12th Parliament · 1st Session
Mr, Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
– Has the Treasurer any further information to give to the House regarding the part stoppage of work on the Grafton to South Brisbane railways ? Notices of dismissal expired on Friday last, but I hare read a statement by Mr. Davidson, of the Queensland Parliament, that the work will be finished in July.
– I have nothing to add to the answer I gave to a question on this subject last week. Notices of dismissal had been issued, but in accordance with an instruction issued by the Government, no further action was taken; So for as I am aware the work of construction has not been interrupted, and I believe that it will be completed about July next.
Evictionof Rural Lessees
asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Awards by Film Appeal Board.
asked the Acting Minister for Trade and Customs, upon notice -
– A report from the Film Appeal Board reached me this morning. I have not yet had time to give it consideration, but shall make an early announcement on the subject.
asked the Prime Minister, upon notice -
What action is the Government taking with respect to the strikes at Yallourn, Mort’s Dock, and elsewhere, against the award of the Arbitration Court in the metal trades?
– I am not aware of any facts existing at the present time whichcall for any action by the Government. As the result of a conference between the Mort’s Dock management and union officials, the dispute there has been terminated, and, as regards Yallourn, a very small section is concerned, and conferences between the parties with a view to an early settlement are proceeding.
asked the Treasurer, upon notice -
– I am bringing the second question under the notice of the bank. On receipt of the bank’s reply, I shall furnish answers to the several questions asked by the honorable member.
asked the Acting Minister for Trade and Customs, upon notice -
Whether he has completed his inquiries with respect to carburettors for motor cycles, and whether, if it appears that the Australian requirements are not being satisfactorily met f rom Australian manufacture, he will give instructions ‘or the admission of such carburettors on the tariff conditions existing before the 10th April last?
– No new conditions were attached to the importation of carburettors in April last, either by way of alteration of duty or restriction. The duty was increased in December last, and representations that the duty is unduly high in relation to carburettors for motor cyoles is receiving consideration.
Mr.KEANE asked the Prime Minister, upon notice-
What were the prime factors that caused such a marked decrease in the Commonwealth Statistician’s cost of living figures for the quarter ended 31st March, 1930?
Have any special steps been taken by the Statistician to check the figures supplied to prove their accuracy?
Were the rentals then being asked in respect of empty houses included in the figures, and, if so, were such rentals deflated to induce new tenancies ?
What steps does he propose to take to ensure that the workers’ standard of living, as determined by the basic wage, is not unduly interfered with by any mis-application of price index figures?
– The answers to the honorable member’s questions are as follow: -
Mr.CUSACK asked the Minister for Works and Railways, upon notice -
Will he place before the Main Roads Board the advisability of prescribing that contractors under the Board be compelled to give preference to labourers near the locality in which the work is to be carried out?
– I shall place the honorable member’s request before the State Minister in charge of road construction.
asked the Treasurerupon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Acting Minister forTrade and Customs - upon notice -
– Bounties are not considered or recorded in relation to Parliamentary electorates and no discrimination is shown between electorates or States in the amount of such bounties.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Acting Minister for Trade and Customs, upon notice -
– The information will be obtained.
Change of Civic Administration - Leave Rights of Transferred Officees
asked the Minister for Home Affairs, upon notice -
– Officers of the Federal Capital Commission who were transferred to government departments were informed that the leave which had accrued to them would stand to their credit, as their service was unbroken. It is contrary to policy to pay an officer the money value of leave due instead of inquiring him to take his leave, which is granted to permit his recuperation and maintain his efficiency. Officers who severed their connexion with the Commis sion and who have not been transferred to government departments have been paid the value of the leave accrued at the date of ceasing duty.
Order of Business
asked the AttorneyGeneral, upon notice -
– The order of business in the Arbitration Court is a matter for the court itself; but I will have inquiries made from the Industrial Registrar as to the facts of the case, and hope to be in a position to answer the honorable member’s question fully at an early date.
Preference to Unionists
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Acting Minister for Trade and Customs, upon notice -
– The question of protection of Australian fauna in the respective States is governed by State law, and at present the Commonwealth has not the power to take the action suggested by the honorable member. The Commonwealth, however, does what it can in this connexion by imposing restrictions on the exportation of such fauna, and any representations of the honorable member on this aspect of the matter will receive full consideration.
asked the Minister for Works and Railways, upon notice -
In view of the uncertainty which has existed for a considerable time, and which still exists, as to whether or not the town of Tallangatta is to be submerged by the Hume Reservoir, and in consequence of which uncertainty, property-owners who desire to sell or lease freehold property there, are placed at an unfair disadvantage, can the Minister yet say definitely whether the Reservoir is to be completed to the full 2,000,000 acre feet capacity; or, if not, can he give an undertaking that the town will not be submerged before a definite period, say two or three years?
– The construction of the Hume Reservoir to a capacity of 2,000,000 acre feet has been referred to the River Murray Commission for investigation and report to the contracting governments. A decision regarding the capacity of the reservoir will be given by the contracting governments after consideration of this report, which is expected to be presented within a few weeks. It will not be possible to give any definite information regarding the township of Tallangatta until this decision has been given.
Motion (by Mr. Scullin) - by leave - agreed to -
That leave of absence for one month be given to the honorable member for Melbourne Ports (Mr. Mathews) on the ground of ill health.
That leave of absence for three months be given to the honorable member for Reid (Mr. Coleman) on the ground of urgent public business.
Bill brought up by Mr. Beasley, and read a first time.
Motion (by Mr. Blakeley) agreed to-
That he have leave to bring in a bill for an act to provide for the establishment of a Forestry Bureau.
Bill brought up by Mr. Blakeley, and read a first time.
The following papers were presented : -
Defence Act - Royal Military College - Report for period 1st July, 1928, to 31st December, 1929.
Housing Act - Regulations Amended - Statutory Rules 1930, No. 46.
Land Tax Assessment Act - Regulations amended - Statutory Rules 1930, No. 45.
Debate resumed from the 2nd May (vide page 1431) on motion by Mr. Parker Moloney -
That the bill be now read a second time.
Upon which Mr. Latham had moved by way of amendment -
That all words after “ That “ be omitted, and that the following words be substituted in lieu thereof : -
This House is of opinion that, while present circumstances justify a guarantee by the Governments of the Commonwealth and States of a minimum price of 4s. per bushel for f.a.q. wheat, season 1930-1931, delivered at railway sidings, legislation providing for such a guarantee should be introduced separately from any legislation providing for the establishment of a monopoly in the marketingof Australian wheat by means of a compulsory pool.
.- In my opinion this bill is one of the most important that has come before Parliament for a long time, because it deals with the future of an industry of paramount importance to Australia. The Minister for Defence (Mr. A. Green) supported the institution of a compulsory wheat pool on the ground that it would serve the interests of the farmers of Western Australia, and he went on to say that any one who opposed the bill must be working in the interests of the wheat speculators. The Minister, apparently, has not made himself acquainted with the working of well-known economic laws, nor has he considered the effect of compulsion upon the State which he represents. Eis suggestion that those who oppose this bill must be doing so in the interests of the wheat speculators is absurd. What honorable member of this House would place the interests of two or three wheat speculators before those of the 10,000 or 15,000 farmers in his State? The Minister said that the bill would assist -the wheat-growers in Western Australia. Why, then, is there no provision in the bill for consulting the farmers with a view to learning what arc their wishes on the matter ? The Government is asking Parliament to take away from the farmers the control of their wheat, and the farmers are not to be given any say in the matter at all. The whole thing is to be arranged by this Parliament and the parliaments of the States.
– Does not that apply to all legislative measures?
– It is not usual for Parliament to take away from individuals the right to control their own products. The honorable member for East Sydney (Mr. West) does not advocate that the control of his products should be taken away from the manufacturer in the city. That probably would be more to the advantage of our people and would break up many monopolies. One could, perhaps, understand a temporary pooling arrangement being made for one year to meet special circumstances, but this is to be for three years, and it will probably become a permanent arrangement once it has been begun. The bill does not provide that Western Australia, which produces the greater proportion of its wheat for export, shall share in the higher prices obtained for wheat in the more populous States. The other States have the benefit of home markets and higher prices, but those benefits need not necessarily be shared with Western Australia. Under successive governments assistance has been given to many industries in Australia, but the three great wealth-producing industries of the country - wool-raising, wheat-growing and mining - have received no assistance. Last night honorable members were dealing with a cotton bounty bill, the purpose of which is to assist an industry confined almost exclusively to one State, but the Commonwealth as a whole is to pay that bounty. Again, the Commonwealth Government is paying a bounty on the production of galvanized iron, which is made wholly in New South Wales. There is no provision, however, that New South Wales shall provide half the amount of the bounty. Bounties are also paid in respect of sulphur and wine. Since the introduction of the bounty system the following amounts have been paid by way of bounty in respect of the industries mentioned : -
Mining and wheat-growing have been affected more than any other Australian industries by our high protective policy, but they find no place of value in this list.
I object to this proposal because the State Governments are being asked to find half of any loss -that may be incurred by paying a guaranteed price of 4s. per bushel at the railway sidings. If there is a loss the Commonwealth should meet the whole of it; otherwise Western Australia and South Australia will suffer severely. The other States, with the exception of Tasmania, have benefited to a very large extent by our policy of providing bounties and high duties. According to a Treasury return New South Wales has received during the past seven years, in addition to the advantage she has derived from our high protective policy, no less than £1,969,762 in bounties, and Western Australia has received only £53,834.
The Government is not justified in assuming that we shall receive a sufficiently high price for our wheat to provide the money necessary to pay a guaranteed price of 4s. Having regard to the trend of forward wheat prices and the information I have obtained about the huge quantities of wheat stored in various parts of the world, the Government is likely to incur a loss of 6d. per bushel by paying a guaranteed price of 4s. at the railway siding, which means approximately 4s. 8d. f.o.b. The following table shows -
To meet her loss Western Australia would have to increase her taxation by £1 3s. 6d. per head. The increases in the other States would be - South Australia, 12s. lid.; Victoria, 5s. 4d. ; New South Wales, 4s.; and Queensland, 9 1/2 d. The large increase in the case of Western Australia is explained by the fact that that State has to export about 36,000,000 bushels of wheat’- per annum. As the local consumption of - her population of 414,000 averages about 7$ bushels per head per annum, or about 3,000,000 bushels, it will be seen that her export trade is by far the principal factor in her case. New South Wales and. Victoria both have a large local consumption’ which would assist them to meet any loss on the exportable surplus, but it is not so , with Western Australia. The total amount of loss that will be incurred by all the States, if my expectations are fulfilled, will be about £2,000,000, and the
Commonwealth will have to bear a similar loss. I am not at the moment dealing with local consumption.
It appears to me that the agreement with the States does not make it mandatory that the whole of the receipts from the sale of wheat, local and export, shall e pooled. . It provides that the Wheat Board may control the export and distribution of wheat, and the transfer interstate of wheat and wheat products. The provision that Western Australia may receive the advantage of any cheaper freights that she may be able to secure in consideration of her being geographically nearer to the oversea markets should be made absolute and not left to the discretion of the board. Apparently all the expenses are to be pooled.
In the circumstances, I intend to support the amendment of the Leader of the Opposition (Mr. Latham), which provides that the Commonwealth shall guarantee the price, and itself meet any loss that may be incurred. As the Leader of the Opposition has stated, the proposal for a compulsory pool should be considered quite apart from that of a guaranteed price. We could arrange for our marketing to be done along the lines that have been adopted by the farmers of the United States of America and Canada. A compulsory pool is not necessary. There is every reason why we should act with caution in dealing with the wheat industry, for it and the mining industry are . two great industries which could provide more employment than any other two industries in the Commonwealth. Every wheatproducer and every gold-miner carries at least seven or eight other persons on his back. The wheat and gold-mining industries are the two great wealth producing and labour employing industries of Australia. We have made no effort to reduce the cost of production in this country. If these industries’ are to be successful we must reduce production costs. According to a statement issued by the National Bank of New York, the wholesale price index in ‘ the United States of America for a large number of articles in 1925 was 151; and in 1930, 126. In Great Britain the price index in 1925 was 159 ; and in 1930, 131.
In. France the price index in 1925 was 133 ; and in 1930, 117. In Australia the price index in 1925 was 169; and in 1929, 164. In all the important countries of the world, with the exception of Australia, there have been huge reductions in the price index. The protection policy of Australia has been responsible for the high, cost of production in the wheat industry, and there is not the slightest doubt that the action of the Government recently in increasing duties and placing embargoes upon certain imports must tend to increase further the cost of production. We must reduce costs. When I visit the outlying farming districts of my constituency and note the difficulties of the pioneer farmers and the legalized robberies to which, under the tariff, they are subject, I realize that secession is the only alternative. The first duty of this, or any Government, should be to develop the country, and to that end we must have cheap fertilizers.
– And cheap land.
– We have plenty of cheap land in Western Australia, and plenty of room for very many settlers. In Victoria the Government is urging the people to sow more wheat.. The opinion of all agricultural scientists is that the future of this country depends upon a proper analysis of the soil being made, the use of the best and cheapest fertilizers and the development of small areas. Small areas scientifically cultivated will yield much better results than huge areas planted indiscriminately and yielding poor harvests and the wheat industry has developed to a considerable extent because of the encouragement given to it by the Council for Scientific and Industrial Research. The Government should allow fertilizers to enter this country free of duty. We import into this country fertilizers bearing a duty of 25 per cent. We have magnificent hydro-electric works in Tasmania at which similar nitrates could be extracted from the air. There is no reason why we should not establish this great industry when the value of nitrate fertilizers has been definitely proved. In the meantime every encouragement should be given to their importation. They have been of great value to Western Australia, and the development which has taken place there because of the top dressing of the land has been marvellous. In Western Australia we pay £240,000 annually for sulphur. The equivalent tonnage of pyrites would cost £140,000, and by importing pyrites from Great Britain we would save £100,000. There would also be a saving of £74,000 by arranging for the payment of freights here. Pyrites are not needed in South Australia because that State has zinc slimes from which it extracts sulphuricacid. That acid cannot be conveyed to Western Australia, so we have to- import sulphur from America. By using pyrites we would transfer that trade from the United States to Great Britain, and that would give us an advantage, not ‘only in freight, but also in the purchase costs. In addition we would have special facilities for freighting wheat back to Europe. The Tariff Board .has recommended that pyrites should be admitted duty free and this should be given effect at once. Instead of bothering about the establishment of a compulsory pool we should do everything within our power to cheapen the cost of production. On my last visit to Western Australia I went through much of the dry areas, comprising country with a rainfall of from ten to eleven inches. The great value of that country is that the rain falls during the growing period. At one new settlement there were 136,000 bags of wheat at the railway siding; yet in that small community hardly one settler could meet his grocer’s bill. I admit that the settlers have been a little extravagant, many of them believing that prospects were bright and that high prices would rule ; but with such a yield they should have been in a much more prosperous condition. I also visited Southern Cross near the Bull Finch area.
– Was that recently ?
– It was during the last three months. I saw there some of the richest chocolate soil that” I have ever seen. There is a fairly decent rainfall in that district generally, though last year there was a failure in the wheat’ crop. The settlers there are battling against many difficulties-. For every commodity that they require on the farm they have to pay high prices. Tho cost of production has been increased in every direction, and on every’ occasion that this Government increases the tariff additional penalties are imposed upon thom. Many of these settlers in the back country have to cart their wheat in motor trucks from ten to thirty miles to a railway station. In many places the water supply is poor. Thank goodness the late Government did great work in utilizing groat rock catchments for water conservation purposes. In some cases water is brought 20 to 30 miles.
– And yet the people of Western Australia kicked out that Government.
– Any other government would have done as much. Mr. Lindsay, who was not a Labour supporter, was responsible for the whole scheme. I do not wish to take any credit from the late Labour Government of Western Australia; but to show the House how the farmers are resenting the federal policy let me point out that at a recent conference which was attended by settlers from Northam, Kellerberrin, Baandee, Walgoolan, Narrembeen, Dowerin, Yarding, Merredin and Totadgin this resolution was passed : -
As the reduced prices of world wheat have already lowered the standard of living of the primary .products, this conference of farmers calls upon the Federal and State Governments to take such steps as will bring about an adjustment of standards with other sections of the community who in the last issue depend ‘Upon the wealth created by primary producers.
Is it not the duty of this Parliament to legislate in such a way as to give equal concessions to every section of the community? In any case our first concession should be to the man on the land, the man who produces the wealth of this country. At the same conference this resolution was also passed : -
Whereas the farmers assembled in conference realize that special efforts to grow more wheat, in response to the Prime Minister’s appeal irrespective of the cost of production, will inevitably increase our financial difficulties by (1) ‘bringing about reduced yields per acre; (2) tending towards lower overseas prices; (3) .adversely affecting the. present exchange position which favours producers to She extent of 3d. or 4d. per bushel; and (4) reducing net profits to the grower, we urge wheatgrowers throughout the State to concentrate their resources upon better methods of cultivation on small areas of first-class land as a means whereby they may most readily and effectively help themselves.
The following resolution shows how these people view the matter : -
In view of the fact that the declared policy of the Federal Government places further handicaps upon primary producing States, and Western Australia in particular, we urge the State Government to resist further encroachments on State rights, even to the point of secession if necessary.
That is the feeling which has grown up in the State in which the Minister for Defence (Mr. A. Green) has said the farmers approve of a compulsory wheat pool. Honorable members can judge for themselves the extent to which it is approved by them.
I have been reared in the school of self-reliance. I believe in liberty of action, and have faith in individuality. The best results can be obtained by encouraging self-reliance and independence. Great Britain, whence we migrated, has always been the home of freedom. We must have freedom of both thought and action. It should be the keen desire of every person to give the fullest possible measure of liberty to the people. If there are in the community trusts and combinations which are acting in restraint of trade, in a manner inimical to the welfare of the people, it is the duty of the Government to take action against them immediately. But before we take away freedom of trade from the producer we must be absolutely sure that what we propose to substitute for it is infinitely better than what he has. Are we doing that when we insist upon a compulsory wheat pool? I am a thorough believer in organization. I have always been a strong supporter of voluntary pools, and of the giving of financial assistance to voluntary organizations. Honorable members will learn a great deal from that great work which has been published by Mr. Tait, at one time Director of Education in Victoria, dealing with his experiences in Denmark and detailing the wonderful benefits that have accrued to every section in that country from the operations of various pools. At the present time Canada has a voluntary pool, in which the primary producers have the greatest faith. Western Australia had a magnificent voluntary pool, and the people of that State are exceedingly proud of the work that it has done. . They have declined the offer of a compulsory pool. Even those who have come under the operation of the voluntary pool prefer to retain the right to say how they shall market their produce. A man who produces wheat must enter into financial obligations. The Government wishes to say to the wheat farmers, when they have garnered their wheat and wish to sell it, “ Hand it over to us. We will give you an advance upon it, and sell it in whatever way we think fit; and. at some future date we will pay you what we have received, after we have deducted the costs that have been incurred.” I know that the Minister will say that the guarantee of 4s. a bushel will enable the farmers to meet their commitments and that they will thus be relieved from financial embarrassment. This, however, is to apply only to the present season. What is to happen next season?
– I suppose that the farmers in thehonorable member’s electorate will accept the 4s, a bushel?
– They will take 10s. a bushel, if it is offered. I am afraid that, so long as the Minister (Mr. Parker Moloney) can inaugurate this piece of socialization, the interests of the farmers will have very little consideration from him, or from many of those who sit on his side of the House. Under this proposal, liberty is to be taken away from the producer in the future. His opinion of this proposal is not being sought.
– That is nonsense, and the honorable member knows it.
– I do not know it. The Minister cannot prove me incorrect by quoting from either the bill or the agreement. The farmers will have the right to elect their representatives, but according to the bill before us they will have no right to say beforehand whether they will join the pool. During the war period it was essential to have a compulsory pool; yet what was the experience of the two pools in South Australia and New South Wales? Millions of bushels of wheat were lost in South Australia because of either incompetency or neglect. In New South Wales there were charges, not of incompetency but of dishonesty. Under a voluntary pool the operations of independent buyers enable a judgment to be come to as to whether the pool is being managed with efficiency, honesty, and business capacity.
If the opportunity to make comparisons is withdrawn, how can a decision be arrived at as to whether a pool is being efficiently managed? Although I admit that compulsory pools were justified during the war period, what was the result of their operations? In 1915 the area under crop was 9,650,000 acres. A special appeal was then made to the farmers of Australia to increase their acreage, and in the year 1916 it was increased to 12,480,000 acres. In the following year, however, it dropped to 11,580,000 acres; and the decline continued in the manner shown by the following table : -
Tho farmers then regained their independence, andthe acreage rose to 9,000,000 acres in 1921, and 9,690,000 acres in 1922; and in 1929 it was no less than 14,800,000 acres. Those figures demand consideration.
– Surely the honorable member must have forgotten the fact that many young men were absent from Australia fighting her cause!
– Not in 1920. The honorable member for Echuca will have an opportunity, when I resume my seat, to speak in favour of compulsory pools. I cannot see, from a study of the Commonwealth Year-Book, any direction in which a compulsory pool has tended to stimulate production in Australia.
The Government has urged the farmer? of Australia to grow more wheat, and a campaign directed to that end is being conducted. But scientists and bureaus of agriculture have always stressed the point that what we need more are scientific advice and the cheapest possible fertilizers, with a view to reducing the costs of production and of marketing. A great deal is said regarding our adverse trade balance, and our financial difficulties. We are a debtor nation, and it is necessary for us to export our surplus products to pay our debts and to purchase goods abroad. Therefore, every effort should be made to decrease as far as possible the cost of production in our great basic industries. If that were done, there would be far less unemployment and much greater prosperity inAustralia.
The Labour party’s policy in regard to wheat is merely a step towards its socialistic objective - nationalization of the means of production, distribution, and exchange. Every attempt by governments to stabilize markets has ended in failure.
The Government of Brazil introduced what was called a valorization scheme to control the export of coffee. The purpose was to stabilize the industry. With government assistance large quantities of coffee were stored and prices were raised. Temporarily the growers enjoyed greater prosperity, and thousands more acres, were planted. But as prices rose; other countries began to grow coffee. As a result of that competition prices fell again, and to-day both the Government and the coffee-growers of Brazil are experiencing acute distress. No less than 15,000,000 bags of coffee, equal to one year’s supply, are stored in the warehouses, and prices are down. So far as my reading teaches, schemes of control, whether termed valorization, stabilization, or orderly marketing, offer no help to the producer. The March bulletin issued by the National City Bank, of New York, draws attention to the crisis in the Brazilian coffee industry, and describes the action taken in the United States of America to assist agriculture. Congress voted $500,000,000 to assist in the marketing of farm products and to help the industry generally. The principal objective was the stabilization of wheat and cotton, but so far as one can judge, the effort has been a failure. The bulletin says -
The Farm Board has frankly recognized that it can do nothing for the farmers unless its policies are in harmony with the law of supply and demand. Doubtless it intends that they shall be, and so intended when it determined on the value at which it could make loans on wheat and cotton. In pursuance of its purpose to have the law of supply and demand on its side, so far as possible, it is appealing to the farmers to reduce the acreage in cotton and wheat, and the production of dairy products. Obviously this will help in the maintenance of prices. The Secretary of Agriculture in an address at Springfield, last month, plainly stated that the fundamental trouble with agricultural prices was that production was running ahead of world requirements.
The Farm Board made advances on cotton in excess of the current market- prices, and it is now appealing to the farmers to grow less wheat, cotton, and dairy pro ducts. The Canadian Wheat Pool is probably the finest effort made by a voluntary organization of producers to control the marketing of their product, but it is doubtful whether even that scheme can defy the law of supply and demand. According to the bulletin of the National City Bank of New York, the wheat carryover in each of the last five years was : 1925, 298,000,000 bushels; 1926, 284,000,000 bushels; 1927, 344,000,000 bushels; 1928, 422,000,000 bushels; 1929, 598,000,000 bushels. That excludes Russian wheat.
– Who wants Russian wheat, anyhow?
– I cannot imagine a more stupid interjection. Russian wheat is not likely to be sent to Australia, but we have to consider the possibility df it being sent to the markets that Australia has been supplying. With a carry-over of nearly 600,000,000 bushels for 1929, if good harvests are enjoyed in Canada, the United States of America, Argentine, and Australia, the market will be overstocked, and naturally prices will he low. No pool can dictate prices. The coffee valorization scheme in Brazil, and the efforts of the United States of America to stabilize agriculture, have failed, while the rubber pool proved disastrous to all concerned.
High prices in recent years have induced increased production in Europe. Europe, including the Mediterranean seaboard, produces annually about 2,300,000 bushels of wheat, and 1,800,000 bushels of rye, and many millions of tons of potatoes, which are a valuable alternative to wheat. If the price of wheat is high, European people will eat more rye-bread and potatoes, and naturally the wheat market will collapse. For this reason we must be exceedingly careful in attempting to fix an artificial price for our produce. Italy is one of Australia’s best customers. Because of its greater protein value, Australian wheat is always worth from 3d. to 4d. per bushel more than Argentine wheat, and is used extensively for the manufacture of macaroni, vermicelli and spaghetti. If Australia attempts to raise prices to an artificial level, Italy will protect itself by buying from other countries, and we shall probably lose its trade. Because their values do not fluctuate to the same extent as the prices of agricultural produce, metals are more capable of control, but even in respect of them attempts to regulate prices have failed, and have prejudiced those who were concerned. Australia cannot ignore economic considerations. The mining industry used to employ tens of thousands of workers, but, because of the high cost of production, mine after mine is closing down. Potential wealth which should give employment directly and indirectly to many thousands of people is lying in the ground. We cannot afford to adopt any policy that may destroy similarly the agricultural industry. The- Prime Minister (Mr. Scullin) stated: “It would be a policy of despair to declare that costs of production and development are too high to permit of the expansion of our industries.” The cost of production is too high, otherwise the two great industries I have mentioned would be producing more wealth and giving greater employment. Ministerial members are pursuing a policy of despair when they decline to advise their followers that they can enjoy good wages and industrial conditions only if, working in co-operation with the employers, they will produce more. One cannot take out of a pot more than is put into it. Owing to the high prices obtained for our produce during the war period, Australia enjoyed great prosperity, and artificial standards of wages and working conditions were created. The markets of the world are now back to normal conditions, and only by working harder and producing more wealth can prosperity be restored to Australia.
.- The state of the wheat industry throughout the world is very interesting. When I was electioneering about ten years ago, I stated from several platforms that, whether the people liked it or not, the time would arrive when they would have to choose between government control and combine control. That time has. not arrived yet, but in this bill the Government is attempting to give to the growers of wheat an opportunity to control the marketing of their product, backed by a Government guarantee. In all parts of the world governments are finding it in creasingly necessary to take a hand in the wheat industry. The honorable member for Swan (Mr. Gregory) referred to the action that might be taken by Italy if Australia raises- the prices of its wheat. For some years the Italian Government has been rationing the imports of wheat, and the Governments of France, Germany, and South Africa are either prohibiting, rationing, or, by heavy duties, restricting the imports of foreign wheat. Even in the United Kingdom, which the honorable member extols as the “ home of liberty,” the Government is’ gradually being forced to take action to ensure a payable price for locally-grown wheat. The Statist of the loth March, 1930, said -
The view is gaining increasing support of late that a position has been reached when the active intervention of the State is called for, and added significance is lent to the movement for the creation of a new form of organization in the wheat trade by the fact that agriculturists and grain trade authorities approaching the problem from different standpoints, express equally strong dissatisfaction with the present system.
So much for the position in the consuming countries. On the other hand, we find that in Canada a voluntary wheat pool was instituted in 1923. It received increasing support until its membership reached a total of 142,000 farmers. Up to this year it operated without government assistance; but three of the provincial governments have now found it necessary to stand behind it. The pool has to advance money to the growers, borrowing the money from the banks. It is stipulated that the value of the wheat held, by the pool shall show a margin of 15 per cent, over and above what the banks have advanced. Because only 60 per cent, of the wheat produced in Canada went through the pool, the private merchants have been operating with the other 40 per cent., with Argentine wheat and, to a lesser extent, with Australian wheat, in an effort to smash the pool. It appeared at one stage that they would succeed, and some of the provincial governments were forced to take action by guaranteeing the 15 per cent, margin insisted on by the banks. In the United States of America last year it was necessary ‘to make provision by means of a farm relief bill for the setting up of a farm loan board to extend credits to farmers. That board has to deal not only with wheat, but with corn, rice, cotton, tobacco, hogs, dried fruits, &c. All this points to the fact that some form of government control or assistance to primary production is becoming increasingly necessary. It seems necessary to decide between government control and combine control. The only compromise is control by the growers, and that is what we are seeking to establish by means of this bill.
It is natural, of course, that the private merchants should oppose the establishment of a wheat pool, and equally natural that they should induce their representatives in this Parliament to plead their cause. That is why members of this House have received a ten-page foolscap document from the private merchants setting out their opposition to the bill. I recognized in the speech of the honorable member who has just sat down, one or two of the arguments contained in that document. Many of the statements and figures used by the Leader of the Opposition (Mr. Latham) may also he found in the memorandum supplied by the private merchants. The Leader of the Opposition spoke more as the mouthpiece of the private merchant than as a representative of the farmers. As part of the private merchant’s campaign, inspired articles are being published in the press, and farmers, evidently in the pay of the merchants, are going round the country organizing wheat freedom leagues. The merchants would like the farmers of Australia to be in the condition of pitiful helplessness that exists among the farmers of the Argentine. In that country, despite the fact that the last wheat crop was one of the best ever harvested, the farmers have never been in a worse position, and they are asking for sustenance until the next harvest. Lord Beaverbrook, whom no one can accuse of being a socialist, made the following statement about the Argentine wheat crop : - “ Wheat is produced there,” he said, “ for about 3s. lid. a bushel, but the British consumer did not get the benefit of that cheap wheat, though more of it was coming into Britain. The foreign wheat trading firms are taking the profits, not the consumers. These middlemen are not passing the benefits of low wholesale prices to the consumers. They are mulcting the public, pocketing the proceeds, and growing rich as the result.”
It is understood that one or two of these middlemen also buy Australian wheat and naturally just as cheaply as they can contrive to get lt.
I think I could make a good guess at the names of some of the merchants, and they are operating in Australia as well as in the Argentine. The circular issued by the’ wheat merchants has been sent out under cover of a group of about twenty South Australian farmers. I know some of those farmers, and if they were dying of thirst they would refuse a drink from a Labour member because it might have been drawn from a socialistic reservoir, carried on a socialistic train, in response to a message through a socialistic telephone. This is a sample of the tone of that document -
From a consideration of the financial’ aspect it is abundantly clear that the bribe of 4s. advance would be repudiated. Growers would be trapped. They would be sold. The open market would be gone, and they would be left to the mercy of those who sold them.
Surely that is the death scream of the private merchants. Those who prepared the document were so pushed foi- arguments that thuy dared to say the Commonwealth Government would repudiate its promise to the wheat-growers of Australia; that it intended to trap the growers, and that the growers would be sold. The circular harps on the alleged shortcomings of the war-time compulsory wheat pool. The honorable member for Swan (Mr. Gregory) did the same, and suggested that nearly all the troubles encountered by the pool were due to the compulsory provision: This, however, is what the then Prime Minister, the right honorable Mr. W. M. Hughes, said in 1917-
One of the terms of the contract made between the Commonwealth and the British Government was that the latter should move 000,000 tons of wheat per month from Australia. During the month of June not one bushel of wheat was shipped from this country to Britain.
I ask the champions of the private merchants what would those merchants have done if, after a contract had been made to shift the wheat, no wheat had been shifted. They would have shut their doors, and if, for two successive years, they , had been unable tq dispose of the wheat they, had bought, they would certainly not .have bought the third year’s crop. The Adelaide Advertiser of the 2nd July, 1917, published the following: -
When asked on Saturday to say whether there was a possibility of Australia being cut off from the outside world owing to the shortage of shipping, the Minister for Home and Territories (Mr. Glynn) said, no doubt, one of the greatest difficulties was transport. Pools that had been formed and those that had been suggested, all came back to the same thing, the difficulties of private companies and persons in getting rid of their produce.
That was the primary reason for instituting the original wheat pool, and that was also the cause of most of the losses suffered. Every ohe knows that there was a mice plague, and that the wheat was attacked by weevils ; so much so, that one huge stack in South Australia was known as “Mount Lousy.” Those things fannot be blamed on a compulsory pool. The pool may not have been managed as well as it could have been, but the pests and plagues were not the result of the pool, but were due to the necessity for keeping such huge quantities of wheat stored for such long periods. Several honorable members opposite, including the Leader of the Opposition (Mr. Latham), delved into the past in regard to the war-time compulsory wheat pool, so that I make no apology for revealing something from the past of the private wheat merchants. I have here the report of a royal commission appointed in South Australia in 1908. The members of that commission were - Mr. E. EL Coombe (chairman), the Hon. Richard Butler, Messrs. A. McDonald, Laurence 0’Loughlin, John Newlands, Crawford Vaughan; and Clarence Good. Mr. A. E. Roberts was originally a member of the commission, but upon his election to this chamber as the member for Adelaide he resigned, and Mr. Vaughan was appointed in his stead. Every member of the commission was prominent in the politics of the States or Commonwealth, and most of them at one time or another were Ministers of the Crown-. At the time the report was made only three of them were Labour members. The extracts I shall make are from the unanimous report of the commissioners. The first paragraph I shall quote deals with the “honorable understanding” between the wheat merchants and millers. It reads -
Much interest has centred in the evidence elicited by your commissioners with reference to the existence of an agreement between nine of the leading wheat-traders of the State with a view, of limiting the price to be paid by them in the country. According to Mr. Darling ‘ it is, “ An understanding between the traders to protect their interests.” “ The trader is regarding his interests with more care and solicitude, with a strong desire to prevent what we would call sweating by country agents, or fictitious prices against ourselves.” “They (the farmers) may think they arc not treated as well as they were formerly, but I think, with all respect, that they were treated too well formerly, and the trader was sweated all along the line.” (Q. 1511.)
The “ Mr. Darling “ mentioned there was the honorable John Darling, who, when he died, left an estate valued at £1,750,000. Although he said that “ the farmers were treated too well “, I am certain that not one of them made anything approaching the fortune that he made. I marvel that the farmers of thatday voted for the same political party as the wheat merchants, the bag merchants and the shareholders in the superphosphates’ combine. At that time Mr. Darling was a member of the National Defence League, and many of the farmers of South Australia were also linked up with it. I am glad that to-day the farmers are realizing to a greater extent than ever before that the political party which the wheat merchants support is not the party for them. Among the recorded utterances of Solomon is -
There be three things which are too wonderful for me, yea, four which I know notThe way of an eagle in the air; the way of a serpent upon a rock; the way of a ship in the midst of the sea; and the way of a man with a maid.
With all respect, I would suggest that if he were living in these times he would add to that list of incomprehensible things the way of the wheat-farmer who votes for the same political party as the wheat merchant, the bag merchant and the superphosphate combine shareholder. . The report of the commission proceeded as follows : -
According to Mr. W. Steele, who acts in a clerical capacity for the gentlemen connected with the agreement, and as umpire in cases of complaint between them, the combination has no name, meetings are rarely .held, there is no chairman, and no minutes arc taken. The only book contains a record of prices.
– In what year was that report made ?
– In 1908.
– That is a long while ago.
– I remind the Leader of the Opposition that the lesson of life is learned by hearing what the century has to say against the year. History has a habit of repeating itself. The report continues -
Mr. Steele stated: “I think it (the price) is fixed up between certain members, who telephone to one another. One or other of the traders intimates to me that they have arranged an alteration of price, and then I formally advise the other gentlemen in the honorable understanding ‘. It is a sort of confirmatory advice.” (Q. 4911.)
Mr. Steele added that in about eighteen months he had investigated about 100 complaints of departures from the agreement, and that there was a penalty attachable to each such offence. (Q. 4920).
This body, which had neither a name nor a chairman and kept no minutes of its proceedings, provided a penalty for a breach of its rules. The nature of the penalty is shown in the evidence submitted to the commission from which I quote the following: - 4925. Is there any penalty? - I think a penalty can be exacted. 4926. Can you tell us what it is? - I think the aggrieved party can claim thewheat in dispute. 4927. The whole of the wheat in dispute? - Yes. 4928. That is, supposing 1,000 bushels changed hands, and it was shown that one firm in purchasing it had gone beyond the price fixed, the firm complaining could claim the whole of the wheat? - I believe that is it. 4929. Has that been done? - I do not know whether it has been done or not.
I quote further from Question 4959, which was as follows: - 4959. By theHon. R. Butler. - With reference to the penalty: Supposing a parcel of 1,000 bags of wheat had been sold at a price over and above the price agreed to by the merchants, would the whole of that wheat be forfeited by the man who broke the agreement? - Not necessarily. 4960. That is the penalty, is it? - I understand that is the penalty. 4961. Without any payment for it at all? - Oh, no. 4962. What do you mean, then? - I understand that if the penalty were imposed the complainer would have the right to take that wheat at the proper price. 4963. And the man who bought it at1d. a bushel over what he ought to have paid for it would have to lose the difference? - That is it.
It will be seen, therefore, that the penalty was most effective. The wheat merchant who departed from the “honorable understanding” and was found out lost not only the right to the sale of the wheat that he had bought, but also the difference between the agreed price and the higher price paid to the farmers. This was a most effective method of ensuring that the members of the combine observed the conditions agreed upon. But in spite of experiences of this kind, honorable members opposite want free’ and full competition in the wheat trade. In other days the wheat merchants . had their opportunity to trade fairly, and this report shows how they used it. Here is another extract about the “honorable understanding”.
The influence of the “ honorable understanding “ has been chiefly in respect to prices, and your Commissioners have endeavoured to ascertain by how much quotations have been reduced owing to the existence of the agreement. The exact date of its initiation has not transpired, but as the appointment of Mr. Steele as umpire and correspondent took place at the beginning of February. 1907, that may be assumed to be the time when the understanding was arrived at. Appendix K gives a list of weekly prices at Port Adelaide, Melbourne, and Sydney, for three months before the appointment of Mr. Steele and three months after, and it shows that in the three months prior to his appointment, Port Adelaide price was twice under that of Melbourne, but only to the extent of¼d. per bushel on each occasion, and once under that of Sydney, and that to the value of½d. per bushel, while in three instances Port Adelaide quotation was in excess of Sydney price by½d. per bushel. During the three months subsequent to the time referred to. Port Adelaide was below both Melbourne and Sydney in each weekly list of quotations, and in nearly every instance by upwards of1d. per bushel. Your Commissioners, therefore, think there are good grounds for believing that the reduction in prices in the season 1906-7 (subsequent to January), owing to the existence of the “ honorable understanding,” was at least1d. per bushel.
Let me remind honorable members again that this was a unanimous report signed by members of. all the political parties in the State Parliament at that time. Consequently when statements of the kind that I have just quoted appear in it, it is certain that the facts were as given.
The report deals further with the prices for wheat which ruled at Port Adelaide and Melbourne and Sydney before and after the “honorable understanding” was reached. I quote another paragraph from the report -
An assessment of the loss occasioned to the producers by the “ honorable understanding “ in the season 1907-8 is more difficult, inasmuch as New South Wales prices have not been on an exportable basis, and Victorian quotations have also been affected by local considerations, though to a less extent. A reference to Appendix L will show that Port Adelaide quotations have ranged from 3 1/2 d. to 7 id. below Sydney and from Id. to 6d. below Melbourne After allowing for the special conditions which have applied to Sydney and Melbourne, your commissioners are of opinion that had it not been for the agreement between the leading traders the price of wheat at Port Adelaide would have been at least 2d. per bushel higher. A striking example of the disadvantageous position of the South Australian farmer as compared with the Victorian is to he seen in the prices of 7th August, 1908. The price quoted for flour in Adelaide on that day was £9 10s. and in Melbourne sales were made to bakers at £9 5s. Pollard was the same price in both places and bran 4d. a bushel dearer in Adelaide than Melbourne. But notwithstanding the lower prices received by Melbourne millers for flour and bran they paid 4s. lid. that day foi’ wheat, while the price to millers on the same day at Port Adelaide was 3s. 9*d. (Q. 9146.)
This shows clearly that even when flour was being sold in Melbourne for 5s. per ton less than in Adelaide, the Victorian millers were paying 4d. per bushel more for their wheat than the South Australian millers.
– Did not the vendors in South Australia know what price3 were ruling in. the other States?
– Probably they did, but practically all the wheat buyers in South Australia, with the exception of the South Australian Farmers’ Co-Operative Union, and all the millers were parties to the “honorable understanding”. The names of the milling firms which were parties to the agreement were: - The Adelaide Milling Company; Messrs. A. E. Davey & Son ; Messrs. Verco Bros. ; Messrs. W. Thomas & Company; and Messrs. W. C. Harrison & Company. The names of the merchants associated with them were, Messrs. John Darling & Sons; Messrs. Jas. Bell & Company; Messrs. W. R. Cave & Company; and Geo. Wills & Company Limited.
The report proceeds to show that although there was a reduction in railway freights in South Australia at that time, the whole advantage of it went to the parties to the “ honorable understanding.” The farmers received no benefit whatever. In that connexion the report states: -
Another example of the injurious effect of the “ honorable understanding “ was in connexion with the reduction of railway freights on 14th October, 1907. The reduction applied to 51 stations over 50 miles from the seaboard, and was estimated to entail a loss to the Railway Department of £4,500 between 14th October, 1907, and 30th June, 1908 - a period of eight and a half months. Except in the case of Pinnaroo station and Sutherlands the reductions were not passed on to the producer, but retained by the traders who conducted the business at the places concerned. The explanation of Mr. Darling is that the “ honorable understanding “ considered the reductions and said, “ There are considerable, expenses incurred, and we will be on the safe side “. The expenses referred to were owing to new by-laws affecting demurrage at the principal shipping ports and increased cost of lumping. In support of the action of the traders he stated in evidence on 10th August that the freight reductions had amounted to only £2,071 7s. 4d. so far as the gentlemen in the “ honorable understanding “ were corcerned, whereas they had paid in overtime and additional pay to the lumpers £2,500. (Q. 8285.) On the other hand the Railway Commissioner estimated the loss owing to the reduced freight on wheat to have been £4,500 to the end of June, and expressed doubt as to the accuracy of Mr. Darling’s statement that the traders in the “ honorable understanding” had been put to increased expense to the extent of £2,500. (Q. 8758-9.) Mr. Darling did not produce any data to substantiate his statement, and the evidence of other gentlemen in the “ honorable understanding “ and of representatives of the Waterside Association at Port Adelaide and Port Pirie, strengthens the suggestion that a mistake has been made in that respect.
If the gentleman concerned were not deceased I should use a much stronger word than “ mistake “. The fact remains that the reductions in freight were collared by the honorable understanding that was then operating in South Australia. The summary of the report reads -
Your commissioners cannot but regard the explanation of the failure to pass the reduction of freights onto the farmers as extremely unsatisfactory. After careful consideration, your commissioners have come to the conclusion that the existence and operation of the “ honorable understanding “ are decidedly inimical to the interests of the wheat-growers. Before making any definite recommendation with regard to the “ honorable understanding “, however, they prefer to have the experience of another wheat season to guide them.
I suggest to the Minister that a leaflet containing that evidence be printed at the expense of the Commonwealth, and distributed among the farmers of this country, so that they may have some idea of what took place under the competitive system of the private merchants” prior to pools coming into operation. I do not know whether the Minister will accept that suggestion, buthe should certainly give it consideration.
I shall now give my reasons for supporting the bill. I certainly favour the proposal to take a ballot of the wheatgrowers of Australia to ascertain whether they are desirous of establishing a compulsory wheat pool. It is certainly a proper procedure, and will give effect to majority rule.
– What is the franchise?
– The Minister for Agricul- ture in South Australia has stated that persons who hold 50 acres or more will be entitled to vote. I presume that the same condition will operate in the other States. It is not this so-called socialistic Government, but the wheat-growers themselves, who are to decide whether a compulsory wheat pool is to be established, and I am satisfied to abide by their decision. The Leader of the Opposition (Mr. Latham) referred to the Government’s proposal as an attempt at socialization, but let me inform him that the proposal is really to place the control of the industry in the hands of those engaged in it. What is wrong with that? Are we not affording the primary producers an opportunity of working out their own salvation? I am surprised at the stand taken by the members of the Opposition. I am anxiously waiting to hear what the Leader of the Country party, (Dr. Earle Page) has to say on the subject. Another reason why I support the bill is that I wish to see a compulsory pool tried out in normal times. Surely that is a fair proposition. We have had experience of the compulsory pool that was established during the war, and also of recent voluntary pools, and in the light of that experience there is no reason why a compulsory pool should not be successful in normal times. It has been stated in the press, and elsewhere, that the wheat merchants have given greater returns to the farmers than have voluntary pools. I do not know whether that is correct, but I notice that in South Australia, during the two years quoted by the Leader of the Opposition in arriving at his conclusion, those are the years when the lowest percentage of wheat was placed in the voluntary pool. It is very evident that the overhead charge on a small quantity of wheat would be almost as heavy as on a large quantity of wheat. In the case of South Australia, it was certainly an unfair comparison to quote the two years during which the lowest percentage of wheat was placed in the pool. Why were not other years quoted and a fairer comparison given?
– The challenge was made in respect of those two years.
– The challenge was made from New South Wales, but, unfortunately, it was applied in South Australia at a time whan a small percentage of wheat was in the pool. Will any honorable member opposite honestly tell me that he believes that, had there been no voluntary pool in operation during the last six years, the farmers would have received the same return for their wheat? They do not believe it. The position is this. The merchants of this country have cut their costs to the bone in competition with the voluntary pool, so that their prices may show to the disadvantage of the voluntary pool. Their object is to force the voluntary pool out of existence, and to recoup themselves for their previous losses once they obtain a monopoly of wheat, as has happened in the Argentine. I have always been of the opinion that prices were low at the beginning of the season and high at the end of the season, and that in the past merchants have gained an advantage by holding wheat. I have spent a great deal of time searching South Australian newspapers, including the Register, published between 1902 and 1914, when the war started, and the following is a list of prices that I have taken out : -
If honorable members will take the trouble to examine those figures, they will find that in five years, the price in September was higher than in January, while in seven years the position was reversed. I have not had time to work out the figures, but I believe that the advantage would be with the man who held his wheat, because the jump ‘in prices in the years when the prices were higher in September than in January is in some cases fairly pronounced. Under the compulsory pool the farmer who was financially “pushed” would obtain the advantage of higher prices at the end of the season. I have to admit that there was not so great a difference between the prices of wheat at the beginning and at the end of the year over that period as I anticipated. I find that the price of wheat on the 1st January averaged 3s. 6$d. per bushel. That figure, compared with the guarantee of 4s. at railway sidings to-day, is higher, taking into consideration the fact that 14s. 6d. pre-war would purchase as much us £1 purchases to-day. The average price of 3s. 6 3/4 d. per bushel would be equivalent to 4s. 6d. or 4s. 8d. at Port Adelaide at the present time.
– Has the honorable member compared the costs of producing wheat ?
– I am not now dealing with the cost of production. Judging by these figures, it would seem that there is not a great deal of risk in the Government guaranteeing 4s. a bushel to the farmers in respect of this season’s wheat, but if the return falls short, of the guarantee, it is only right that the Government should assist the farmers by making up the difference. While I do not agree with the extremist statements of some members of this side as to the value of protection, nor with the extremist statements of the honorable member for Swan (Mr. Gregory) and the honorable member for Forrest (Mr. Prowse), as to the advantages of freetrade, I must admit that the farmer is under a disadvantage regarding the tariff. Therefore, if the Government has to come to his assistance, and make up the guarantee, it will be only extending to him a concession such as has .been given to other producers, and also to those engaged in the secondary industries of this country.
I have given some thought to the amendment that has been moved by the Leader of the Opposition (Mr. Latham), and I cannot see how his proposal to have a guaranteed price without a compulsory pool could be operated. No machinery for its operation has been suggested, and I invite honorable members opposite to state how it can be given effect. It appears to me that the amendment has been moved with a view to escaping from the position of having to cast a vote against the Government’s proposals. Let us take a supposititious case. Brown sells to Dreyfus in January 4,000 bushels at 3s. 9d. a bushel; to Darling in March 2,000 bushels at 4s. Id. a bushel; and to the local miller in May 500 bushels at 4s. 3d. a bushel. When the receipts had been totalled and a deficiency disclosed how would it be made up, and to whom would it be paid ? This matter must have been discussed in the caucus of the parties that sit opposite, and doubtless reasons were advanced for bringing forward the amendment. I challenge honorable members opposite to show how it could be put into operation. They cannot do so. With such a multiplicity of operations between, wheat-growers and merchants, voluntary pools, storekeepers and grain stores, as well as with each other, in what way could the differing prices in different months be reconciled? Honorable members opposite are endeavouring to deceive the farmers by what I regard as a piece of political bluff. They are unworthy of the position they occupy when they use this means to justify a vote against the proposal of the Government to establish a compulsory pool if the growers desire to have one. Even if it could be operated, what would be the result? Is it proposed that the merchant shall pay the farmer 4s. a bushel and then, if he obtains a lower price, that he shall be reimbursed the difference? If that were the case, he would be on a very good wicket. How would you check his various sales ? On the other hand, is it proposed to make up to the farmers the difference between the price received and 4s. a bushel? In that case also honorable members opposite. would lay themselves open to criticism, because all farmers are not honest, and a very pretty joke would be worked on them. The corruption possible under the opposition scheme, compared with that which might take place under a compulsory wheat pool would be as a pyramid to a grain of sand.
I do not claim to have made a nonparty speech on this matter. I commend the Minister (Mr. Parker Moloney) upon the non-party speech that he delivered; it is perhaps the only one that I have ever heard him make. The Leader of the Opposition (Mr. Latham), however, did not follow his example. I cannot serve two masters, the wheat merchant and the farmer. One is a buyer, and the other a seller. I know that tho wheat merchants look after themselves and that they have many advocates both inside and outside this House. It is my aim to look after the interests of the wheatgrowers.
I am sorry that it has been necessary to adopt such a roundabout method to obtain a wheat pool. This legislation must pass the House of Representatives and the Senate, and similar legislation must be carried by the State Lower Houses and their Legislative Councils, which are elected on a different franchise. The reason for . that is that this National Parliament has not the power to deal with the matter itself, if those wheat farmers who are in favour of a pool do not regard the present procedure as an argument in favour of voting for the referendum proposals of this Government when the opportunity is afforded to them in a few months’ time, neither my eloquence nor that of any other person will convince them of the need for doing so.
The wheat-growers have the settlement of this matter, in their own hands. I believe that they have sufficient commonsense, to realize which is the right side of the deal and that they know who are their friends. I hope that they will vote for a compulsory pool.
.- Every honorable member must recognize the very great importance to Australia of the wheat-growing industry. I feel sure that the object of any criticism of the Government’s proposals will be to do what is best in the interests of all concerned. It is well known that our wool and our wheat-growers are responsible for the great bulk of the products that are exported from Australia. In the year 1928-29 our exports totalled something like £140,000,000, of which approximately £80,500,000 was accounted for by wool and wheat. It is unfortunate that certain sections of our people do not realize that the very high standard of living that we enjoy in Australia is dependent largely upon the profitable export of our primary products. The high cost, of production, and the comparatively low values of those commodities in the markets of the world within recent times have been responsible for the difficulties with which our primary industries are faced. I have no doubt that the Government honestly believes that the best way in which to render assistance to the wheat-farmer is to guarantee him a minimum price for his product and to market it by means of a compulsory pool; but I am sufficiently optimistic to believe that tho growers will differ from that view. The honorable member for Swan (Mr. Gregory) has expressed a doubt as to whether they will be consulted; but we have the assurance of the honorable member for Angas (Mr. Gabb), corroborated by the Minister, that the State wheat boards will provide the machinery for the operation of the ballot. That is only right and fair. Some time must elapse before any arrangement can be made, because the growers must express their will by means of a ballot before the States will act and the States will doubtless be guided by the decision of the wheat-growers.
The Leader pf the Opposition, in an admirable speech, said that sustenance in the form of a subsidy or a bounty is justified to meet a temporary difficulty, but that a general proposal to subsidize either the wool or the wheat industry would be regarded by him with a great deal of apprehension. I entirely agree with that statement. The existing circumstances in the wheat industry are exceptional. I support the proposal to have a guaranteed price, not only because of the severity and long duration of drought conditions in many wheat-growing districts and the low prices that have been obtained in the markets of the world, but also because of the extraordinary increase that has taken place during the last few years in the cost of production, as a result principally of our false economic conditions.
The Prime Minister (Mr. Scullin) has appealed to the wheat-farmers to grow more wheat. On the face of every envelope that passes through the post that appeal is made, and further publicity has been given to it through the agency of the press. I believe that every one is anxious to encourage the extension of our primary industries ; but it is questionable whether the present is the right time to ask our farmers to grow more wheat. The position is complicated, not by any lack of ability to grow more wheat, but because of the difficulty of finding a market for it at a remunerative price. At some little trouble, I have obtained figures concerning the wheat supplies of the world. For some years the quantity of held-over wheat in the United States of America has been considerable. In 1925 it was something like 135,000,000 bushels, and by 1929 it had increased to 262,000,000 bushels. The slogan in America at the present time is “ Grow less wheat.” I learned from a press paragraph the other day that the crop for this year in America is estimated at no less than 525,000,000 bushels. I had exceptional opportunities, “ as a member of the Australian Parliamentary Delegation to Canada to see some of the wonderful wheat lands in that dominion. It is said that Canada supplies 10 per cent, of the world’s requirements of wheat. In that dominion the carryover wheat increased from 26,000,000 bushels in 1925 to 104,000,000 bushels in 1929. Some of our friends opposite were inclined to laugh when the honorable member for Swan said that Russia is likely to be a strong competitor in the wheat markets in the future.
– We challenged, not the statement, but the figures.
– The fact is so patent that it cannot be challenged. The Government of Russia recognizes that something must be done in the way of export, and has given encouragement to wheatgrowing. We shall find the wheat markets of the world much less remunerative in the future than they -have been in the past, as a result of this increased com petition. In Germany, France, and Italy duties have been imposed on the importation of foreign-grown wheat, ranging from 2s. 6d. to 4s. lOd. a bushel. Australia can expect to supply, at the most, only about 3 per cent, of the world’s requirements; and if there is any glut in supplies prices must drop. AH these facts suggest that considerable difficulty will be experienced in finding a market for our wheat at a remunerative price. The Prime Minister (Mr. Scullin) has appealed to the farmers to grow more wheat in order to assist to adjust the trade balance ; but surely there are other industries which offer greater security if adequate encouragement is offered. For instance, there is a world shortage of beef, and the world wants Australian wool at a price; yet those two industries have been seriously hampered by transport charges, Federal and State taxation, and high land rents. Lamb-raising and hograising and other smaller industries might be stimulated to produce more wealth, without running the considerable risk that is involved in the establishment of a compulsory wheat pool, backed by a Government guarantee with an appeal to “grow more wheat.” A feature of the Government’s appeal to the people to produce more wealth is that they are directed to the people in country districts. No appeal has been made to the overgrown cities to provide any of the muchneeded exports. Although ever-increasing protection has been given to the secondary industries, they give no indication of being able to export their products. And still they are dissatisfied. Complaints have been made that their prices have been increased, and they offer no hope that they will be able to compete in the markets of the world.
This bill is designed to impose a compulsory pool on the farmers, and on principle, and also because of our past experience, the proposal should be strenuously resisted. The Minister for Markets (Mr. Parker Moloney) claims that it will assist the orderly marketing of wheat. The experience in Australia and Canada suggests that the reverse is likely to happen. The honorable member for Angas (Mr. Gabb) had much to say of compulsory pools during war-time. Commencing in 1915 the pools lasted six years; but it is significant that during that period wheat from the Argentine without a pool averaged 2s. 2d. a bushel more than was received by the Australian growers under a compulsory pool. . The following figures regarding the acreages under wheat during the war years clearly prove that compulsory pooling did not inspire confidence in the growers :- -
The honorable member for Angas attempted to explain the failure of the pools by referring to the depredations of mice and weevils and the shortage of shipping. Although those causes may have operated for one year, it is hardly likely that they operated for three years. A further explanation by ministerial members is that, during the war period, the agricultural districts experienced a shortage of man power. Other countries had a bigger percentage of their men engaged in the war than did Australia, and at no time were so many men absent from the Commonwealth that labour could not be obtained by the farmers. None of the reasons that have been given satisfactorily explain the fact that between 1915 and 1920 the area under wheat shrank 50 per cent. Throughout the war period there was a world-wide shortage of wheat, and Australia had a unique opportunity to supply the market. During the six years of control the management of the compulsory wheat pools had every opportunity to build up a strong organization; but the fact that during the last two years of their operation there was a strong agitation for de-control, shows that the farmers were disappointed either with the management or with the prices obtained for their wheat. The increase in the area under cultivation immediately after de-control is significant -
The facts that during the period of the pool the area under wheat declined, and that immediately the industry was decontrolled the area increased, strongly suggest that this system of control was not in favour with the farmers. It is clear that greater success was achieved by them when they were free of government interference.
The Minister for Markets (Mr. Parker Moloney) stated that this proposal indicated the general policy of the Government in regard to the marketing of primary products. That statement no honorable member can afford to overlook, because there are indications that the Government is extending its control over industry in various directions. The Leader of the Opposition (Mr. Latham) pointed out that compulsory pooling is a step towards the Labour party’s objective, the socialization of the means of production, distribution and exchange. The Labour party is quite justified in giving- effect to its platform whenever the opportunity offers, but it must not attempt to gull the farmers into the belief that this bill is introduced in their interests. “
– The experience of the Queensland pool does not support the honorable member’s attitude.
– There is a wheat pool in Queensland, but that State does not produce wheat on a large scale. It is in the fortunate position of being able to market locally the whole of its production, and apart from the desire of the growers to protect themselves against the competition of flour from the southern States, there is no reason why they should support this proposal.
The Government’s legislation regarding the wheat pool, banking, and the cotton bounty, and its attempt to compel every public servant to join a union, shows that it is losing no time in putting the planks of its platform into operation. I do not blame the Government; but it is the duty of honorable members of the Opposition to warn the people of what is happening. Fortunately the farmers will have an opportunity to express their views on the pooling scheme. In South Australia farmers having 50 acres or more under wheat will be entitled to vote. That is a fair qualification, and if it is adopted in other wheat-growing States the growers will have a reasonable opportunity to decide their future. If they are alive to their own interests they will reject this proposal, and preserve their freedom in respect of voluntary pooling and open markets. The people of Queensland have had some experience of government interference with industry. For fourteen years a Labour government attempted the nationalization of industry - the meat industry is a notable instance - with the result - that heavy losses were sustained and the people of the State are paying high taxation in consequence. I am convinced by such experiments that compulsory pooling and the nationalization of industry are inadvisable. The Minister for Markets stated that the farmers are being exploited by the agents. That statement is disproved by the percentages of wheat voluntarily pooled in Australia -
These figures constitute the strongest possible reply to the statement of the Minister that the agents are unreliable. They make it clear that the agents must have rendered useful service in competition with tho voluntary pools. There can be no doubt that the wheat-growers are in favour of the guarantee price offered by the Government, and this may influence many to support the compulsory pool. The amendment moved by the Leader of the Opposition (Mr. Latham) offers a much more attractive proposal, and will prove to be the test of the Government’s sincerity. . If the object is to assist the wheat-growers, it .can be attained by means of the usual voluntary pools, with the guaranteed advance, allowing the farmers the open market in competition.
The fact that the compulsory pool is for three years, with a declared guarantee for one year only, causes immediate suspicion. The farmers will be at the morey of the Government for the second and third years. The guarantee is for one year only, but the farmers are to. be tied up in a compulsory pool for three years without knowing the conditionsunder which they will be required to sell their wheat.
– It is for thevery reason that jio one can say what the. conditions may be, that the guarantee cannot be made for longer than one year. There is a provision in the schedule of the bil for extending the guarantee if desired.
– Then why not have the pool for one year, with a right of renewal if the farmers so desire when they know the circumstances in which they will have to sell their wheat? I support the Leader of the Opposition in his statement that the growers should beallowed to decide for or against a continuance of the pool beyond the first year. There should bo no objection to that. If the Government is desirous of doing the right thing by the farmers, it cannot, object to consulting them after the pool has been in operation for a year. The Minister did not explain why the States have been asked to share in the guarantee. It is not clear whether the Stateswill be expected to meet any possible loss on a co-operative basis, or whether each State is to bear the loss on its own production.
– It will be on the basis of production. Four of the States were represented at the Canberra conference, and agreed to the proposal - therefore, there is no occasion for us toworry about them,
– Am I to understand that each State will bear its own share of the loss?
– Losses will be borne on the basis of production. That was agreed to by the representatives of the States at the Canberra conference.
– Did Western Australia agree to that?
– Western Australia was not represented at the conference, because at that time an election was in progress in that State.
– It seems to me that Western Australia may be placed in a very unfortunate position under this arrangement. As the honorable member for Swan (Mr. Gregory) pointed out, Western Australia produces about 35,000,000 bushels of wheat a year, and her population is small. The bulk of her wheat will be exported, and if there is a loss on the operations of the pool the people of Western Australia will be asked to bear a crushing burden. A loss of even 3d. per bushel on our total production would represent £2,000,000. It would be reasonable, I think, for the Commonwealth Government to accept full responsibility for the finances of the pool. We know well that the money ha3 to come from the same people in any case, and it does not make much difference whether it is derived from State or Federal sources.
It seems to me that the Government has some ulterior object in asking the States to share in the guarantee. I do not desire to do the Minister any injustice, but it seems to me that it will be impossible for the Government to find the £4,000,000 necessary to make good the guarantee. That being so, it is probable that the State Governments are being asked to share in the guarantee so that the price of flour may be raised, and the money for the guarantee obtained in that way. This would result in an increase in the cost of living which, in turn, would affect the cost of production, thus adding further to our troubles. The Minister should make a plain declaration of the objects of this legislation. If the sole desire of the Government is to help the fanners to help themselves, it should make the pool operative for one year only, and then allow the farmers to determine whether it shall be continued beyond that time. Moreover, the Government should state its readiness to pay the whole of any possible loss out of Consolidated Revenue. If there is no intention of making the compulsory pool a step towards the socialization of industry, the pool should not bo continued beyond the period of the guarantee, unless the wheat-farmers are further consulted. I favour the guarantee for one year, with complete freedom to the wheatgrowers of Australia to form a voluntary pool, or to sell their wheat in the open market available to them.
.-Although I listened attentively to the honorable member for Lilley (Mr. Mackay), I was not able to follow the arguments he advanced against this bill. His attitude does not appear to be in keeping even with the policy, of his own party in other parts of Australia. In Queensland, the honorable member’s own State, a wheat pool is in existence. It is true that it was .organized by a Labour Government, but a Nationalist Government has been in office now for some time, and it has made no attempt to repeal the pool legislation. The Queensland Wheat Pool is very similar to that it is proposed to establish by means of this bill. The guarantee to the farmers is approximately the same, namely, 4s. a bushel. Mr. Walker, the Minister for Agriculture in the Queensland Government, attended the Wheat Conference held at Canberra, and supported the proposal to establish a Commonwealth compulsory wheat pool. Therefore, it cannot be said that the honorable member for Lilley is speaking for the State he represents. He should be very chary of opposing any proposal to assist primary producers in other parts of Australia in time of need, because the rest of the Commonwealth has given a large measure of assistance to the sugar industry in his State.
The bill proposes to establish an Australianwide wheat marketing organization, controlled by a pool board in each of the States; the board to be selected by the wheat-growers. There is also to be a Commonwealth pool board on which every State will be represented. That is an aspect of the proposal which has not been sufficiently dwelt upon. Some honorable members opposite have introduced all sorts of extraneous matters, and have done so, no doubt, from lack of other argument. They are here as the representatives of interests other than the producers. They represent those who get a rake-oft’ from the wheat industry, but produce nothing. The bill provides that a ballot of the wheat-growers shall be taken before the 31st July, 1930, for the election of the Wheat Pool. Boards. Could anything be more democratic? That will place the control of the pool board entirely in the hands of the growers.. The third proposal is that the Commonwealth and State Governments shall join in the guarantee to the growers of 4s. a bushel at country sidings, which is equivalent to a guarantee of 4s. 8d. a bushel. I can .show that this represents approximately the cost of production for this commodity. The wheat industry is waning, and needs some assistance from the Commonwealth and State Governments in order to stabilize it. The bill provides that legislation shall be introduced into such State Parliaments as have not hitherto given their Governments the statutory power to make agreements of the kind proposed. That, I think, summarizes the measure.
I congratulate the Government upon having introduced the bill at such an early stage of the session.’ In doing so it has endeavoured to give effect to the policy of the Labour party and the views expressed by the members of the party when they were in Opposition in this Parliament. I well remember that on one occasion, when the present Minister for Markets was a private member, he moved the adjournment of the House for the purpose of urging the Government of the day to take some action to assist the wheat-growers of Australia. It is realized fairly generally to-day that the producers are not getting a fair share of the wealth which they are producing, and the object of the bill is to effect an improvement in that regard.
So far all the members of the Nationalist party who have participated in the debate have opposed the bill, and I am wondering what attitude the members of the Country party will adopt. I cannot see how they can consistently oppose it. The honorable member for Wimmera (Mr. Stewart), who represents a rural constituency, joined members of the Labour party last year in urging the Government of the day to grant some assistance to the wheatgrowers, and I expect him to support this bill. I remember that on one occasion, in a speech on this subject the honorable member said -
After all, however, the main hope for this country is in increased production, and a greater volume of exports. More trade, and not less, should be the slogan of Australia.
Later in the same speech he observed -
I suggest that the Government should do everything possible to assist those primary industries, which are to produce economically, and to compete in the markets of the world. I refer particularly to the wool and wheat industries. The Government should foster, by every means in its power, the development of the wheat industry.
In these circumstances I confidently expect the honorable member to support the bill. The members of the Nationalist party have urged strongly that vital alterations should be made in the measure, but in the six and a half years their party was in power with the Country party nothing was done to assist the farmers. Now the Opposition is busy setting up men of straw to knock down. All kinds of extraneous arguments have been introduced into the discussion. We have heard a good deal about the nationalization of industry, and other things that have nothing whatever to do with the case.
The slogan “ Grow more wheat “ comes under our notice every day on the envelopes that we receive through the mail; but the farmers cannot be expected to grow more wheat unless they are satisfied that it is economically sound, to do so. The object of the bill is to put the industry on a sound footing. If we can export more wheat it will do a good deal to correct our adverse trade balance and provide additional work for our people. As the proposed guaranteed price ia only equal to the cost of production, I cannot see that honorable members opposite have any reasonable grounds for objecting to it.
During the recent election campaign in South Australia the’ subject of a compulsory wheat pool with a guaranteed price was frequently discussed. The ex-Premier of South Australia, an ultraConservative, said that the proposed pool could not possibly be formed, because the Commonwealth Bank would not agree to advance the 4s. per bushel desired by the Minister for Markets. That statement, like many others made during the campaign by opponents of the pool, has been proved to be absolutely untrue.
Representatives of the Country party and the wheat-growers were included among those who attended the Canberra Wheat Conference.
– It was a hand-picked conference !
– It was nothing of the kind. The wheat-growers and the various State Governments were asked to send accredited representatives to it. Subsequently, the Victorian Country party held a conference in Melbourne, the proceedings of which were reported in the Countryman on the 11th May. I quote the following passage from the report : -
Mr. E. Reseigh, as the representative of the Victorian Country party to the Canberra wheat conference, reported that the meeting which was representative of all States, had agreed to a compulsory all-Australian wheat pool. The Federal Ministers present had stated that the compulsory pool, when formed, would be under the control of the growers. The Government was also offering a guarantee of 4s. a bushel.
Mr. I. J. Weaver. Are you sure of that?
Mr.Reseigh. - Yes, I am sure of that, as the Commonwealth Bank has already advanced that amount to the voluntary pool.
Later the report states that Mr.Reseigh moved, and Mr. D. S. Anderson, of Dimboola, seconded the following motion, which was agreed to: -
That this conference confirms the policy of an all-Australian compulsory wheat pool adopted by the conference of wheat-growers from all States called by the Ministerfor Markets at Canberra.
There can be no doubt, therefore, that the Country party of Victoria is favorable to this proposal. Sincethe conference was held in Canberra, the South Australian Co-operative Wheat Pools Ltd. held a meeting, which was attended by the farmers, at which the following motion was agreed to: -
That the thanks of the council be forwarded to the Federal Government for their action in bringing forward their proposals for stabilizing the wheat industry.
It must be apparent, therefore, that the farmers, who should know their own business, desire the assistance which the Government is proposing to give them.
The principal opposition to the bill is coming from the Nationalist party, which for a long time has gulled the farmers into believing that the views of Nationalism are the views that they should hold. By exaggerating the reports of industrial turmoil in Australia, manufacturing ill-founded election slogans, and disseminating specious propaganda, the Nationalist party has, for a considerable time, misled the wheat-growers into believing that it desires to assist them. A good deal of printed propaganda has been circulated among honorable members on this subject, some of which indicates clearly the reasons for the opposition to this bill. I quote the following statement from one pamphlet which has come into my hands : -
We know that financial interests are more powerful than party politics. It would probably be futile to suggest that speculative selling of foodstuffs and buying options should be made criminal offences. Business methods would be stripped of half their evils if that could be done, but any statesman, short of a Mussolini, who tried to do it would be crushed between the upper and nether millstone. Pak-a-pu, two-up and starting-price betting can be penalized, but an attack on the tremendous gambling hell of the wheat pit would dry up the political party funds, and deprive the democracy of one of its proudest privileges - the right to vote into power the man with the money.
That summarizes the position admirably. The Nationalist party is opposing this bill because it represents, not the wheatgrowers, but the wheat merchants.
– I rise to a point of order. The statement of the honorable member that the Nationalist party represents the wheat merchants is offensive to me, and I ask that it be withdrawn.
– I do not think that the statement to which the honorable member draws my attention can be regarded as unparliamentary or even offensive, though it may be incorrect or may misrepresent the position. If that is so, the honorable member will have an opportunity of putting his point of view later.
Honorable members interjecting-
– Oh let it go.
– I ask the honorable member for Cook (Mr. C. Riley) to recognize that when the Speaker is addressing the House it is entirely out of order to interject.
– No doubt about that.
– I will name the honorable member if he offends further.
– Then name him. We are not school boys.
– I name the honorable member for South Sydney (Mr. E. Riley), and ask that the Prime Minister be sent for.
– I understand that you, Mr. Speaker, have named the honorable member for South Sydney?
– That is so.
– For disobedience to the Chair?
– In that case I ask the honorable member to express his regret for having offended. I am sure that he spoke in haste. He is probably the most amiable man in this Parliament, and very courteous, and it would be most unpleasing to me, and to you, too, Mr. Speaker, to take extreme action. He, like myself, has Celtic blood in his veins, and gets warm on occasions, but he will now, I hope, withdraw his remark and express regret for having made it.
– At the Prime Minister’s request, I withdraw what I said. I am sorry for what happened and apologize to the Chair for it.
– I hope that the people will fully realize the motive behind the opposition to this bill. Honorable members opposite are putting up a plea for the merchants and those who have a monetary interest in the wheat industry, apart altogether from the actual producers. A few weeks ago a referendum was taken in Victoria in respect to the sale of liquor in that State, and one section of the community, comprising the brewers and the hotelkeepers, spent about £500,000 in preventing a “ nolicence “ vote. It was obvious that that expenditure was an investment in order to keep intact a business which gave them large profits. To-day the same thing is happening in regard to the wheat pool. The merchants are desirous of keeping intact the huge profits that they have made and are making out of the wheat industry. They are expending thousands of pounds, and engaging organizers to go through the country manufacturing false slogans, which have even been mouthed by honorable members in this chamber. The wheat merchants are making a determined attack upon this bill, and that is clear evidence that the Government, in proposing to establish a wheat pool, is acting in the interests of the growers. There has been a good deal of controversy in South Australia on this subject, and various statements have been published respecting the conferences that have been held in that State. The following is a statement written by Mr.
Todd, who is a farmer and an advocate of the pooling system, in reply to a statement by Mr. Cadd, who is an opponent of the pool.
The writer has been growing wheat for twenty years, and would he glad if Mr. Cadd would inform him of the procedure. His experience is that ho has marketed his wheat not in his own way, hut in the way the wheat merchants decide. Mr. Cadd goes on to state that the compulsory pool would he an abuse of the fundamental elements of the immutable economic law. Reference to this law is becoming almost a byword. Is it economically unsound for farmers to join or be joined together in a wheat-selling pool in order to cut distribution costs ?
A system of marketing has been in vogue for wheat, which, to say the best for it,, is wasteful in the extreme. An enormous quantity of overlapping exists to-day which can, and must, be cut to help to save the industry. To give a few instances one might mention the army of wheat inspectors, thousands of code telegrams sent to agencies quoting prices, &c, the big army of railway men required to sort out consignments of wheat at terminals. Then in sea freights, insurances, and many other incidentals savings might bc made amounting to a considerable sum in the aggregate, to say nothing of the pernicious speculative element which so pervades tho present marketing system. The farmers will not upset any economic law by being banded together in a compulsory pool* the aim of which is to reduce distribution costs. Properly handled, the pool will enable farmers to eradicate the wasteful practices of to-day, and they will more nearly get for their wheat the “ world’s parity “, less only legitimate and proper handling charges, which they are entitled to and which is not afforded them now. Costs of production can also he reduced in various ways, as is alleged, hut this should not he brought forward as it so often has been since the Commonwealth proposal came before the farmers to cloud the issue, which is a perfectly sound and reasonable attempt te help the farming community to place its marketing facilities on a sounder and more economic basis.
Similar evidence could be obtained from many of the farmers if they were permitted to give an unbiased opinion. Unfortunately the farmers have been overwhelmed with incorrect statements such as have been made hero this afternoon. They have even been told that their wheat is to be held as security to enable money to be borrowed overseas. That statement is entirely inaccurate, and has been made in the interests of those who do not produce wheat, “Wheat-growing, until recently, has had a certain fascination, which was brought about by the high prices that were ruling during years of plenty and the consequent inflation of land values. Many farmers to-day are growing wheat on land purchased at a price that could not permit of a profit being made from any product grown upon it. The wheat-farmers would find it exceedingly difficult to carry on without some guarantee. I regret that this bill was not passed three months ago, but even a guarantee at this stage will encourage many farmers to obtain advances to tide them over until next year.
– Does the honorable member suggest that the giving of a guarantee will tend to the economic production of wheat?
– I do not say that the guarantee is likely to alter the cost of production, but I believe that it will encourage the sowing of a greater acreage with wheat. If the farmers to-day are unable to produce wheat economically, they are certainly entitled to assistance equal to that given to other industries. The fascination of wheat-growing has passed, and many persons who were looking for blocks of land a few years ago are not looking for them to-day. They have realized that wheat-growing is unprofitable under present conditions. I know of farmers who have been growing wheat for the last 30 years, and because they have worked long hours they have been ridiculed by other sections of the community. But even after 30 years they are Still on their farms trying to get a living for themselves and their families. It is quite true that a number of farmers have retired. They have been able to retire, not because of the profit made from growing wheat, but because of the sale of their properties during the period of inflated land values. . I know of one farmer in the district of the honorable member for Wakefield (Mr. Hawker) who has been farming for twenty years. He bought additional land at an enhanced value when the price of wheat was high, and to-day, because of his heavy interest payments and the considerable drop in the price of wheat, he is before the insolvency court. I know of another similar instance. These men work early and late. They farm scientifically and yet they are facing ruin. One honorable member referred on Friday last to the question of the dearer loaf, and it was very evident that he was trying to mislead the House. No section of the community is suffering more because of the high cost of living than the farmer. In 1912 the average monthly price of wheat at Williamstown, Melbourne, was 4s. Id. per bushel, and the weighted index figure of the cost of living at that time was 10S0. In 1915 the price of wheat was 7s. 6d. a bushel, and the weighted index figure of the cost of living was 1255 ; in 1921, the price of wheat was 8s. lid. per bushel and the weighted index figure of the cost of living was 1668. In 1929, the average price of wheat at that port was 4s. 10 5-16d. per bushel, and the weighted index figure of the cost of living was 1799. In 1912 the average price of wheat was 4s. Id., and in 1929, 4s. 10d., an increase of 9d. a bushel. In 1912 tho weighted index figure of the cost of living was 1080, and in 1929, 1799, an increase of about 80 per cent. It is clear that the position of the farmer to-day is much worse than it was in 1912. At the present time the price of wheat is approximately 3s. Sd. a bushel, and the cost of living weighted index figure about 1750. Although the price of wheat is less than it was in 1912, the cost of living is 80 per cent, greater than it was then. That is not only a reason for assisting the wheat-grower, but also an indication that the cost of wheat does not affect very greatly the cost of living.
The honorable member for Lilley (Mr. Mackay) and other honorable members, have referred to earlier compulsory pools in Australia; and in the press controversy that has been proceeding with regard to this matter, the proposed pool has been likened to those pools. The authors of those comparisons should first have acquainted themselves with the facts. The war-time pools were governmentcontrolled to the fullest extent; this pool, on the contrary, will be controlled by those who produce the wheat. The only way in which the Government will come into the matter is as a guarantor of the price that is to be paid for the wheat produced. The wheat-growers are to have the right to select the members of the State boards, and also to send representatives to the Federal board. The war-time pools not only were governmentcontrolled, but also operated under extraordinary conditions, when transport was not available for the carriage of our wheat overseas, and the most severe mice plague that has been experienced in Australia was responsible for considerable wastage. The total production of two harvests, as well as wheat from other years, was on hand at one period during the operation of the pool. What would have been the position had the wheat been uncontrolled during the period that the farmer could not transport his wheat, and had to contend against a plague of mice? The merchants would have exploited the farmer ; they would not have paid him as much as he received from the pool. The last compulsory pool ceased to operate after the 1921 harvest. The price that it paid for that harvest was 8s. lid. a bushel. The 1922 harvest was handled by the wheat merchants, and the price which they paid was 5s. 7 1/4 d. a bushel, at the port I have previously mentioned. That is an illustration of what would have happened in earlier years, but for the operation of the pool. This pool will differ further from that for which the right honorable member for North Sydney (Mr. Hughes) was responsible, when Prime Minister of Australia, in that it will operate under a guaranteed price for the wheat that is produced in the coming season. Honorable members opposite who ridicule the war-time pools should not forget what happened when the right honorable member for North Sydney was prevailed upon to release governmental control of the cornsacks required by the farmers. Immediately that was done the price advanced by 100 per cent. That is an indication of the effect of pooling in the direction of keeping down prices. No comparison can be drawn between this pool and one that is government controlled. This will be controlled by representatives of the farmers.
It has been stated that the bill provides for a guaranteed price for only one year, although the pool is to operate for three years. The facts are not as honorable members opposite would make us believe that they are. Because of the fact that the pool is only in the making and is not yet functioning, it is necessary to fix a price at the present time; and I am pleased that that action has been taken. I would have been more pleased had this legislation been passed in the early part of this year, or at the end of last year, because probably we should then have a larger harvest than we may have. Still, an impetus has been given to the industry, and there is likely to he an increased cro The price guaranteed for the first year is 4s. a bushel at railway sidings. Future guaranteed prices will be controlled, not by this Government, but by the representatives of the growers upon the hoard.
– Will the board fix the guaranteed price?
– The board will recommend to the Government what it considers should be the guaranteed price. I ask the Minister whether that is not so ?
– It will be competent for the board to recommend.
– Would it be desirable, under present conditions, for the Government to guarantee a fixed price for future years? The cost of living is decreasing and it is the desire of every person that there shall be an appreciable reduction in the next year or two. Any person who understands the economic position must wish the purchasing value of money to become considerably greater than it is at the present time. How, then, could the Government fix a price over a period of years? The growers have no reason to fear this proposal; they can rest assured that, so long as this Government remains in power - and that should be for years - it will do the fair thing by them and try to keep their industry going. Figures that have been taken from statements prepared by the Commonwealth Statistician, and the Director of Agriculture in South Australia, Professor Perkins, show that there have been marked increases in various farm costs during the past fifteen years. The average wage of adult male workers has practically doubled since 1911, the figures being, respectively, £2 lis. 3d., and £5 0s. 5d., a week. Farm machinery shows an increase of 73.7 per cent, over 1913 prices, harness an increase of 81.6 per cent., and essential tools, an increase of 164.5 per cent. A statement which has been supplied to me says -
Wheat prices for 1928-29 will probably average little more than the prices of 1914, and they will be many pence per bushel below the average cost of production. The same position occurred in the 1927-28 season, when the average prices were still below the average cost of production. Is anything further needed to show the urgent need for a readjustment of the burdens so unfairly placed on agriculture? When wheat prices commenced to fall recently, and it was evident that wheat-growers would be hurt, what action did the various Governments take? We know what America is trying to do; that Canadian premiers all urged growers to work together in their pool. Italy, France, and Germany did not talk about the position at all; they promptly raised the import duty on wheat, and so saved their wheat industry from harm.
Similarly, it is the duty of this Government to save the industry in Australia.
On the question whether the price of wheat has any effect on that of bread; I remind honorable members that the price of bread is the same to-day, with wheat at 3s. 8d. a bushel, as it was when wheat was 5s. 9d. a bushel.
– What is the reason ?
– Notwithstanding the decrease in the price of wheat, the combination that controls flour supplies have not reduced their price. It will thus be seen that the cost of wheat does not govern the price of flour, except to a slight extent. There is no competition in that commodity, either here or in other parts of the world. The writer of a communication that I have received states -
In the following letter to the Montreal Herald, Lord Beaverbrook exposes the fallacy of cheap wheat giving cheap bread. He points out that it is foreign wheat trading firms which are taking the profits, not the consumers.
He further said -
Wheat is produced in the Argentine at less than 3s. 1-Jd. a bushel, a price at which farmers, neither in Canada nor Britain can compute. Further. 340,000 tons of this wheat entered our port in September of this year. British imports of Argentine wheat are, therefore, growing rapidly. We are also receiving quantities of grain from East Prussia. This wheat is subsidized by the German Government to the extent of ls. 7 Ad. a bushel, which enables it to be sold at 5s. to 5s. 6d. a bushel in the British market. This again is a price lower than that demanded by the Canadian or British farmers if they are to cover their expenses. These are the facts on the wholesale side. On the retail side is the further fact that the quartern loaf now costs 84-9d. But Sir Charles is right. A recognized authority in England on agricultural questions, has shown conclusively that the quartern loaf can be, and has been, profitably sold at not exceeding this figure, even when the wholesale price of wheat advances to (is. 10£d. a bushel. If
Sir Charles is right, and there is no doubt of that, how is it that the loaf is now sold in London at 9d., when the wholesale price of Prussian wheat is 5s. to 5s. 6d. a bushel, or when the cost of production of Argentine wheat is less than 3s. Hd. a bushel. The reason is that the middleman is not passing the benefits of low wholesale prices to the consumer. He is mulcting the public, pocketing the proceeds, and growing rich as the result. Might I mention further, that the three firms most concerned with the sale of Argentine wheat in Britain are respectively French, Belgian and Dutch. Here then is the reason of the high price of bread. It is not the activities of the Canadian Wheat Pool. It is the activity of the middleman, chief among whom are foreign firms. Since this is the case, it is immaterial in the short run to the British consumer whether he buys bread made of Argentine wheat or Canadian. The price he pays is the same in either case.
That is true of Australia also. The millers get the highest price they can extort from the public for their flour, regardless of the price of wheat, and the worker does not get a cheap loaf even when the wheat market is down. In a treatise by Stirling Taylor regarding cooperative marketing the following pas* sage occurs -
From the 1st May, 1925, to the middle of Mardi, 1926 - nearly eleven months - the price of flour in Melbourne remained steady at £14 10s. a ton.
Now what happened to the wheat prices during those eleven months? The record is illuminating. In May they varied from £12 us. to £12 15s. a ton; in June from £ll 5s. to £12 5s.; in July from £11 5s. to £12 5s.; in August from £12 to £12 5s.; in September from £11 to £12 5s.: in October from £10 15s. to £11; in November from £10 15s. to £12 10s.; in December from £12 to £12 10s.; in January, 1920 from £12 5s. to £12 10s.; in February from £11 5s. to £12 5s.; in March (to the middle) from £11 5s. to £12. ‘.
It will be seen from the foregoing figures that flour, a product of wheat, was the same, price (£14 10s. a ton) whether wheat was £10 15s. a ton or £12 15s. a ton, while the price of wheat varied as much as £2 a ton.
It is clear from those facts that, notwithstanding fluctuations in the price of wheat, the price of flour has remained almost stationary. Therefore, the statement that the compulsory pool in conjunction with the Government’s guarantee will increase the price of bread is not sound. With wheat at 3s. 8d. the price of bread is the same as when wheat was 5s. 9d. ; there is a margin for the reduction of tho price of bread by one-third.
– The honorable member surely does not contend that the price of wheat will not affect the price of bread.
Mp. LACEY. - If there were competition amongst the millers the price of flour and bread would vary with the fluctuations of the wheat market; but at the present time that does not occur to any appreciable extent. That is proved by the index figures relating to the cost of living. If one thing more than another affects the cost of living it is the price of bread ; but although the cost of living has increased 80 per cent, since 1912, wheat is cheaper to-day than it was then. Only in 1913 was wheat cheaper in Australia than it is now, and in that year the average price was 3s. 7f d. per bushel. The prices realized by the Canadian wheat pool and those paid by the merchants in Australia, have been compared to the advantage of the latter. Apparently figures can be made to prove anything, for I have other statistics which show that whilst in 1923-24 Australian wheat sold in Liverpool at 5s. 4d. and Canadian pool wheat at 5s. 3£d., that was the only year in which Australian wheat brought the higher price. That was before the pool assumed a controlling influence in the export of wheat from Canada. Since then the Canadian pools have been steadily gaining more control, and the relative value of Canadian wheat as compared with Australian has correspondingly advanced. In October, 1929, Australian wheat was over ls. per bushel below the Canadian price. This is a vivid illustration of the effect that a reasonable amount of control over the wheat surplus has on prices. Other facts regarding the Canadian pooling system show that it has been of great value to the growers and to the Dominion.
The honorable member for Swan said that the wheat-growers should be permitted to sell their wheat in their own way. From that one would infer that in the absence of compulsory pooling the grower can sell his wheat as he chooses. Honorable members who are engaged in the wheat industry know that that is not so. In the early part of the season many farmers find it necessary to sell at least a portion of their wheat immediately. They deliver to the station or siding and must accept whatever price the merchant is prepared to offer. In times of depression or drought farmers have no option; if they want ready money they must accept the buyers’ terms. At other times the wheat is stored, and sold later. We have been told that merchants compete with each other for the farmer’s wheat. For two seasons I was employed in weighing wheat for a merchant, and I know how the prices were regulated. One merchant would receive a telegram advising him to lower or advance the price, and within an hour every merchant in the yard would be similarly advised. There was no competition amongst the merchants then and there is none now. They act in combination to control prices in such a way as to insure to themselves a substantial profit. Wheat is bought and sold by persons who have nothing to do with the growing of it. More money is made out of wheat gambling than out of wheat-growing.
– I favour a voluntary pool.
– If a pool is to be of value all the wheat produced in Australia must go into it. If some growers are allowed to. trade independently the maximum efficiency in marketing and shipping will not be obtainable. The only way by which the farmers will reap the full fruits of their labour is by coming together in an Australian-wide pool. This bill will enable them to do that, and the guarantee will assure to the growers at least the cost of production. Having introduced this measure of assistance to a great industry the Government will, I hope, propose other measures to assist those who are in distress through unemployment. If such proposals are introduced, I hope that those who are upporting this bill to help the wheat-growers will be equally sympathetic with the unemployed. I commend tho Government for its attempt to stabilize the wheat industry, and I urge the farmers not to be misled by honorable members who exploit their votes at election time, and at all other times . support the merchants who exploit the primary producers.
– I support the bill. I am a compulsory pooler, not by choice, but by necessity. I have had a wide experience in connexion with voluntary and contract pools and have had a lot to do with the growers of wheat. This experience has taught me that to be successful a pool must be compulsory. There is no occasion for heat in this debate. It is really a business proposition that has been put forward by the Government, and it should be treated as a non-party measure. In my opinion it merits the support of honorable members on both sides of the House. The honorable member for Swan (Mr. Gregory) said that no provision was made in the bill *o enable Western Australia to participate in the higher local consumption prices realized for wheat in some of the more populous States. If he examines the schedule, however, he will see that provision is made there for an equalization scheme. 1 do not think that it is the business of this Government to say that such a scheme shall be inaugurated. All it is called upon to do is to insert a provision in the bill declaring that it may be inaugurated. The scheme now proposed is different from that under the old compulsory pool. Under that scheme all the wheat sold for export was for, and on account of, the general pool, while that sold for local consumption was for and on account of the State making the sales. In that way Western Australia received just treatment. The proviso to clause 12 of the schedule is as follows :-
Provided that prior to the effecting of such equalization any geographical or other advantage enjoyed by a State before the coming into operation of the scheme may bo taken into consideration and accounted for to the State Wheat Board concerned accordingly.
Therefore, Western Australia would receive the advantage of her lower overseas freight rates to the extent of about 3/4 d. a bushel, or 2s. 6d. to 3s. a ton.
– New South Wales has the advantage of a higher home consumption price.
– In my opinion, the only really effective equalization scheme would be to place the proceeds of the whole exportable surplus in the general pool, and the additional price secured for the wheat sold on the home market could alao be paid into the general pool. Suppose Victoria produced a crop of 50,000,000 bushels, of which 40,000,000 bushels were exported at an average price of 4s. That would leave 10,000,000 bushels to go into local consumption at a price of, say, 5s. a bushel. The average price obtained would be the average net realization price for the whole Australian crop, plus any advantages now enjoyed by Victoria. The bill does not provide for such a scheme, but I am prepared to support it, and to support that clause in the schedule to which I have referred, provided it has the effect of including Western Australia. I am anxious to see Western Australia become a party to this agreement.
– Does the honorable member think that the equalization clause is clear in its terms?
– I think it is. The honorable member for Warringah (Mr. Parkhill) said- that New South Wales was enjoying a higher local consumption price than was being received for exported wheat. The actual price, I think, is 2d. in excess of the export parity price. Victoria enjoys a local consumption price which is 3d in excess of the export parity price. The local consumption price in Western Australia is not in excess of the export parity price, but the fact that it costs her f d. a bushel less to export her wheat than it costs the eastern States would qualify her, under this hill, to receive the benefit of that f d. a bushel in the distribution of the pooling proceeds. Under the same system Victoria would receive the benefit of 3d. a bushel, and New South Wales 2d. a bushel. It is the duty of the States to make good their claims for these advantages.
The honorable member for Swan (Mr. Gregory) referred to the need for cheap fertilizers, leaving it to he inferred that cheap fertilizers were not available in Australia at the present time. I know that the prices for fertilizers in Victoria compare favorably with those in any other part of Australia. The company of which I happen to be the chairman of directors, the Phosphate Co-operative Company of Australia. Limited, Victoria, is supplying fertilizers to farmers in Victoria at £4 10s. a ton. We are selling as low as £4 7s. 6d. a ton in lots of 100 tons and over. The Tariff Board report suggested that the proper price for fertilizers should be £4 6d. 9d. a ton cash. We are selling at £4 10s. cash. When this company started its operations two years ago the price charged by the combine was £5 7s. 6d. We reduced the price by giving our own shareholders a rebate of £8 6d. a ton, on an undertaking that they would do the work of ordering and receiving, and would pay cash with the order. That reduced the price to £4 19s. 6d. The combine reduced its price to £6 5s.; we also reduced our prices to £5 5s. Our main object was to supply wheat-growers with cheap fertilizers in order to reduce the cost of production, and we were so successful that at the end of last year we were able to make a rebate of 8s. per ton to our shareholders on the basis of tons supplied to shares held, which made the net price £4 8s. 6d. per ton.
Sitting suspended from 6.15 to 8 p.m.
– The honorable member for Swan (Mr. Gregory) said that the primary producers would lose their freedom if the bill were passed; but the bill will not take away their freedom. It will be necessary for the State Governments which become parties to the agreement to operate under marketing acts which will give the producers the opportunity to decide whether there shall, or shall not, be a compulsory pool. The honorable member also said that millions of bushels of wheat had been lost through incompetent management during the compulsory pooling period. But it must be borne in mind that the wheat merchants did all the work of receiving, handling, stacking, and protecting the wheat handed over to the pools. The only loss incurred in Victoria during the compulsory pooling period was in connexion with the 1916-17 pool.- All the other Victorian pools showed a definite gain. The stupendous loss of 1,277,174 bushels of wheat was suffered in the one pool. I do not think that blame was attachable to anybody because of that loss, for it was caused by mice and weevil, and could almost be put down as an “ act of God.” Neither good management, nor anything else, could have avoided it. But if blame is attachable to any one, it rests with the wheat merchants who were specially retained to advise generally on the receiving, handling and marketing of pool wheat.
– I referred to the loss on the South Australian pools through wastage, and on the New South Wales pools through dishonesty.
– There may have been dishonesty; but we have gained a great deal of experience in pooling since those days. Even the great loss on the Victorian pool of 1916-17 was more than made up by gains on the other pools. The following table shows the gain in weight in the various pools: -
Total harvest only 12,000,000 bushels.
The loss that occurred to the 1916-17 pool through weevil was experienced over three or four years. There was a gain over the whole pooling period of 1,285,589 bushels.
This bill may not be perfect, but I believe that it is reasonably satisfactory. I have had a number of lengthy discussions on the measure with the Minister for Markets (Mr. Parker Moloney), and I believe, as do many people who are interested in the pooling system, that when certain amendments are made, which the Minister has indicated that he will move, the hill will be as perfect as it is possible to make it. There are one or two matters on which I. still disagree with the- Minister, but, speaking in general terms, the fundamental principles of the measure are sound. I intend to deal with certain misstatements that have been made in regard to the pooling system, and also to show that the Canadian contract pooling system has been of immense value, not only to the wheat-growers of the sister dominion, but also to those of Australia. The voluntary pooling system has many drawbacks. The uncertainty as to support and as to the quantity of wheat that will be given to the pooling authorities to market, make it very difficult for them to operate successfully. Quite often the authorities do not know until near the end of December whether they will have a single cargo of wheat. This prevents them from selling forward if the conditions are favorable, and chartering forward, if that should be considered advisable. It is really necessary to charter about the end of September or the beginning of October to get vessels alongside ready to load in December. In Western Australia it would probably be necessary to have the vessels available early in December; but in the eastern States the end of December or the beginning of January is the most desirable time. No business man could be expected to take the risk of selling forward unless he knew that he would have the wheat to sell, and it is not possible to obtain that information early enough under a voluntary pooling system. For the same reason, boats cannot he chartered ahead. A man must know that he will have wheat available before he can arrange for bottoms in which to put it. Under the voluntary pooling system the management is entirely dependent upon the farmers, who may give it all the wheat, or none at all.
During the compulsory pooling period, an enormous quantity of wheat was handled. The honorable member for Swan said tha.t there was a distinct decline in the area under wheat in the period 1914-15 to 1920-21. But when we consider that no fewer than 365,000 of our best men, many of whom came from the farms, were overseas <_n active service, and that we had huge stacks of wheat in Australia which we could not sell in those years, we must admit that there was a good reason for a decrease, instead of an increase of the area under cultivation. The total quantity of wheat handled by the compulsory pools was 636,250,000 bushels. The value of it net to the growers was .175,750,000. The actual realization on the wheat was probably nearer £200,000,000 in the six years. Victoria alone pooled nearly 220,000,000 bushels of wheat. That State is frequently referred to as “ the cabbage garden “, but in the compulsory pooling period it pooled more wheat than any other State in the Commonwealth. The net value of the wheat it pooled was £59,750,000. The freight paid on the compulsorily pooled wheat in Victoria was £3,277,000, or an average of £546,000 per annum. The total amount that has been paid in freight on wheat pooled in Victoria is £5,877,388. This does not include the freight paid on openmarket wheat. These figures show the value of the wheat industry to Victoria. The industry is proportionately valuable to the other States. The railway, systems of all the States have a valuable customer in the wheat industry.
It -was thought that when the war ended Russia would soon resume her position in the wheat market and be a competitor of Australia; but twelve years have passed since the termination of hostilities, and Russia has not yet exported in any one year an appreciable quantity of wheat. The export figures for the last seven years have been as follows : -
These are very small figures. The economic position of Russia is revealed by the fact that to-day she is actually exporting wheat from some of the districts in which bread cards are being issued. It is reasonable to assume, however, that before very long Russia will resume, to some extent at any rate, the position which she formerly held in the world’s wheat market. When that time comes I expect a return to the pre-war price of wheat. That will make the position of the Australian wheat-grower much more difficult than it was prior to the war, for land values have advanced greatly since that time. A return to the pre-war price of wheat would undoubtedly be reflected in the economic life of Australia. Before the collapse of the wool market, many producers ceased growing wheat and went in for sheep. The change was made quite easily and extensively in Victoria. I speak of that State for I am most familiar with- it. But at the moment, both of these important primary industries are in a very bad condition.
When the Minister for Markets introduced this bill, the season’s prospects were as poor as they could well be; but we are all happy to know that in the last fortnight our grazing areas and wheat belts throughout the length and breadth of the continent, have had the best rains they have had for many years. This has materially changed the whole outlook. But even before the rains fell many wheat-growers had risked their all, and even gone into debt, in order to buy seed wheat, fertilizers, machinery, horsefeed, and even food for themselves, in the hope that a good season would be experienced. We are thankful that this hope now has a good prospect of being realized.
I urge the Minister to amend the bill j provide that the Commonwealth Government shall accept the whole responsibility for any loss that may be incurred through guaranteeing 4s. a bushel for wheat at the rail sidings. If a loss does occur, and the States have to bear half of it, Western Australia, in particular, will be put in a very difficult position. The honorable member for Swan read a carefully prepared statement this afternoon which accurately set out the position in this connexion. It may be argued that even if there is a loss of 6d. a bushel on the wheat pool, the States will have received the benefit of the amount of the loss to the extent of 3d. per bushel, which would otherwise not have been available. This applies to all States. Western Australia has had to contribute her quota towards the cost of the sugar industry, our various bounties, the river Murray works, and the like, and if she has to face the possibility of providing a substantial sum to cover the loss on the wheat pools, she may not agree to become a party to the arrangement. It is highly desirable that all the States should come into the pool. There should be only one selling and chartering agency, but if Western Australia and South Australia remain outside the pool there will be three. We should also have a number of chartering agencies in South Australia and Western Australia including the pool and the wheat merchants, so that instead of having only one chartering and selling agency in the whole of the Commonwealth, we should probably have ten or twelve such agencies, and that would undoubtedly be detrimental to the best interests of the Commonwealth. Therefore, every effort should be made to induce Western Australia to join the pool. If that State, because of its geographical position, believes that it is entitled to retain the advantage in cheaper overseas freights which it has always enjoyed, I should be perfectly willing to allow it that advantage which it has already been given under the equalization scheme. The Government has realized that it is necessary to conserve the second largest primary industry in the Commonwealth. Wool for a number of years has been our principal industry, but its supremacy will shortly bc challenged by the wheat-growing industry. If the Government offers reasonable encouragement, such as a guarantee for three years, and assumes the whole responsibility for any loss, I believe that during the next three years an unprecedented quantity of wheat will be grown in the Commonwealth. We have had splendid rains, and it is quite on the cards that we may get a harvest of from 1S0,000,000 to 200,000,000 bushels of wheat. If we are to sustain the interest of wheat-growers, and if this country is to derive any benefit from this industry, it will be necessary, not only to grow a large quantity of wheat for the current year, but also to prepare the soil for the following two years. If the farmers are given a guarantee for next year, they will do all in their power to meet the wishes of the Prime Minister and the Premiers of the various States for a considerably increased acreage under crop. The wheatgrowers are prepared to do their best provided that they have the assurance of reasonable prices. I do not say that 4s. a bushel is a payable* price, but under the circumstances it is a fairly generous offer by the Commonwealth Government. The wheat growers will appreciate it, but they would appreciate it more if the guarantee were given for the next two years. In that way a considerable fillip would be given to the wheat-growing industry.’
– Dear wheat means dear bread.
– Wheat-growing certainly provides more employment than woolgrowing, in respect of both production and marketing. It has been said that the Australian production of wheat represents only 3 per cent, of the world’s production. Let us compare our export of wheat with the export of America.
Canada is tho largest exporter of wheat in the world, and then follow, in their order, the Argentine, the United States of America and Australia. In 1927-28 America produced 878,000,000 bushels of wheat, consumed 675,000,000 bushels and had an exportable surplus of 203,000,000 bushels. In that year Australia had a production of 117,000,000 bushels, consumed 32,000,000 bushels and had an exportable surplus of 85,000,000 bushels. In 1928-29 America produced 902,000,000 bushels and had an exportable surplus of 227,000,000 bushels. In that year Australia produced 159,000,000 bushels and had an exportable surplus of 127,000,000 bushels. In 1929-30 America produced 792,000,000 bushels and exported 117j000,000 bushels. In that year Australia produced 105,000,000 bushels and exported 72,000,000 bushels. That was one of the worst seasons that Australia had experienced for some time. During the three years from 1924-25 to 1926-27 America produced 201,000,000 bushels less than it did during the last three years, and Australia 60,000,000 bushels more than it produced during the last three years. The drought, of course, had a considerable effect on the harvest of 1929-30.
I do not propose at this stage to deal with the bill. We might ask what are the Government’s proposals. In the firstplace it is proposed to establish a compulsory pool controlled by the elected representatives of the growers. A State wheat board is to be appointed in each State, consisting of a majority of growers’ representatives. A central wheat board is also to be established consisting of one representative of the growers from each State, who will be a member of the State Wheat Board. and will be nominated by such State Wheat Board for a position on the central board, and one representative of the Commonwealth Government. The constitution of the scheme is practically the same as that constituted in connexion with the compulsory war-time pool. I presume that under the Government’s proposals there will be one selling and chartering agency. I have been associated with the pooling of wheat since its inception some fourteen or fifteen years ago, and I am firmly convinced that the only form of pool that is likely to be a success is a compulsory pool. Some people object to compulsion,. but almost everything that we do is done under some form of compulsion.
– Not yet.
– Many farmers will not destroy rabbits or thistles unless they are compelled to do so.
– If that be true it is a reflection upon them.
– I have had a lengthy experience of voluntary pooling, and while I admit that it has undoubtedly been of great benefit to the wheat-growers in various States where voluntary pools have operated, the system was most unfair to the man who put his wheat in the pool, because in some cases he had to wait twelve months to get his money while his neighbour, who would not join the pool, received his money immediately on delivery of his wheat at the railway siding, and secured a much better price for it owing to the operation of the pool.
– The voluntary pool cannot make the world’s market in wheat.
– I shall deal with that aspect later. The voluntary pool cannot be the success that it should be when from 30 per cent, to 40 per cent, of the farmers remain outside and simply smash the market to the detriment of the pool.
– What market do they destroy?
– They destroy the local and overseas market by selling against the pool at a time when there should be orderly marketing of wheat. South Australia, the year before last, established a contract pool, which was more successful than the ordinary voluntary pool. At that time the merchants in that State did not believe in contract pools, and advised the growers to stick to the voluntary pool. When we had a voluntary pool the merchants did not be,lieve in any pool at all. Now that we want a compulsory pool the merchants tell us to return to the contract and voluntary pools. There is a world-wide movement taking place to-day, in which the wheat merchants and other combinations are interested, to prevent the primary producers from organizing to benefit themselves. Canada has a pool which has been very much maligned. In Canada the farmer enters into a five years’ contract from which he cannot withdraw. The pool is run for five years, and it is now in the first year of the second five-year period. To-day there are 142,000 individual contracts signed in Canada in connexion with the contract pool. Notwithstanding the slight setback which the Canadian pool seems to have experienced this season, it has been of an inestimable value to the Canadian growers. To some extent it has stabilized the prices of wheat in Australia. Had the whole of the Canadian harvest for 1928-29, consisting of 565,000,000 bushels of wheat, been dumped on the market under ordinary conditions, the consequent slump in the world’s markets would have been reflected in Australia and wheat prices would have dropped as low as 2s. 6d. a bushel. Even last year, in the month of June, when Canada was expected to have rather more than a normal harvest and had a big carry-over from the previous year, wheat slumped in Victoria to 3s. 6d. a bushel, and it was only when the Canadian crop suffered because of the dry conditions that the world’s prices advanced and the Australian market advanced in sympathy. Had the last Canadian’ harvest been as large as the previous harvest, wheat prices would have slumped considerably, notwithstanding the existence of the. pool. I do not say that the pool is the ‘panacea of all ills, but it has done a great deal to stabilize wheat prices throughout the world. There is a voluntary pool operating in Western Australia, a contract pool in South Australia and a contract pool in Victoria. These pools have been more or less successful. It we were to take a vote of the growers to-morrow in any of these States, 90 per cent, of them would vote for a pool. There would be no intention on the part of many of them to join the pool. They would want the “other fellow to join the pool, and to make the market for them. For that reason the voluntary pools have not been supported as fully as they should have been during the last two or three years. The institution of a compulsory pool under proper conditions will return to the grower a fair average market price-, and that is all that we should look for. I am satisfied that, with the elimination of competition in selling, the price of Australian wheat will be higher in the world’s market. The factor we are up against is not only competition in regard to freights, but also competition on the other side in regard to selling. The saving on overhead alone would be enormous. There would be a reduction of chartering rates, owing to there being only one charterer. There would be big savings in regard to commission, Are and marine insurance, despatch moneys, and in various other directions that were altogether unrealized by the farmer prior to pooling, and in fact are not generally known to-day. This year there has been an extreme variation in chartering rates. The Western Australian pool effected some charters early last season at the rate of 43s. a ton, but since then they have been effected at as low as 21s. 3d. a ton. That is to say, the cost of sending wheat from Australia to London in the early part of last season was ls. 2d. a bushel, but since then it has been as low as 7d. a bushel, and to-day charters can be effected at a rate of about 8d. a bushel.
– Is there any instance of a successful compulsory pool?
– I do not know that there is, seeing that there has been only one compulsory pool, and that that was run under wartime conditions.
While the advance of 4s. a bushel at country stations does not represent the cost of production, it is as far as the Government can reasonably be asked to go. There is always the danger that the price of wheat may slump still further. Assuming that we have a decent season and a large seeding - which we are likely to have - with a more liberal use of superphosphate, the Australian production can easily be from 160,000,000 to 200,000,000 bushels. The loss of Id. a bushel on 150,000,000 bushels would represent two-thirds of a million pounds. If wheat realized only 3s. 9d. a bushel, there would be a loss- of £2,000,000. A local consumption charge of ls. a bushel on the 33,000^000 bushels consumed locally would reduce that loss by £1,650,000, leaving a debit of £350,000. Many honorable members who sit on this side condemn the Government’ for taking this risk. In my opinion, however, the risk is not great; and I suggest that the internal loss would probably be more than offset by the external gain. The restoration of the balance of trade and of credits abroad, and the righting of the exchange position, would be of inestimable value to the Commonwealth. At the present time, although the exchange is against Australian importers, it certainly is in favour of the wheat-grower, as the following figures show : -
Therefore, to-day, because of the low freights and the fact that the exchange is in our favour, the wheat-farmers are receiving very much more than they would obtain under normal conditions.
I do not know what action the Government proposes to take to finance the pool, but I apprehend no great difficulty in that connexion. A seasonal inflation of the note issue appears to be quite sound with such a gilt-edged security as wheat Anything from £20,000,000 to £30,000,000 may be required to finance a record crop. Everything will depend on the season. The opening of the season has been wonderful, and I believe that we can reasonably look forward to a tremendous harvest. Deliveries will be spread over at least twelve weeks, during which large sales will be made and the overdraft thus materially reduced. The various boards could arrange to pay interest to those growers who were prepared to stand out of their money for 3, 6 or 9 months. Past pools paid interest to growers who elected to stand out of their money, and thus lightened the drain on their resources. I assume that the financial transactions will be conducted through the Commonwealth Bank. The whole of the realization from day to day could be paid into that hank, and a corresponding value in notes retired. The only difficulty that could occur would be that caused by the failure of the final realization to equal the amount of the guarantee. The Government would have to guarantee the bank against loss
in that case, and I presume that it would do so. We have in Victoria, a voluntary pool that has signed up more than 50 per cent, of the growers, and the contracts have another two years to run. Undoubtedly mistakes were made in connexion with the first compulsory pool; but I do not believe that they are likely to be repeated. I do not altogether blame the wheat merchants. Many of the frauds perpetrated were quite unconnected with’ the end that they were handling, and; could not have been prevented by them. Nor do I suggest that they can be held accountable for the losses that were occasioned by weevil and mice. But I do combat the idea that is being canvassed in the circular that the merchants in South Australia have issued, that either the farmers or the pool authorities were responsible for the enormous losses that’ occurred.
– There is no. doubt about that in connexion with the New South Wales pool. That was the. finding of a royal commission.
– -I was a member of theboard, and I know what occurred. The right honorable member for North Syd-‘ ney . (Mr. Hughes) placed wheat merchants on the board to act as advisors to it. If any trouble arose, or any losses were made, the merchants and not the pool authorities must take the blame.
– They were on the central board, but not on the State boards.
– The merchants received, stacked, and handled the wheat in the country, and did all the work for the State boards.
Although the bill does not make any provision in regard to a local price I consider that there is every justification for the fixation of such a price. There are three principles upon which local consumption pricesmay be based. The first is the oversea parity, or export parity; the second, London value; and the third, import parity. I suggest that we are entitled to a price something better than export parity. If we are not, we may as well have no home market,but export the whole of our wheat. In some quarters it is claimed that we are entitled to the import parity, the same as the manufacturer, who raises the prices of his goods to the level of costs in the United Kingdom or the United States of America, plus freights and all other charges, and duty. That, in my opinion, would be extreme. It would mean that if the price of wheat in the United Kingdom was 5s. a bushel, the local price would be 6s.11d. a bushel, freight and other charges being responsible for at least1s. a bushel and duty for 11d. a bushel. On the other hand, the export parity is too low. With wheat at 5s. a bushel in the United Kingdom the export parity would be 4s. a bushel after the cost of shipment -1s. a bushel - had been deducted. I feel sure that the great bulk of the people would not object to the wheat-farmers being paid London values. Generally speaking our people are well fed, well clothed, and well housed, and work under good conditions. I do not believe that they would object to pay the price that is being paid by the poor people in London and on the Continent.
– We pay more for our butter in Sydney than is paid in London.
– But get a better class of butter. With wheat at 5s. 6d. a bushel in Australia, bread should be no dearer than it is at the present time. The highest price paid for wheat for local consumption since the inception of the compulsory pool during the war period has been 7s. 8d. a bushel; although the South Australian pool, on account of the high prices that wheat brought overseas, realized 9s.1d. a bushel net to the growers.
But so far as I recollect7s. 8d. is the highest price charged in Australia for wheat for local consumption. When that price was ruling people in country districts were paying1s.1d. and1s. 2d. for bread. To-day, with wheat at about 4s. per bushel at country mills, we are still paying1s. and 1s.1d. per 4-lb. loaf. Therefore, in my opinion the people have no need to worry that the price of bread will be increased as a result of the compulsory pool. Mr. A. H. Hurst, at one time an office boy employed by the firm of Louis Dreyfus & Company, of London and Paris, and now a member of the firm of Strauss, and a very wealthy man, says in his book The Bread of Britain -
From 15th July to 15th August, 1929, the average price of good red milling wheat (Liverpool) was 10s. 3½d. per cental, whereas from15th October to 15th November, 1929, it dropped to an average of 8s.11½d. (authority, Broomhall) a decline of about 13 per cent. During this decline, bread in London was marked down only one farthing per 4-lb. loaf, a reduction of under 3 per cent.
To-day the wheat merchants and millers of the world are combining to buy in bulk, and for that reason, if for no other, the growers must combine, for their own protection, to sell in bulk. In the United Kingdom there are practically only three large buyers - Joseph Rank, Limited, big flour millers, who control almost the whole of the Irish flour trade, and also have large interests in England; Spillers, Limited, who are large millers, and the Co-operative Wholesale Society of Great Britain, which also is a large miller. These three buy in bulk and distribute to the smaller millers, thus avoiding competition in buying. They control 62 per cent. of the flour of Great Britain. Here we have organized buying which must be met by organized selling. Undoubtedly there has been a world-wide attempt to smash pooling, and if time permits, I shall describe the wonderful fight by the farmers of Western Canada against this effort to smash them. Had there been a compulsory pool in Canada the present position may not have arisen.
– If thebuyers did smash the sellers, what would become of the buyers?
– They could live on the enormous fortunes that they have accumulated as a result of their trading in wheat. I have already mentioned Mr. A. H. Hurst who, commencing as an office boy in this business, is now reputed to be a millionaire. What is the reason for the anxiety being shown by the wheat merchants? Are they concerned about the welfare of the farmers ? I am convinced that they are more anxious about their own welfare. They can see that their hold on an exceedingly lucrative business is fast slipping away. Every other section in the community has organized, aud the growers must do likewise. What they desire and are entitled to is a living wage and a fair standard of comfort. They are prepared to allow those conditions to other classes, and they ask the same for themselves.
The French crop recently harvested is a record one. For some time France has been trying to find a method of exporting wheat, and at the same time assuring to the farmers the ruling price in the local markets. The Government has now agreed to grant export licences, and to pay a premium of about 14s. per quarter, or ls. 9d. per bushel, on all wheat exported. The duty on wheat imported into France has been raised from 2s. 2d. to 6s. 6d. per bushel; in other words from £4 to £12 a ton, which is considerably more than Australian wheat is worth overseas. I understand that the duty on Australian and Canadian wheat entering Germany has been increased by 4s. 3d. per qr. over the previous rate of 6s. 3d. per qr ; that is to say, our wheat will have to pay a duty of 2s. 7d. per bushel. German millers must use 50 per cent, of home-grown wheat, plus 5 per cent, of rye ; the balance may be imported wheat. Italy also placed a duty on imported wheat; whether it is still in operation, and whether it particularly aims at excluding Australian wheat I do not know, but Italy is using as much home-grown wheat as possible. As a matter of fact the principal wheat consuming nations of the world are doing what Australia is attempting to do, namely, to become selfcontained. To that end Australia is doing everything possible to establish secondary industries. Other countries are doing the same in regard to primary production. The Governments of Europe particularly are straining every nerve to produce their own foodstuffs, and I am afraid that this will be disastrous to Australia. However, we have the land, the machinery and the will to work and to succeed, and on the success of the farmer depends the future of this country. The Commonwealth is first and foremost a primary producing country. Millions of acres of good land have not yet been broken up, and the depreciation of wool values during recent years will probably result in much more land being converted to wheat production. All that is necessary is to satisfy the farmer that he can produce the grain at a profit. The time will come when, by some means, he will have to produce at a price lower than wheat is realizing to-day. The duty of the Government is to remove every hindrance that besets the man on the land. If the farmer lives and succeeds, others will do likewise. If he goes down, as surely as night follows day, others will go down with him. We have been living in a fool’s paradise, and it is not too late to do that which stern necessity will demand of us, if we fail to take the right course now. The right course is to go ahead with the compulsory pooling scheme, increase production, and by that means restore the balance of trade and improve our credit abroad. If we can do that- within two or three years, a wonderful improvement will be effected in the financial and economic outlook for Australia. [Extension of time granted].
I propose to describe briefly the Canadian pooling system. The Victorian Wheat-Growers Association has been in regular correspondence with the Canadian wheat pool and I have every reason to believe that the following circular, issued by the latter on the 22nd January last, contains a statement of fact: -
There are four wheat pools in Western Canada; the Manitoba, Saskatchewan and Alberta wheat pools, and their Central Selling Agency, called the “ Canadian Wheat Pool “.
The three pools of Manitoba, Saskatchewan and Alberta are now operating on their second five-year contract period. These three Canadian wheat pools have a total membership of approximately a hundred and forty thousand farmers joined together in the world’s greatest non-profit producers’ co-operative marketing association. In less than six years the Canadian wheat pool has become the leading marketing agency for Canadian wheat, handling more than half of all the wheat sold by Canadian farmers. The total wheat acreage under crop in Western Canada is estimated at about 23,000,000 acres. More than 15,000,000 acres of this total is already under contract to the wheat pools.
The Canadian wheat pool organization is an evolution rather than a revolution in the grain marketing system of Canada. The pioneer farmers of our Canadian West, after they had found out by a long series of experiments, on their farms and at the dominion experimental farms, the varieties of wheat which would give a satisfactory yield of high quality wheat, were faced with the necessity of improving marketing methods if the grain-grower was to have any margin above the bare cost of production for his crop.
For more than 30 years the wheat-farmers of the West were engaged in a continuous struggle for some measure of control over the marketing of their grain. In the report of the Royal Grain Inquiry, 1925, it is stated that: - “Between the year . 1897 and the outbreak of the Great War in 1914, thirteen investigations into various departments of the grain trade were held by royal commissioners, in some cases appointed by federal and in other cases by provincial authority. All of these investigations were prompted by conditions emanating from the producers of grain and they all resulted in the bringing about of at least some beneficial changes in the conditions complained of “.
The grain-growers did not rely solely on legislative checks to ensure more satisfactory returns for their wheat. They became grain handlers on a large scale themselves. In September, 1906, the Grain-Growers’ Grain Company, now the United Grain-Growers, was launched as a farmers’ co-operative grain handling company. In 1911 the Saskatchewan Co-operative Elevator Company, formed along somewhat similar lines (now absorbed by the Saskatchewan wheat pool) was formed. Both companies were very successful but were regarded by many farmers as serving largely as gathering agencies for the speculative grain trade without exercising any stabilizing influence on the market. The world war, which brought into operation government control and centralized marketing, and the disastrous slump in the price of all farm crops, and especially of wheat when the Canada Wheat Board was discontinued in 1919, brought about a strong sentiment in favour of the reestablishment of the Wheat Board as a permanent institution. When all attempts to bring back the Wheat Board failed, a campaign for a voluntary wheat pool was launched in the three prairie provinces.
The Alberta pool was the first organized, and opened for business on 19th October, 1923. with a membership of 26,000 and 2,536,000 acres under contract.
Saskatchewan and Manitoba completed their organization the following year, Manitoba with 8,000 members and 720,000 acres under con tract, and Saskatchewan with 47,000 members and approximately 7,000,000 acres under contract. As soon as the three provincial pools were organized a central selling agency was formed, with a board of directors composed of three representatives from each of the three provincial, pool boards of directors. This selling agency has full control of the marketing of the grain, which is collected and turned over to it for sale by the three provincial pooh, and recently by the newly organized Ontario grain pool.
A five-year contract, which has stood the test of the courts, is an essential feature of the pools. This contract binds the farmer to deliver during the term of the contract all the wheat grown by him except registered seed wheat, and his own seed and feed requirements. From the proceeds of the sale of wheat the provincial pool may deduct 1 per cent. of the gross selling price for a commercial reserve, and may deduct an additional 2 cents per bushel for the purchase of elevators and facilities for the handling of grain, shares being issued to pool members to the amount of the 1 per cent. so deducted. These shares are interest bearing.
The following review of the activities of the Canadian wheat pool for the past year shows what a commanding position it already holds in the grain-marketing field: -
The three provincial pools delivered 244,248,000 bushels of wheat, or 51.3 per cent. of the total inspections for the year in the westerninspection division to the Central Selling Agency during the crop year of 1928-29. The total wheat deliveries to Central in 1926-27 were 179,950,000, in 1925-26 they were 187,970,000, and in 1924-25 over 81,670,000. In 1923-24 the Alberta pool handled 34,219,000 bushels. The Central Selling Agency also sold 16,081,000 bushels of coarse grains for Manitoba and Saskatchewan pools in 1927-28, and 21,161,000 in 1926-27, and 25,000,000 in 1925-26. The pool handled 35,694,057 bushels of coarse grains during the crop year 1928-29.
In round numbers the combined membership of the three wheat pools for the past five years was as follows: - 1924-25, 91,000; 1925-26, 122,000; 1926-27, 139,000; 1927-28, 138,000; 1928-29, 141,000. In round numbers the wheat acreage under contract to the three pools for the past five years was as follows: - 1924-25, 10,700,000; 1925-26, 14,000,000; 1926-27 and 1927-28, 14,500,000; 1928-29, 15,480,000. The combined elevator and commercial reserve of the three pools now stands at more than $25,000,000. The three pools now operate more than 1,600 country elevators, with a total storage capacity exceeding 50,000,000 bushels, and eleven terminal elevators with a total capacity of 35,000,000 bushels. Two new terminal elevators, at Vancouver and Port Arthur, with a combined capacity of 12,000,000 bushels, were constructed last year.
The Central Selling Agency shipped grain to nineteen countries through90 ports during 1928-29, exporting directly over 108,000,000 bushels. The pool’s largest customers, in the order named, were: Great Britain, China and Japan, Holland, Italy, and Germany. The amount of pool wheat taken by these countries varied from 34,600,000 imported by Great Britain, to 7,800,000 imported by Germany.
Manitoba. - During the crop year of 1928-29, the Manitoba pool received 18,379,667 bushels of wheat, and 15,837,943 bushels of coarse grains. The Manitoba pool handled 22,484,573 bushels through 143 country elevators, which it operated during the past year. Manitoba now has 155 pool elevators.
Saskatchewan. - The Saskatchewan pool received 158,424,177 bushels of wheat and 18.268,714 bushels of coarse grains during 1928-29. Over 138,000,000 bushels of grain were handled through 970 pool elevators in Saskatchewan in 1928-29.
Saskatchewan has now 1,042 pool elevators in operation in the province. The Saskatchewan pool operates five terminal elevators at Port Arthur, which have a combined capacity of 25,600,000 bushels.
Alberta. -During the crop year of 1928-29 the Alberta pool received 67,444,356 bushels of wheat. The Alberta pool handled 44,382,203 bushels of wheat through 314 elevators in 1928-29. This pool now operates Over 400 country elevators. The Alberta pool operates the new 1,250,000 bushel terminal elevator at Prince Rupert and the 1,650,000 bushel terminal at Vancouver, and a new 5,150,000 bushel terminal at Vancouver.
The wheat pools owned no grain-handling facilities when they began operations, but they have been rapidly acquiring or building country and terminal elevators. The present season all three western pools are building a large number of elevators and within a year or two practically every railway point with any considerable number of pool members will have a pool elevator. Last season the Manitoba pool had 143 elevators, and this year has built twelve more. The Saskatchewan wheat pool has added 72 to its string of 970 country elevators, and the Alberta pool 125 to the 314 in operation last year.
The newly-organized Ontario grain pool now has over 12,000 members enrolled, and arrangements have been made whereby its grain will be sold by the Canadian wheat pool.
Some little time ago a person known as Mr. Sandford Evans attempted to discredit the Canadian wheat pool. Our corporation cabled the Canadian pool authorities for information, and in reply we received the followingcablegram : -
The following is for publication: - Evans is the only member of three provincial legislatures to oppose the pool bill. No word of truth in his contention that pool is beaten. It is in sound financial condition. The morale and membership are the best in the history of the organization. Many new members every day. Only relying upon provincial governments for moral support. Guarantees solely precautionary measure to avoid any possibility forced liquidation in case our collateral with banks, which is still valued in excess of 15 per cent. over and above amount of bank loans, should temporarily fall below 15 per cent. surplus security required by banks.
I understand that that margin has never been interfered with. Prior to the advent of the wheat pool in Canada the Canadian growers were receiving on an average from 8 cents to 12 cents a bushel less for their wheat than were the farmers in the United States of America. Since the pool has been in operation the Canadian growers have been receiving from 8 to 10 cents a bushel more than have the American farmers. These figures are born out by the market quotations published daily in the local metropolitan press. I have here a table of figures taken from theYear-Book issued by the Department of Agriculture of the United States of America, showing the respective wheat prices quoted in Winnipeg, in Canada, and at Minneapolis, in the United States of America. They show that the prices of wheat for 1909-23 were consistently higher in the United States of America than in Canada, while from 1923 onwards the position has been reversed, and the Canadian prices have been higher. The figures are as follow: -
When the Canadian pool commenced operating in 1924, contract wheat was lod. below Minneapolis; in nine months it went ls. 4-5d. above Minneapolis.
The higher prices here quoted for Winnipeg wheat obtained until some two or three months ago, since when the margin has not been so noticeable. It is now some four cents in favour of the Canadian pool as against Minneapolis.
.- I congratulate the honorable member for Echuca (Mr. Hill) on the able way in which he has dealt with this measure. His speech reflects a very full knowledge of the wheat industry, and I am for that reason all the more pleased that he is supporting the bill. I also congratulate the Government on introducing this bill, because it is urgently necessary that assistance should be given at this time to the primary industries of the Commonwealth. The Leader of the Opposition (Mr. Latham), in an attempt to show that the last compulsory pool interfered with wheat production, quoted certain figures which I challenge. On page 1424 of Ilansard he is reported as follows: -
The pool years were from 1915-1G to 1919-20, and the area under crop in each of those years was as follows: -
His figures do not agree with those given in the Commonwealth Tear-Booh, according to which the area sown for grain and hay in 1918 was 9,428,398 acres. In 1919 the acreage was 8,250,572, and in 1920 it was 10,271,055 acres. I have a close personal knowledge of the situation which existed in regard to the wheat industry in 1919, especially in New South Wales. At that time the industry was seriously disorganized, and those engaged in it were in a bad way. The actual area under cultivation that year slightly exceeded 9,000,000 acres. Unfortunately, there was a large area within which the seed did not germinate, and a still larger area on which the crop did not pay the actual cost of tilling. It was necessary that some action should be taken, and I was appointed by the farmers of New South Wales to formulate a scheme. The result was the establishment of what is now known as the Rural Industries Board of New South Wales. I mention this merely to show that the system of compulsory pooling could not be blamed for the unsatisfactory condition of the wheat industry at that time. Farmers had not been growing wheat in anything like the same quantity as before, because wool values were high, and they were tempted to go in for sheep. A good deal of the land in our more closely settled areas, which in the past was used for wheat production, is now used to produce wool. This position was brought about by the uncertainty associated with the marketing of wheat. But since the farmers have been able to anticipate with some degree of confidence that they will receive a fair price for the wheat that they grow, a large area has been put under crop. The introduction of the pooling system with a guaranteed price for wheat has done a good deal to improve the position. It is necessary that the farmers shall have a reasonable prospect of a fairly quick return for their crop in order that they may have some sense of security. The organization which I had the honour of inaugurating was able to afford them this sense of security, and, in my opinion, the establishment of a compulsory wheat pool with a guaranteed price, as proposed in this measure, will also have a most beneficial effect upon the industry.
The ‘main argument of the Leader of the Opposition (Mr. Latham) against the establishment of a compulsory pool is not supported by the facts. I have had a great deal to do with the wheat-growers, and I know that it is essential to their welfare that their credit shall be main- tained at a high level. I can see no method of achieving this end except by guaranteeing them a satisfactory price for their wheat, and to do this without having to face the certainty of a loss it is necessary to enforce the principle of compulsory pooling. The present method of marketing our wheat is cumbersome and expensive. It is said that it is a competitive system, but that is not so. It is only apparently competitive. I have seen four or five wheat agents operating at a little country siding from which not more than 20,000 or 30,000 bags of wheat are railed. These agents practically took it in turns to weigh the wheat that came in. Those who think that the present system is competitive deceive themselves, for it is merely expensive. The wheat merchants of Australia are connected with the international selling organizations, and there is no real competition among them.
I do not wish to discredit the voluntary pooling systems that are operating in other parts of the world; but the facts show conclusively that the farmers would be much better off under a compulsory pool than under even a voluntary pool. There can be no doubt whatever that the private concerns which at present market our wheat are chiefly interested in their own profits. They manipulate the market to suit their own ends, and all their propaganda is designed for the same purpose. This is shown by the following report in regard to the position in the United States of America, which appeared in a recent issue of the Sydney Morning Herald: -
UNITED STATES FARM BOARD’S WHEAT BUYING.
Washington, 18th March.
Some criticism of the United States Farm Board charge it with having actually attempted a “ corner “ in wheat.
The tone of a reply given by the board’s chairman (Mr. A. Legge) shows that ho has been stung by this charge. “ If,” he says, “ you can find the workings of the law of supply and demand in a situation where the world has 50,000,000 fewer bushels of wheat in 1929 than in 1928, and yet the price was 15 cents a bushel less, then you’re beyond me.
The law of supply and demand was not working when the Farm Board stepped in. Bankers had subscribed to a huge pool to hold up the prices of stock but they did not put up anything to end the panic in the wheat market.”
That statement shows that the law of supply and demand, insofar as it effects the world’s price of wheat, has been entirely abrogated. The price of wheat is controlled by the commercial institutions which handle the commodity. One of the main causes of the disorganization in the agricultural industry at present is the violent and entirely unnecessary fluctuation that occurs periodically in the price of wheat. There is no justification for the rapid increases and decreases in wheat prices. They are caused by the international combine which markets the wheat.
The whole trend of modern business is towards the trustification of operations, and to some extent the wheat industry will be trustified in Australia if the proposed compulsory pool is established. But this will be entirely to the advantage of the wheat-growers, for the pool will be managed by them or agents appointed by them. Combinations for the purpose of the collection and distribution of commodities are unavoidable in these days, and the farmers should join together to manage their own affairs. Otherwise they must still be at the mercy of the wheat merchants, who have given very little attention to their welfare in the past. The primary object of this bill is to give the farmers control of their own property. They are well able to control their own affairs. The able speech delivered this evening by the honorable member forEchuca (Mr. Hill) shows that there are honorable members of this Parliament who are thoroughly familiar with the international aspects of the marketing of wheat, and could, if necessary, undertake the duty of marketing the whole of our crop. The wheat-growing industry is of considerable importance to Australia, and the most significant feature of the opposition to the bill is the dire and pessimistic utterances of honorable members opposite as to the future of this great industry. The honorable member for Swan (Mr. Gregory) painted a most pessimistic picture of its future. He stated that it was probable that tremendous crops would be grown in other parts of the world. In taking that attitude he is merely following the example which the wheat merchants have set in the past. They have tried continually to convince the Australian growers that the world’s production is so much on the increase that sooner or later it must react adversely upon the wheat-growing industry of Australia. The utterances of honorable members opposite tend to challenge the national security of this country. Even the Deputy Leader of the Opposition (Mr. Gullett) said that the land values of this country had fallen 50 per cent. That was a dangerous statement to make at a time when the Commonwealth Government was faced with the difficult task of remedying the financial ills that the previous administration had inflicted upon this country, and it ill-became the Deputy Leader of the Opposition, who was a member of that Government, to make the damaging statement that the land values of this country had fallen 50 per cent., when, in fact, nothing of the kind had happened. In recent years the average price of wheat in Australia has been 5s. 9 1/2 d. per bushel, while the price on the English market has been 55s. 2d. per qr. Taking the actual cost of sending the wheat to London and the actual price received for it, it is evident that a large profit has been made by some one, certainly not the wheat-grower. Under the pooling system the farmers manage their own affairs, and any profits are distributed among them. Honorable members opposite have contended that a considerable, sum of money will be required to meet the responsibility undertaken by the Commonwealth Government in establishing a compulsory pool, and guaranteeing a price of 4s. a bushel.
The honorable member for Swan built up an imaginary case, and instanced the price which would be ruling for wheat. I would remind him that, because of the extraordinary conditions governing the actual supply of wheat, no man can tell three months ahead what the price will be in the world’s market. Wheat is always being placed on the market, and the climatic conditions obtaining in any particular part of the world quickly influence the price of wheat. The case submitted by the honorable member for Swan has no real foundation. If the law of averages is to obtain - and I have taken my information from the Australian official Tear-Booh - there will be no occasion for the Commonwealth to find money to meet its obligations under the pool. In view of the importance of the wheat-growing industry to Australia, and the necessity to develop our export trade, it is imperative that some sense of security should be given to the primary producers, and, if necessary, the whole of the community should contribute towards a fund to assist the growers. It has been stated definitely by the Opposition that labour costs in primary production are too great, but I am pleased to say that the action of the Federal Government has to some extent relieved that position. One of the chief reasons for the increased cost of production to-day is the action of the private banking institutions in raising the interest rates. The high cost of money is ten times more important than the increased labour costs. Immediately the wheat-growers found that they were, to some extent, up against things, these financial institutions, without any notice, raised the interest rate on overdrafts from 6£ per cent, to 8 per cent. Yet not one honorable member opposite who has spoken about the high cost of production has protested against the action of the private banks. The Commonwealth Government, in cooperation with the State governments, has found it necessary to institute special facilities for the extension of credit to the wheat-growers.
References have been made by the Opposition to the mismanagement of past wheat pools in justification of the discontinuance of the pooling system. What was the history of the compulsory pooling system in New South Wales? I have before me particulars of the whole of the expenses connected with the various pools, and those particulars’ have been made known to the public. There may have been inconsistencies in the management of the compulsory pool;- but let me say that those responsible for that were the merchants and others who had previously controlled wheat for a considerable number of years. Those who actually receive a benefit from this improper manipulation of the funds of the pool were men associated with the members of the Opposition, and high in the councils of the Nationalist party. The pool that was established by a Labour government of New South Wales was properly managed, and not one word has been said against its administration. It stands’ unique as the best-managed pool ever established in Australia. One of the main features of the pooling system will bc the development of a competent organization, so as to give to the people of this country a permanent sense of security. In the year 1924-25 the value of our total exports was £162,030,159, and in 1927-28 £143,213,070. Last year, because of the drop in price of our two major commodities the value of our exports fell considerably, and brought about a. difficult financial position. During that period of four years the aggregate value of imports over that of exports was £111,860,445. That position, of course, developed greatly last year, and, to a large extent, increased our financial difficulties. If we are to maintain our standard of living, it is imperative that we should permanently organize our primary industries so as to develop a great exportable surplus. If we are to compete successfully against the world, we must change our methods. In the compulsory pooling of wheat we should develop an organization which will give to the farming community a greater return for its labour, aud to other branches of the industry a knowledge of the requirements of the man on the land and the return to which he is entitled. Surely it will have brought to its notice the many inconsistencies ‘ incidental to the sale of wheat. Take, for example, the actual loaf value to the farmer and the miller to-day compared with what it was eight years ago. Then they received two-thirds of the actual loaf cost; but on the present price of wheat they receive only one-third, while two-thirds go to the distributor. Such a condition should not obtain, and it ought to be brought under the notice of any body that is appointed to control the collection and the marketing of wheat, so that it may see that the farmer receives the full results of his industry, that a fair deal is done to all sections, and that the credit of the Australian nation is maintained.
Although the Leader of the Opposition (Mr. Latham) has said that he is in favour of a guarantee, it is not so long ago that an oh a proposal was treated in a distinctly hostile manner by members of the Opposition. I would certainly oppose a suggestion to ask the farmers to accept a guarantee without a com,pulsory pool. What sense of security would they have? From a business point of view it is an absolutely unsound proposal, and is entirely inapplicable to modern commercial conditions.
I have dealt with the effects of the fluctuations that occur in the price of this commodity. I cannot agree with all that the honorable member for Echuca (Mr. Hill) has said regarding the factors that operated during last year. The Australian growers were told that the granaries of America were filled, and that there were large quantities of wheat on hand and in sight. The figures were so manipulated that they were convinced that their wheat was worth only 3s. 6d. or 3s. 7d. per bushel, and many of them sold at that figure. Before long, however, the price rose to 5s. 8d. a bushel f.o.b. in Australia. There had been no development in the world’s market to cause such a violent fluctuation; it was due to the manipulation of those institutions that improperly control the wheat markets of the world. In Australia a wire may be received to-day stating that wheat is at a certain price, and to-morrow a price 2d. a bushel lower is quoted ; yet no alteration has taken place in the world’s wheat supply ; showing distinctly that the difference is not . caused by the law of supply and demand.
The Leader of the Opposition also said that the prices obtained by voluntary pools are not so great as are those that are procured by private sellers. I challenge the correctness of that statement, and I cannot understand how such figures could be obtained.
– As the result of an audit by chartered accountants.
– No chartered accountant in any part of Australia can obtain authentic information indicating at what price a farmer is selling his wheat privately. Seed wheat is being sold in Australia to-day at prices ranging from 6s. to 4s. 9d. per bushel, and it is an absolute impossibility to secure accurate or reliable information. But even if it were possible, what is the position? Private buyers compete against the pool. Many private buyers are local millers, and to secure the wheat quickly they will j>ay a price that may for a certain time be above export parity. By that means they obtain an advantage. I . say unhesitatingly that under a properly regulated system the average price obtained by the farmer under either compulsory or voluntary pools in Australia or any other part of the world has been greater than that obtained under the system of private buying. The honorable member for Echuca has quoted figures which emphasize strongly that particular point.
The honorable member for Swan (Mr. Gregory), in a doleful speech, predicted that Australia cannot look for an increased price for her wheat in the future. That is utterly ridiculous, and is not in accordance with either the law of averages or the conditions that have obtained in the past. Experience has taught us that the price of wheat fluctuates considerably in accordance with the quantity available and the climatic conditions that, from time to time, influence the supply. It seems as though those who are opposed to this proposal are prepared to put forward any argument in an effort to defeat it. An analysis of their arguments proves that these cannot be sustained by the facts.
Let us consider another direction in which the farmer would be benefited by a compulsory pool. The operations of wheat-buying merchants influence sellers. During this year the farmer was advised to hold his wheat. The wheat merchants said ‘to him, “If you hold your wheat you will get a bigger price for it later on.” The miller gave him similar advice. What was the result? If the legitimate requirements of the market had been met, as would have been the case under a properly managed pool, the surplus of 11,000,000 bushels in Nev/ South Wales could have been sold early in the year at from 4s. 8d. to 4s. 9d. a bushel. The wheat was stored with the millers; consequently the farmers had to borrow money at a high rate of interest. That operation was to the detriment of the farmer and to the advantage of the miller and the private buyer. Whenever the wheat-farmer acts on the advice of the merchants he finds himself in a similar position. This organization has been developed with the sole object of playing into the -hands of the private merchants. It is part of an organization that is international in its operations and its ramifications. A circular has been issued to honorable members by men who claim to be heaven-sent saviours of the wheatfarmers, such as John Darling, Bunge, and other private wheat-buying merchants. They have referred in glowing terms to the power of their organization to do all that is necessary to control the wheat on behalf of the farmers. They told the farmers that they were not able to manage their own business, and that, whilst the Government could not inaugurate a system of finance which would give a guaranteed price to the farmers when they delivered their produce over the weigh-bridge, the merchants could. In other words, the farmers were told to trust the merchants, but to distrust the ability of the Labour party, the Commonwealth Government, and the people of Australia to finance the wheat crop. Their object was to induce the farmers to believe that the Government was not earnestly desirous of assisting the people to overcome the financial and economic difficulties with which they are- faced - difficulties which are to a large extent the result of improper manipulation by private institutions in the past. Wherein lies the difficulty of financing the wheat guarantee? A certain quantity of wheat ripens throughout Australia over a period of four months. If this legislation is enacted, the Commonwealth Government will establish an authority which will arrange charters and the placing of the wheat on the markets of the world. Is it unsound finance for the Commonwealth Bank, the people’s bank, to establish a temporary credit while the wheat is being realized, and so enable money to be distributed to the individual farmers as they deliver their grain ? This has been done in the past by private institutions and it can be done by the pool management. The proposal is not unsound, and the scare cry that the guarantee will place too great a strain on the financial resources of the Commonwealth, is opposed to facts and common-sense. No private institution is as well qualified to provide the necessary financial accommodation as will’ be an authority created by the Commonwealth Government and backed by the Commonwealth Bank. In view of the benefit that will be conferred, and the internal credits that will be established throughout the country, by the immediate payment of 4s. per bushel on delivery of the wheat at the sidings, it ill becomes any group of business men to question the power, or the earnest desire of the Government to bring this system of orderly marketing into being.
For the management of the pool the farmers of each State will elect a State board, and each State board will in turn elect representatives on the federal board, which will deal with matters of federal concern. These boards will be constituted in accordance with the desires of the growers as expressed by their deliberate vote. In this way the Government is giving to the farmers an opportunity to help themselves, and become emancipated from the private firms and institutions that for years have been battening upon them to the detriment of their industry and the Commonwealth. Past governments made no attempt to give to the primary producing interests relief from the uneconomic conditions that have obtained during recent years. On the other hand they borrowed to such an extent that the burden placed upon the producers was almost too great for them to bear. Through private institutions, and even through the Government Savings Bank, credits were withdrawn from the rural industries, and the money expended in the big centres of population for the creation of huge distributing establishments, and in the erection of flats and dwellings. The breaking point was almost reached, but because of the advent of a government that realizes the folly of this policy and earnestly desires to serve the people bur difficulties will be overcome. This measure represents merely a preliminary step. I hope that in future further action will be taken to give to the men on the land an opportunity to help themselves and to overcome the serious problems with which they are confronted at the present time. [Quorum formed.]
– The speech of the honorable member for Calare (Mr. Gibbons) filled me with amazement. Never have I heard in a deliberative assembly a more incoherent and unintelligible jumble of words. If his speech is accepted as an intelligent contribution in support of the Government’s proposals they must be condemned as incapable of logical justification. The position of the wheat-grower to-day is probably unprecedented in the history of his industry. The Government has appealed to the farmer to grow more wheat. This plea is emblazoned by the Postal Department on every letter that passes through the post, and in view of the attitude of the coal-miners, is somewhat ironical. The first and obvious thought that occurs to people is that the Government might very reasonably appeal to the miners, who have not worked for the last year, to hew some coal. A similar plea might be addressed to the metalworkers and others with whom the Government probably has more in common than it has had hitherto with the farmers. I question whether the appeal to the farmers to grow more wheat is in their own interests. I understand that the Canadian contract pool embraces 60 per cent, of the farmers in the dominion. That endeavour to control the wheat market has been far from successful, and in that respect it is merely meeting with the same fate as pools established in other countries. To-day the Canadian pool holds 200,000,000 bushels of unsold wheat, including 80,000,000 bushels carried over from last year. The honorable member for Echuca (Mr. Hill) described what would have been the effect had the pool unloaded the whole of its wheat on the market last season. If such a step would have been detrimental to the farmers then, it would be more so now. If the pool had not held the wheat for a rise it could have realized last year 2s. 9d. per bushel more than it is worth to-day; the difference on the total quantity of wheat held represents a loss of £20,000,000. That is the kind of management that is held up for the admiration of the farmers of Australia. As a matter of fact, the Canadian pool has paid only 3s. to the farmers in respect of the 1929-30 pool, and has not yet paid the final dividend in respect of the 1928-29 pool. The only effect of its withholding last year’s wheat from sale has been to smash the world’s market. Buyers in the open market paid the Canadian growers 5 cents per bushel more than the pool was able to pay.
– Only for a small quantity sold at the peak period.
– The difference on the average prices realized for the whole of the wheat was 5 cents in favour of the open market. The position in the United States of America is very similar. The chairman of the Farm Relief Board admits the failure of the attempt to control the wheat market, and has given advice to the farmers which is diametrically opposite to that given by the Commonwealth Government. Far from telling the farmers to grow more wheat, he has told them that unless they decrease their area by 10 per cent., the board will not be able to help them. In France, Germany, Italy, and South Africa duties are being imposed on imported wheat, and the proportion of foreign wheat which may be used for making flour is limited. It is doubtful, therefore, whether the advice to grow more wheat is sound. If the Government really wishes to help the farmers it should take steps to reduce the cost of producing wheat. . It should make available cheaper fertilizers; it should reduce taxation by adjustment of the tariff; it should reduce harbour charges, and encourage the application of science to wheat production. I am convinced that there is. no security for the farmer until the cost of production is reduced to a level which will enable him to compete in the markets of the world. This bill will do nothing to achieve that end. Those who have supported the bill have argued that it will help the farmers. It will do nothing of the kind. This pool will be merely a temporary expedient, which will eventually leave the farmers worse off than they were before.
I am opposed to pools of any kind ; they should not be resorted to except in such extreme emergencies as war. There is something to be said for voluntary pools. Any number of farmers are entitled to co-operate in that way, but no Government has any right to seize the whole product of men’s labour, take the marketing of it out of their hands, and dispose of it when, and how, and where that Government pleases. I was surprised to hear some honorable members on this side of the House supporting the bill, and expressing views diametrically opposed to those they have voiced when dealing with anything other than matters in which they are personally concerned. I was sur-prised, for instance, to hear the honorable member for Echuca (Mr. Hill) say that there should be an inflation of the note issue for the benefit of the wheatfarmers. I am sure that if the honorable member for Adelaide (Mr. Yates) had advocated the same thing for the benefit of the miners, he would have received very little support from the honorable member for Echuca. The farmer should be left to work out his own salvation without interference by the Government. After all, the business of the Government is to govern, not to trade.
– This is not a Government pool.
– It will be a Government-controlled pool, just as other compulsory pools have been. There is a distinction without a difference. The honorable member for Echuca made one intelligent contribution to the debate when he said that the pool which will be inaugurated under this legislation will be identical in its machinery with the previous compulsory pool. That is, undoubtedly, true. The honorable member also said that the previous pool had been controlled by the merchants; that is not true.
– I was referring to the management of the pool.
– I am referring to the New South “Wales Pool Board, under whose regime there were more losses, more mismanagement, and more criminality than was ever associated with any other government or quasi-government undertaking. The members of that board were Mr. Grahame, then Minister for Agriculture in New South Wales, Mr. Rossell of the Western Milling Company, Mr. Valder, then secretary of Agriculture, and Mr. Holliman, then UnderSecretary of Finance in New South Wales. Those men were representative, in the main, of the farmers, and the pool was controlled directly by Mr. Drummond, as manager. That is the same Mr. Drummond who has since become a member of the Commonwealth Bank Board.
It seems to me that the farmer is ready to acept this proposition because he knows that it will benefit him at the expense of other people. He sees that the working classes of this country are receiving high wages; that the sugar industry is being assisted to the extent of £4,000,000 per annum; that the wine industry has received bounties of £1,250,000; that the timber industry is receiving assistance to the extent of nearly a million pounds; that the cotton industry is to be granted bounties the value of about £1,000,000 ; that the dried and canned fruits and other primary industries have been helped to the extent of £3,000,000 ; and that the manufacturers are being helped to the extent of £30,000,000. He knows that while the Australian consumers are paying £26 per ton for sugar, our exportable surplus is being sold overseas at £12 per ton; and that while the Australian consumer is paying 2s. per lb for butter, the British consumer is able to buy Australian butter for ls. 2d. and ls. 4d. per lb. He knows, too, that the Government has prohibited the importation of certain commodities into Australia, which will help the millionaire manufacturers already operating here, and enable many other manufacturers to become monopolists and millionaires. In all these circumstances, he sees no reason why he should not dip his hand into the public’s purse. It is probable that these pools will cost the taxpayers of Australia between £3,000,000 and £4,000,000.
Now that the wheat-grower is to be helped in this way, we may expect that the wool-grower will be granted a substantial subsidy. The only proposition left is for the consumer to be paid a subsidy to eat the wheat and wear the wool. The whole basis on which our industry is conducted is unsound. The consumer will undoubtedly have to meet the cost of this expensive experiment. It would be far better for the farmer to carry on his operations without this Government’s interference.
But, after all, the Government is only guaranteeing 4s. a bushel at the rail sidings for the coming harvest. The honorable member for “Wannon (Mr. McNeill) was asked at a meeting at Dimboola recently whether he would move an amendment in the bill to provide that the guaranteed price should be paid for three years. He replied that as he was a supporter of the Government he could hardly do that, but he added that the Government would be dishonest if it did not pay the guaranteed price for the period of the pools. I do not know whether the Government is prepared to agree to that proposition.
– “Why not read the statement made subsequently by the honorable member?
– I have not seen it. The farmers would do well to remember that in the years 1924-25 and 1925-26 the wheat sold on the open market realized from l£d. to 2-Jd. a bushel more than the wheat sold through the pools. That was because the marketing of wheat is a highly specialized business, carried on by wealthy and expert organizations. If these organizations are disbanded, the farmers will be left to the mercy of inefficiently managed pools.
I regret that the wheat merchants of Australia and other countries have been most unfairly attacked during this debate. I hold no brief for the wheat merchants; I do not know any of them. But they are as much entitled as any other commercial people to carry on their business without criticism and abuse, provided that they act with honesty, integrity and probity. There has been no justification for the base attacks made upon them to-day. The marketing of wheat is a highly specialized business, requiring the services of trained men, capable of arriving at quick decisions and necessitating worldwide resources in money. The grain merchants have these world-wide means and trained helpers, and the farmer of Australia is more likely to get a better deal from them than from mismanaged pools. On the boards to be created we shall not for years get men trained in the business. Most likely the members will have practically no knowledge of wheat dealing. In any case the Governments, both Federal and State, will not pay the salaries necessary to secure the services of men who will be capable of managing the pool efficiently.
– The Government will not he running the pool.
Mr. ARCHDALE PARKHILL.The pool will be a quasi-government concern. There will be a representative of the State Government on each board. In any case the Governments, both Federal and State, are finding the money. Surely the man who pays the piper is entitled to call a bit of the tune, and the Governments will certainly have some voice in fixing the salaries to be paid. It is idle to think that an improvident Government or an extravagant organization created by governments using other people’s money f can compete with the world’s brainiest men using their own money and standing their own losses.
Approximately £40,000,000 . will be required for financing the pool. There will be outstanding at almost any given time from £20,000,000 to £25,000,000. It is understood, of course, that any loss is ro be made up by the Commonwealth and the States on a fifty-fifty basis, but the Commonwealth taxpayer is also the State taxpayer. The boards can fix any price they like for local consumption. It can be high enough to provide for the whole or any part of any failure on the foreign market. The honorable member for Echuca (Mr. Hill) expects the boards to fix a price which will be higher than the export price. In 1920, although not more than 6s. Sd. a bushel was secured for Australian wheat sold overseas, 9s. a bushel was the price fixed for local consumption, and the consumers of the Commonwealth therefore paid £4,000,000 more than the world’s parity so that the farmers might enjoy the privilege of the pool.
– That is absolutely incorrect.
– At any rate that is what it amounted to. The present world’s price is 4s. 6d. a bushel f.o.b. The Government is guaranteeing 4s. a bushel at country sidings. Let me enumerate the other charges which will have to be met. They are as follow : -
The Government has to pay 5s. ll£d. a bushel for wheat for which it will be able to obtain only 4s. 6d. a bushel overseas. That is a point that the Treasurer must consider. The Government will pay 47s. 6d. a quarter of 480 lb. c.i.f. and e., although 39s. 6d. represents the sale value of the product overseas* It means that there will be a loss of ls. a bushel, or 8s. a quarter if the Government advances 4s. a bushel to the grower on an anticipated crop of, say, 160,000,000 bushels. That will represent an aggregate loss to the Australian taxpayers of £8,000,000. The only way in which the loss can be counteracted is by advancing the price of wheat above the oversea value by 3s. a bushel, which would mean an increase to the local consumer of 2-Jd. on a 4-lb. loaf of bread, or 1 1/4 d. on a 2-lb. loaf.
– Where did the honorable member obtain those figures?
– I have made inquiries, and they are incontrovertible. They are available to any honorable member, and I guarantee that he will be unable to discover an error of even Id. in the whole computation. Our present unemployment problem is nothing to what it will be later. The workers of the country will be unable to bear this additional burden with equanimity, and no vote of mine will impose the hardship .on them. Those supporting the bill will later have to answer for its consequences.
I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
House adjourned at 10.50 p.m.
Cite as: Australia, House of Representatives, Debates, 15 May 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19300515_reps_12_124/>.