12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
Senator HOARE, as chairman, brought up a report of the Printing Committee;
Report read by the Clerk as follows . -
The Printing Committee have the honour to report that they have met in conference with the Printing Committee of the House of. Representatives. The joint committee recommend as follows: - 1. (a) That the evidence taken before all standing and select committees be printed in condensed and deposition form and that the chairmen ofsuch committees be requested to exercise discretion when presenting reports to Parliament as to whether the Minutes of Evidence should accompany the reports and be printed therewith; (b) That it be a recommendation to standing andselect committees that their reports be condensed as far as is possible, consistent with the presentation of the full effect of the committee’s investigations.
In view of the foregoing resolutions of the Printing Committee, and the fact that the document is already in print, it is recommended that the report from the Parliamentary Standing Committee on Public Works relating to the proposed establishment of an automatic telephone exchange at Hawthorn, Victoria- presented to the House of Representatives on the 3rd June, 1930- be printed as a Parliamentary paper.
Motion (by Senator Hoare) - by leave - agreed to.
That the report of the Printing Committee, brought up this day, be adopted.
– I wish to ask if the Leader of the Government in the Senate has seen in this morning’sDaily Guardian an article which- reads as follows : -
SAY IT WITH CACTUS.
OnSale in City.
There’s a new craze starting in Sydney 1 It’s the cactus craze. To-day if you want to be in the vogue, you don’tsay it with flowers any more, but with prickles.
Miss Joyce Walker, once a Hobart society girl, has opened a little flower and bric-a-brac shop in the Sydney Arcade.
Anxious to try something different, she one day dressed her window with cactus instead of flowers.
Her friends said she was mad, and the crowd that assembled outside the window probably said so, too; but there was method in her madness.
The unusual show - they range from twoyearolds to fourteen year- is a moneymaker.
People still stop and gape; but they go in as well, and go out plus a cactus and minus some cash.
I should like to know if the Leader of the Senate is aware that these cactus plants are on sale in the city in which Sir George Julius, who is paid £2,000 a year as Chairman of the Council for Scientific and Industrial Research, resides. Hundreds of thousands of pounds have been spent to eradicate prickly pear.
– The honorable senator may ask a question, but not make a statement.
– I have not seen the article in question, but I shall certainly bring it under the notice of Sir George Julius and ask him to furnish me with a report.
– On the 22nd May Senator E. B. Johnston asked the Minister representing the Minister for Trade and Customs, upon notice -
I am now able to furnish the honorable senator with the following information : -
Senator Sir GEORGE PEARCE.Has the Leader of the Government any statement to make to the Senate of a character similar to that which I understand has been made by the right honorable the Prime Minister (Mr. Scullin) in another place, and which is of a most important nature, regarding the financial position of the Commonwealth in Great Britain?
– I was not aware that such a statement had been made; but I shall have inquiries made, and, if possible, make a statement on the motion for adjournment this evening.
The following papers were presented : -
International Labour Organizationof the League of Nations - Thirteenth Conference, held at Geneva, October, 1929 - Reports of the Australian Delegates.
Norfolk Island Act - Ordinance No. 2 of 1930- Affidavits.
Is it a fact that the Minister has postponed the election for the Darwin Town Council ?
If it is a fact, under what act or ordinance has the Minister taken such action?
What is the reason for such action?
– The answers are as follow: -
Reduction of Salaries
asked the Minister representing the Minister for Defence, upon notice -
– Inquiries will be made and a reply will be furnished to the honorable senator as early as possible.
asked the VicePresident of the Executive Council, upon notice -
– The arrangement of freights is normally a matter between the shipping companies and the shippers. A voluntary association, known as the Australian Overseas Transport Association, and consisting of representatives of the primary producers, exporters and importers, on the one side, and representatives of the oversea shipping companies, on the other, was formed last year with the object of stabilizing shipping and freights with a view to effecting a reduction in shipping costs. At the request of this association, legislation was passed in April of this year to permit of the shipping companies and the shippers entering into mutual agreements to safeguard their respective interests. . The Government has no official advice as to the progress made in connexion with the proposed agreements, but the position will be closely watched, and the attention of the Australian Overseas Transport Association will be drawn to it.
Chief Petty Officer Cushway
asked the Minister representing the Minister for Defence, upon notice -
– The answers are as follow: -
asked the Minister representing the Minister for Home Affairs, upon notice -
– Inquiries are being made, and the honorable senator will be advised as soon as possible.
Alleged Dumping in Western Australia.
asked the Minister representing the’ Minister for. Trade and Customs, upon notice -
– The answers are as follow: - 1 and 2. A complaint to this effect has recently been received.
Land Transfer Forms
asked the Minister representing the Minister for Home Affairs, upon notice -
– The answers are as follow: -
Result of Competition
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers are as follow : -
– I move -
That the bill be now read a second time.
There should he no necessity for me to remind the Senate that the Government regards this bill as one of the most important on its legislative programme. Its importance is apparent if there is a proper appreciation of certain statistical and other facts. For example, the area under wheat throughout the Commonwealth in 1928-29 was 14,812,264 acres, from which 159,725,400 bushels were taken. In 1929-30 the area under cultivation was estimated at 14,093,310 acres, and the quantity of wheat produced at 126,470,326 bushels, representing an estimated value of £30,300,000. As regards our overseas trade the quantity of wheat exported to all countries during 1928-1929, the latest year for which figures are available, was approximately 49,138,000 bushels, valued at £20,336,200. Although Australia is not regarded as a great wheat-exporting country it is a fact, nevertheless, that a large quantity of the wheat grown in the Commonwealth is marketed overseas. Our exports average approximately 11 per cent. of the total exported from all countries. Many people appear to he under the impression that the quantity of Australian wheat sold in the overseas market is an insignificant factor in determining world’s prices. That is not so. Actually, Australia is fourth on the list of wheat exporting countries. The particulars of exports from the four principal wheat-exporting countries are as follow : -
And, again, the various States of the Commonwealth have spent millions of pounds in the construction of developmental railways and roads to open up areas for agricultural occupation, and the interest charge upon this huge expenditure is a heavy burden upon the taxpayers. Many more millions of pounds will have to be expended on similar undertakings if we are to develop this country on satisfactory lines. These facts, I suggest, must be taken into consideration in the discussion of this measure. We are optimistic enough to believe that one day these many railway schemes will become profitable, and it is the duty of the Government to hasten that time as much as possible. We are convinced that, with the more scientific handling of wheat grown in areas that have been developed by the construction of railways and roads, we shall have a better chance of reaching that objective. And again the policy of all political parties in the wheat-growing States of the Commonwealth is to increase the acreage under cultivation for wheat. The following tables set out the exact position in the Commonwealth : -
It will be of interest to honorable senators if I now survey briefly the world position of wheat. In 1929-30 the wheat production in all countries, excluding Russia and China, was 3,420,000,000 bushels, or approximately 525,000,000 bushels less than in 1928-29, and 61,000,000 bushels below the average for the last five years. The stocks carried over from 1928-29 were estimated at 625,000,000 bushels, so that the present available supply of wheat amounts to 4,045,000,000 bushels, which is less than the total stocks for the previous season by 344,000,000 bushels.
And again, in addition to huge expenditure on development of railways and roads, the various State Governments and other public authorities are disbursing annually large sums of money on scientific investigations with a view to increased production. This policy is amply justified because of the high quality of the wheat grown in Australia. A few pessimists allege that the production of wheat in the world has overtaken the supply and that nothing which governments can do will save this important primary industry in Australia. I remind those who hold this view that we are in a happy position with regard to the world’s market, because of the high quality of our f.a.q. wheat. Recognized authorities allege, and rightly so, that Australian wheat is admirably suited for blending with wheats grown in other countries, and for this reason, among others, Australian wheat finds a ready sale in overseas markets. No doubt that important feature influenced the delegates who - attended that very representative conference of farmers in Canberra, convened by the present Minister for Markets (Mr. Parker Moloney), at which this particular scheme was originated and arrangements were made for the drafting of the necessary legislation.
If any honorable senator feels any apprehension concerning the body of opinion behind this movement, I invite him to study the personnel of the conference over which the Minister presided, and having done that, to ascertain how many of them have changed their opinions since then. Although there is some opposition to the scheme, the strongest and most representative forces of the farming community are behind it. The conference was attended by the Ministers for Agriculture in the various States, also the State Directors of Agriculture and representatives of big farming organizations. As the result of its deliberations, the Government agreed to introduce this legislation. Since the scheme for a compulsory pool was outlined, honorable senators have received a number of communications from organizations supposed to be representative of the farmers, and strong protests have been made by various merchants associations. The real ground for their complaint seems to be that the Government’s proposal is an abrogation of some important principle; that, in short, the Government is attempting to conscript the farmers’ wheat. This, of course, is not the Government’s intention. I remind critics that in actual practice the marketing of wheat is not now in the hands of the farmer. I have in my hand a document issued by the South Australia Wheat Producers Freedom Association. It contains a tirade against the Minister for Defence (Mr. A. Green), and in attempting to establish a case against him, the association has given me a very strong argument in favour of the scheme. As might be expected, the association is totally opposed to the project. This is what it says -
It is our job to grow the wheat. But if we can do this successfully it does not follow that we can market it equally as successfully. We cannot do so, because wheat marketing is a highly specialized business calling for long experience and special knowledge which the successful farmer has not had the opportunity to acquire.
This bill will enable the farmer to acquire that knowledge and sell his own wheat. It is admitted by this organization that at present the marketing of wheat is taken entirely out of the hands of growers and placed in those of the merchants. The Government contends that it is better to take wheat marketing out of the control of individual farmers and place it under the administration of a competent body, constituted by the farmers themselves, which will sell their wheat for them, having due regard to the interests of the industry that it represents. Even Senator Sir Hal Colebatch will not suggest that the pooling system to be inaugurated under this bill will affect the law of supply and demand to any greater extent that does the present system.
– I do not suggest it. I affirm that it will operate differently.
– The honorable senator must admit that under the existing system of marketing wheat, the farmer is entirely in the hands of the merchants.
– I do not admit it. He can pool his wheat if he likes.
– If he does not pool his wheat he has to sell it to a merchant.
– He pleases himself as to what he does with it.
– The proposed pooling system from that standpoint will’ not alter the present position of the farmer; but it will alter the present method of marketing by establishing one system instead of the dual system of merchants and pools.
– It will remove competition between the pools and the merchants.
– I am obliged to the right honorable senator for his interjection. My limited experience of wheat matters and my study of the measure lead me to think that that will be a very good thing. I shall point out in a few minutes the condition of affairs which operates in London in connexion with the sale of wheat, and I think honorable senators will be satisfied that the sooner we eliminate that competition in the selling of our wheat in London, the greater will be the return to the farmer and the better it will be for the nation.
I invite the Senate to consider the bill on its merits. I do not propose to reply to the many documents, demands, threats and suggestions that have poured into my letter box, and probably into those of other honorable senators. I am certain that whatever is good in those circulars will influence the minds of honorable senators, and that they have sufficient training to distinguish between extravagant statements and statements of merit. The Government feels that there is. no necessity to answer those statements. It contends that it has a good case.
The question is not as to whether we are to have socialization or nationalization, but whether under the present social system our methods of marketing can be improved upon. If they can he improved we have to ask ourselves whether pooling would be an improvement ; and, if it would be, whether a compulsory pool is the best form of pooling.
Practically the only overseas buyers who come to Australia to secure our wheat are Japanese, who normally take only a very small portion of our production. The great bulk of the wheat has to be sold in London, .where all importing countries have representatives or agents. London buyers buy on a c.i.f. basis, necessitating that the seller ships the wheat, insures it, and in order to give delivery merely hands over the shipping documents to the buyer.
No farmer or group of farmers can reasonably sell wheat upon this basis and accordingly merchants purchase wheat from them and sell it on to buyers in Europe. Although the press quotes numerous sales in Europe, the price at which wheat is sold includes the freight, insurance, and all other charges incurred by the merchant, and it is practically impossible for the farmer to work out the local value of wheat from the overseas prices quoted. This .position has resulted in the London value of wheat determining the value in Australia except that the wheat merchant has become the sole interpreter of that price. Except for the. group of merchants there are only millers buying w.heat from farmers. Millers are shippers, so that there is really no wheat market or wheat exchange in Australia in any sense of the word: All that the farmer is concerned with is the price he can receive for his wheat. That price is almost arbitrarily determine.d by the merchant. On many -occasions a mer- chant will refuse to buy wheat at all. On other occasions the price will be an unduly low one. The farmer has ho alternative but to accept the price or refuse it. Practically all the merchants have the same buying price, and the farmers’ wheat must ultimately be bought by them at their price.
London is the centre where practically all wheat exported from producing countries is sold. Congregated there are buyers from every country in Europe. Only a few years ago the competition among buyers was keen, and the prices offered genuinely reflected the demand for wheat. To-day, however, the position is different. Two firms - -Rank Limited, and Spillers - practically control the whole of the buying for the United Kingdom. Not only do they buy two-thirds of all the wheat imported into the United Kingdom, but they buy further considerable quantities for smaller mills. It is easy to see that they dominate the position.
– “Will this bill alter all that?
-It will not alter the fact that you have only the two buyers there; but it will eliminate the competition that exists between pools and merchants to the detriment of the best interests of the wheat industry.
The United Kingdom is the principal buyer of Australian wheat, and the fact that the buying in that country is controlled” by the two firms mentioned makes competition among sellers particularly undesirable, as it places the several sellers of Australian wheat almost entirely at the mercy of the buyers. As I pointed out, the whole of our wheat is controlled by, the merchant system. Honorable senators may feel that competition is desirable. Competition may be desirable intra-Commonwealth, but it becomes most undesirable when we have in the Commonwealth people selling the same class of goods to monopolists on a socalled world’s parity.
The first real break away from the merchant system occurred in 1915 before the buying for the United Kingdom became concentrated iri the two firms mentioned. The failure of such system was not brought about by the inability to market wheat at a satisfactory price in Europe, but rather by their ; in ability to buy wheat at all from farmers. Shipping became scarce, and owing to the uncertainty of the duration of the war, merchants were able to off.er farmers prices ranging from 2s. 6d. to 3s. per bushel, and even then only for limited quantities of wheat. Wheat at those prices meant that growers would cease to produce wheat freely; and as there was no alternate use to which the great wheat-growing areas could be put, the then Government considered the matter to be one of national importance, particularly as wheat was required as a reserve for the allies and to maintain Australia’s exports. After considerable thought it was considered that the only way out of the difficulty was to introduce the most efficient marketing organization that could be devised - a system which would enable farmers to get the full value for their wheat, an initial advance on its delivery, and enable that wheat to be shipped overseas at the lowest possible rates of freight, and ultimately to be sold for the highest price obtainable. It is now common knowledge that a compulsory wheat pool was adopted as the most effective means of marketing. A compulsory wheat pool was inaugurated for the season 1915-16, and although the wheat of that season had to be stacked for long periods - in many cases amounting to years - the wheat was ultimately sold at a price which returned to the growers 4s. 6d. a bushel - ls. 6d. a bushel more than merchants had offered, and that in spite of abnormal damage being done by mice and weevil, and the rates of freight to Europe attaining an unprecedented figure. Moreover, the Government itself had to operate the pool, and many of those engaged to conduct its affairs had little, if any, previous experience in handling wheat.
Despite criticisms from many - and there are always a large number against anything a government may do–the compulsory pool saved the wheat industry of Australia, and, incidentally, the Commonwealth itself; for Australia would have had difficulty in financing the war without the wheat. Probably no step ever taken by any government in this country had such far-reaching as well as such, desirable results.
The State and Federal Governments guaranteed farmers a minimum first advance upon wheat. Each” State Govern ment acquired all the wheat’ within its State. So much as was not required locally was made available to the Australian Wheat Board, consisting of representatives from each of the States whose function it was to market overseas that surplus of all States. Owing to the shortage of shipping, each season’s wheat could not be sold within the twelve months; but as fast as shipping would permit, wheat was sold, and the fact that there was only one seller meant the complete elimination of competition in effecting sales. Wheat was made available for use within the States at whatever price the Australian Wheat Board determined. A special price could have been secured without difficulty; but as a matter of policy it was considered desirable to make wheat available at a reasonable price on account of the war, although towards the end of the pool wheat was sold at as high as 9s. a bushel.
The outstanding result of the compulsory pool was the enlightenment of farmers as to the inefficiency and inadequacy of the merchant system, and the desirability of having some really efficient system of marketing Australia’s wheat as a whole. The prices of Australian wheat were comparatively satisfactory for the whole of the period; the delays in completing the pools, although considerable, were obviously unavoidable. The idea of balance-sheets covering the pool’s operations and the farmers getting the whole of the purchase money and incidental revenue, less only the actual expenses, was generally appreciated. Farmers learned that wheat gained in weight whilst in stack during the winter months, and that year in and year out the pool sold a greater weight of wheat than was delivered by farmers, and that they got paid for that increase in weight. That is an important factor. In order to ascertain what it meant, I secured figures from the Victorian compulsory wheat pool, which showed that the net gain in the weight of the wheat handled by that pool during the period that it operated was 8,415,’ bushels.
-There is nothing unusual about that.
– Of course not. The only difference is that since that time an allowance has been made for the increase in weight.
– Does the honorable senator suggest that when the wheat is delivered by the farmers, an allowance is made for the increase in weight ?
– I was prepared to give the merchant system credit for doing so. In any case an allowance should be made and I understand that that is now being done.
– An allowance is made in the price but not in the weight.
– That is a distinction without a difference.
– Allowance has always been made in the price.
– Prior to the operation of the compulsory wheat pool and the farmers being apprised of that unearned increment-
– Were not the farmers always aware of the increase in weight?
– I have never grown wheat; but I have made inquiries from those who have, and I understand that that factor was not generally taken into account before the operation of the compulsory wheat pool.
Sentaor DALY. - It is easy for the honorable senator to say “ nonsense.” I doubt if he has grown a thousand acres of wheat in his life.
– He is a Hay-street farmer.
– Senator Colebatch will not deny that any allowance for the increase in the weight of wheat is determined solely by the merchants when fixing the price for wheat.
– Or by the farmer if he puts his wheat into the pool.
– If he puts his wheat into a pool, he will receive the amount. But, if he sells it to the merchant, he gambles on what he will get.
– He will get it if he puts his wheat into a voluntary pool.
– Of course he will. I am glad to hear the honorable senator’s admission that the farmer who puts his wheat into a voluntary pool will get the allowance. I hope to be able to show that if a voluntary pool is desirable, a compulsory pool is much more desirable. If I can get the Senate to agree to the principle underlying the pooling system, I shall have no fear as to the fate of this bill.
– If a farmer puts his wheat into a voluntary pool, he gets the benefit of the increase in weight.
– As the result of compulsory pools, the farmers learned, further, that there was also considerable revenue obtained from despatch money for the prompt loading of vessels; that there was chartering commission earned upon allfreight that was engaged; and, generally, that quite a lot of perquisites attached to the marketing operations that were previously unheard of by them. Towards the latter days of the pool, growers were given a considerable voice in controlling the pool’s operations, and there was a strong feeling that the ideal system of marketing wheat would be through the medium of a compulsorypool conducted solely in the interests of growers and controlled by- elected representatives of growers.
The only real complaint which has reached Parliament is that the growers, who have begun to understand more of the marketing side of their product, have no real voice in it. Under this bill we propose to give them a voice in the marketing of their wheat.
When the Federal Government intimated in 1921 that it would not be concerned in the marketing of wheat in the future, there was general dissatisfaction amongst growers. In every State ballots were held to ascertain just how strong was the feeling in favour of continuing the compulsory pool. In two States the pool was carried on. In Western Australia’, the State Government continued the compulsory pool for one year only, and in Queensland the compulsory pool is still operating. In Victoria there was a ballot of growers, and of 15,000 votes recorded over 13,000 favoured the compulsory pool. That ballot was conducted with an entire absence of propaganda, and, accordingly is really the clearest exposition of the growers’ feeling it would be possible to obtain.
With the refusal of the governments to continue the compulsory pools, voluntary pools were formed to market such wheat as growers chose to deliver to them. Each of these pools operated upon the same general basis as the compulsory pools in that the total proceeds of sales and incidental revenue were distributed among growers, less only the actual expenses incurred in marketing. They were, however, controlled by representatives of growers and were absolutely non-profit earning.
The voluntary pools have been subjected to a continual tirade of abuse from those interests which are opposed to pooling. The claim is made that for certain seasons the pool payments have been exceeded by the merchants’ average price, and that the expenses in operating the pools have not been lower per bushel than the merchants’ expenses, and at various times attacks have’ been made on the pools on other points. It must, however, be said that the pools have published balance-sheets showing the itemized expenses and the receipts from sales and the payments to growers. No merchant has ever done this, nor has any balance-sheet been criticized as showing undue expenses or poor sales. The Victorian pool had handled 119,500,000 bushels up to the commencement of the season 1929-30, and the average net return to the grower for the whole of this wheat is no less than 5s. 1.2d. per bushel, less rail freight. No merchant in Victoria has handled such a large quantity of wheat since the war period, and no merchant can claim to have paid as good an average price to growers. That is really the test of the efficacy of the whole matter.
– Then why do not the pools get the whole of the business’ The farmer must be a fool if this is so.
– I do not think he is a fool any more than is the elector who does not vote except under a compulsory system.
– If the facts are as stated by the honorable sena. tor, why do they not all choose the pool ?
– I suppose there are some who think that their interests will be better served if they remain with the wheat firms. Others may act through ignorance. A thousand different things may prevent farmers from taking advantage of a pool.
– The financial position of many farmers compels them to sell for cash.
– I accept the ex. planation offered by a practical farmer. The Victorian voluntary pool is, I submit, a striking example of the efficient manner in which a pool can be conducted. There are, however, shortcomings to the voluntary pools - shortcomings which cannot be overcome without pooling being the universal method of marketing wheat in all the States. These shortcomings can be overcome by a compulsory pool on the lines proposed by the Commonwealth Government. No definite claim has ever been made by the merchants that the marketing of wheat is done less efficiently by the pools than by the merchants. In fact, the boot is really on the other foot,, for in many respects the pool can show that it is able to market wheat more efficiently than the merchant system. By controlling a large proportion of the Australian harvest the pools were better able to regulate the bulk of the wheat shipments and thus prevent prices being depreciated by indiscriminate selling of large quantities by merchants.
The effect of merchant selling in competition with the pool method is shown by the fact that during the war quotations by the pool to Japanese buyers were based, not upon the London parity, but upon the cost of landing American wheat in Japan - a much higher figure at times. At the present moment it would be impossible for a voluntary pool to sell to Japan on that basis because the merchants would immediately quote a price based upon the London parity. At the start of the season 1928-29 a similar position arose in .connexion with India where Australian wheat was required. Before the season opened the pools were selling at a considerable premium above the London parity but when the season opened and the merchants were able to buy wheat they immediately forced the premium down until there was practically no difference between the Indian price and that at which sales could be made to Europe.
Admittedly the voluntary pools are doing excellent work, but until pooling becomes universal they cannot function with the efficiency which is necessary for the marketing of such an important product as wheat. As pointed out by Senator Pearce, there is a section of farmers absolutely opposed to any government control, and while that section remains out of a pool, the whole system of pooling is in danger.
– Does the honorable senator suggest that a compulsory pool can put above world’s parity the price of wheat in Japan ?
– If the whole of the wheat marketing of Australia were under one control it would be possible at times to secure a higher price than London parity. I have already shown what was done in the case of India. That was in the 1928-29 season. A premium on London parity was obtained until the pool lost control and merchants were able to get supplies of wheat. I do not suggest that the merchants deliberately forced down the price of wheat, but where we have this dual control competing in a market outside Australia, these things will happen. It may be due to accident or to bad business methods rather than design.
Then we have the merchants’ statement that they do not speculate in wheat. As they buy wheat from farmers they sell the wheat overseas. That means that if on any day they purchase a definite quantity of wheat in Australia they promptly sell that wheat so as to eliminate at once the risk of the price falling. Again, admitting that the merchants are not speculators, I invite honorable senators to see whether the interest of the farmers is being properly conserved under such a system. At many periods of the year the overseas buyers are not disposed to buy wheat at current quotations. It is quite all right to offer wheat at such times at the current price, but it is obvious that to “force a sale at such times necessarily means that a price below current quotations must be accepted.
In most cases such sales are made to speculators who buy only with a view to selling when’ the price improves. Yet on the merchants’ own admission, that is their policy. It is futile for any one engaged in a business as a means of livelihood to be concerned with the welfare of the farmer when to do so would have the effect of making that business precarious. The position of a merchant is such as to make it necessary for him either to speculate with wheat or to sell it at times when he knows that a sale can only be effected by reducing prices. The pooling system can remedy that. It can eliminate the possibilities of speculation, and give a closer grip and tighter control of selling operations.
– That is what the United States of America, with infinitely more backing than Australia, attempted to do; but it failed.
– The United States of America did not try to do anything of the sort. But, even if it did, I am one of those who believe that the average Australian is a better man than the average American. I think that an Australian wheat pool would succeed where an American pool might fail. We have already succeeded in many cases in which America has failed.
– The Farm Relief Board of the United States of America bought up wheat in order to prevent it from being thrown on the market.
– The point at which it was evidently necessary to take that action in America would not have been reached under a proper pooling system. The Government does not believe in attempting to close the stable door after the horse is out. It believes, in seeing that the door is firmly closed in the first place.
There is a general impression that the overseas markets are capable of absorbing any number of cargoes of wheat each day. That is entirely incorrect, because there are many occasions when it is impossible to sell even one cargo except by taking a reduced price. In the course of business the pools have split dozens of cargoes of wheat, because no buyer was prepared to take a whole cargo, but buyers could be found who would take a few hundred tons only. This splitting of cargoes means that the total sales required to dispose of a whole shipment may take some days, and therefore it is not acceptable to merchants ; yet, from the point of view of growers, it is a means of disposing of wheat in a narrow market without depreciating prices. On numerous occasions the Australian pools have refrained from selling wheat because the market was dull, and could not absorb wheat without depreciating prices.
Another point about the merchant system of selling wheat is that it necessarily involves that there . are several sellers of Australian wheat competing for sales. That immediately places the buyer in a position of advantage, since he can play one seller off against another. This has particularly been the case during the last year or so, on account of the fact that about two- thirds of the wheat required by the United Kingdom is purchased by two large firms, who have accordingly a very considerable control over prices. It is worthy of note, also, that since these firms acquired their control the price of wheat overseas has steadily depreciated, and the price of bread , in the United Kingdom has not shown any corresponding drop. In fact, bread is dearer in England now than it was when wheat was of a much higher value.
One factor which is of the utmost importance is that, under the merchant system, the rate at which wheat is put upon the overseas ‘market ‘each day is governed, not by the ability of the overseas market to absorb wheat, but by the quantity of wheat sold by farmers to merchants in Australia. Under the pool system the pool receives wheat during the delivery period, and it is able to offer it overseas according to the actual demand for wheat by buyers. In other words, its selling policy is dictated solely by a desire to secure the best prices, and it is never obliged to force sales for reasons of business safety.
Merchants are not concerned with any variation in the price of wheat. If by forcing a sale overseas the price of wheat is reduced, say, Id. per bushel, they simply buy here .on the following day at Id. or 2d. per bushel lower, and their business is not disturbed one iota. The pools, by reason of their uniform aim in selling, are also able to work together instead of in competition. All of the Australian pools co-operate so as never to compete with one another. If, for example, the Victorian and Western Australian pools desire to sell a cargo upon the same day, and on that day a buyer can be found for only one cargo, then there is only the one cargo offered. Competition between sellers is thus reduced to a minimum. But unfortunately there is still the competition of the merchants’ wheat which may be offered for sale at any price and may necessitate the pools withdrawing their wheat from the market or entering into competition with the merchants. The pools’ method of selling is a comparatively scientific system calculated to maintain prices for wheat at as high a figure as practicable, having, regard only to the actual world supply and demand for wheat. The merchant system is merely a relic of antiquity, hopelessly inadequate to secure the wheat industry of this country.
In the ordinary course of events merchants charter a certain number of vessels before the opening of the wheat season. Usually the merchant regards these as pure speculation, and confines his charters to comparatively reasonably priced ones. The pools are in a little better position because they have contracts from growers and have a reasonable idea how much wheat they will be marketing. If a pool can charter before the opening of the season at a satisfactory price it does so because by so doing competition for freight when the season opens is reduced. When the season opens merchants charter freight for wheat practically from day to day as they buy the wheat. The result of this procedure for years past has been to establish among shipowners a practice of increasing rates of freight as soon as wheat values rise, because as soon as the farmers are offered the increased prices there is immediately competition between merchants to secure freight to enable them to sell the wheat in Europe. The point is that with a pool the chartering is done more steadily rather than just at those periods when prices rise, and the pool eliminates much of the competition for freight. During the few years before the war there were over twenty firms who exported wheat from Victoria alone, and it is easy’ to see the effect of competition among those twenty for freight as soon as farmers started to sell freely - particularly when those exporters were not concerned with the amount of freight but were all working on the same basis. . If by reason of half a dozen trying to charter two or three vessels in a suitable position, freight rose say 2d. per bushel, that did not hinder the merchants’ business. The price to farmers was simply reduced that 2d. and that ended the difficulty.
– The shipping position to-day is that if we doubled our exports there would be twice the number of ships necessary to take them away.
– That may apply to cargoes other than wheat, but they are not the class of charters to which I am referring.
– Ships are sometimes waiting for months to get a cargo.
– Of wheat?
– I am afraid that the Leader of the Opposition would increase considerably the cost to the farmer if he were in charge of the chartering of ships for wheat cargoes.
In the ordinary course of events freights vary more than 20s per ton in the course of a season - about 7d. per bushel - so this is quite an important factor. A compulsory pool can completely eliminate competition for freight and so get freight at the lowest rates. Supposing it is correct, as Senator Pearce asserts, that we have ships here waiting for freight, in such circumstances with a compulsory pool there would be a better chance of striking a bargain with the ship-owners than there would be if there were twenty shippers attempting to secure freight. The control would be in the hands of those who had wheat to ship.
– The position is the other way about. At times there are twenty ships for every shipload available.
– That is not the position, but even if it were the shipper who could relieve the shipowners’ position by providing sufficient cargo to enable him to send away ten of his ships at once would be able to strike a better bargain than could the shipper with only half a cargo. That is the point I. am trying to emphasize. Even if there is a surplus of shipping to-day, an offer to charter three ships which could be sent away immediately, and harbor and other dues thus avoided, would enable better terms to be secured than could be obtained by a man who had only half a shipload.
Wheat is sold in Australia, normally, at the London parity, that is at the net return available from a sale to the United Kingdom or Continent. Wheat and wool are probably the only things that are available in Australia at the overseas parity. The wheat-farmer is considered to be entitled to something better than this. For all he buys he has to pay a special Australian price, and yet he is unable to get an Australian price for even portion of the one thing he has to sell. I think Senator Colebatch will agree with that. The voluntary pool in Victoria has been able to control sufficient wheat to secure a premium on wheat used locally, but the merchants are always prepared to quote wheat to millers at prices below the pool and if it were not that the millers have contracted to buy fixed quantities throughout the year at a fixed premium there would be no premium available. In New South Wales a local price is being secured at the present time, simply because farmers will not sell their stored wheat and there is a shortage of wheat held by millers. Possibly merchants are deliberately paying a premium to attempt to discredit’ the pool in Victoria and so assist in belittling pooling generally. Queensland has a compulsory pool and secures a premium over parity of from 6d. to 9d. per bushel. Queensland cannot prevent wheat coming in from New South Wales, and the result is that the cost of getting wheat from New South Wales determines the limit of Queensland’s premium.
The proposed federal compulsory pool will definitely prevent interstate traffic in wheat and as the merchants will not have wheat to sell, a price can be fixed at whatever the pool may decide.
– The Navigation , Act does that effectively already.
– It does not. Various suggestions have been made as to the premium that should be secured for locally consumed wheat. The actual value in London is one suggested basis. That would mean approximately ls. 6d. per bushel premium. A reasonable price above the overseas parity could not be objected to by any section of the community and the longer the period during which the price could be constant, the lower, relatively, would be the price at which the bread could be sold. If ls. per bushel premium were secured on the wheat used in the Commonwealth it would result in more than £1,500,000 of additional money being made available to wheat-growers - and that probably without any increase in the price of bread.
– Where would the extra money come from ?
– Prom the air!
– It will come out of the pockets of those who consume bread. Those who consume this commodity have an interest in keeping the farmer on the land.
– I do not mind so long as the honorable senator admits that they have to pay.
– After I have explained the position the honorable senator says that he agrees with me; why did he disagree with me in the first place? The man who consumes bread has nominally to pay the premium.
– That is contrary to what the Minister said just now.
– The Minister said that there would be no increase in the price of bread.
-I said that an increase in the price of wheat does not necessarily mean an increase in the price of bread. If a premium has. to be paid on wheat for locally-produced flour, the premium, whatever it -is. must be met by the consumer; but an increase in the price of wheat would not necessarily mean an increase over parity price plus the premium. Such an increase would not necessarily mean, a higher price for bread.
– Because the millers might have covered themselves. They might have wheat in silos.
-There may be many circumstances. It is remarkable that in the States where wheat is cheapest bread is dearest.
– The price of flour follows the price of wheat.
– There is a general impression that’ if wheat prices increase, bread prices must follow. In practice bread prices do not change from one year to another, whereas wheat prices change every day or so. A recent royal commission in Victoria went into this matter and found that for some years bread prices had undergone no change in that State. A year ago wheat prices rose as much as ls. in a single month.
– The Housewives Association in Victoria took a hand in connexion with the price of bread, which was nicely arranged.
– If this measure is passed the Housewives Association or similar organizations will not be prevented from endeavouring to keep down the price of bread or any other commodity. Even if this measure is passed there can still be exploitation; it does not affect that aspect of our social life. In Queensland wheat .is sold to millers at a higher price than in any other State, yet in that State bread is cheaper than elsewhere. During the war period when local wheat prices reached 9s. per bushel, the price of bread never exceeded ls. 2d. per 41b. loaf. To-day wheat is approximately half that price, and bread is only 2d. cheaper.
The concentration of all the work of administration into one organization necessarily involves a reduction in the expenses per bushel. Instead of having half a dozen merchants, each with his own individual manager and secretary, auditor, and London office, there is only one organization - necessarily larger than any one merchant’s office, but having a much smaller pay roll than the aggregate of the various offices. At country stations under the merchant system anything up to half-a-dozen local agents operate at most of the larger sidings. Each has to make a living and the payment per bushel is accordingly high. Some three or four years ago the merchants agreed to increase the agents’ commission from l£d. to l£d. per bushel. The voluntary pool was forced to pay the increased rates. That meant a dead loss to wheatgrowers of over £1,000 for each million bushels of wheat produced. A compulsory pool would mean the elimination of all unnecessary agents at every station and accordingly the rate could be reduced substantially and still enable the remaining agents to make a good living. At the present time agents are required to work among growers, doing the whole of the canvassing for wheat. The whole of the work of canvassing is waste energy and would be eliminated under a compulsory pool. The unnecessary cost of handling at railway stations and sidings must be apparent to honorable senators. One has only to travel through South Australia, or, in fact,, any of the other wheat-producing States, to realize that unnecessary costs are incurred at all sidings where there are sheds and stacks controlled by different wheat merchants, whose overhead expenses have to be met by the producers. We contend that the whole of these expenses should be met by one organization, with consequent beneficial results in the price per bushel paid.
Apart from the agents’ commission, there are many other savings effected by a compulsory pool. The stacking sites used at country stations are allotted to each of the firms operating at each station. This means necessarily that rent is being paid for some sites which may have little wheat in them. A compulsory pool would enable the sites to be used more effectively. Again, in mouse-proof fencing the stacks, the pool found that frequently a fence could not be erected around a stack because the merchant with a stack on an adjoining site would not fence his stack, and the stacks were too close together to have a fence between the two. At seaboard depots each merchant has facilities for storing and handling wheat. At Geelong the whole of the merchants’ storage facilities are leased from the pool. The compulsory pool would enable the numerous staffs to be -dispensed with, and many economies effected.
In Victoria the compulsory pool, which operated for the seasons 1915-16 to 1920-21 inclusive, handled 220,000,000 bushels and paid to growers £57,000,000 in cash, or an average of 5s. 2.21d. per bushel net. The expenses incurred, which amounted to an average of 9.16d. per bushel, were made up as follows: -
From the above it will be seen that the total realizations averaged 5s. 11.37d. per bushel. The total income earned by these pools was over £65,000,000, which included over £1,000,000 incidental revenue - money received other than from the sale of wheat, whilst the whole of the expenses, including rail freight, amounted to £8,403,000. The net gain in weight over the whole of these pools was 8,415 bushels, but it must be pointed out that the 1916-17 pool resulted in a loss of 1,277,174 bushels. This loss was brought about by the fact that an unprecedented plague of mice and weevil occurred, and it was not possible to ship the wheat overseas, so that enormous damage resulted.
If the Senate agrees with the principle of a voluntary pooling system it must admit that it would be desirable for the system of pooling to operate universally, and not, as to-day, in competition with merchants. The time has arrived to pro: vide for control by one seller when the wheat arrives in London. That being so, the question resolves itself into one of whether we. can have a universal pool operating in that way. The ideal of a universal voluntary pool seems impracticable of achievement, and if the Senate is in favour of a universal pool, it must be in favour of making this particular pooling system compulsory.
I shall now briefly outline the main provisions of the bill. The object of the compulsory wheat pool is to pay growers a minimum price of 4s. per bushel for f.a.q. wheat of next season’s harvest delivered at country railway stations or other usual place of delivery. Payment will also be made on delivery of wheat below f.a.q. standard, arid wheat delivered in inferior sacks or in bulk, at prices to be determined according to the quality of such wheat.
Should the total sales of the wheat crop of the 1930-31 season, after deducting expenses, yield a net return of more than 4s. per bushel, each grower will receive a further payment based on the quantity of wheat delivered by him to the pool. The 4s. per bushel for f.a.q. wheat at country railway stations is the bedrock price which the grower will receive. If the net total realization of the crop does not reach 4s. per bushel the grower will not lose, as already he will have obtained the guaranteed price. The Commonwealth and the three or more State Governments financing the pool will make up the shortage. In addition to a guaranteed price for next season, authority exists in the Commonwealth legislation for any three States and the Commonwealth to make an agreement to pay to farmers a stipulated minimum price for wheat produced in either or both of the 1931-32 and 1932-33 seasons. The intention is to bring about the orderly marketing through an organization controlled by growers of all wheat and flour produced in Australia; to effect reductions in freight, insurance and other charges by collective bargaining by an organization set up by growers; to ensure that millers will be able to purchase wheal for Australian requirements in a stabilized market, and that wheat required for the manufacture of flour for export shall be supplied at world parity.
The bill, which has been passed by the House of Representatives, requires the acceptance’ of at least three State Governments before the pool can come into operation. A wheat pool is in existence in Queensland under legislation passed in that State several years ago, and the authorities controlling the State pool are prepared to join in the federal scheme. A poll of wheat-growers is to be taken in New South Wales, Victoria and South Australia at an early date to ascertain whether growers desire the establishment of a wheat board in each of these States to also join up with the federal scheme. The Western Australian Government is prepared to act similarly to New South Wales, Victoria and South Australia, provided no financial liability to the State is involved.
– Will the Government accept that suggestion from
Western Australia and still give .the guarantee to growers in Western Australia?
– No. I do not think, when it was put up to the Government, that the people of Western Australia really believed that, it would. Tasmania’s relatively low production and high cost of wheat prevent it from associating with the scheme.
The pool will comprise not less than three State wheat boards and an Aus: tralian wheat board acting conjointly. Each State wheat board will be formed under State law, and will consist of a majority of wheat-growers. The Australian Wheat Board will consist of one representative elected by each State wheat board and a representative appointed by the Commonwealth. It will have power to . sell all wheat placed in the pool except wheat required for use in the State in which it was produced ; this wheat will be sold by the State board. The Australian Wheat Board will regulate the export trade’ in wheat and flour from all States, including those not represented on the board, and not in the compulsory pool. It will make all arrangements in regard to insurance ‘and freights, export and interstate, and in this way endeavour to effect savings on present costs. It will appoint agencies overseas, regulate the wheat, and, if necessary, the flour trade between all the States, including those not in the compulsory pool, so as to prevent dumping from one State into another, price-cutting, or anything else likely to disorganize the Australian market.- This control of interstate trading in wheat will be effected by compelling the owners and carriers of wheat and flour, produced in one State but intended to be transferred to another State, to take out licences. These licences will be issued subject. to certain conditions, such as, that the wheat and flour shall not be sold below the price fixed by the Australian Wheat Board. Any breach of the provisions of the licence will be punished by the imposition of a heavy penalty. When required, the board will investigate and report on any matter affecting the wheat industry. - Each State wheat board shall take delivery of all wheat harvested in that State and, where necessary, of wheat grown outside that State. Wheat grown in the Riverina, New South Wales, will probably be delivered to the Victorian board, if both States join the pool. It will make all payments, including the initial payment at the rate of 4s. per bushel, to farmers on delivery of the wheat to country stations, and issue certificates to farmers for all wheat so delivered. It will make all arrangements for the storage, insurance, and internal transport of the wheat; and, by arrangement with the Australian Wheat Board, the State board will sell all wheat required for use within the State, and act generally in association with the Australian Wheat Board in all matters connected with the pool.
– Will the State board have power to fix the price of wheat for sale within the State?
– Not without consulting the Australian Wheat Board.
– Where is that provision in the bill?
– It is the general tenor of the measure. Sales of wheat within a State must be a matter of arrangement between the Australian Wheat Board and the State board.
– As to prices ?
– There is nothing in the bill to that effect.
– I cannot refer the honorable senator to the actual provision, hut if he will direct attention to this matter when the bill is in committee, the Government will consider any suggestion to tighten up its provisions.
All payments, including the initial payment to growers at the rate of 4s. per bushel, will be made by the Commonwealth Bank under a guarantee to be given by the Commonwealth Government. The rail freight and working expenses of the pool will be defrayed from the .proceeds of the sale of the wheat. An amount of 8d. per bushel will be provided for this purpose by the Commonwealth Bank under the guarantee of the Commonwealth Government. When the pool is wound up any surplus available will be distributed amongst growers in proportion to the amount of wheat placed in the pool by them. Should the pool result in a loss, the Commonwealth and the State Governments concerned will jointly make up the deficiency.
Millers will be supplied by the Australian Wheat Board with wheat at export parity for the manufacture of flour for export. This is made compulsory under clause 10 of the schedule to the bill, and will enable millers, not only to retain, but to extend their present oversea trade in Australian flour. Wheat for consumption in Australia as flour will be sold to millers by the State boards acting in consultation with the Australian Wheat Board. The interstate trade in all flour, and, if necessary, also the export trade, will be regulated by the Australian Wheat Board in order to prevent disorganization of the Australian market for wheat, especially by States not associated with the pool.
Should the pool of any year show a surplus, the State boards and the Australian Board will ascertain by what amount, if any, the average net price obtained for wheat sold in Australia exceeds the average net price of wheat exported. The excess will then be paid into an equalization fund and distributed amongst growers in accordance with the quantity of wheat delivered to the pool by each grower after payments have been made from the fund to States such as Western Australia, which have a special advantage over other States through their cheaper freights to European markets. Any State which, through a shortage in production or a higher price obtained for wheat consumed locally during the year 1929- 30, is entitled to this advantage. This Commonwealth legislation not only enables the pool to be brought into operation to pay farmers at the rate of 4s. a bushel at country stations for wheat of the coming harvest, but also’ enables the pool to be formed with a guaranteed price to the grower during both or either of the two following years if, for any special reason, the pool cannot be established in time to deal with the 1930- 31 harvest.
The accounts of the pool will be subject to audit by the Commonwealth Auditor-General and a report on its work must be made by the board and submitted to Parliament annually. Powers also exists in the bill for the making of all agreements and obtaining all the information necessary to the effective working of the scheme. That briefly is an outline of the system. I confidently submit the bill to the Senate.
Debate (on motion by Senator Sir George Pearce) adjourned.
Debate resumed from 18th June (vide page 2827) on motion by Senator Daly -
That thebill be now read a second time.
– I do not remember any bill for the payment of a bounty concerning which there was so much vagueness as there is in connexion with this measure. So far as I have been able to follow the debate, we have not had a definite statement as to. the quantity of cotton produced or the area under cultivation in Queensland. We have been simply told in general terms that some cotton has been grown in that State for a considerable number of years ; that the industry has not made great progress and that it is therefore necessary to arrange for the payment of a bounty to growers. All this may be true. Certainly it indicates the need for definite information concerning the industry. Senator Duncan yesterday presented some figures purporting to be correct, but I happened to see some references to the industry in the Queensland letter published in the Melbourne Argus of Tuesday last, and I noted that the figures supplied by the Brisbane correspondent of The Argus were at variance with those given by the honorable senator.
– Can the honorable senator vouch for the correctness of those figures?
– No; but I state the source firm whence they came, whereas the figures quotedby Senator Duncan may be a figment of the imagination for all we know.
– Why make such an insulting reference to them? I stated that they had been supplied to me.
– The honorable senator did not indicate their source.
He said that Queensland last year produced. 10,000 bales of cotton lint, whereas the statement in The Argus - and I believe from inquiries which I have made, that it is approximately correct - is to the effect that there was an increase in the yield from 5,037 bales to about 8,000 bales. The area under cultivation was given at 28,000 acres, an increase of 6,000 acres over the area cultivated in the previous year. It would appear that it took 3½ acres to produce one bale of cotton lint. The value of the crop is estimated at £260,000, or roughly £32 10s. a bale. This gives an average production of £9 per acre and the cost of picking was stated to be £3 6s. 8d. per acre.
– I assume that the honorable senator is aware that the 28,000-acre crop towhich he refers has not yet been harvested.
– It is possibly an estimate of the Queensland crop for the current year, arrived at, no doubt, after the same manner as is the estimated benefit from this bounty, if granted. From what I can gather, the cotton industry in Australia is undergoing a change. Originally, it was associated with mixed farming, and engaged in as a family industry. I learn that individual farmers are now harvesting larger areas than previously, and that the family aspect is disappearing.
– There are very few large areas.
– There are about 2,500 growers in Australia.
– Those interjections support my contention that there seems to be a considerable difference of opinion, even among those interested in the industry, as to what the industry represents, and who are conducting it. It is estimated that, after all the assistance that has been granted to the industry, the crop for this year, said to be considerably greater than that of last year, will be worth £260,000. One honorable senator stated that Australia imports about £11,000,000 worth of cotton in various stages of manufacture. We have a long way to go before we can hope that our production of cotton will make any appreciable impression upon the cotton requirements of Australia. Senator
Rae urged that rather than reduce our own standard of living to something comparable with that of cotton-growing countries that employ coolie labour, we should endeavour to bring those countries up to our standard. A tremendous distance has to be travelled before anything can be done in that direction. I remember that when the Empire Parliamentary Delegation was in Canada, several Indians and Indian representatives were attached to the party. The matter of the earning capacity of the Indian peasant came under discussion when we were at Vancouver, and Sir D’Arcy Lindsay, a member of the Indian Legislative Assembly, who has lived for many years in India and knows the country thoroughly, told me that the average earnings of the Indian peasant farmer amounted to £4 10s. a year, and I believe that the peasant is not on as low a level as the coolie. While I have no intention of urging that we should drop our standard to theirs, I maintain that if we cannot grow cotton without reducing our standard of living, it is eminently desirable that we should not endeavour to grow it at all.
– Did that £4 10s. a year include the man’s keep?
– No ; he had to keep himself and his family out of it.
– By citing the conditions of labour with which we have to compete, the honorable senator is advancing another good reason for the granting of the bounty
– We must seriously consider whether it is worth our while fostering the cotton industry. Are we not misdirecting our efforts by endeavouring to compete with cotton grown under coolie labour conditions? Would we not be better advised if we concentrated our energy and our money on an industry that gave a better return.
– Do you suggest that the State of Queensland should go out of the business?
– It would ‘be quite futile for me to suggest anything to a Queenslander. The people of that State seem to have the happy knack of foisting upon the taxpayers of the Commonwealth all sorts of industries that have to be maintained at considerable cost by the community.
This is one of the very few bounties that we have been asked to confer on a branch of primary production. I remind honorable senators that Australia is suffering because of the falling off in the consumption of wool. No effort is being made to boost that industry. Rather, we are suggesting the establishment of a lesser industry that will further undermine the wool industry. It has been truthfully said that the other industries of Australia will have to pay . this bounty. Australia has approximately 13,000,000 head of cattle, of which Queensland produces 6,000,000 or 7,000,000 head. What good will the cotton bounty confer upon Queensland cattle-growers, who will have to assist to pay the bounty on cotton ?
– They will have 25,000 more men to eat their beef.
– I have heard that tale before. Ever since I have been able to read a newspaper I have read the story that the higher you raise duties, the greater will be your home market. Actually, when prices are exorbitantly increased, the people of the country are unable to purchase the goods affected, so that there is no good result.
When introducing the measure the Minister made a very injudicious remark. He stated that the cotton industry had not progressed of recent years, because of the uncertainty as to whether this bounty was to be granted.
– There is no harm in telling the truth; therefore there was nothing injudicious in my statement.
– If this industry is to strike its roots into the soil of Australia and become acclimatized, it cannot expect always to live upon a bounty. The one redeeming feature about the proposal is that the bounty will be on a graduated scale, and will definitely cease in five years’ time. I have heard references to so many bales of “ cotton lint.” On inquiry from those who know a little more about the subject than I, I have found that 1 lb. of cotton lint represents about 3 lb. of seed cotton. It is on seed cotton that we are asked to pay the bounty ; therefore we shall have to pay by way of bounty about 4£d. per lb. for the best quality cotton lint. That represents a very substantial payment. A great many people have become apprehensive about what it will mean to the Commonwealth if it becomes necessary to pay 6d. a bushel on wheat if the wheat-pooling scheme goes awry. Sixpence a bushel on wheat covers 60 lb. of that commodity, whereas the payment on cotton lint will be 4£d. a lb.
– Is that why the honorable senator is in favour of the one proposal and against the other?
– The honorable senator is premature. . I have not expressed approval of either. On the same ratio that amounts to the equivalent of over £1 a bushel on wheat.
– How does the honorable senator work that out? .
– By adopting a basis of 4£d. per lb. for cotton lint. The honorable the Leader of the Senate also made reference to the “ potentialities “ of the industry. The word recalls to me an incident that occurred when the delegation to which I have referred was at Edmonton, the capital of Alberta, Canada. There we met the Acting Premier and his Government in conference one afternoon at the State Parliament House. The Acting Premier was a very cautious old gentleman, who spoke with great deliberation. He told us about the phenomenal mineral wealth of Northern Alberta. The only point about which he was definite was that Northern Alberta possessed 18 per cent, of the coal deposits of the earth. He did not tell us how the statement could be substantiated. He also declared that Northern Alberta possessed other wealth of tremendous value, and when pressed as to what it consisted of, he said, “ Gentlemen, if I attempted to tell you this afternoon, I fear I should neither do myself or my subject justice. I shall ask Professor Wallace to address you this evening after dinner. He will tell you all about it.” When Professor Wallace met us after dinner he painted a glowing picture of the wonderful mineral wealth of Northern Alberta. He led us to believe that it was Dame Nature’s favorite child, in whose bosom was stored up all the wealth of the Indies. But he concluded by saying that, unfortunately, nature had super-imposed a pre-Cambrian shield over that wealth, through which no one had been able to penetrate, with the result that that wealth is there to this day. That seems to be the position with regard to the wonderful potentialities of the cotton industry in Australia. Nature has placed a pre-Cambrian shield over it, through which it is expected to struggle.
There is only one point in favour of this bill. The late Government introduced a measure, for the payment of bounties to the cotton industry, as a result of which Parliament appropriated £900,000 to assist the industry. Only £290,000 of that sum has, so far, been expended. ‘ While we may, or may not, approve of that appropriation, we cannot shut our eyes to the fact that that money has been appropriated for a special purpose, and that, in equity, it is already earmarked for that purpose. To that extent the cotton industry has a claim in equity on the Senate to continue the bounty, at least up to the point of the appropriation already made. I take it that, even if this bill is not passed, the appropriation already made will stand, and that the country will be liable for the unexpended balance of that appropriation. That is the lion in the path so far as I am concerned ; I should not like to be a party to the breaking of an agreement entered into by this Parliament. I do, however, desire to obtain from the Minister an assurance that if this bounty is granted we shall not later have an application for its renewal.
The Minister said that, as a result of the Government’s activities, there was renewed life in the cotton industry, and that a fine yarn-spinning plant had been built at Gladstone. If the yarn-spinning plant at Gladstone is equal to the one now operating in Canberra, it should be of immense benefit to the industry ! The cotton-growing industry appears to have been started on wrong lines. It may have to retrace its steps, and it may yet prove a payable proposition. I ask the Minister whether he can give the assurance I have asked for, as it may affect my vote on this bill.
– I regret that, owing to unavoidable circumstances, I was unable to be here yesterday to listen to the debate on this measure. It is well known that, for a number of years, I have been associated with the British-Australian Cotton Association Limited. “Were I still occupying the position in connexion with the cotton-growing industry that I previously held, I should feel some hesitation about recording a vote on this bill; but as the company with which I have been associated has sold out to a co-operative association of growers - although the consent of the shareholders has yet to be obtained to the course taken by the directors, the circumstances are such that the passage of this legislation will make no difference whatever to the nature of the bond entered into - I feel free to record my vote.
Mention of the disposal of the company’s assets to a new association reminds me of a statement in Senator Colebatch’s speech yesterday. The honorable senator said that he fully expected that the new association would appeal to the public for funds, using the Commonwealth bounty as an inducement to investors. If the honorable senator understood the nature of the transaction, and the constitution of the body that is to take over the plant of the old association, he would appreciate that nothing of the kind is involved in the transaction. Under the law. of Queensland the cotton-growers are banded together in a species of compulsory cooperation. The people of Queensland have become accustomed to some form or other of compulsory co-operation.
– That is all right so long as they get plenty of government funds to assist them! m Senator GREENE. - With the exception of the cotton industry, there has been no assistance from government funds. I must say, in favour of legislation with which I am not altogether in sympathy, that when the farmers of Queensland who have been associated with compulsory pools have had the opportunity to express an opinion as to their continuance or otherwise, they have on every occasion voted for continuance. Evidently there is something to be . said for the principle. The Queensland Cotton Board has extensive powers. The whole of the cotton produced in Queensland is vested in the board, which has power to make levies and to erect ginneries. Senator Colebatch is sufficiently a man of the world to recognize than an association like that with which I have been connected is in an extremely dangerous position if the raw material it requires to keep its works going is vested in a body over which it has no control, and which, moreover, may make levies and erect its own ginneries. For that reason the association was glad to enter into negotiations for the disposal of its plant. The Cotton Board will not have to raise any capital other than that obtained by means of deductions in some form or other from the proceeds of the cotton crop. That is the way in which the plant will ultimately be paid for, unless, unfortunately, the Queensland Government has to pay for it under the guarantee.
– How will the shareholders of the original company fare?
– They will come out of the transaction badly. They invested in. the industry with great enthusiasm. Before I was associated with the company, it erected far more works than the quantity of cotton grown justified, with the result that there is to-day a great deal of surplus plant. I’ may say that, in my opinion, the BritishAustralian Cotton Association Limited obtained a fair market price for its plant.
I support the bill because I believe that, if we can only establish the cottongrowing industry in Australia, it will be well worth our while to do so. The reports of the speech of Senator Colebatch, which I understand was the principal speech in opposition to the bill, indicate that he attacked this measure from two standpoints: first, that he did not believe in bounties at all; and secondly that the cotton-growing industry was not worth supporting in any circumstances. Let us deal first with his contention that the bounty system is bad.
– I said nothing of the kind.
– Does the honorable senator agree that the bounty system is good?
– Had the honorable senator been here yesterday he would have heard my reasons. I said that the bounty system could be applied only to industries which did not suffer by comparison with those of other countries.
– Does the honorable senator say that this is an industry to which the application of the bounty system is bad?
– Does the honorable senator also say that it is an industry which, owing to the disadvantages under which we operate in comparison with other countries, cannot be successfully established in this country.
– Seeing that the honorable senator was not present to hear my speech he might have read it and become acquainted with what I did say. I object to being now crossquestioned.
– I repeat that the cotton-growing industry is well worth establishing in this country. If we can encourage it to the point at which its roots will have driven themselves down deeply into the ‘soil of Australia, its success will be one of the outstanding successes in agriculture in this country.
– Why has it failed, notwithstanding all the assistance already given to it?
– That is a fair question, and I shall endeavour to answer it. I realize that there has been a considerable measure of failure; but I hope to show that the causes of that failure can be remedied. In this country we are somewhat prone to put all our eggs in one basket. We have not sufficient diversity of production. Many of us are old enough to remember the time when the squatter fought with most desperate persistency against every effort to open his lands for wheat-growing, and there are still people in Australia who believe that the country should in the main be a sheep walk, or that everything should be subject to the requirements of the wool industry. I am not saying a word against the great value of that industry to Australia. It is one of the greatest, if not the greatest, of our industries, and Australia is eminently suitable for the production of the finer wools ; but I would not say that it should be developed at the expense of all other pursuits of an agricultural class. We should try to diversify our interests as far as is humanly possible> not only because by that means we add to our wealth, but also because if some calamity should affect one particular industry another may succeed, and as a result the economic balance in the community be assured. The extreme economic depression from which Australia is now suffering is due to the fact that the price of practically everything we produce has fallen.
– The depression is world-wide.
– It is; but honorable senators will, I think, admit that it is prudent to diversify our agricultural interests so that we shall not have too many eggs in the one basket at the one time.
I wonder if any one has ever thought of the value of the cotton crop to the United States of America. Cotton is grown in a few States down in the southeastern corner of the United States of America, and the value of the crop for the last year, in regard to which I have been able to obtain the figures in the Library, was the staggering amount of £252,000,000 - five times Australia’s total wool clip this year. We have in this country acre for acre as much land capable of growing cotton as America has. I admit that the cotton industry was established in America under conditions which would not be tolerated in Australia, and which have created one of the greatest social problems from which America is suffering to-day; but we should not forget that the wages paid in the cotton industry in that country to-day are very little below what we have to pay in Australia.
– I think in some cases they are a little higher than those paid in Australia.
– Except for cotton-picking.
– There is very little doubt that when the cotton industry becomes established in Australia - when we have, as they have in America, the descendants of generations who have spent their life picking cotton - we shall have a class of cotton-picker that has developed a special sense in regard to cotton-picking which will enable them to do the work very rapidly. It takes time to develop ti” at instinct I think it will be also possible to effect a material reduction in the cost of cotton-picking by the adoption of mechanical means. Great strides have already been made in that direction. The problem is not yet solved, but I believe the day is not far distant, in this mechanical age, when it will be satisfactorily solved; and when that happens the greatest part of our trouble in this country in respect to cottongrowing will have been overcome.
Senator Carroll mentioned, that 28,000 acres have been devoted to growing cotton, and I believe there are 2,500 farmers who are growing cotton. The average acreage tilled by each individual farmer is therefore about 12 acres.
– Do the farmers engage exclusively in cotton-growing ?
– The average shows that cotton-growing is still to a very large extent a sideline. Some of the farmers in Queensland have to some extent solved the problems associated with cultivation - there are problems associated with the growing of cotton as there are with the cultivation of any other crop - and they have gone in for considerably larger areas than the average; but cottongrowing, as the figures show, is in a large measure a family industry. It is already forming quite a valuable contribution to the income of small farmers. I am hoping that, as time goes on, many will see fit to increase the areas they have under cotton.
The greatest trouble the BritishAustralian Cotton Association had to face was the fact that it did not get anything like the quantity of cotton it was anticipated would be produced. In the early stages of the guaranteed price, a great many people planted cotton who knew nothing about it and whose cultural methods were of the most primitive kind. Quite a number of people lost money in that way. For instance, one man who put in 1,000 acres, did not get any crop; because he did not understand the proper methods of cultivation. A tremendous lot of damage was also done at that time by the enthusiasm put into the propaganda issued in association with cotton-growing. A lot of people were induced to grow cotton who knew nothing about methods of cultivation, and even with the aid of the Agricultural Department in Queensland it has taken years to bring those methods into anything like perfection. A great deal of ground has yet to be traversed before it can be said that an ideal method of cotton cultivation in Queensland has been found.
– Have the farmers given up ratooning?
– To a very large extent, they have. Senator Pearce pointed out quite correctly that one of the things that- has hurt the industry is the fact that there has been too much politics in it; and one of the questions around which the whole controversy raged for two or three years was that of ratooning.
– How are the growers to improve their methods?
– They are learning all the time. Already there has been a marked improvement, but they hav; not yet learned all that can be learned in the way of improved methods.
– A good deal is done at the State Government’s experimental farm.
– The State Government is doing a lot to help the farmers, but I do not know that its efforts have been entirely properly directed. The government experts themselves are learning. A great deal lias to be learned about the proper varieties of cotton to grow. The State Departinw.it set out quite rightly with the most Admirable of intentions to try to insist on the growing of pure breeds of cotton ; but it concentrated the whole of its energies on the growing of two varieties - Durango and Alcala. These are of similar type. Both have a long staple, and, as far as I can learn, both have similar characteristics and similar weaknesses. Furthermore the department tried to have these varieties grown in every district in the State, quite forgetful of the diversity of climate to be found in Queensland. It did not experiment in the production of other varieties of cotton to suit– different portions of the State. That opinion is supported by the fact that in the early stages - I am now speaking of 1923-24 and not of when cotton was first grown, in that State - it was being produced from various varieties grown in that State for many years previously. It was a good mixed cotton, but as it was not a pure variety and as it was short in staple the Government was anxious to get rid of it. A fair quantity was grown in the Moreton district, between Ipswich and the range, but at present hardly any is grown in that locality. The Durango cotton is not suitable to that district as it is of a longer staple, takes longer to mature, and, as the growing period is necessarily longer, the frosts catch it too early. The farmers in the Moreton district have practically given up growing cotton, but in other districts where they have succeeded, the Durango appears to be the most suitable variety. Even in growing that variety they have to learn a good deal concerning the right types to produce. America, which has been experimenting in this direction for many years, has not yet completed her investigations. In America the cotton industry has, as everybody knows, been established for many years, and has nourished, as far as it has been possible, under present prices. A large sum of money is still being spent on experimental work through the Federal and State Agricultural Departments.
I come again to the question of whether the cotton industry is worthy of financial support from the Commonwealth. I have referred to the wonderful national wealth that America is obtaining from the growth and development of its cotton crop, and have pointed out that there is a similar area in Australia capable of producing cotton. I believe that there is an area in Western Australia quite capable of producing cotton, and, perhaps, Tasmania is the only State in the Commonwealth where suitable land does not exist for the production of this crop. Cotton is used in some form by every member of the community. Moreover, it is absolutely impossible to manufacture munitions of war without cotton, and no country can be regarded as self-contained which cannot produce its own cotton. During the war period Germany had, in effect, to strip cotton from the backs of her people in order to conserve supplies. I have often said that we shall never have to defend ourselves against an aggressor on our own territory until our sea communications are interrupted or destroyed. If, at any time, that should, unfortunately, happen, we shall be thrown upon our resources. In that event what would be our position if we were unable to supply our forces in the field with the necessary munitions? We may have men trained to the highest point of efficiency; but they would be utterly helpless unless we had at our command sufficient munitions for their use. Without cotton such muni-‘ tions could not be supplied. From that viewpoint alone this industry is worth fostering. An enormous amount of wealth can be produced from cotton-growing, and I believe that if this measure is passed by the Senate, the industry will benefit by experience and will be successfully established. During its chequered career, information has been gained which is of great value to the growers. It is - true that we have been paying heavily for our mistakes.
The Leader of the Opposition, when speaking on this measure gave one of the chief reasons, quite unintentionally, perhaps, why the assistance previously given has not produced the results anticipated. The right honorable senator said that the Government proposed to provide for a bounty when the existing bounty had. 3till eighteen months to run, and suggested that we should wait. Delay has been the cause of all the trouble in the past. Perhaps the right honorable senator did not realize, at the time, that it takes over twelve months from the time the first preparations are made until a crop of cotton can be produced. If honorable senators will refer to page 7 of the Tariff Board’s report on cotton-growing and allied industries, they will find the quantities produced over a period of years including the years in which government assistance was given in the form of a guarantee and later as a bounty. They are as f follows :- 1921, 922,778 lb.; 1922, 3,878,673 lb.; 1923, 11,769,502 lb.; 1924, 15,179,046 lb., and 1925, 20,022,000 lb. In the following year, when the bounty was first paid, the production was only 9,007,141 lb. ‘
– There was a. drought in the cotton area during that year.
– Yes, but the tremendous shrinkage in the production waa due to the fact that the Government took so long to make up its mind that the time had passed for the preparation of the land for cropping before the growers knew what was to be done. The Cotton Board and every one interested in the industry endeavoured to get the Government to realize that the provision made did not fully meet the position, particularly with respect to the manufacturing side of the industry. The delay in putting the position clearly before the growers was such that in 1927 production fell to 7,504,951 lb. or one-third of what it was two years before. During that year we managed to get something from the Government, and in the following year obtained a slight increase. I speak as one who has had bitter experience in trying to get things done. It was not that the Government was not willing; but it did not make a pronouncement in sufficient time to enable the growers to decide what to do. Honorable senators representing Queensland were as well aware of the trouble as I was, and a great deal of our efforts were wasted. Full advantage could not be taken of the assistance available because no one knew what was likely to happen. If there is one thing that I can commend this Government upon, it is that it has taken “the bm! by the horns” in sufficient time to give those engaged in the industry an idea of the policy to be adopted before the present bounty expires. It is also making some necessary adjustments, which, if made earlier, would have prevented some of our past troubles.
Some honorable senators may not be aware that the cotton industry was first brought under the notice of this Parliament in 1907. It was in that year that the Senate first agreed to grant financial assistance to the industry.
– It has had a fairly long trial.
– That may be so. A cotton bounty was made available from 1907 to 1915 and, in order to show how it was understood and appreciated, I quote the following figures. The bounty on ginned cotton for eight years was 10 per cent, of the market price, and the amount allowed was £6,000 a year. The bounty on cotton seed for the same period was also 10 per cent, of the market price, and the amount allowed was £1,000 a year. But in the eight years under these two bounties, only £421 was paid on ginned cotton, and £89 on cotton seed.
– “Where was the cotton ginned?
– I understand a roller gin was operated, perhaps by Dan Jones, who was once closely associated with the industry. To-day I had an opportunity to look up the debates on that proposal, and if I were to tell honorable senators all that was then said they would be surprised at the extraordinary care exercised by the Senate before passing the measure. The forecasts concerning the prospects of the industry were exceedingly rosy. Unfortunately they have not been realized, I think, however, we can say that the more recent bounty legislation has laid the foundations of the industry. I do not think they are too secure, but I believe there is a reasonable chance, if the Senate passes this bill, that they will be secure. I suggest, therefore, that if it is possible by passing this bill to make secure the foundations of an industry such as this, which has possibilites which are very great from the agricultural side, and features essential for the safety of the country from another side, the money will have been well spent, and the Senate ultimately will have good reason to congratulate itself.
– Bounty legislation in respect of the cotton industry goes back 23. years. I have a very vivid recollection of debates on the Cotton Bounty Bill, which was one of the first measures that came before the chamber after my election. I took no part in that debate but I listened carefully to all that was said by other honorable senators, and I remember the assurances . given by the then Leader of the Senate and others who supported the bill, concerning the future of the cotton industry in Australia. “We- were told that once it was established on a sound basis this infant industry would quickly attain to the proportions of a sturdy and robust adult. Information to be found in the Commonwealth Year-Book for 1929 with regard to this enterprise is somewhat disappointing. It shows that all the. promises made concerning the industry a few years earlier were illusory.
Senator Greene stated just now that cotton could be grown in every State of the Commonwealth with the exception, of Tasmania. That may be so. Tasmania some years ago was deeply interested in cotton-growing from the manufacturing side, because the climatic conditions of that State approximate more closely to those of Lancashire than any other part of the Commonwealth. As regards rainfall, humidity and prevalence of fogs in certain parts, Tasmania is in every sense comparable with certain parts of Lancashire, particularly the district of Bolton. It may interest honorable senators representing other States to know that seven or eight years ago one of the largest manufacturers of towelling in Bolton, Lancashire, visited Tasmania to make a reconnaisance with a view to establishing cotton mills in that State.
The crux of the business from the point of view of the allied secondary industries is the price to manufacturers of the raw material grown in Australia. When I was in Canada about two years ago, with other honorable senators as members of the Empire Parliamentary Delegation, I had an opportunity to obtain first-hand knowledge of what had been done in that dominion. The history of its cotton-manufacturing industry is really a wonderful story. Canada can grow cotton in the maritime provinces, particularly in Novia Scotia and New Brunswick, but the Canadian Government was not so foolish as to encourage the establishment of an uneconomic enterprise. Instead, that country concentrated upon the manufacturing side of the industry, with the result that to-day there are in Canada twelve or thirteen large industrial concerns exclusively engaged in the manufacture of cotton piece goods, the industry being protected by a tariff of 7$ per cent, in respect of British yarn goods and 20 per cent, under the general tariff. Without any assistance by way of a bounty, the textile industry in Canada is in a flourishing state. The manufacturers buy the raw material, in the cheapest market, and, having the advantage of cheap hydro-electric power, they are able to hold their own against practically all competitors.
After reading carefully the debates on the previous bounty proposal, and after studying both reports issued by the Tariff Board dealing with this matter, I cannot help feeling that this bill is an attempt to establish an unnatural industry. Senator Crawford spoke of cotton-growing as an enterprise suited to tropical countries, and of the wonderful opportunities in tropical and sub-tropical portions of Queensland. As far as I have been able to gather, the Upper Burnett, the Callide, and the Dawson Valley districts cannot be regarded as tropical areas, as they are from 800 feet to 1,700 feet above sea level and have a mean rainfall of between 29 and 30 inches a year. That class of country is suited to mixed farming, and I understand that much of it is put to that use. According to official statistics for 1928-29, there were 2,278 growers of cotton in Queensland, and of that number, one-half cultivated less than 10 acres each, being otherwise engaged in mixed farming. On this point, it is interesting to note that, in its 1925 report dealing with this matter, the Tariff Board made the following comment: -
It is quite obvious that cotton-growing on a large scale with hired labour is not an economical proposition, and that profitable cotton -growing must be confined, so far as Australia is concerned, to the farmer who is growing other staple primary products, and plants cotton as a side line on areas of from 10 to 20 acres, which he can handle up to the picking stage with the assistance of his family, and the lower-paid employees engaged on the other work of the farm.
The great obstacle to success of the cottongrowing industry in Australia is the cost of picking. I understand that despite improvements in mechanical appliances, the bulk of the cotton grown in the world is hand-picked. I have visited several countries where cotton is grown, and I have lived in one, so I am not unfamiliar with the general conditions of the industry. As far as my knowledge goes, nearly all cotton is hand-picked by cheap coloured labour. I believe that this practice is largely followed in the United States of America. In Australia, the cost of picking ranges from 1¾d to 2d. a lb. as against 2 cents, or a little more than £d. per lb., in the United States of America. Prom this point of view, the industry in Australia is seriously handicapped.
Senator Greene stressed the importance of the industry for defence, declaring that cotton is essential to the manufacture of munitions. That is about the only valid reason yet advanced in this debate in favour of the bill. It might be sound policy to encourage the growing’ of cotton with that end in view, so that, if at any time our sea communications were severed, we should have available to us the raw materials for the manufacture of munitions. I emphasize, however, that Australia has spent a great deal of money to encourage these frail infant industries which require a very costly diet, and notwithstanding all the care bestowed upon them, many do not become sturdy, selfreliant concerns that are an asset to the Commonwealth. For this reason, I cannot see my way to support the bill, which, if passed, will commit the Commonwealth to an expenditure of £800,000, spread over the next five years. At a time like this, when finance is so difficult, the proposal is monstrous. Apart from the direct expenditure involved, it will have the effect of increasing the cost of living to; our people. We shall merely be repeating our experience in the sugar industry. Australian sugar is the dearest in the world. If we pass this bill, Australian cotton also will be the dearest in the world.
I have said that the financial outlook in Australia is far from satisfactory. I understand that an ominous statement on the situation was made this afternoon in another place by the right honorable the Prime Minister (Mr. Scullin) who intimated that arrangements were being made for a conference between the Government and a member of the Board of Management of the Bank of England, together with the financial adviser to the British Government, and a leading economist. I am sorry that Senator Crawford is not in the chamber. Yesterday the honorable senator appeared tobe possessed with a great scorn for economists. This great financial expert, Sir Otto Niemeyer, is coming to Australia with another economist, to confer with this Government, and the Commonwealth Bank with regard toour financial position. That may be all right, but it appears to me almost to suggest that the official receiver is coming in to survey our assets.
– That is a statement which should not have been made in any circumstances.
– I give that as my construction of the proposal. If this bill is passed it will commit Australia to a heavy expenditure, with a very problematical result accruing therefrom. The whole thing is extremely hazardous. Yesterday Senator Duncan said that these unfortunte cotton-growers had been induced by a previous Government to grow cotton and that we were in honour bound to stand by them and see them through. I do not know whether our cotton-growers were induced by the Government to grow more cotton or whether they induced the Government to provide a bounty to bring about the further growth of cotton. It was probably fifty-fifty. As the present assistance to the industry has another eighteen months to run, I consider that it would be wiser to suggest to the people who are growing cotton on land eminently adapted to mixed farming and dairying, to drop cotton and stick to the natural industries of the country. I have spent a considerable amount of time in studying this problem, and endeavouring to master a number of reports on the subject, in an effort to come to a just decision. I have done so, to the best of my ability. I believe that in attempting to set up the cotton industry in Australia we are on the wrong lines. The industry has had a good deal of spoon-feeding in the past, and will need a great deal more in the future. That assistance must inevitably increase the cost of living. It is an extraordinary thing that throughout the debate we have been given so little real information in the form of statistics,concerning costs and so on. Everything has been painfully vague. We have simply been urged to grant this bounty, and told that everything in the garden will then be wonderful. Personally, I cannot visualize anything but the reverse. Therefore, I cannot support the second reading of the bill.
– As Senator Sampson seems to have some doubt as to the possibilities of the cotton industry in Australia, and as his doubts are shared by other honorable senators who have spoken against the measure, I have obtained samples of the work actually done by Australian industries with Australian cotton. I must confess that I marvel at the progress that has been made during the eight years following the introduction of the Massy Greene tariff.
– What is there to marvel about?
– That we can produce such excellent materials.
– At what prices?
– I have not all the prices with me.
– That is the basis of the whole thing.
– The honorable senator looks at a shop window, sees a halfcrown pair of cotton tweed trousers, does not know anything about quality, ascertains that they were manufactured in Great Britain, and precipitately arrives at the conclusion that it would be uneconomical to manufacture them here.
– Are the values of the cloths that the honorable senator holds economically sound?
– Of course they are.
– Then will the honorable senator quote their prices?
– Senator Payne knows that if I were to go through the whole of the samples and quote their prices, he would be just as fogged then as he is now.
– The honorable senator is fogged.
– If it will satisfy Senator Payne, I candidly admit that we should both be fogged if I adopted that procedure. If honorable senators have any doubt as to the possibilities of the cotton industry in Australia, let them examine these samples.
– No one has any doubt as to the capacity of Australia to manufacture such material.
– It was distinctly said in this chamber that cotton-growing was not a white man’s industry. The natural corollary to that is that it is a black man’s industry. I produce these samples to show that white men can produce cotton and manufacture and sell such fabrics. I have not heard any serious objections to the prices asked for them.
Senator Pearce dealt at some extent with what he termed the “ ill-directed enthusiasm “ that had allegedly hindered the progress of the cotton industry. He specially referred to a gentleman who for some time directed the Queensland Government’s cotton policy and who, having grown a cotton bush in his backyard, advocated the ratooning of cotton and so caused a considerable set-back to the industry. The gentleman referred to is well known to the Acting Minister for Trade and Customs.
– I was referring to a gentleman in Queensland, not the present Acting Minister for Trade and Customs.
– At no time did the gentleman direct the policy of the Queeusland Government, although he did advocate cotton ratooning. But comparatively few cotton-growers followed his advice. That the ratooning controversy of the time had very little effect on the industry is proved by the following figures -
During these seasons ratoon cotton was excluded from the guaranteed price arrangements, and after 1924-25 ratoon cotton greatly diminished. It has since practically disappeared.
A large portion of Senator Pearce’s speech against the bill was devoted to the alleged serious departures in the measure from the recommendations of the Tariff Board. Senator Pearce’s comparisons were entirely drawn from the Tariff Board’s report of 20th July, 1925. That board has since investigated all phases of the industry much more thoroughly, and its conclusions are set forth in a report dated 6th March, 1929, that was tabled in Parliament on the 12th March, 1930. Th(.- present bill, and incidentally recent increases in the customs duties on cotton products, almost exactly conform to the recommendations of the Tariff Board in its 1929 report. It may be mentioned that in 1925-26 the industry, especially the secondary phase of spinning yarn, was going through its initial experimental stages, and that the Tariff Board in 1929 reversed a number of the opinions it expressed in 1925. I shall deal with Senator Pearce’s comments on these differences later.
The right honorable senator said that iD dealing with the bill we cannot lose sight of the fact that what is practically a prohibitive duty has been placed on imported cotton yarn, which has already caused considerable trouble among the knitters. It will be seen that item 392 of the Customs Tariff introduced as from 22nd November, 1929, quotes rates of duty on certain yarns - mercerized, bleached, &c. - at free from the United Kingdom, and 5 per cent, from foreign countries, and for certain other yarns at 35 per cent, from the United Kingdom and 55 per cent, from foreign countries. The position is that most of the yarn imported into Australia comes in at the free and 5 per cent, rates, and only about 25 per cent, is dutiable at 35 per cent. United Kingdom and 55 per cent, foreign. The yarn that has been made dutiable is of the types that can be and are being made by Australian spinners in a very satisfactory manner. The Knitters Association of New South “Wales has written to the Acting Minister for Trade and Customs strongly supporting the tariff and bounty policy of the Government, as expressed in recent duties and in the present bill. Many Victorian knitters have expressed the same sentiment, including the great firms of Myers, Prestige Limited, and others. It is admitted that a misunderstanding arose and existed for a while between certain Victorian knitters and the Customs Department with regard to certain yarns which were being charged the higher rates of duty. However, that misunderstanding was completely removed at a conference held in Melbourne, three weeks ago, and convened by the Acting Minister for Trade and Customs. Steps were immediately taken to admit at free and 5 per cent, all yarns that cannot at present be made in Australia. In this regard much of the blame for the duty that was levied by the department on a few yarns that, it is now known, cannot be made in Australia, was due to improper practices by some knitters in trying to evade the duty on certain dyed yarns, which the department has every reason to believe were bleached after importation, and then used for the purposes for which the Australian yarns are entirely suitable.
Senator Pearce stated that the new duties would immensely increase the cost of cotton goods throughout the Commonwealth, and that wherever cotton yarns entered into any other manufactures the cost of these goods will be increased. Taking cotton yarn prices first, as the duties on yarns not made in Australia have not been increased - but have, in fact, been left at free United Kingdom and 5 per cent, foreign, instead of free United Kingdom and 10 per cent, foreign, as recommended by the Tariff Board - the Government’s policy has not affected costs at all. As regards yarns made in Australia and which are now dutiable at 35 per cent. United Kingdom and 55 per cent, foreign, the two spinners concerned have not exceeded selling prices nominated by them to the Tariff Board when the matter was being investigated. In fact, the largest spinner has actually reduced the price of several counts as compared with the period immediately preceding the November 1929 tariff. The other spinner satisfied the Tariff Board thai the prices of some of his counts of yarn, which had been abnormally low before November, 1929, would have to be increased to enable the factory to function. Now, with the larger output made possible by the recent increase in duties, this spinner has been able to reduce the prices of many counts below those nominated to and accepted by the Tariff Board. As regards the price of cotton goods on which increased duties were imposed last November, special investigations were made by expert customs officers in May, 1930, and it was found that not only had there not been any advance in the price of cotton garments made in Australia since the November tariff, but that nearly all lines had been reduced in price, some of the reductions being quite considerable. Full details are in the possession of the department, and can be supplied to any honorable senator who so desires, if he will ask the question of the Minister representing the Minister for Trade and Customs in the Senate.
The right honorable the Leader of the Opposition further stated that the cost of growing cotton is the smallest part of the cost of production. This is not so. The Tariff Board’s report of the 5th May, 1926, published the special costing report of the accountant of the Department for Trade and Customs in regard to seed-cotton production, which showed that the cost of growing was 2.425d. per lb. up to the picking stage. On top of that is the picking cost, which is now, in Australia, 1¾d per lb. for most of the cotton, and 2d. per lb. for the final picking of each field. Senator Pearce then referred to an alleged shortcoming in the bill because it did not, he said, provide for the spinner being allowed to use a reasonable proportion of foreign cotton. The right honorable senator quoted from the Tariff Board’s report of May, 1927, which stated that the time had not yet arrived for imposing conditions to make’ the percentage of Australian cotton to be used in bountiable yarns either high or rigid. He also stated that the long staple, high-grade cotton grown in Australia was not the kind of cotton that the maker of the yarn requires to meet the demands of his customers, and so on. On those points the Tariff Board, in its 1929 report, has come to an entirely different conclusion. It found that the Australian spinners had so developed their manufacturing methods and their Australian market that they were able to use all grades and staple lengths of Australian cotton. That is an important fact for honorable senators to realize. Accordingly, the board recommended that the new Cotton Bounty Act should provide that, the bounty on yarn be pro rata to the proportion of Australian cotton used. As further and very striking proof of the entirely different position on this aspect, it is sufficient to point out that the two Australian spinners have already purchased the whole of the Australian production of raw cotton for the coming season, namely, about 10,000 bales of lint. Moreover, in actual practice it has been found unsatisfactory to mix imported cotton with Australian cotton in making yarns, because when such yarns are required to be dyed for special trade purposes, they take the dye unevenly. Senator Pearce also said that the Commonwealth and Queensland Governments, in dealing with the encouragement of cotton-growing, had in view the selling of that cotton on the world’s markets. The late Hon. H. E. Pratten, Minister for Trade and Customs, stated on the 5th August, 1926, when speaking on the Cotton Bounty Bill, that -
The Government had come to the conclusion that the basis of economic proposals to develop the cotton-growing industry must be the production of raw material for manufacturing development here, and not entirely for the export industry to compete with the very cheap labour engaged in growing cotton in other parts of the world.
– That is where the policy was changed. I was referring to the policy anterior to that.
– The right honorable senator also contended that high-grade cotton was exportable at a profit with the aid of the bounty. This is only the case when world’s prices are not less than lid. per lb. for middling spot at Liverpool. This has only happened on three brief occasions during the past four and a half years, whereas the world’s price should average lid. during the Australian marketing period to enable our cotton to be sold abroad at a profit. As a matter of fact, the sale of Australian raw cotton within Australia always brings 2d. per lb., or two-thirds of Id. per lb. on seed cotton, higher net return to the grower than does the sale of similar cotton to other countries. This is accounted for by the saving in freight and other marketing costs.
Senator Pearce said also that the Government, contrary to the advice of the Tariff Board, proposed in the bill to make conditions as to the use of Australian cotton more rigid. The more rigid conditions in the bill as to the use of Australian cotton are as recommended by the Tariff Board in its latest report. Those recommendations were deliberately made by the Tariff Board with the approval of both the Australian growers and the spinners, in order to encourage the greatest possible use of Australian cotton. At a conference held between the growers’ representatives on the Queensland Cotton Board and the cotton spinners in Canberra last February, the terms of the Government’s policy, now embodied in the present bill, were approved by all those present.
I do not propose to deal with the right honorable senator’s objection to clause 13, for that can be dealt with best when the bill reaches the committee stage.
Senator McLachlan would deny to cotton that protection which is given to all Australian industries, including wine. Since 1924, £1,300,000 has been paid in bounty on sweet wine, whereas only £320,000 has been paid as bounty on seed cotton and cotton yarn since 1926. The honorable senator voted for the recent Wine Export Bounty Bill, with its practically permanent bounty of1s. 9d. per gallon, but inconsistently objects to the present bill with its reducing rates of bounty for cotton.
I am able to give Senator Carroll the assurance he desires; the Government does not intend to re-enact this bill at the end of the term stated therein.
– Nor to give additional tariff protection?
– The Government will give to this industry such protection as it thinks the industry merits. That protection may be higher or lower than it is now. Surely the honorable senator realizes that there is a difference between a bounty and a protective duty.
Senator McLachlan also said that wine bounty was satisfactory because the exports brought money into Australia. But the cotton policy will keep still larger sums of money from going out of Australia.
– At great cost to the taxpayers.
– The honorable senator must admit that there is no difference between keeping money in Australia and preventing it from going out of Australia. Senator Greene has replied to a number of statements to which I intended to refer, so that there is now no necessity for me to do so.
– Can the honorable senator explain why the industry has failed, notwithstanding that £320,000 has already been expended in assisting it ?
– It would take me as long to explain why the cotton industry has failed as it would to show why the wine industry has failed, notwithstanding that £1,300,000 has been spent in assisting it.
Question - That the bill be now read a second time - put. The Senate divided. (The President - Senator the Hon. W. Kingsmill.)
Majority . . . . 17
Question so resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Sitting suspended from 6.16 to 8 p.m.
Private business taking precedence after 8 p.m.,
In Committee: Consideration resumed from 30th May (vide page 2355). (Recommittal) :
Clause 57 -
Upon which Senator Dunn had moved by way of amendment -
That the following new sub-clause be added to the clause: - “ (7.) No company or person shall alter in any way any policy, once issued, without the consent of the Registrar first having been obtained.
– I have already pointed out to Senator Dunn that his proposed sub-clause has no relation to proposal forms. It would be more appropriately attached to clause 59, and I am prepared to accept his amendment, if moved as a new clause, in the following form: - 59a. Any alteration made in any policy without the consent in writing of the Registrar first had and obtained shall be void and of no effect.
As the bill was recommited for the consideration of clause 57 only it will probably be necessary to have a further recommittal to enable the honorable senator, if he cares to do so, to carry out my suggestion.
– It is my intention to try to get the bill recommitted for the consideration of two new clauses.
– If the procedure suggested is followed it will enable’ me to bring under the notice of Senator McLachlan a matter which has reached me by telegram from Townsville, and which breaks fresh ground.
If the amendment is withdrawn the bill can be reported without further amendment, and it will then be competent for further action to be taken.
Amendment - by leave - withdrawn.
Clause agreed to.
Bill reported without further amendment.
– It is desired to insert as a new clause, but in a slightly different form, the amendment which Senator Dunn was anxious to have made in clause 57, for the reconsideration of which the bill was recommitted. I should like your ruling, Mr. President, as to what course should be followed.
– On a motion for the adoption of the report of the committee on any bill, it is competent for a further motion to be moved that the bill be recommitted for the consideration of any clause, or for the insertion of new clauses.
Question proposed -
That the reports be now adopted.
Motion (by Senator Dunn) proposed -
That the bill be recommitted for the consideration of a new clause to follow clause 59.
– I am anxious to move for the recommittal of the bill for the insertion of new clauses.
– It is always desirable that an honorable senator should give notice of his intention to move for the insertion of new clauses, so that they may be printed and circulated.
– In the committee stage I discussed the provisions which I was anxious to have inserted and was promised that another opportunity would be given to me to deal with them.
– Although I was anxious to break fresh ground, which a recommittal would give me an opportunity to do, rather than complicate the position I am prepared to rely upon having the matter dealt with in another place.
– Do I understand that the motion before the Chair is for the reconsideration of a certain clause? If so the committee should be informed of its purport to enable honorable senators to record an intelligent vote.
– It has been moved “ That the bill be recommitted for the purpose of considering a new clause to be inserted after clause 59.” I understand that Senator Rae wishes to move an amendment to the motion, and perhaps he will be good enough to state what he wishes the committee to reconsider if the bill is recommitted.
.- I move -
That the following words be added to the motion : - “ and for the purpose of considering the insertion of the following new proposed clauses : -
At the request of any owner of a policy in any company the Registrar may require the company to furnish particulars as to the financial position or transactions of the company including that of any item in the balance-sheets.
No person shall insure the life of another over the age of sixteen years without the written consent of such person.”
The latter clause was accepted in another form ; but later it was withdrawn on the understanding that it would be inserted in another portion of the bill.
– It is unfair to ask honorable senators to agree to a recommittal of the bill until the proposed new clauses which it is desired to insert have been fully explained.
– I suggest that the motion and the amendment thereon having been put, some honorable senator who has not spoken should then move the adjournment of the debate to enable the new clauses to be printed and circulated. That would meet Senator Herbert Hays’ objection.
– I very much doubt if SenatorRae’s amendment is in order as the motion is for the recommittal of the bill for the purpose of considering a specific clause. Are we to understand that the proposed new clauses which Senator Rae wishes to insert are to follow the clause which Senator Dunn wishes to insert?
– Not necessarily.
– If Senator Rae’s amendment is carried, who is to determine where the proposed new clauses shall be inserted?
– That would be attended to by the clerk.
– This bill has been before the Senate for weeks and there has been ample opportunity for amendments to be prepared and circulated. Senator Dunn’s proposed new clause was before the committee previously and after discussion the debate adjourned to enable it to be considered. Senator McLachlan, who is in charge of the bill, has announced that he is prepared to accept it in substance provided that it is inserted in a different part of the bill from that first suggested, but I have not previously heard of the proposed new clauses which Senator Rae wishes to insert.
– The right honorable senator supported one of them.
– The one I voted for is included in the bill.
– It was; but later was deleted. Senator McLachlan suggested that it should be withdrawn so that it could be inserted in another portion of the bill.
– I have a recollection of having voted for it.
– I do not know the purport of Senator Rae’s proposed new clauses, but so far as I can gather one is in relation to the insurable interest of a wife in her husband’s life. If my assumption is correct the proposal is one which I cannot accept, as an amendment in that regard was opposed by a considerable majority of the committee.
– It was carried.
– But ultimately deleted.
– On the suggestion of the honorable senator who said it would be inserted in another portion of the bill.
– I did not make any such promise concerning a wife’s insurable interest in her husband’s life. I understand the honorable senator also wishes to move for the insertion of a new clause relating to the insurance of children.
- Senator Rae should circulate copies of the new clauses he wishes to insert.
– I am willing to support the motion for the recommittal of the bill for the consideration of the clause which Senator Dunn wishes to insert, but I cannot support the amendment for the insertion of the two new clauses which Senator Rae wishes to incorporate in the measure.
Question - That the words proposed to be added be so added (Senator Rae’s amendment) - put. The Senate divided. (The President - Senator the Hon. W. Kingsmill).
Majority . . . . 2
Question so resolved in the affirmative.
Amendment agreed to.
Motion, as amended, agreed to.
In committee (Recommittal) :
Motion (by Senator Dunn) agreed to.
That the following new clause be inserted: - “ 59a. Any alteration made in any policy without the consent in writing of the Registrar first had and obtained, shall be void and of no effect.”
. -I move-
That the following new clause be inserted: - “ 55a. At the request of any owner of a policy in any company, the Registrar may require the company to furnish particulars as to the financial position or transactions of the company, including that of any item in the balance-sheets.”
The need for some such provision is borne out by experience. No reputable company should object to give to any shareholder the fullest information as to its finances. The ordinary balance-sheet of a company is not very explanatory. In most instances a great many items are grouped together and the statement without an explanation is not comprehensible by the average person. It seems to me to be the essence of fair play that the directors of professedly democratic mutual companies should not be allowed to treat policy-holders with contempt by refusing to explain what any particular item in a balance-sheet means. I have already admitted that it is extremely difficult to define what is a satisfactory answer to any question, and instead of insisting, as first I intended, that such information may be demanded by any policy-holder at the annual meeting of a company, I have come to the conclusion that the case will be met by an amendment which gives the Registrar authority to require a company to supply information to the policyholders or shareholders. It is reasonable that those who are interested in a company should be supplied with all the information desired by them as to its finances. I hope Senator McLachlan will accept the amendment.
– As I understand Senator Rae’s amendment, it seeks to provide that the owner of any policy in any company may make his request to the Registrar. I point out that the very purpose of this bill is to see that policy-holders are protected. The provisions relating to the statutory fund and the sanctity with which we have surrounded it should afford sufficient protection to any policyholder. I shall take honorable senators back a little, beginning at clause 43 of the bill, which states that -
Every company shall, at the expiration of each financial year of the company, prepare, in respect of each class of insurance business -
a revenue account for the year in accordance with the form set forth in the First Schedule to this Act; and
Under section 44 a separate return as to industrial business has to be lodged, and clause 45 provides that the company shall prepare an additional statement in accordance with the form set out in the third schedule. Clause 46 provides for the lodging of an actuarial report in abstract, while a statement of insurance business is dealt with by clause 47. That has to be done at a time and in compliance with the requirements of the Registrar. Clause 48 makes elaborate provisions for the lodging of accounts and abstract statements. If Senator Rae will examine sub-clause 4 of clause 48 he will find that the Registrar is given very considerable powers in the event of his finding that the requirements of the statute have not been complied with. An appeal is given against the decision of the Registrar under that sub-clause. Sub-clause 5 of the same clause provides that every revenue account and balance-sheet deposited with the Registrar shall be accompanied by a report on the affairs of the company submitted to the shareholders or policy-owners of the company in respect of the financial year to which the revenue account or balance-sheet relates. Then follow provisions as to valuations, dealt with by clause 49, with which we need not trouble here. Clause 50 confers power on the Registrar to make to a company any comments or queries that he thinks desirable in relation to any of the items contained in any account, abstract or statement deposited by the company with him. Clauses 52 and 53 make provision for the furnishing of copies of the last deposited account, abstract, statement or return, and for the lodging of confidential statistical returns to the Registrar, while clause 54 states - (1.) Every company shall, if so required by the Registrar, produce to him, or to any person specified by him in writing, at all reasonable times, any books, accounts or documents of the company, and shall permit the Registrar or the person specified to inspect them and to take extracts from them and to examine on oath its officers, agents and servants in relation to its business, and for this purpose the Registrar or the person specified may administer oaths . . .
Then, of course, there is a provision for ensuring secrecy on the part of the officer appointed by the Registrar. I submit that those precautions, coupled with the provisions for the statutory fund which honorable senators have debated ad nauseam, afford ample safeguards for policy-holders, and those are the people that Senator Rae’s new clause is directed to assist. All the information that is essential for the protection of a policyholder, or of the shareholders if it came to that, has to be furnished to the Registrar. He is the guardian and watch-dog of the policy-holders and of the shareholders to a certain point. The bill is directed mainly to the protection of policy-holders, and I suggest that no further protection, as suggested by Senator Rae, is needed. The acceptance of the amendment would merely offer an inducement to disgruntled people to worry the Registrar who, with the amendment accepted from Senator Dunn and other provisions, will, in all conscience, have a sufficient burden on his shoulders. We promised to keep the administration of the measure down to a small department, and we are already tending to overload it. It seems inconceivable that any prejudice can happen to policy-holders once the measure becomes law, and I ask the Senate to reject Senator Rae’s new clause.
– The remarks of the honorable senator in charge of the bill indicate that he entirely misapprehends the position. I did not contend for a moment that the bill allowed any laxity in providing safeguards to policy-holders. I desire to assure that balance-sheets and similar documents, which are frequently obscure, shall be subject to proper investigation. I affirm without fear of refutation that the ordinary company balance-sheet is incomprehensible to the average person, unless he obtains the advice of an actuary. I want this further provision so that the ordinary policy-holder shall have the right to ask for an explanation of what would otherwise be obscure to him. What can create greater confidence in a company than its readiness to explain anything that perplexes the average policyholder or shareholder? I did not want to bring in the name of any company in particular, but Senator McLachlan’s refusal of my proposal forces me to do so. I have in mind an annual meeting of the company that is represented as the bright light of immaculate purity, and hailed as something sacrosanct - the Australian Mutual Provident Society. At that meeting a man who had been a policyholder in the company for between 45 and 50 years, and who possessed an alert mentality, wanted to know the meaning of certain items in the balance-sheet. According to his statement he was not even accorded the courtesy of a refusal. He was simply ignored. Some of the items about which he desired an explanation were of considerable importance and he pleaded that the press, of which there were representatives present from’ all the Sydney daily newspapers, should make a record of his protest. He distributed to the reporters copies of the protest and although the reporters took a note of them, the editors, perhaps not wishing to offend such a valuable advertising asset, refused to print a line.
– Probably because of lack of space.
– No. The matter was tersely put.
– What were his questions?
– Unfortunately, I have mislaid them. One asked how an item of £27,000 was made up, while others referred to matters involving lesser amounts. After providing for practically all that could be specified under separate headings, contingencies, petty cash and so forth, this item of £27,000 came under the heading of general expenses. Another item covered the cost of sending certain officials of the company to London. ThiB man desired to know what expenses were involved in the proposal and what was its object. Still another item dealt with a visit of the chairman of directors to London, where he entertained nearly 200 of the wealthiest titled aristocrats of Great Britain at a big banquet, the expenses of which were charged to the company.
– It waa probably a good advertisement for the company.
– This man did not think so. The majority of us not only want a business to be run straight, but desire reasonable provision for those directly interested in it to ascertain whether it is straight, and whether any of its actions demand inquiry. I remind honorable senators that some of the wealthiest of the world’s insurance companies have crashed. I do not wish to have the Registrar pestered by disgruntled individuals, but if a policyholder desires certain information the Registrar should be the judge as to whether his question is a fitting one to put to the company or not. I fail to see how my amendment would place any hardship or injustice on those concerned.
Senator Sir GEORGE PEARCE (Western Australia) [8.59]. - I suggest that Senator Rae’s amendment is unnecessary. Clause 6 of the bill outlines the duties of the Registrar, paragraph b of that clause providing that he has -
To secure the due observance by every company of the provisions of this act.
Senator McLachlan read the clauses of the bill dealing with the obligations of companies under the measure, so far as they concern the protection of policy-holders. I draw attention to clause 54 (1) which provides that -
Every company shall, if so required by the Registrar, produce to him, or to any person specified by him in writing, at all reasonable times, any books, accounts or documents of the company, and shall permit the Registrar or the person specified to inspect them and to take extracts from them and to examine on oath its officers, agents and servants in relation to its business, and for this purpose the Registrar or the person specified may administer oaths.
– But that does not give the policy-holder any chance to get them.
Senator Sir GEORGE PEARCE.That provision is inserted in order that the Registrar shall have the power to see that the business is being carried on in conformity with the act. That means, among other things, that the policyholders shall be protected. If a policyholder is suspicious that the business of a company is not being conducted in conformity with the act, he should go to the Registrar and make out his case. The Registrar is the servant, not of the company, but of the public. He is there to see that the act is administered properly. He would be the judge of whether or not a prima facie case had been made out.
Senator Rae would make every disgruntled policy holder the judge of his own case. There are some people who think that their function in life is to make themselves general nuisances. In the press the other day I noticed that a judge in one of our courts urged that there should be some way of dealing with persons like one who had just come before him. The person in question had become familiar with the forms of the law and was using them to make herself a public nuisance. She had brought a matter before the judicial authorities twelve times. If Senator Rae’s clause were agreed to, any disgruntled person could make the life of the Registrar a burden. If a policy-holder can make out a prima facie case that the funds of a particular society are not being properly used, he should inform the Registrar, who would then institute inquiries. The Registrar will be a public servant, and will occupy a position similar to that occupied by heads of public departments. Should any person in the community have ground for believing that the Government of the day is using public funds wrongfully, it is his duty to acquaint the Auditor-General accordingly. If the Auditor-General thinks that a case has been made out, he at once investigates the matter. Senator Rae’s clause is unnecessary. Any person who has a genuine grievance and can make out a prima facie case, can have it investigated by placing the facts before the Registrar.
– It is not a question of believing that something is necessarily wrong, but of being able to obtain information in order to know what is being done.
Senator Sir GEORGE PEARCE.That is a different matter. No policyholder should be entitled to be supplied with details of every item comprising an amount set out in bulk in a company’s balance-sheet with the approval of the Registrar and in conformity with the act. In some cases considerable expense and inconvenience would be caused in supplying itemized accounts. We must trust the Registrar to see that the shareholders’ interests are protected. I suggest that if the clause is inserted the position of the Registrar will become intolerable.
.- I think that Senator Bae has overlooked the provisions of clauses 51 and 52.
– The Registrar will be practically the representative of the policy-holders of the company. If he detects anything that is not in the interests of the policy-holders, he . should report accordingly to the Minister. Clause 51 provides that -
The Registrar shall include in the report made by him under section eight of this act, the accounts, abstracts, statements or returns deposited by any company with him under section forty-eight of this act, or abstracts therefrom, and any comments or queries made by him thereon, and any answers furnished by the company to any such comments or queries.
That clause suggests that in certain circumstances it would be necessary for the Registrar to make inquiries with regard to some of the items in a company’s balance-sheet.
– Clause 54 is even more emphatic.
– Every policyholder has the right to apply to the company for a copy of statements or returns supplied to the Registrar. That information might not be in detail; but if he wanted further information he could apply to the Registrar for it. If he made application, he would probably find that the Registrar had already inquired into the matter, and would be able to furnish details.
– I only want to ensure that he will get them.
– There is nothing in the bill to say that he shall not get them; nor is there anything to indicate that the Registrar will not be approachable by policy-holders. I think that the provision in the bill is ample.
– Last week when in Sydney a gentleman who is deeply interested in insurance matters told Senator Rae and myself that when he asked for information from insurance companies with which he was associated the information was refused. All that Senator Rae asks is that a policy-holder shall be furnished with certain information if he asks for it. Under the laws of the States, persons who wish to form companies have to apply to the Registrar of Companies to register them. What is wrong with a policy-holder who has invested his money with an insurance company being authorized to get from the Registrar the information he desires ? If the additional work entailed in supplying the information is too much for the Registrar, some of the clerks who are out of work could be employed to supply it. If a policyholder thinks that there is something wrong with a company’s balance-sheet he should be able to get all the information he desires concerning it. I should be much happier if we had “before us a bill for the inauguration of a scheme of national insurance. Throughout the English-speaking world millions of pounds are being taken annually from the pockets of policy-holders and placed in the pockets of “go-getters.” I should like to see it clearly set out in the bill that a policy-holder may apply to the Registrar for information feeling certain that it will be supplied. I- hope that the clause will be agreed to.
– I cannot understand the lack of logic that has been displayed by those who oppose this proposal. They have pointed out that there are already ample means for controlling insurance companies. I have not disputed that.
– Cannot the Registrar now do everything that the honorable senator would force him to do at the request or demand of any policyholder ?
– It is not a question of whether or not the clause provides the utmost safeguards for the honest administration of the company, but of ensuring that consideration will be given the policy-holders who seek information. Surely it is the policy-holders in the aggregate who make up the company. Throughout the bill there is evidence of a desire to serve the interests of arrogant directors rather than the interests of policy-holders, notwithstanding that it is the latter who provide the directors with their handsome salaries. It is a very cavalier way of treating policy-holders to say that they are disgruntled. I do not ask that details of every £1 expended should be supplied; but I do say that in the law relating to companies there is nothing to compel a company to do more than to present an accurate balance-sheet. There is no provision for an ordinary shareholder or policy-holder obtaining the details of individual items in a balance-sheet.
– He could get that information at a shareholders’ meeting.
– Quite so. He should, but it is frequently refused. Questions asked at annual meetings relating to the affairs of a company are often ignored in a supercilious and arrogant manner.
– That attitude might be taken up towards a man who is known as a “ nark “.
– Whether a man is a “ nark “ or not is no reason why he should not get the information he requires.
– At times such a man may be very annoying.
– That does not matter. A man who is financially interested in a company is entitled to information in regard to any item in the balance-sheet. The chairman or the secretary may also be a “ nark “. Too often those who are supposed to be the servants of the people arrogate to themselves the position of masters. Frequently a civil answer cannot be obtained from those who are well paid to serve the public. My amendment can do no harm. On the other hand it would supplement all the other provisions intended to secure the honest conduct of companies. Reasonable satisfaction should be. afforded to those who find the money to run these companies, and reasonable opportunity to ascertain the meaning of anything in the balance-sheet or in regard to any financial transaction of a company. All along Senator McLachlan has been most stubborn in resisting any proposal to improve his bill, his idea, apparently, being to make the position of insurance companies as comfortable as possible and to see that no “ dog-gone “ shareholder can have any say.
– Is that not rather unfair to me?
– At any rate the honorable senator has prolonged the discussion of the bill by not showing a reasonable attitude towards amendments. My other proposal may be contentious, but this cannot be so regarded. Every policy-holder in a company is a partner in a business and every such partner should have the right to demand all the information he thinks is necessary in connexion with the working of the company with which he is associated. It is unconscionable that the majority of honorable senators should take up the attitude that the policy-holder is a negligible quantity to be treated with disdain by any arrogant jack-in-office.
– The policyholder can look for nothing but information relating to the statutory fund of the company.
– He also has the right to know how the business of the company is going on. If we are to have systematic stonewalling on every proposed amendment we shall approach the Greek kalends before the measure is got through another chamber. If we are to be met by systematic and unreasonable objections in this chamber we shall have to marshal our forces in another place to get a measure of justice. Every balance-sheet should set out the fees paid to directors. In what company’s balance-sheet can such information be found? The money of widows and orphans, which insurance companies exist to protect, is spent very largely in fattening people with excessively high directors’ fees. But all this information is systematically kept back from the policy-holders. The very company to which I recently referred, which is supposed to be the very essence of purity in commercial administration, publishes an advertisement just before the end of each financial year to this effect: “If you want to share in the bonus of this company this year, insure before the next two months have gone by “^-urging people to insure on the ground that if they hurry up they will share in this year’s bonus, whereas under its articles of association, bonuses cannot be issued to it3 policy-holders until they have paid premiums for at least two years. Such are the fraudulent misrepresentations made by some companies who hold their heads high in the commercial world. I feel that the ordinary policy-holder should have an opportunity to get any information he requires in connexion with the company in which he is virtually a partner, and that a little clique of more or less self -elected officials should not arrogate to themselves the right to refuse and treat with disdain any request for information.
– I do not think that the proposed clause merits the discussion that has taken place upon it. I think it really protects companies from any abuse of the powers that policy-holders may have. It is not a mandatory provision upon the Registrar to demand on every occasion every particular that any policyholder may require ; but it really vests in a policy-holder the right to interview the Registrar and place before him the particulars which he thinks should be furnished. It is then open to the Registrar to grant or refuse the request.
– Senator Rae did not say that.
– I am dealing with the words of the proposed clause. Senator Rae made it clear that he did not expect the Registrar to send on every request of what the honorable senator himself described as a “nark”. The matters referred to by Senator Rae relate only to items covered by the bill. The bill itself requires a company to furnish certain information to the Registrar, but that information may not cover such matters as directors’ fees and travelling expenses. The . Registrar will naturally be perfectly satisfied with an audited statement - if he had to keep records of the particulars of every balance-sheet he would require a suite of offices to hold them - but what Senator Rae wants is to give a policy-holder the right to enter the Registrar’s office for the purpose of obtaining certain information. As the bill stands at present, although a policy-holder might feel that he was entitled to certain particulars relating to directors’ fees, when he submitted his request to the Registrar the latter could not entertain it. I see no objection to Senator Rae’s proposal. A policy-holder is practically accepted as a partner in an insurance company. He is accepted as being other than a “nark” or an annoyance. He is a member of the community who is physically sound, and his character is such that the company has accepted him as a member of a mutual benefit society. Such a person may justly feel that he is entitled to certain information from his partners; but under the bill, as it stands, he has no right to approach the Registrar for information that is not required to be supplied by the statute. It is not contrary to the act to omit the directors’ fees from balance-sheets. Consequently, the Registrar, even if he were the most polite civil servant ever appointed, could turn to any policy-holder who asked for particulars about directors’ fees or travelling expenses and say, “ I am sorry, but 1 have no jurisdiction in that matter “. “What Senator Rae wants is to give the Registrar jurisdiction in cases where he himself is satisfied that the policy-holder is not a “ nark “ or an annoyance, and is not going to prejudice the interest of the company by persistent applications. If the Registrar feels that the request of the policy-holder is unreasonable, there is no obligation cast upon him by the amendment to submit the application to the insurance company.
– But if the power is given to the Registrar to make these inquiries it is possible that the policy-holder will get civil treatment at the annual meeting of the company, and may not have to go to the Registrar to get the information that he requires.
– That is so. The Registrar could ask the policy-holder if he had already made application at the annual meeting for the information he was seeking, and if he ascertained that an application made at the annual meeting had been refused, and upon investigation himself decided that there was no necessity for asking the company to supply it, he could so inform the policyholder. Under existing circumstances, however, the Registrar is obliged to say, “I am sorry, but it is not within my power under the act to acquire that information for you”. If the amendment is agreed to it removes from the Registrar the possibility of being accused of using his powers capriciously to the detriment of the insurance company, and at the same time gives him a discretion to turn a deaf ear to a request made by some person who he has reason to believe is simply seeking information in a spirit of caprice and not in the interest of policy-holders generally.I ask Senator McLachlan to yield to the request of Senator Rae and allow the new clause to be inserted. The amendment is, I believe, in accordance with the wishes of honorablesenators and should meet with the approval of the majority of honorable members in another place.
.- The Minister (Senator Daly) has placed a different interpretation upon the proposed new clause and has considerably modified the views expressed by Senator Rae, who distinctly stated that the policy-holders should have the right to approach the Registrar and demand information. If the now clause merely provides that the Registrar may obtain information for a policy-holder on a specific point it should meet with the approval of the committee. Those termed “narks” are never satisfied; but a reputable policy-holder should have the right to approach the Registrar for information concerning an item of expenditure in the balance-sheet. If the new clause merely provides what the Minister (Senator Daly) says it does, I shall support it.
– Under existing circumstances policy-holders have at times great difficulty in obtaining information or in having a grievance remedied. In some circumstances they are able to attend the annual meeting of a company; but when such meetings are held at the head office of a company, say, in Melbourne or Sydney, it is impracticable for many to be present. During the war I, with many others, borrowed money from a big insurance company, I think, on the 10 per cent. instalment plan, for war loan purposes. We were assured that no more contributions would be required, as the interest would be credited and debited to us, and that when the loan matured the company would be paid. The only stipulation was that we should take out policies to the amount of the loan. About twelve or eighteen months before maturity I was astonished, as was every one else similarly situated, to receive a letter from this strong company suggesting that the amount of the loan should be paid or substantially reduced. I regarded the action of the company as a breach of faith; but the only redress open to me seemed to be to attend the annual meeting and express my opinion. Fortunately, other avenues were open to me and I at once paid the amount in full, and later took out a substantial policy in another company. It is not open for every policy-holder to redress a grievance in that way. As the method which Senator Rae suggests would increase the privileges and opportunities of policy-holders to obtain information and to have grievances such as I have mentioned brought under the notice of the company, I shall support the proposed new clause.
– I apologize to the committee for the views I expressed upon this proposed new clause, as I was under the impression that it was mandatory upon the Registrar. On closely perusing it I find, as stated by the Minister (Senator Daly), that it merely gives the Registrar discretionary power to supply information required by a policy-holder. I shall accept the proposed new clause if Senator Rae will amend it to read -
At the request of any owner of a policy in any company the Registrar may require the company to furnish particulars as to any item in the balance-sheet.
– I accept the suggestion and ask leave to amend my proposed new clause accordingly.
Proposed new clause agreed to.
– I move-
That the following new clause be inserted: - 64a. No person shall insure the life of another over the age of16 years without the written consent of such person.
It is generally admitted that there should be power under our insurance law for persons to insure young children; and obviously, it is impossible for very young children to give their consent. The proposed new clause provides that no person shall insure the life of another over the age of 16 years without the written consent of such person be obtained. This subject has been fully discussed on several occasions. A wife who is burdened with a worthless husband may, in her own interests and the interests of her family deem it necessary to insure his life so that in the event of his death she would not be left without some means. In many business transactions also it is considered advisable to insure the life of one of the parties. If Senator McLachlan advanced me £20,000 or £30,000 for investment in a business, he might deem it necessary to insure my life for a certain sum to safeguard his interest in the money loaned. In mutual transactions of this nature, the consent of the persons insured would be readily obtainable. But the position is different where a husband or wife refuses to give permission. Those cases are not likely to be very common, and they are quite reasonably answered by the risks sometimes incurred by persons whose lives have been insured without their consent. Quite recently a man was hanged in London for having murdered his mother whose life he had insured. Because such cases have occurred and because of the possible temptation for criminally-minded persons to take the lives of others,’ it is advisable to have these safeguards in the bill. I remind the committee that this provision was accepted by a substantial majority a few weeks ago but because it was inserted in the wrong place, it was temporarily withdrawn at the request of Senator McLachlan. I assume that the committee will not now stultify its previous decision.
– Senator Rae is attempting to legislate for cases that very rarely occur. Hard cases, as we know, make bad law. If we paid heed to all the murders and crimes committed for pecuniary gain, many persons would hesitate about having anything to do with life insurance business. We have much the same repercussions in regard to wills, and I suggest that a provision such as this will create unexpected difficulties. A wife has been held to have an insurable interest in the life of her husband. Similarly a husband has been held to have the same interest in the life of his wife. The tenant for life of another, that is a person who occupies freehold land during the life of another person - this is a constantly recurring method of bequeathing property - is entitled to insure the life of that person because he has an insurable interest in it. All these cases have been closely examined and there has been a wealth of judicial decision upon them. Any interference with the common law would” be unwise. I cited the case of a board of directors of which I happened to be a member, which saw fit to insure the life of its managing director whose services were extremely valuable to the board because pf certain patents which he controlled.
– Did you have his consent?
– Why should we have his consent? The continued prosperity of the company depends upon the continuance of his life, and in the interests of the shareholders the directors insured his life for a large sum of money. If he had died -suddenly before his life was insured the shareholders might have lost the whole of the money which they had invested in the company.
– It is not conceivable that he would refuse.
– But why should we deprive people of the right to do it, whether he refuses or not? I consider that we should be cutting across a well-established principle of law if we inserted this amendment in the bill, and I ask the Senate to reject it. I do not wish at this late hour to delay the Senate by indulging in a disquisition on the law; but, if the matter is pressed, I shall have to report progress, and debate it at a later date. The acceptance of the amendment would bring about tremendous- confusion. If there was any real necessity for it there would be some case for consideration, but I do not think that that necessity exists. The law - judge-made, I admit - is well settled in regard to the subject of insurable interests.
.^1 have listened with a great deal of interest to the remarks of the honorable senator in charge of the bill, and I appreciate the sincerity with which he advocates his case. Clause 81 of the bill provides that -
A married woman may effect a policy upon her own life or upon the life of her husband, with his written consent, for her separate use …
Where a happy relationship exists between man and wife, and they can afford the necessary money to take out a policy, there is nothing to prevent a wife suggesting that she shall insure her husband. But that relationship may not exist. A man may be working, for £4 10s. a week, out of which he has to pay £1 10s. for rent and £2 10s. for foodstuffs, making a total outgoing of £4, and leaving a surplus of only 10s. I am aware that there are thousands of housewives in Australia who are thrifty, and that even under those conditions one might put by sufficient money to cause her to oe tempted by the blandishments of an insurance canvasser. The husband would know nothing about it, and a row would result when he discovered what his wife had done. One never knows where that sort of thing will lead. I desire to see incorporated in the bill a provision that there shall be a proper agreement between the parties before an insurance is effected. I believe that Senator Daly has a suggestion on the subject concerning the acceptance of a medical certificate as consent. I realize that many husbands are scallywags, and I wish to see the woman given the benefit of the doubt ; but I must insist upon unanimity between man and wife before the insurance is effected. I shall therefore support the amendment.
– May I suggest to the honorable senator in charge of the bill that, whilst I appreciate the legal difficulties that would arise if this amendment were accepted in its present form, I believe that the Senate can, by the addition of certain words, place in the bill a provision that is absolutely essential under our existing system of insurance. Senator McLachlan said that difficulties would arise so far as life tenants are concerned, and quoted the case of a particular servant of the company. In those cases a medical certificate is always obtained before the proponent is accepted by the company, consequently that would be consent by the party being insured. I cannot see where the bill in its present form protects the class of person to whom I referred when the measure was in its second-reading stages. I refer to the £30 insurance. The insurance canvasser knocks at the door, paints a picture of what a drunkard the bread-winner is, says that he may at any time be knocked down by a car, and that it is necessary and desirable for the wife to protect herself and her children by insuring his life for £90. Generally companies do not insist upon medical examination as a condition precedent to the acceptance of policies under £100, and what happens, and not in isolated cases, is that when some calamity befalls the insured, the company produces the application form which declares that he was a man of temperate habits, and refuses to pay the insurance. It points to the conditions of the policy and insists upon observing them, contending that if it created a precedent by going outside of them, it might be injured in its business on some future occasion. I suggest that Senator McLachlan should accept Senator Bae’s amendment with this provision at the end of it -
A medical certificate as to the physical fitness of the insured shall be deemed to be consent within the meaning of the section.
That should satisfy all parties and protect the class of person that Senator Bae is most anxious to protect. At the same time, it will not cross the line of judicial decisions to which Senator McLachlan has referred. It is no use advancing the argument that it would cut out the thrifty wife who is anxious to protect herself and her children against possibilities that may eventuate from the death of the bread-winner. She may put her hardearned savings into a policy, and if anything happens to her husband she will be able to get back the premiums. My proposal will not prejudice the activities of any decent insurance company, and it will serve to keep the poorer type of insurance cleaner than it is at present. At the same time, it will not infringe any of the judge-made laws to which Senator McLachlan has referred.
.- I fear that the difficulty is deeper than Senator Daly imagines. I indicated only a few short reasons for the rejection of the amendment. I have some correspondence on the subject that I am not able to put my hands on at the moment, indicating that a great deal of industrial insurance is business done by wives in the way suggested by honorable senators opposite. It would increase the burdens of insurance if the suggestion that there should be a medical certificate is agreed to. There may be some cases in which companies do not play fair, but that is what this bill is designed to cure. I feel that the amendment is vital to the measure, and that it would upset the whole practice of industrial insurance throughout Australia if accepted. I cannot accept the responsibility of approving it.
– I regret that Senator McLachlan cannot accept the amendment. It is no use claiming that what has been referred to is an isolated example. In legal practice, I happen to represent the poorer classes of the community in court cases, and I know that the party to which I belong was responsible for the appointment in South Australia of a Public Solicitor to whom any pauper, in the legal sense, may go to seek advice. I know the number of cases that used to come into our own. office, and which went to the Trades Hall, and were later referred to me and to my partner, the present. Attorney-General of South Australia. Industrial insurance is one of the blots on the insurance practice of Australia. I shall not say that it is a swindle, as I do not believe in using the privilege of this chamber to make statements of that description, but it is a gamble in which the odds are all on the side of the insurance companies. These canvassers come along to a woman and put all sorts of suggestions up to her as to what the policy means. The poor unfortunate woman thinking that it is a good investment accepts it. Later, when something happens, her position is the same as that of the couple at Gawler to whom I rereferred the other day. Two old-age pensioners at Gawler contributed 6d. a week each in order to provide £12 at death, which the insurance canvasser told them would be sufficient to meet their funeral expenses. Four years later the man developed a cancer. The canvasser called, and after expressing his sympathy suggested to the wife that as the cost of funerals had increased, the policy would be raised to £15 if they each paid an additional Id. a week. Accordingly, the policies were cancelled, and new ones taken out. Subsequently, the man died. The case came to my firm for attention. I went to the insurance company - a big concern which has invested in Australia some millions of pounds in buildings alone - and was informed that payment would not be made, because the proposal for the new policy set out that the man was in good health. The canvasser knew that the man was not in good health when the policy was made out, but that was no protection for the woman, because the policy stated that the company was not responsible for representations made by its canvassers or agents. I can quite understand that Senator McLachlan has not come in contact with such cases to the extent that I have; his clientele is different. The Trades Hall in Adelaide could furnish ample evidence of the same nature, which the Trades Hall authorities of Melbourne and Sydney could no doubt supplement. The merit that I see in the proposal of Senator Bae is that in the case of the very class of person that Senator McLachlan says will not now be capable of being insured - the husband, whose wife does not want him to know she is insuring him - the insurance money will not be paid when death occurs, because there is something wrong, either physically, mentally, or morally, with a man who does not want his wife to insure him. The amendment suggested by Senator Bae, together with my proposal, will protect adequately all decent insurance companies and all decent classes of insurance. Industrial insurance is the most profitable form of insurance to the companies engaging in it. I want to see the business of all insurance companies conducted along the sound lines adopted by the Mutual Life and Citizens’ Company and the Australian Mutual Provident Company, and that those companies whose business is not properly conducted shall be stopped. These companies know that their industrial insurance business is “ crook,” and consequently it is very difficult to see the heads of such concerns with respect to any complaint. Seeing that all decent companies will in no way be prejudiced by the amendment, I hope that the Senate will agree to it, or at leastmake inquiries into the allegations of honorable senators on this side in order that policy-holders may be protected.
– In order that I may have an opportunity of looking into the matter, and as the hour is late, I propose to report progress.
Exchange Difficulties: Consultation with Bank of England - Peas and Beans: Impost Duty by United States - Wheat Guarantee : REPRESENTATIONS by WESTERN Australia.
.- I move-
That the Senate do now adjourn.
This morning I promised to ascertain from the Prime Minister whether a statement had been made in another place in relation to the financial position. I have since been informed that the Prime Minister to-day made a statement in another place to the following effect: - The Commonwealth representative in London has for some time been in close consultation with the Bank of England and other financial authorities with a view to finding a solution of the growing difficulties of providing exchange to cover Australian payments oversea. At the same time the Australian Loan Council has been in close consultation on the same subject with the Commonwealth Bank and associated banks in Australia. The Government and banks have already taken important, corrective measures for -adjusting the trade balance and the banks have materially assisted Australian Governments to secure exchange on London. “The Commonwealth Government is fixed in its determination that all necessary steps shall be taken to meet promptly all Australian oversea obligations and as the Rank of England has expressed its willingness to assist Australia to find a solution of the present difficulties the Government and the bank have mutually agreed that it is desirable that there should be consultation in Australia between a representative of the Bank of England, the Commonwealth Government and the Commonwealth Bank Board. A representative of the Bank of England will accordingly visit Australia at an early date. The representative is Sir 0. E. Niemeyer, who is an official of the Bank of England and was formerly Controller of Finance of the British Treasury, and he will be accompanied by an economist and an officer of the Bank of England. Sir Otto Niemeyer left London yesterday.
Senator Sir GEORGE PEARCE (Western Australia) [10.26]. - All honorable senators regret the circumstances both in Australia and overseas that rendered necessary the action which has been taken; but we all congratulate the Government on having secured the friendly co-operation of the Bank of England and on the steps that have been taken to obtain consultation in Australia upon so important a matter.
Honorable SENATORS - Hear, hear!
– I desire to draw attention to a matter of great importance to the primary producers of Australia, particularly those of Tasmania. I have to-day received the following letter from a Tasmanian firm of produce merchants and exporters -
May we draw your attention to the fact that it is reported on good authority the United States of America Department of Customs has imposed, or is about to impose, a duty of three cents per pound on imported peas and beans. This movement, we are assured, applies to Tasmanian pulse, and will have the effect of stopping importations, amounting as it does to an impost of over 6s. fid. per bushel of GO lbs., which is more than the grower has realized for his produce in Tasmania this season.
We respectfully submit that the time has arrived when the Australian Government should not be content to take these actions sitting down any longer, and suggest that either a trade agreement should be immediately made with the States, or otherwise a prohibitive tariff should be placed upon American products and manufactures. It is not necessary for us to point out that Australia already imports from America many millions of pounds worth of goods sterling more than America buys from us.
During recent years substantial shipments of peas and beans have been made to America. Efforts have been made to ship substantial cargoes of peas and beans to the United States of America, the importers in which country are very desirous of doing business. I am not certain whether these heavy duties have yet been imposed, but the rumor concerning them has already prevented a large amount of business from being done. I ask the Government to ascertain the facts by communicating with the Trade Commissioner in the United States of America, if necessary, with a view to seeing whether something can be done. While I do not suggest that we should adopt retaliatory measures many of us think that some steps should be taken either to open up trade relations with America of a more satisfactory character or to mete out to people who refuse to trade with us, although we are such good customers of theirs, such treatment as will compel them to come to some reciprocal trade arrangement with us. We might refuse to trade with them. If the Minister has any information on the subject I trust he will impart it to the Senate.
– Yesterday and to-day I have been trying to ascertain the quantity of peas and beans exported from Australia to the United States of America. I have not been able to get that information, but I am satisfied that a fair proportion of our export trade in these commodities has been done with the United States of America recently. To show the importance of the matter to Australia, because Victoria and South Australia are equally interested with Tasmania in the output of peas and beans, I have ascertained the quantity produced for 1927 and 1928. In the former year, the output was 900,000 bushels, an average of 15.62 bushels per acre. In the latter year, owing to an adverse season, the yield fell to 800,000 bushels, the average being 12.23 bushels per acre. In view of the fact that certain areas, particularly in Tasmania, are eminently suitable for producing peas and beans and that their cultivation has been, in many instances that have come to my knowledge, the mainstay of many farmers, I support the remarks of Senator Herbert Hays. I hope that the Government will immediately communicate with the Commonwealth representative in New York with a view to his approaching the authorities at Washington to secure some mitigation of the duty imposed on these commodities. We do not know the details, but evidently those interested in growing peas and beans had very good ground for bringing the matter under the notice of Tasmanian senators. I trust that the Government will act promptly so that those engaged in the industry will have some prospect of realizing on the crops they are raising this season.
– In the informative speech which Senator Daly made in moving the second reading of the Wheat Marketing Bill, he said that the Western Australian Government had made representations to the Commonwealth Government on the subject of the proposed wheat pool. I know that the State Government has been very perturbed at the heavy financial burden the Wheat Marketing Bill is likely to throw on Western Australia owing to its small population and large wheat production, and if it has made representations to the Commonwealth Government on the matter, I hope that those representations will be made available so that honorable senators may know what they are before they proceed with the discussion on the Wheat Marketing Bill.
– I should like the Leader of the Government in the Senate (Senator Daly) to supply honorable senators to-morrow morning with a copy of the speech he delivered this afternoon in moving the second reading of the Wheat Marketing Bill.
– As Senator Herbert Hays was good enough to inform me that he intended to bring up, on the adjournment, the matter to which he has referred, I had an interview with the Acting Minister for Trade and Customs (Mr. Forde), who, in turn, made inquiries. So far as his department knows, there is nothing in the rumour that has gained circulation. But, attention having been drawn to the matter, the department will make full inquiries, the result of which I hope to be in a position to place before honorable senators tomorrow or early next week.
Unless there is some objection on the ground of policy, I see no reason why Senator E. B. J Johnston’s request should not be granted. I shall place the honorable senator’s request before the Prime Minister.
I have no objection to making copies of my speech on the Wheat Marketing Bill available to honorable senators, but as there is always a possibility of errors in printing tables of figures, honorable senators must regard as uncorrected the pulls that will be made available to them.
Honorable Senators. - Hear, hear!
Question resolved in the affirmative.
Senate adjourned at 10.38 p.m.
Cite as: Australia, Senate, Debates, 19 June 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300619_senate_12_125/>.