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Wednesday, 19 May 1920

Mr HILL (Echuca) .- Last Friday week I moved the adjournment of this House to discuss the urgent matter of the continuation of the Wheat Pool. On that occasion I made a statement which has since been replied to by the Prime Minister through the medium of the press. I thought Mr. Hughes would have taken the opportunity to make a statement in this chamber, and that he would have given to honorable members direct some indication of the intentions of the Government respecting the continuation or otherwise of the Wheat Pool. Seeing, however, that the Prime Minister's statement was made to the press and not to this House, and seeing, further, that I have learned that many who read the Prime Minister's remarks appear to have understood that they were made here, I desire to correct that false impression.

I wish now to reply to the various statements of the Prime Minister on that occasion.. He availed himself of the privilege of going right through the various minutes of the Australian Wheat Board, and of quoting from them rather freely. I propose, also, to quote ' from those minutes. First, I draw attention to the cable message of the Prime Minister in connexion with the first sale of 500,000 tons. At the meeting of tha Wheat Board, held on 30th June, and extending to 2nd July, 1919, Mr. Pitt, the manager, read the following telegram from the Prime Minister: -

I have been continuously pressing on with negotiations for sale of wheat. With im proved shipping facilities our chances are improving. As you know, we have recently sold considerable quantities to Europe, including some 100,000 tons to Greece, at very good prices. Italy wants to buy, but asks for credit. I am consulting Campion, and have had .him over Paris to advise me on this. It is possible we may be able to dispose of considerable quantities Italy if we can arrange financial terms satisfactory to us as well as to them. The price will be quite all right. Britain: I am seeing the Royal Commission this morning. It may be possible to sell 500,000 tons. What is lowest price the Board is prepared to accept? Such a sale would help us financially in London just now. Reply urgent.

To that, Mr. Pitt replied as follows: -

Your telegram 24th June. Russell is calling with all haste meeting Australian Wheat Board. Expect to be able cable you Monday what you require.

There was no mistake in the minds of the members of the Wheat Board, and that fact is manifested by the following discussion, which occurred at the meeting of the Board on 30th June: -

Senator Russell (Chairman). ; Now, what about this 500,000 to Britain ? The usual practice has 'been for us to state the minimum on which Mr. Hughes may conduct negotiations, but I do not know of a case in which he has not succeeded in getting a bit more. It is necessary to give a definite expression in that regard.

This definitely establishes that Mr. Hughes only sought authority to sell the 500,000 tons. In the matter of price, the Board fixed a minimum, on the understanding, of course, that the Prime Minister would endeavour to secure a better figure. I might say at this stage that Mr. Hughes' reply to my statements when I moved the adjournment of this House is very ingenious. By his quotations from the minutes of the Board he has naturally made his case look as good as possible. I might say that I am now about to endeavour to do the same.

Sir Robert Best - The honorable members infers, then, that his case is going to be ingenious, too 1

Mr Stewart - I am sure the honorable member will be more honest than the Prime Minister.

Sir Robert Best - I do not think the honorable member has any right to say that.

Mr HILL - At least, I will endeavour to stick to the minutes. The following is a further quotation from a lengthy discussion in which members of the Board engaged: -

Mr. Drummond.; I am in favour of nothing less than 5s. a bashel, especially in view of the way the Imperial Government has treated us in regard to shipping and picking the eyes out of the wheat, which will make the position more acute towards the finish.

Mr. Giles.; I move that the lowest price be 5s. a bushel.

Mr. Oman.; Weoffered 5s. last season, and there has been interest since then.

Mr Hill - I thinkwe might suggest 5s. 3d., with anabsolute minimum of 5s.

SenatorRussell. - I think you can leave that to Mr. Hughes. He will get as much as he can. Let us fix the minimum.

After still further discussion, Senator Russell said. "Does 5s. a bushel meet your wishes?" I replied, "As an irreducible minimum." This was unanimously agreed to. Commenting upon the matter of the unauthorized deal, Senator Russell said at a meeting of the Wheat Board held on 22nd August, 1919: -

We had all the information available in the cables, and we decided to fix 5s. as the minimum on thebest information we had, leaving it to the Prime Minister toget whatever over that he could. Fortunately, he got 5s.6d.We did not feel justified in fixing 5s. 6d. as the minimum.

Mr. Baxter(Western Australia). ; This is the most important business we have to handle. You gave Mr. Hughes a minimumof 5s. My telegram put the absolute minimum at , 5s. 6d. for the . 500,000 'tons, but regretted it was so small. Then the sale came along of 1,000,000 tons at . 5s.6d., and, further, an option was given over an additional 500.000 tons till Septemberat the same price. That leftthe British Government in the position, without paying any (consideration, of declining the option in September if the market went down or accepting it if the market went up. Wecould not sell in the meantime.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - Was Mr. Hughes madeacquainted with this discussion that went on about the irreducible minimum, and aboutthese other statements ?

Mr HILL - Well, I cannot answer for that.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - Now come; be fair.

Mr HILL - I can only say that Mr. Hughes obviously went thoroughly through the minutes, and that he had every opportunity to learn the nature of every discussion at every meeting of the Board. To proceed with the report of the discussion -

Mr. Drummond(New South Wales). We only authorized 500,000 tons. That is all we were asked for. Mr. Hughes sold 1,000,000 tons and gave an option over 500,000 tons, which I think we might well have been allowed to consider.

I might interrupt here to point out that the Prime Minister has said thatthis matter had never been raised in the

Wheat Board. The quotations which I am now making reveal that Mr. Baxter raised it, and that Mr. Drummond raised it also. They dispose of Mr. Hughes' statement that this point had not bean brought before the Wheat Board, and that the subject had not been criticised. Mr. Hughes asked for the lowest price at which the Board could authorize the sale, and that minimum price was given him. The Board did not meet again until 22nd, 23rd and 24th August, 1919. Meanwhile, Mr. Hughes had sold the 500,000 tons, and, without authority, another 500,000 tons. Moreover, he had given an option over a third parcelof 500,000 tons,at 5s. 6d. per bushel. Not only had he done that, but he had given the option without requiring payment of any portion of the total price. I said then that this was bad business, and Isay it to-day; and so it was.

At adeputation which waited upon the Prime Minister in January this year, in the matter of the continuation of the Pool, one of the speakersput aquestion direct to the Prime Minister, "Didyou consult the London agency before making a sale?" And Mr. Hughes said., "No." The Prime Minister now says that he did consult the London agency. Whom are we to believe, and when are we to. believe the Prime Minister.? I might say here that a second option was asked for by the Imperial Government. The first was exercised long before the time limit had expired, and the British authorities immediately asked for a further option over . 50.0,000 tons, to which request the Wheat Board responded with a pointblank refusal. In fact, the huge sale made by the right honorable gentleman left us in the position that we could not have supplied the quantity, even if we had given the option. The British Government evidently realized that it had made such an excellent deal in connexion with the 1,500,000 tons that it was eager to buy a further 500,000 tons, in regard to which, as I say, the Board refused to give an option.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - That is the honorable member's statement.

Mr HILL - I have been twitted in this House with having found fault with the Prime Minister for having sold our wheat too cheaply, when I was merely wise after the event. I have been twitted, further, that I consented to sell wheat for local consumption at 7s.6d. per bushel.

Here. I wish to remind honorable members that I made a statement, following upon an interjection by the honorable member for Wannon (Mr. Rodgers), to the effect that the Prime Minister could tell honorable members something more about the price than I was prepared to relate at that stage. Now I think that, seeing that only half the story has been told, it is no more than fair to myself and to this House and to the wheatgrowers generally, that I should state as nearly as possible what really did occur regarding the sale of wheat for home consumption, for about twelve months ahead, at 7s. 6d. per bushel. At the request of the Wheat Board a Conference of State Premiers and Ministers was held on 9th and 10th January, 1920, in order that the States might furnish estimates of their requirements of wheat supplies until the new crop, 1920-21, should have come in at the end of the year. On account of the local position the Board - which, by the way, is the selling medium on behalf of the Australian wheat farmer - had been withholding sales. I emphasize that, according to our constitution, the Board had been called into being to sell wheat. However, having regard to Australia's home requirements we had withheld wheat from sale when it could have been disposed of at very profitable prices. At a meeting of the Wheat Board the following resolution was carried : -

That the Australian Wheat Board hold sufficient stocks to meet Commonwealth requirements for local consumption, each State to declare forthwith its proportion of such requirements, and to undertake to purchase same under the scheme method of payment from time to time in force.

Then arose the question of local price. The Conference could not fix the price. Its members were there as buyers, while the matter of selling was in the hands of the Wheat Board. I shall quote from the report of the discussion which took place at the Conference: -

Mr. Ashford(New South Wales).; It was discussed and agreed upon that, subject to the approval of the Governments in each State, 6s. 6d. should be the price.

Mr Hughes - I have already stated that the minutes seem to sustain your point.

Mr. Ashford.I know that Mr. Drummond would not support anything over 6s. 6d. per bushel, and that, on the other hand, Mr. McGibbon will want something higher. That will equalize it. We might as well finalize it to day.

Mr Hughes -I would like to hear Mr. Hill.

Mr Hill - We are not prepared to sell wheat at 6s. 6d. When 6s. 6d. was fixed at the last meeting, there was no understanding that it was to cover a period of six, nine, or twelve months.

Mr. Oman(Victoria). We really tried for 7s. for home consumption.

Mr Hill - My opinion was that the States would come here to-day to buy, and the Board; would fix the price.

Mr. Ashford.Before the last Wheat Board meeting, the farmers' 'representatives held a meeting and decided to ask for 7s. per bushel. Eventually they gave way, and agreed to 6s. 6d. at the meeting of the Board.

Mr. Giles.That is correct, but we did not agree that it would be permanent for a year.

Mr. Omanthen moved the following motion :

That the price for local consumption be 6s.. 6d. per bushel, with a carrying charge of1d. per bushel per month to cover interest, carrying, &c.

I said, after a lengthy discussion -

According to a document placed before the Board at the last meeting, it was stated that the existing price for overseas wheat was 8s. per bushel; now we propose to sell it at (6s. 6d. Mr. Giles and I would probably support a motion at 7s., plus the carrying charge mentioned by Mr. Oman. Anything below that we will oppose. I can sympathize with Mr. Drummond. He represents the buyers and sellers. Mr. Giles and I are otherwise. We represent the farmers. I have been in. communication with growers all over the State, and there would be trouble if the price was fixed below 7s.

Thereupon I moved -

That the price of wheat for local consumption be 7s. per bushel, plus a carrying charge of1d. per bushel per month.

Later on, Mr. Oman said -

I think the 6s. 6d., plus1d. per bushel per' month carrying charge, gives the farmer a good return, and one which could not be exceeded if we took the world's parity into consideration. I do not agree that, if there is only enough wheat in a. State to serve the State's requirements or only a small surplus, the people should be compelled to take the world's parity always. The cost of production should be taken into consideration. . . . There would have been no difficulty if we had not increased the price at the last meeting from 5s. 6d. to 6s. 6d. Having established 6s. 6d. you would like to give as much as possible to the farmers. All the sales are pooled. It matters not which State supplies the wheat to New South Wales or Queensland. I would urge a fixed rate, and not one which is going to bit the consumer every, time. I am as keen as any man to act as fair as possible.

The following discussion then ensued: -

Mr. Pitt.; Could there not be some compromise between Mr. Oman's suggestion and Mr. Hill's ? Supposing it was fixed at 7s. without any carrying charge.

Mr. Drummond. Mr. Hillhas stated that I represent the unfortunate State of New South

Wales, and has suggested that I am likely to be biased. I still claim I represent the whole of the farmers of Australia as one of the farmers' representatives on this Board, and I also claim that we cannot get away from our responsibility to the consumers as well. In New South "Wales, Queensland, and Tasmania we are at your mercy. There is no denying it. I claim that the farmers, as a whole, are men prepared to do a fair thing, and I think Mr. Oman's suggestion, worked out in' detail, is a fair thing. I consider the whole of the farmers of Australia would be satisfied that they were getting a fair deal.

Mr Hill - If we are to sacrifice the farmers' wheat at 6s. 6d. per bushel, I will not be a party to it. I say it is an unreasonable thing to expect, more especially when one considers the conditions under which the wheat waa grown this year. I venture to say the farmers need every penny of it, and the fact that so many farmers have applied for seed wheat advances shows the necessitous conditions of the farmers of the State. It is only a few of the so-called wealthy sheep and wheat men that are in a fairly good position to-day. The great bulk do not know how they will meet their bills.

Senator Russell.I do not care what it is as long as you make it clear.

Mr. Colebatch.; It seems there is a difference of 6d. per bushel between the two. There seems to be some difference of opinion as to whether Id. per bushel per month is a sufficient or an exorbitant charge. If you are not going to take the world's parity, you had better fix it for the whole year. As far as I am concerned, I am prepared to split the difference, and make it a flat rate of 7s. 3d. per bushel, and would be prepared to move that.

Mr. Oman.Could we get unanimity on that ?

Mr. Colebatch.; I am satisfied with 7s. 3d., and all charges to come out of that.

Mr Hill - My opinion is that we would get a high price if we held the wheat. However, as a compromise, we are prepared to- give them the benefit of the doubt.

The price of 7s. 3d. was decided upon by the Australian Wheat Board. It will be seen that I contended in the first place for 7s. 6d., and stood practically alone, and that I had to agree to 7s. 3d. as a matter of compromise. On a Board of this kind one could not have his own way. However, when the Conference resumed, I said -

We have had four of the best years in the history of Australia in regard to wheatgrowing, but, notwithstanding that fact, the area sown to wheat is decreasing every year. That would seem to 'indicate that the farmers are not doing well out of wheat-growing. We have been' selling wheat at under the cost of production for some time. Now we have a chance of getting somewhere near a fair thing. We are not asking for Ss. 6d. or 10s. We are not arbitrary at 7s. 3d., and will keep the wheat for the whole of the consumers of the Com- monwealth for twelve months. That is a fair price, and much lower than wheat can be had at anywhere to-day. If consumers are entitled to grumble, it is at the profits made by the millers and the bakers.

The Prime Minister said -

I am not going to argue the point. I agree with Mr. Drummond when he says, " We would be getting into deep water if we go beyond 6s. 6d."

After a lengthy discussion, in which the Prime Minister suggested that he should obtain an option over 10,000,000 bushels of British Government wheat stored here, to which Mr. Oman and I objected on the ground that it would depress the local market and create a very bad impression in the minds of the. farmers, seeing that the price would show a big profit to the Imperial Government and a corresponding loss to the Pool brought about by this unauthorized sale, the- following discussion took place -

Mr Hughes - I can only say my own view is that we should postpone it if you are not in favour of 6s. 6d. Personally, I cannot agree to any increase in the price of bread until we have exhausted every means of preventing it. There is a way of preventing it. We have tried that.

Mr Hill - I understand New South Wales Government will take all wheat for seed at 7s. 6d. per bushel.

Mr. Ashford.6s. 6d., and 7s. 6d. for graded wheat.

Mr Hill - I have seen wheat going into our stacks fit for seed. They are offering 6s. 6d. and 7s. 6d. for seed iri New South Wales, and now you want us to keep that wheat here for twelve months for 7s. 3d.

Mr Hughes - I cannot agree to the price of wheat all over Australia going up to 7s. 3d. There may be a reason why it should go up to 7s. or 7s. 3d. in New South Wales. I am quite sure you do not realize what an outcry there would be if we put the price of wheat up to 7s. 3d. It would have been better if you had put it up to the 7s- 3d. at the last meeting.

Mr. Oman.We have turned down offers within the last two months at high rates with a view of holding it for local consumption. We turned down South Africa at 8s. 7-id. I am not arguing personally. I have no interest in the Pool this year or last. We are in a strong position to-day, thanks to the sale you made to the British Government at 5s. 6d.

I did not agree with that remark -

We have buyers offering us 8s. 74d. It put us in a very good position for a good clean up. In my opinion, if you get back 10,000,000 bushels of British wheat, you will reduce our chance of obtaining a good clean up, and we would not be able to get the good price we are now getting from Japan for inferior wheat. I do not think the last 3d. was justified, and we would do well to drop it. Mr. Hill should see that it is not wise to embarrass the position by fighting for 3d.

It is abundantly clear that I fought for the highest price we could possibly get. I can look every consumer in the face and say that even in regard to the price of 7s. 3d. suggested we were absolutely generous in fixing the price. The Prime Minister finally said -

I suggest that the matter stand over until we know from the British Government whether they are prepared to do one of three things: - (1) supply South African trade, or (2) give the Board an option of 10,000,000 bushels exercisable up to September. (3) If not agreeable to 1 or 2, whether they would agree to

Bdi 10,000,000 bushels, and, if so, at what price. If the price suits us we will buy it; if it does not, then we will not buy. We cannot lose on buying at 0s. 6d. and selling at 8s. 7$d.

The Prime Minister having declined to accept the price fixed by the Australian Wheat Board - 7s. 3d. per bushel - and having intimated that he would adjourn the meeting to a date to be fixed, and that in the meantime he would cable the Imperial authorities to secure an option over 10,000,000 bushels, &c, as suggested by himself, the Board adjourned from the 9th January. No cable was received in reply until the 29th January, and the various State Ministers were kept waiting during that time. When the Conference was eventually called together by the Prime Minister on the 27th and 29tn January the following cable from the Secretary of State for the Colonies was read by the Prime Minister : -

With reference to your telegram 10th January, Royal Commission on Wheat Supplies has carefully and sympathetically considered proposals outlined by your Prime Minister, but owing to difficulty of securing necessary wheat in North America, and also owing to grave apprehension of labour disputes in Argentine, it finds that to sacrifice wheat in Australia would endanger supplies to United Kingdom. Expectation of drawing alternative supply from South Russia entirely dispelled, whilst Indian export still doubtful. Tonnage already allotted to load very large part of wheat still remaining to be shipped from Australia, and further tonnage arranged load balance as quickly as possible. In these circumstances, and as United Kingdom by far largest customer for Australian wheat, Royal Commission on Wheat Supplies regret unable to agree to forego any of their wheat supplies already purchased in Australia, and feel that they are justified in asking that orders to bc completed other outside markets should be temporarily sacrificed by Australia rather than United Kingdom; case would be different if there were an actual shortage wheat Australia for local requirements, but not gathered from your telegram that such shortage likely to exist, if necessary action taken by Commonwealth to guard against undue export other destinations.

Having considered this cable, the world's wheat position, and prices, the members of the Australian Wheat Board had decided that the price should be increased to 7s. 9d. per bushel. At the Conference of the 29th January, Mr. Oman said -

The cable has given us the information we want, and I take it, it will be for the members of the Board to determine the price at which they are prepared to sell the wheat they hold on behalf of the people. I felt last week that we were offering the wheat at a cut rate. You took a different view and cabled to London. The reply confirms the view we held, viz., that there was a strong market. I will not be a party to selling on a low parity. We are selling to-day at 8s. 10id., and, personally, I am of the opinion that the price should now be somewhere in the vicinity of 8s. However, there is a slight concession on that. I am not prepared to give away the wheat belonging to the farmers at under 7s. 9d. per bushel. Your cables, fortunately for the producers, strengthen me. I take it, it will be for this Conference to determine the price, and I say that if the whole of the States are prepared to buy at a fixed rate, you should not withhold your consent. We have information now that there is no wheat available from Argentine, India, or Russia. If they cannot look for wheat there, how can our customers look for wheat there? The result is that we can write our own ticket. We see oats selling for 6s. 6d. per bushel of 40 lbs. We are entitled to put wheat on a parity with other grains. An equitable thing has to be done. I am quite convinced the price should not be less than 7s. 9d. per bushel, and I am not prepared to take less. Inferior wheat can be sold to-day for 8s. 10id. per bushel.

Mr. Hughesthen said ;

That is a matter you' must please yourself about. The only thing I want to point out is that the question in dispute is not the sale of wheat oversea. You can get whatever price you can. If you can get 200s. per bushel, so much the better. The point is, at what price are you Australian farmers going to sell the wheat to your own people? As for the Japanese, charge as much as you like.

Mr. Hughesargued that the constitution of the Australian Wheat Board obliged it to get London parity. Members of the Board disagreed, arguing that the Board should sell the wheat elsewhere, and at much higher prices. However, the Board had no desire to oversell at these high prices, and thus leave our own people short. But it did insist upon getting what it considered to be something like a reasonably fair price, although that price was not nearly as high as could have been obtained for overseas shipment. Mr. Hughes refused to entertain the price of 7s. 9d. fixed by the Board, but postponed the meeting, and meanwhile cabled to London with a view to finding, if possible, London parity.

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