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Wednesday, 9 November 1938

Mr DRAKEFORD (MARIBYRNONG, VICTORIA) - I realize that. The statement was contained in a pamphlet which has been circulated to honorable members; it was also made in the Parliament of Western Australia. I do not suggest that Japan would use wastefully the iron ore from Yampi Sound; 1 am inclined to think that, that ore is required because of its free-smelting qualities. I have some data here which indicate that Japan's iron ore resources are less than ours. It is wellknown that if a country while conserving its own resources can get other countries, which may be possible enemies, to deplete theirs, it gains a practical and lasting advantage over them. According to Mr. Clements, the iron ore resources of Japan total about80,000,000 tons. In addition, Japan is supposed to have in Manchuria further reserves totalling 500,000,000 tons, but that ore is of poorer quality. Naturally, Japan does not want to use any of those deposits if it can get the free-smelting haematite ore from Australia. Twenty years ago, the iron ore deposits in the United States of America were estimated to total approximately 4,824,000,000 tons. For the year 1917, that country produced 75,288,851 tons of iron ore', and in 1910 it produced : 39,434,797 tons of pig iron. Notwithstanding that production, the United States imports iron ore from other countries to mix with its own ores. That country, which is the world's greatest producer of iron and steel, finds it advisable to import iron ore for mixing purposes from Chile, Brazil, Newfoundland and Spain. Australia has so little iron ore that it would be calamitous to allow its first-quality ore to be shipped to Japan. The iron ore at Yampi Sound contains 68 per cent, iron free of melting difficulties and is therefore of such good quality that most countries would be glad to have it.

Should iron ore from Yampi Sound be exported to Japan the ships used to carry it would probably bring to Australia goods which would compete with Australian products, thereby reducing employment in this country. That would certainly be the result if manufactured goods were brought here in such vessels. That is a. point which the Government should not overlook. We should not encourage other nations to bring to this country goods which can be made here. On the other hand, if iron ore from Yampi Sound were taken to the eastern States for smelting purposes - and there is no coal close to Yampi Sound to enable smelters to be set up there - the ships used to transport the ore could take Australian goods to Western Australia on the return journey. Moreover, in such circumstances, both the ore and the manufactured goods would he carried in Australian, not foreign vessels. There would be loading both ways. I am convinced that the export of iron ore to Japan would be detrimental to the best interests of Australia. The production of pig iron in the Commonwealth for manufacturing purposes in this country would give employment to many factory workers, in addition to those 'who would be employed in the transport vessels, and on the waterfront, whilst in producing coal and fluxing materials work would be provided for many others. Should the iron ore pass through the various processes until it reaches the manufactured stage, work for many skilled artisans would be afforded. If we do anything toprevent employment in Australia we shall render a distinct disservice to this country.

The remarks of the honorable member for Swan (Mr. Gregory) regarding the mining of iron ore under the sea, have been dealt with by the Minister, who set out clearly the difference between the conditions prevailing in Newfoundland and at Yampi Sound. At the latter place, the porous nature of the country might enable the sea to get into the workings. Experience has shown that cementing has sometimes to be resorted to. It would appea r that the idea of mining below , sea level at Yampi Sound is impracticable. In this matter I would be guided by the advice of experts.

If the Government were honest, it would admit that it did not realize the possible effects of its inaction. But instead of admitting the error, which arose from its delay, it now claims to have done the right thing. These mineral deposits are a heritage for the present and future generations of Australians which we, as representatives of the people, are bound to protect. We cannot allow people who belong to the getrichquick fraternity and are backed by foreign interests, to exploit these irreplaceable assets, and thus establish in Australia a field of influence which later may become a source of international complications. We must safeguard our own interests. Japan has control of vast quantities of iron ore in China. Why does Japan not exploit those deposits, instead of endeavouring to secure a footing on the coast of Australia? The probabilities are that Japan's mineral experts know that the haematite ores of Yampi Sound are the richest available, and are much more easily worked than are supplies nearer to hand. Apart from the sphere of influence which it is recognized a nation acquires by investing its capital in other countries to obtain essential raw materials, under the existing capitalistic system an imperialistic nation which can induce possible enemies, or even trade competitors, to use their essential raw materials, while conserving its own, gains a tremendous advantage. That appears to be the aim of Japan. In a book entitled Political and Commercial Geology and the World's Mineral Resources,Mr. G. E. Spurr, an authority on this subject, referred to the Japanese position. In a chapter dealing with political and commercial geology, he said -

Japan lias an iron and steel industry which, although small as compared with the United States of America, Germany or Great Britain and the other leading manufacturing countries, is rapidly expanding. Blast furnaces, steel-making furnaces, and steel mills are being erected in Japan, Korea, Manchuria, and China by Japanese interests. Japan is still far from supplying her own consumption of iron and steel, which is 1,500,000 tons annually

Ifr. Drakeford.

Probably the position has developed greatly since that was written in 1920. I suggest that Japan was about to pursue a policy of peaceful penetration by obtaining the right to take iron ore from Australia. On this point I again quote from an article by Mr. Spurr in his book, Who Owns the Earth? Dealing with mineral or raw material, he said -

It remained for Germany, pressing impudently towards the conquest of the world, to see the advantage of combining the powers of the state with those of business monopolies as a means of . regulating industry at home and overpowering other nations.

The success of the plan of German penetration was most disagreeably brought home to the British mind, as well as to the French and the American perception, by the war, and during the war England took under government control her mineral industries more definitely and systematically than did we. Moreover, perceiving the success of the German system as a means of penetration, and as a method against competitors, she has adopted it, there being a striking tendency to put her key industries under syndicates, unions, cartels or trusts controlled directly by the state.

A system, of State Socialism thus takes the place of the freedom of individual competition. As regards the mineral industries, much of the same action has been taken by France. But in America, dropping all the problems and half-learnt lessons of the war we return to the status quo ante. If this indifference continues, it is certain that British control of the earth, whereby we mean minerals, will eventually preponderate. As far as we are concerned, we should rather see it in the hands of Britain than any other power.

Our statesmen, newspapers, and financiers proclaim that we intend te take the lion's share of the world's shipping and commerce. England says- nothing, but puts her Government directly behind her own industries, while the American government still holds aloof from them. Nationalism has been revived in Europe, and especially in England and France, as a result of the' struggle to prevail against the intense German nationalistic spirit, which all hut subjugated a world drifting comfortably into internationalism.

I do not want, to do anything which may be construed as being provocative to Japan, but we would be unworthy of our trust if we failed to safeguard the interests of Australia by permitting Japan to get too strong a footing in Australia, and we would he laughed at as neophytes in statecraft if we permitted any foreign nation to do so, particularly one which prevents such a course in its own country. Mr. Spurr went on to say-

It is conceivably a step backward, a reversion, but what attitude shall America take? The British and French nationalism need not disquiet us so much as that of the Japanese, still more intense and purposeful and working with the same German tools (not made in Germany, but in America, but like most German arts successfully copied and utilized) now adopted by England and France in selfdefence. America also has had a re-birth of nationalism quite necessary in the existing state of affairs.

Later he observed -

As the case now stands, (1) The United States of America holds 71 per cent, of the world's petroleum in 1917. (2) Great Britain far behind, but in a way to overtake us under her new system.

Dealing with iron and coal he said -

In iron and coal, United States leads. The second place in the steel, held by Germany, was lost during the war, and now goes to Great Britain, already second in coal and with her iron industries in charge of a government controlled syndicate for the purpose of protection and expansion.

Mr. Spurrincluded in his review a long list of minerals of one kind and another and the position, in order of importance, of the nations in respect of each mineral. The list is interesting, but time will not permit me to give it in detail. Mr. Spurr emphasized the important place that the United States of America holds in respect of petroleum which is, of course, the source of power and light and is the key to the mastery of the air. Next in order is fuel coal and its ally, the great metallic mineral, iron, which must go together for the manufacture of iron and steel, the backbone of . all our mechanical achievements. Why should we permit this essential mineral to go away to other countries?

Australia has certain mineral resources which should be used to the best advantage. I have no desire to say anything that could be justly interpreted as expressing a wish to prevent another country from obtaining minerals from Australia which are available in this country to. an almost unlimited extent. All I say is that iron ore does not fall into that class. We have not an unlimited supply of iron ore. In these circumstances Western Australia has no real grievance; in regard to the embargo itself, it should look at the subject in the light of the national requirements of Australia.

Undoubtedly when the Lyons Government first considered this subject it showed that, like practically all composite and compromise governments, it lacked vision. Otherwise it would not have permitted, without protest, foreign interests in the guise of a company with a British name, to acquire a footing at Yampi Sound. When it came to understand the real position it also showed that it lacked the power, as do all governments comprised of opposing interests, to deal with the situation effectively. If the Government yields to the pressure now being brought to bear upon it to withdraw or slacken the regulations now in force, or if it does anything to weaken the effectiveness of this too-long-delayed embargo on the export of iron ore, it will undoubtedly deserve the derision of the Australian people.

However, the claim by the Western Australian Government, and the representatives of Western Australia in this chamber, that the Commonwealth Government should take steps at once to develop the iron ore deposits of Yampi Sound and utilize them for the benefit of the Australian people has merit in it. A government which is not deprived, by its very composition, of the capacity to put into operation progressive ideas would find no insuperable difficulty in developing this deposit, and, by pursuing such a course, it would win the admiration of Australia, generally, and of Western Australia in particular.

The amendment of the Acting Leader of the Opposition should commend itself to every member of the House who has a true Australian outlook, whereas the proposal of the honorable member for Swan (Mr. Gregory), being of a retrograde nature, should be resisted. The carrying of the motion for the disallowance of the regulation would lay Australia open to present and future danger. The amendment provides the opportunity for honorable members to indicate, on a non-party subject, that the Parliament believes it to be the responsibility of the Commonwealth Government to ensure that the resources of this country, in whatever State they exist, are not allowed to remain undeveloped so long as any

Australian citizen is looking for an avenue in which his brains and energy may be advantageously employed.

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