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Thursday, 14 December 1905

Mr SALMON (Laanecoorie) - The hon.orable member for Parramatta has given it, as his chief reason why the Bill should not be dealt with at this particular time, that no evidence has been adduced to show the necessity for its introduction. He urged that American conditions cannot be cited to that end.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - This is not the American law.

Mr SALMON - No. But I intend to deal with the conditions now existing in Australia, and will endeavour to . show that, if some such action as is - now, proposed is not taken, we shall soon be in a position similar to that of America, although I agree with the honorable member for Parramatta -that it is incredible that political corruption, such as is part of the industrial conditions there, should ever exist here. The honorable member asserted that Australia is free from the influences of trusts, and that we are not likely to have to deal with them in the immediate future.


Mr SALMON - The honorable member's whole argument was directed to the non-necessity for this legislation, because of the non-existence of the evil which it has been introduced to combat. But, even if it were admitted that trusts and monopolies do not exist in Australia - and I do not admit it - wise men must be guided by experience. Prevention is far better than cure, and we are justified by what we know of other countries in taking time by the forelock, and legislating for the prevention of the conditions by which we are menaced .

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Bill would not affect a trust whose operations were confined to one State.

Mr SALMON - It will deal with three great trusts which are at the present time operating in Australia, the International Harvester Company, the tobacco monopoly, and the Colonial Sugar Refining Company. The two latter are already causing the consumers of their productions - for whom honorable members opposite are always expressing solicitude - to pay very dearly for them, while the first-named has public] v announced its intention to secure the Australian trade in agricultural implements, as it has already secured 90 per cent, of the trade of the world.


Mr SALMON - Yes, but it has fastened one of its long tentacles upon the heart of Australia, and threatens the very existence of industries which have been established at considerable cost. If it gains the upper hand it will certainly raise the prices of its manufactures to the consumers. So far as we are concerned, the trust is a young tiger, which is at present living only on mil k ; . but the time will, come when it will demand blood- the life-blood of the industrial population of Australia.


Mr SALMON - I believe that every trust, whether local or foreign, should be brought under control. The Bill deals not only with foreign, but also with local combinations. We have had evidence of the manipulations of the trusts in America. I would refer honorable members to two enormous volumes in the Library, which contain information collected by Congress with regard to the operations of the American trusts. There they will find indications of the extremes to which the manipulations and exploitations of the trusts have been carried on. Similar operations are certain to be conducted here, and, in fact, they are being carried on to-day. The methods of the trusts are not apparent to those who look merely at the surface of things. They take good care that what they are doing does not appear on the surface. The Bill provides means by which the surface can be broken, and their operations can bc brought into the full light of day. We should be foolish if, in considering this question, we entirely shut our eyes to what has taken place in America, where trusts have assumed the largest proportions. We should take warning bv the shocking example which the "United States presents of long continued indifference on the part of those responsible for the welfare of the body politic. The Legislature of America is largely to blame for not having taken action in regard to trusts when they could have been more easily grappled with. We should take heed of the teachings of history, and not allow the trusts to assume such magnitude that they cannot unless with great difficulty be combated. The trusts devise means by which the public can be completely hood-winked. They are able to cover uv what they are doing, and we can obtain a knowledge of their transactions only by invoking the power of the law. The evils brought about in America have been manifold. In the first place, the operations of the trusts tend to reduce employment; and in the second to increase the cost of- living. The moment that a trust gets into working order employment is reduced. We have had a case in point in Australia. The great tobacco combine has closed up a number of factories, and a number of men, from managers down to leaf strippers,, have been thrown put of employment. Evidence was given by one* of the managers of the combine that the trust was brought about partly with the object of reducing the cost of administration.

Mr Lonsdale - Why does not the honorable member wait until the Tobacco Committee can make its report?

Mr SALMON - The Committee is not inquiring into the effects of the tobacco combine, so much as into the question of the desirability of the Government taking over the industry. The evidence given, however, has been sufficient to demonstrate the evils attendant upon such large combinations.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - And yet before the Committee can bring up their report it is proposed to alter the whole state of affairs.

Mr SALMON - That argument has always, been used in favour of delay. I do not think that the inquiry now being conducted by the Committee need be interfered with in the slightest degree. The question as to whether the Government shall take over the industry is not involved in the measure before us. The reduction of employment to which I have referred is always followed by two great evils from which this country has already suffered in some degree, namely,, centralization and concentration. The factories of -the tobacco combine are now carried on only in the greater centres of population. The smaller factories have been obliterated, and the employes have been thrown on the streets. I am sure that honorable members who are aware of the ill effects of centralization would not favour industrial methods which would accentuate the evil. One of the first results of monopoly is an increase in the price of the commodities which the trusts put upon the market. This increase is not always apparent. The consumer is not always aware that he is paying a higher price. When a combine has the power to reduce the quality of an article, it invariably does so, and thus in effect considerably increases its cost. The article' does not last so long and does not stand the same wear and tear as does one manufactured under conditions of fair competition. The International Harvester Trust has publicly announced that it has secured 90 per cent, of the world's trade, and intends to obtain the rest. That may be a verv laudable ambition on the part of a trading concern, but it is one which I am sure that honorable members are not prepared to assist that combination to attain. As the result of a long and sad experience, we recognise that if we were placed entirely at the mercy of such a trust, the advancement of our agricultural industry would be seri- ously retarded, and the well-being of those engaged in it seriously menaced.

Mr Lonsdale - Can the honorable member 'adduce any proof ?

Mr SALMON - Yes. We have had undue demands made upon us for years and years by a great combine of a similar character. Before they were threatened with local competition, the American manufacturers of reapers and1 binders required our farmers to pay prices 100 per cent, in advance of the actual value of the machines.

Mr Skene - Why are they_ selling them cheaper now?

Mr SALMON - The prices were reduced as soon as the Commonwealth Tariff was announced, because it was recognised that the duties might be increased under the operation of the provisions of division VI. a of the Tariff, and that factories would be started here. The honorable member for Grampians has had a life-long experience of the agricultural industry, and he must know thai! what I say is absolutely correct.

Mr Lonsdale - Why did Mr. McKay join a combine in order to keep up the prices?

Mr SALMON - I am prepared to leal with any combination of a nefarious character. I am a protectionist, and I contend that a proposal of this kind is the corollary of a protective Tariff. Protection for the manufacturer only is no protection at all. The necessary accompaniment of protection to the manufacturer, which we have secured to a certain extent by means of the Tariff, and protection to' the operatives, which has been insured to some extent by our industrial legislation, is the protection of the consumer, which we can secure by means of anti-trust and anti-monopoly legislation. We are perfectly aware of the methods usually adopted by the trusts. They first of all lull the consumer into a false sense of security by satisfying him that they will bring about a reduction in prices. The International Harvester Company reduced the prices of their machines in order to kill local competition. It is the invariable practice of the trusts to reduce their prices in order to secure the market and shut out all competitors.

Mr Lonsdale - The honorable member must know that the prices of harvesters were raised at Mr. McKay's instigation.

Mr SALMON - The Bill proposes to deal with those who unduly raise prices.

Mr Lonsdale - The Bill cannot affect Mr. McKay, and the honorable member knows it.

Mr SALMON - The provisions of the Bill are broad enough to include every one whose operations may be inimical to the best interests of the community. The first thing a trust does is to reduce the price of the article, and when its monopoly has been thoroughly established, to raise the price again, or to put on the market goods of an inferior quality, or perhaps do both'. I think I have succeeded in showing that any consideration which a trust, local or foreign, may extend to the consumer, will not necessarily be of a permanent character. The experience of other countries has been that a reduction in price, which has evidently been made for the purpose of securing a monopoly, has invariably been followed, either by an increase in the cost of the goods, or a reduction in their value, or both. We must assume that a similar result will follow the efforts which are at present being made in one particular direction in Australia. Surely free-traders and protectionists alike - because . I maintain that this question is a non-party one - must recognise that they owe a duty to the Commonwealth at large, and not to any particular section of it. We have, by our legislation, given certain assistance to the chief of our producing and manufacturing interests, and we are now entitled to consider the interests of the consumer'. I contend that if this Bill be passed in anything like its present form, it will extend a substantial protection to the consumer, who, hitherto, has benefited only in. an indirect fashion. There is one other point to which I desire to direct special attention. I have already spoken' of the methods which are adopted by various combines. I wish to point out that a most reprehensible practice is being adopted in this State by one of these combinations. The company in question deals with agriculturists, and endeavours to sell its machines upon the best terms. Those terms in a very great number of cases include a mortgage upon the land of the agriculturist. This mortgage, I would point out, is npt held by any local corporation. It frequently happens that the mortgaged lands fall - as they may easily do in time of droughtinto the hands of this company, which has no home or abiding place in Australia.

Mr McColl - What are the mortgages given- for?

Mr SALMON - They are given for the machines which are supplied to the farmers.

Mr McColl - I am afraid that the honorable member has been misled.

Mr SALMON - This is a very serious matter, and may have the most untoward effect upon the development of our agricultural industries. In regard to local monopolies, I may mention that some years ago, as a member of the Victorian Parliament, I made inquiries into the methods adopted by the Colonial Sugar Refining Company. I found that that company, owing to the power which it then possessed of securing different prices for its product in the various States, was able to amass a considerable profit year by year. In addition to having a monopoly of the trade in refined sugar,, it was able, at the beginning of a sugar season, to compel the growers of Queensland to accept a certain price for their cane, irrespective of the yield.

Mr Poynton - The Minister says that this Bill will not touch that company.

Mr SALMON - If the honorable member will read its provisions, he will see that it applies to trusts, whether they are within or without Australia.

Mr McLean - Does it not apply only to imports?

Mr SALMON - I do not think so.

Sir William Lyne - It applies to InterState trade. I said, in moving the second reading of the Bill, that I did not think it would apply to the Colonial Sugar Refining Company.

Mr SALMON - If the Minister's opinion be correct, I sincerely hope that before the measure leaves this Chamber it will be made to apply to every combine which is inimical to the interests of the consumer. The tobacco monopoly, which does extend beyond the -borders of individual States, and which, to mv own knowledge, has secured the trade of Australia in a way that would not be permitted under this Bill, has a very simple, but most effective, method of securing its profits. It is a most effective combination, because it embraces both manufacturers and importers. Let us suppose that a distributor in a country town desires to obtain a supply of a particular brand of tobacco, which he finds that his customers fancy - and we know that there are no persons who are more fanciful in their tastes than those who drink liquor and smoke tobacco - and. that he applies to the head office for, say, five boxes of that tobacco, which we will assume is called the "Mary Brown" brand. He immediately receives a letter stating that, unfortunately, there is no tobacco of this brand in stock. He then asks if the combine can supply him with even a couple of boxes to meet immediate requirements. To that communication a similar answer is made, but he is informed that the combine has another brand of equal quality in stock at a price of 3d. per lb. less,, and1, eventually, he finds himself compelled to purchase it. Under such circumstances I contend that both the consumer and the distributor are absolutely in the power of the combine. Nobody outside it either imports or manufactures these particular tobaccoes. The honorable member for North Sydney has asked why this information was not given to the Select Committee which is inquiring into the question of the tobacco- monopoly. The explanation, to my mind, is very simple. The distributors are entirely dependent for their supplies upon the combine, and is it likely that they will give information against it?

Mr Watson - A number of them stated that thev would not dare to do so.

Mr Kelly - Is the honorable member sure that this Bill will apply to the tobacco combine ?

Mr SALMON - Undoubtedly.

Mr Isaacs - Most certainly it will apply to the combine.

Mr SALMON - The great distributing house of the combine has this most significant paragraph upon its price-list -

Goods supplied in this State must not be exported to other States.

We all know what that means. It means that each State is to be kept absolutely inthe grip of the combine, and that though the prices charged in the various States may be utterly dissimilar, nobody can interfere, because export cannot take place between State and State.

Mr Isaacs - And that is called free competition ?

Mr SALMON - I recognise that the advocates of free and unrestricted competitionhave had some justification for the views which they hold. But I fail to see how any free-trader can oppose a Bill of this character, which is intended to break downmonopoly and to substitute for it a healthy competition. The sole object of combinesand trusts is to obliterate competition, and, therefore, the true freetrader must support a Bill which has for its object the annihilation of such bodies.

Mr Kelly - Conversely, the protectionists must oppose it.

Mr SALMON - No. I do not for a moment admit the justice of the honorable member's definition of the term "protectionist." We have been told that the quality of an article will indicate the likelihood of its survival. I have already shown that in the case of one article, at least, that is not so. It has been said that this Bill is intended to prohibit importation - that it marks a further advance in the protective policy of the Commonwealth. I deny that. It is a Bill which is intended to prohibit unfair competition, and that term has been clearly defined. Under it dumping will be prohibited. That is where the prohibition comes in. This Bill will prohibit the dumping of the products of other countries at a price below their value, to the detriment of the established industries of the Commonwealth, and it will also prohibit the initiation of unfair competition which would result in the destruction of local industries. Dumping is prohibited in the interests of the three classes of the community who are specially mentioned in the Bill, namely, the producers, the workers, and the consumers. I feel sure that every honorable member will admit that although the dumping of cheap goods may confer a temporary benefit upon those who use them, it is almost invariably followed by opposite results. The dumping of cheap goods means the destruction of local industries, and the destruction of those industries must eventually place those using articles so produced entirely at the mercy of the importer. In my opinion, the principle of this measure must be affirmed. The honorable member for North. Sydney, with that extensive and successful business experience which he possesses - an experience of which this House has been glad from time to time to avail itself - must feel that there is some demand in Australia for a Bill of this character. I feel sure that his extensive knowledge of the commercial world will lead him to recognise that there is growing up in Australia a tendency among the great suppliers of the community to combine. They find it to their advantage to do so. No one knows that better than does my honorable friend. Although he may consider that some of the provisions of the Bill are too drastic, I am confident that the principle involved will be affirmed by him; that, as a free-trader, he is in favour of doing away with practices which can tend only to lessen fair and healthy competition. I am satisfied that his fiscal beliefs lead him often in the direction of securing that there shall be that proper trade rivalry which we are told must result to the advantage of all concerned. In these circumstances, I am_sure that he will be found -.supporting the second reading of the Bill. Although he may be prepared in Committee to propose certain amendments, I fail to understand how he and those who think with him could at the present juncture offer any serious objection to the motion for the second reading. As I have said, the principle must be affirmed ; Australia must not be the exploiting ground of the dumper.

Mr Poynton - Does not the honorable member think that we ought to have some evidence, apart from that of Mr. McKay and others interested, as to the necessity for this Bill ?

Mr SALMON - The whole of my speech has been in the direction of showing the necessity of preventing abuses.

Mr Lonsdale - It has consisted, not of proof, but of assertion.

Mr SALMON - The honorable member will pardon me if I do not reply to his interjections, vociferous though they may be, since I should not for one moment endeavour to prove anything to his satisfaction. We have heard of the one juryman who complained of the obstinacy of his eleven fellow jurors, and I feel sure that in such a position my honorable friend would be found in the minority. I am not going to attempt to prove anything to him; but I ask him to accept my assurance that my desire is to prevent the creeping into Australia of those abuses which most people admit exist in great industrial countries. We hope to make Australia a great industrial centre, and, that being our desire, we must see to it, at the outset; that we do not allow to fasten upon our industrial life such a vampire as the combine has proved itself to be in older countries. As a protectionist, I believe that protection should be of a triple character; it should protect, not only the manufacturer, but the operative and the consumer. This Bill will afford protection to the consumer, by breaking up trusts and combines which' act against his interests, as well as against those of the country generally.

Mr HUME COOK (BOURKE, VICTORIA) - The honorable member has a vivid imagination.

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