedy is for the Commonwealth to enter into the business itself.
– But that is Socialistic, you know!
– I have quoted Western Australia and Queensland to show that where State-owned lines are run the producers benefit.
– Is the Western Australian line still running?
– No; because the Labour Government was succeeded by another Government, who were imbued with the principles of the right honorable gentleman himself.
– My impression is that the line was a failure, and died.
– The line was not a failure, though, as in -many other cases of the kind, it was said to be one; at any rate,I am quite sure you would not get many primary producers of the north-west of Australia to admit that it was anything but a pronounced success. A loss on one year’s operations does not by any means prove the venture to be a failure; there might be a loss of, say, £2,000, but we have to consider the many thousands of pounds that the presence of these steamers on the coast put into the pockets of the producers. I do not call such a venture a failure if there is a loss on the running of the vessels because, as I say, we have to bear in mind the number of people benefited.
– The House and the country owe a debt of gratitude to the honorable member for Grampians (Mr. Jowett) for the facts he has laid before us. It is not quite fair for the honorable member for Hume (Mr. Parker Moloney) to charge the honorable member for Grampians with not having proposed a remedy, because, as we know, the honorable member’s time expired before he had said all he desired.
I have held for very many years that the shipping of the world to-day is dominated by the Inchcape Shipping Combine, which has purchased practically the whole of thelines running, not only to Australia, but running in Australian waters. As an example, I may say that the boats running to Tasmania are in the
Inchcape Combine. I have put on the notice-paper for to-morrow the question, “Has an arrangement, or any agreement, been entered into by the overseas Combine and the Commonwealth Line of Australia?” Here is a statement which appeared in to-day’s newspapers -
In announcing the reductions, it was stated on behalf of the owners that the task of arranging the schedule had been most difficult. The work had taken over eight weeks to complete, and entailed discussions with the Prime Minister (Mr. Hughes) .
We have the extraordinaryfact that the freights of the Commonwealth. Line always go up and down exactly on a par with the freights of the Combine. Who regulates the freights charged on the Australianowned vessels? Freights are dominated and practically fixed by the Inchcape Combine.
– Suppose the Commonwealth freights were lower than the freights of the Combine, some producers would got their transport cheap, while to others it would be dear. There would then be a howl.
– As it is, nobody gets cheap freights.
– There are no large profits being made now by the Commonwealth Line.
– Are there not? I have challengedthe shipping companies to produce their balance-sheets in order to show whether or not there are undue profits made.
– The shipping companies produced everything they could produce before the Select Committee on this question; and the honorable member knows it!
– The shipping companies produced everything except their balance-sheets. On that Committee, I was turned down by the honorable member who interjects.
– And by every other member of the Committee!
– The balancesheets were not produced.
– The shipping companies produced everything. Be fair !
– The figures quoted by the Prime Minister (Mr. Hughes) to-day came to me like old friends; many I recognised as figures exceedingly like those supplied by the federated shipping companies to the Select Committee; of which the honorable member for Wakefield (Mr. Richard Foster) and myself were members. I do not say that the figures are the same, but there is a family likeness.
– That is a very unjust statement !
– And a very unfair one!
– I am dealing with the freights charged on the Australianowned ships. Two days ago I asked the Minister controlling shipping what’ Commonwealth boats had carried fruit from Australia during the present season, and what was the price charged; and I was informed that the price was8s. per case. This is the price fixed by the Inchcape Combine - a fact hard to get away from.
– Does that not suggest that, if the Commonwealth Line is not making inordinate profits, therefore, the Inchcape Line is not making an inordinate charge?
– I have been asked to be fair, and I am trying to be. I know that the cost of- running ship? has enormously increased; everything connected with shipping, from sails to wages, and dock charges to insurance, has been increased in cost, very largely in some cases, as compared with the period before the war. But I say that the prices charged before the war enabled nearly every one of the companies trading to Australia to practically renew their fleet out of the profits made. We have the fact, as stated to me in the House two days ago, that the freight on a 40-lb. case of fruit from Australia to England is 8s., whereas in 1914 the cost was 2s. 3d. to 2s. 9d.
– It was more than that, I think, in 1914.
– No,, that was the freight at that time. What the honorable member for Grampians has . said is quite true ; and if any industry in Australia is suffering to-day, it is the fruit industry. Some time ago, I went with the honorable member for Echuca (Mr. Hill) through the Goulburn Valley, and it was, indeed, pitiful to see the splendid fruit rotting on the ground. May I say here that if it had not been for the assist- . ance given by the Treasurer (Sir Joseph Cook), some 5,000 or 6,000 tons of peaches would have rotted in Goulburn Valley alone. I am trying to be fair; but wecannot forget the high- freights that are charged to-day as the result of an unholy alliance. What disturbs me more than anything is that, whoever dictates the freights as between Australia and England, those charged oh the Commonwealth Line go up and down according to a scale fixed. No one knows who fixes the scale, and we ought to know. Mr. Larkin, the manager of the Commonwealth Line in England, has said on more than one occasion that it is not the policy of the Government to enter into afreight war with the Combine. I submit that that is the very object for which the Commonwealth Line of vessels was created, and for which it is kept in existence. When we think that the freights of the shipping companies are too high, then there should be. a war of freights.
– Much help would not be given from the Government side of the House, anyhow!
– May I say that there are honorable members on this side who would give all the assistance possible in such a case.
– Jowett’s gun is not loaded; he is only letting off fireworks.
– Ever since the honorable member for Grampians entered this House he has been fighting the Shipping Combine. When I was fighting the Combine I received more help from him than from the honorable member for Maranoa (Mr. James Page).
– What is the honorable member’s remedy?
– The Commonwealth Line should fix fair and reasonable rates of freight. If the Commonwealth is not big enough to fight the Combine on the freight question, it is time we went out of the business, and allowed somebody to come in who is big enough. Having regard to the slump which. has come in meat and hides, and. is coming in wheat, unless we can get our produce conveyed to Europe at something like a reasonable price, much lower than it is to-day, ruin must come to the producers. This matter is not one which affects this party or that. It affects not only the primary producers, but the whole financial stability of the Commonwealth. As the mover of the motion has said, . the only thing which enabled Australia to pay interest on her bills during the last five or six years was her export trade in those things taken out of and off the land. Although some honorable members speak harshly of the wool growers, it is nothing less than financial disaster that there should be, as stated by the honorable member for Grampians (Mr. Jowett), something like 4,000,000 bales of wool carried over, and representing from £70,000,000 to £80,000,000. Instead of that amount being distributed in Australia, much of it will be represented by overdrafts bearing interest at 7 per cent. That is a serious position. Everything we are producing to-day is low in price; except wheat and milk, there is no primary product that is being sold at a price which covers the cost of production. We cannot allow the high freights to continue. A freight charge of 8s. per bushel case of apples is nothing more or less than piracy and high-sea robbery. The black flag with the skull and cross-bones is what the Shipping Combine should be flying. The only hope we have is the competition of the Commonwealth Line of steamers, and if that line is to work by arrangement with the Combine, the primary producers will be at the mercy of Tiberius.
– I should like to settle this matter in a few moments. I am pleased that the question of -freights has been raised’ by a member of the Country party. The farmers are always fond of a little bit of Socialism if it suits them, but they do not care to give much to the poor unfortunates in myelectorate. The honorable member for Franklin (Mr. Mc Williams) has complained of a freight charge of 8s. for a case of apples. There is not enough refrigerated space in the Commonwealth Line of steamers to carry all the Australian fruit to the Old World, so that if the whole of the Commonwealth freight were made available, most of the fruit would still have to be handled by the Combine. The honorable member said that the Commonwealth Line should lower its freights. If that were done, and my fruit went to England for 6s. per case, and the honorable member were charged by the Combine 8s. per case, he would grumble. The only satisfactory solution, therefore, is for the Commonwealth to carry the whole of the fruit. We cannot build the requisite number of ships in time. We must charter sufficient ships to carry the whole of the Australian produce to Great Britain. After we have done that, and lowered the freights, the Inchcape Combine will come into competition and reduce their freights still lower in order to beat us. And the producers will, thereupon, rush their goods into the. ships of the Combine, the chartered ships will go to the wall, and the whole undertaking will then be pointed to as another instance of the failure of State enterprise!
– We may sign our contract for five years.
– I know all about signed contracts. Every time an attempt has been made to socialize any public utility the private combines have fought the Government undertaking with lower charges. The peoplerush the lower charges, and the State enterprise is wiped out. Another example of the folly of Socialism! If the Government were to charter sufficient ships to carry all Australia’s exportable commodities, the Shipping Combine is strong enough to fight us with lower prices. When that happened would the producers refuse to avail themselves of the cheap rates? Honorable members may talk of making an arrangement for a number of years; but how can it be done?
– The Commonwealth Line could answer the Combine with a further reduction of freights.
– And make the chartered ships a worse losing proposition?
– But the producer would get the benefit of the freights.
– The honorable member for Hume (Mr. Parker Moloney) tried to show that, even though there had been a loss on the ships operated by the Western Australian Government, the enterprise had been beneficial to the growers and consumers of meat ; but we heard not a word about that when we were assailed on account of that instance of the alleged failure of Government enterprise. If cheaper freights were offered by the
Inchcape Combine in their endeavour to defeat the chartered ships, the primary producers and exporters would not remain loyal to the Australian Government. What is the use of honorable members making suggestions without indicating what they are prepared to do to defeat the . Inchcape Combine? ‘ They will get every assistance from honorable members on this side in inaugurating a Socialistic shipping enterprise. I know that the shipping charges are too high, and it is impossible for things to continue as they are to-day. The honorable member for Dampier (Mr. Gregory) will show that some of our minerals, cannot be exported on account of the high freights. If the stoppage of the export of certain commodities would lead to the expansion of some of our local trades, such as fellmongering, I would hail the existing conditions with joy ; but it does not have that effect. On the contrary, it helps to defeat the particular trade I have mentioned. If the members of the Country party and Government supporters desire to embark upon aSocialistic venture in the shape of Government control of shipping, we will help them; but we require also the assistance and loyalty of those who sent them to this House in order to make it a success. A Government, enterprise could not succeed if, as soon as the Inchcape Combine lowered its charges in order to squeeze the Government out of the market, the producers transferred their support to them.
– In dealing with this question we ought to be as accurate as possible in our representations. That has not been the case to-day. The question raised by the honorable member for Grampians (Mr. Jowett) concerns mainly oversea shipping, but coastal shipping was mentioned again and again by the honorable member for Franklin (Mr. Mcwilliams), who made certain erroneous statements.I have repeatedly corrected him on other occasions, and I say once more that the coastal shipping companies submitted the whole of their figures to the Select Committee on the Sea Carriage of Goods, and their statements were confirmed by Admiral Clarkson in behalf of the Government, and Mr. Eva, the local manager of the Commonwealth Shipping Line. I hope I shall not have to repeat that cor- rectionagain. It is the duty of every honorable member’ who served on that Select Committee to see that justice is done to all parties. In regard to the question at issue today, I have been waiting to bear a remedy proposed. We are exceedingly fortunate that already there has been a slump in freights, which have decreased by from 60 per cent, to 70 per cent. I wish they would fall further, but we must tackle the problem from a practical point of view in such a way as to bring us back gradually from abnormal and artificial conditions to normal conditions. The solution cannot be found in any other way.
– And it will be a slow process, I am afraid.
– It will be a slow process, and it will not be completed in a month or a year. The same remark applies to the high cost of living. Certain figures have been submitted by the Prime Minister to-day, which not merely tell against the capitalistic or. monopolistic party, but apply all round. The Select Committee on the Sea Carriage of Goods received ample evidence as to what was responsible for the increased shipping charges. When those charges are fairly tackled, and reductions made all round, there will be a howl- of opposition from honorable members on the Opposition side as well as from the monopolists.
– What about the Country party? Will they be satisfied?
– They will, because they are nearly all sensible men, and represent not only a section, but the whole community. It is useless for honorable members opposite to talk platitudes in the country electorates. If we are to face the existing problems, let us face them fairly and squarely, and admit that if freights are to be reduced, they can be reduced only by fair reductions all round. When we are back to normal conditions, everybody will be better off than under abnormal conditions.
I was pleased indeed to listen to the honorable member for Wakefield (Mr. Richard Foster). He is the latest public apologist for the Inchcape Shipping Combine.
– I have never apologized in my life.
– The honorable member has done nothing else but apologize for the Shipping Combine, whose claws are at the throats of shippers throughout the Commonwealth. Another apologist for the Combine is the Treasurer. The honorable member for Grampians (Mr. Jowett) deserves the thanks of the country for having brought before the House the subject of oversea freights. But his gun is not loaded; he merely makes a noise with blank cartridge. As the honorable member for Perth (Mr. Fowler) has told them times out of number, the Country party have the remedy in their own hands ; but they choose to do nothing. Last year they took the Prime Minister (Mr. Hughes) to task for having spent £10,000,000 without the authority of Parliament, but he told honorable members that they ought to thank God that he had done it, because thereby the whole of the Commonwealth had escaped from the tentacles of a Shipping Combine. Now we find that the Commonwealth Line of Steamers is in that Combine as much as any other line of steamers, but if the Countryparty are merely going to shoot fireworks the Government are perfectly safe. The honorable member for Franklin (Mr. McWilliams) has ‘ pointed out that, whereas the freight on fruit before the war was not higher than 2s. 93. per case to the United Kingdom, to-day it is 8s. per case. What would happen if any member on this side of the House moved that the freights chargeable by the Commonwealth Line of Steamers should be reduced to the normal conditions applying before the war?
– Does the honorable member think it possible to get back to those conditions with the present cost of labour and the other high charges?
-No, I do not expect it; but can the Treasurer say that the charges have gone up to an extent that would justify imposing a rate of 8s. per case for fruit to the Old Country?
– I do not know. I can only say that there are no abnormal profits being made by the Commonwealth Line of Steamers on the overseas trade.
-Butwe do not want to make profits. We want to carry the produce of the primary producer - his wool, tallow, hides, skins, fruit, butter, &c, but not to make aprofit in doing so.. We have enough business to keep our own boats employed.
– That is not the point. The honorable member complains that the shippers are fleecing the people here, but that remark cannot apply to the Commonwealth Line of Steamers.
– The Commonwealth Line of Steamers charge the same freights as the others do who fleece us.
– Even supposing we do charge the same freights, all I can say is that the charge does not express itself in the shape of inordinate profits.
– All I can say is that the Commonwealth are in the Combine just as much as other ships are. The Prime Minister told me yesterday that my education as a mathematician had been neglected, but the facts as they present themselves to me are that wool was conveyed to the United Kingdom in 1914 for less than half the cost to-day. The Prime Minister ‘ told us that he bought the Commonwealth steamers because he was far-seeing enough to realize that there would be a general combination of shipping throughout the world which would so manipulate freights as to bring injury to the primary producers of Australia. To that sentiment the Corner party said “ Hear, hear !” ; in fact, they tendered him a dinner, and some of them helped to subscribe £25,000 for him for what he had done. The honorable member for Grampians (Mr. Jowett) is a member of the Pastoralists Union, one of the biggest Combines in Australia, and he does exactly what the other fellow is doing. When the other man puts the screw on he seeks to have his freights reduced. When I saw the announcement in the press that the honorable member intended to move the adjournment of the House to-day, I realized at once that it meant nothing, and that the motion would go the way of all other adjournment motions; it would end in smoke.
Mr.riley - He would not take a vote upon it?
– There is no danger of that. The Country party will watch him very carefully to see that he does not .call for a division.
– If they do not we shall do so.
-It is a most peculiar fact that when the fate of the Government is at stake both the Country party and the Nationalists have the same object in view. I have no desire to displace the Government on this particular question, but I want it to go out to the world that if honorable members in the corner mean what they say, and no doubt some of them do, the remedy lies in their own hands.
.- I was sorry to hear the honorable member for Franklin (Mr. Mowilliams) say what he did in reference to the evidence asked for and obtained by the Select. Committee appointed to inquire into the sea carriage of goods. He was Chairman of that Committee, and I was a member of it; but if he had attended to his duties as he should have done - and I leave it to him to say that he did - I am sure he would’ have realized that the exhaustive information the Committee obtained did not bear out in the slightest degree what he has said in the House to-day,
I am pleased that the honorable member for Grampians (Mr. Jowett) has introduced the discussion; but, although I listened to the honorable member carefully, I failed’ to hear him suggest a remedy. No one who followed him has suggested any. I cannot see how we can bring the overseas shipping combine to their knees, and no one has suggested how iti can be done, but. as the honorable member for Grampians is very largely interested in wool, it has occurred to me that there is a way in which his industry could be protected to a considerable extent. Before the drought Australia had 93,000,000 sheep, Russia 72,000,000, the United States of America 48,000,000, and Argentine 43,000,000. Two Australian sheep will produce the value of woo] that can be produced by three sheep in Russia. It is clearly evident that we have a control of a vast quantity of the raw material for the woollen manufacturing industry; and why should we not manufacture it here so that the manufactured .article could bear the cost of Freight overseas ? Tt could do it far more easily than can our raw material. Mr. Stirling Taylor, Director of the
Bureau of Commerce and Industry, writing on the 26th February, 1920, said -
Although there may be difficulties, there is no real obstacle in the way of the greater part of the Australian clip being treated, namely, turned into woollen goods, in Australia.
Then he pointed out that to treat 200,000,000 lbs. of greasy wool, representing one-third of the clip, and turn it into worsteds, woollens, and .all kinds of piece goods, cloth, flannel, and blankets, would require, on the authority of leading woollen millers, an expenditure ‘ of £50,000 foi- land, £3,200,000 for buildings, £600,000 for power (including heat and light),, and £10,000,000 for plant, the total being £13,850,000. If each of the S0,000 wool-growers supplying wool to the Central Wool Committee con tributed £200, a sum of £16,000,000 could be raised for the purpose of dealing with our wool clip. Of course, the contribution would not be on a flat rate. Each individual would subscribe according to the number of sheep he held. If we complain of the difficulty of getting our products shipped at anything like the pre-war rate, we must try some means of achieving that object. I recommend the honorable member for Grampians to investigate the scheme T have put forward, and see whether it could not be adopted. It might he possible in this way to do away with the threats that the flocks of sheep of Australia will be largely depleted unless some alteration is made!
– I am a member of the Bureau to which the honorable member has referred, and I have done everything possible to forward the objects’ he has mentioned
– If the producers will not adopt the ideas put forward for their benefit, and will not help themselves, what have they to complain about? The profit to be made upon manufacturing the wool would be distributed among those who subscribed the. money to inaugurate the scheme, and if the subscribers are the producers themselves, then they would be deriving a profit out of a secondary industry. I think it is our duty to endeavour to find remedies for existing disabilities in respect of getting our goods to the other side of the world at reasonable rates of freight.
.- I am personally indebted to the honorable member for Grampians (Mr. Jowett) for having brought this matter before the House this afternoon. Even if no definite solution of the difficulty has been propounded by honorable members who have spoken, the time devoted to the debate has not been lost, since it will serve at least to demonstrate to the House the disability under which Australia labours in marketing her primary products in competition with other parts of the world. In dealing with another . big question - the Tariff - which is before the. House, honorable members will have an opportunity either to increase or to lighten the burdens now resting on our already overburdened producers. The costs that are heaping up un the Shipping Combine, and which, as the Prime Minister has been able to show, are very great, have also been piling up on other industries; but while the Shipping Combine is able to pass’ on such increased costs, there are primary industries in Australia which are quite unable to do so. If the export of those commodities to which the honorable member for Grampians (Mr. Jowett) has referred is made unprofitable because of the increased cost of production and the charges which are laid upon them, they will simply go out of production, because it will become utterly impossible for us to compete with other countries. Honorable members will have read the statement made by President Harding, as published in this morning’s newspapers, in which he wisely recognises that primary production is the principal and fundamental thing for the United States of America. He regards most seriously the fact that primary production there is costing so much that Russia, the Argentine, and other countries can export their produce to America and outdo the local producers. He has, therefore, decided to give the primary industries the benefit of heavy protective duties as a natural corollary to the heavy Protection given to the manufactured products of the country. The fact that one section of industry was protected, while the other was not, brought him to the conclusion which is reported in the press this morning.
I do not regard as likely to be effective the remedy suggested by the honorable member for Melbourne Ports (Mr. Mathews) for the matters complained of by the honorable member for Grampians; The fleet of vessels which we now have lias had no appreciable’ effect - on the situation, and, if our ships of the future are to cost us what we are paying for them to-day, we shall not be able to compete, in the matter.of ship construction with other countries’.
– The Labour party say, “ Go further “ in the matter of shipbuilding iri Australia, while the press say, “ Get further out.”
– Exactly. I find that there are certain; honorable members, as well as people who are not honorable in this Australia of ours, who are prepared to advocate the manufacture of certain things in the Commonwealth, no matter what they cost, as long as some one elBe will pay for them. Possibly there will be an opportunity to-, increase our fleet either by chartering or purchasing additional vessels, but the evidence wo have in regard to the little fleet now owned by the Commonwealth rather inclines us to the belief that they ave in the Shipping Combine. A great many people in Australia, provided we got a big fleet, would sympathize with the Combine as long as shipping construction could go on in Australia. Some people do not seem to care what a primary producer has to pay for a plough as long as that plough is made in Australia. Their chief consideration is that everything should be manufactured here. The fact that in their desire to give effect to that. principle they may render it more difficult for our farmers to compete with the primary producers of the Argentine is of no concern to some’ Australians; they care not whether Australia goes out of primary production, and consequently is deprived of the means of obtaining more money from abroad. I am glad, however, that this question has been brought up, because the discussion will aid some people to recognise the position in which Australia is gradually being placed in competition with other countries. We are face to face with a most serious problem, and if things continue as at present, we shall come to a dead-end before we get much further forward.
Question - That the motion be agreedto - put. The House divided.
Majority …. . . 2
Question so resolved in the affirmative.
House adjourned at 4.32 p.m.
Cite as: Australia, House of Representatives, Debates, 14 April 1921, viewed 22 October 2017, <http://historichansard.net/hofreps/1921/19210414_reps_8_94/>.