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Tuesday, 22 September 1942


Mr CALWELL (Melbourne) .- The trouble in connexion with the Allied Works Council originated with the honorable member for Richmond (Mr. Anthony), who sought to pillory the Minister for Labour and National Service (Mr. Ward) because he believed that the officers of that gentleman's department were making the call-ups and were deciding the fate of men who eventually came under the control of the DirectorGeneral of Allied Works. In response to questions, and to statements contained in questions, asked by the honorable member, the Minister prepared a statement which he read to this chamber. It was competent for the honorable member, had he so desired, to persuade his party to permit him to move the adjournment of the House on the following day in order to discuss the matter.


Mr Anthony - I asked the Minister to table the statement in order that it might be discussed.


Mr CALWELL - The honorable member certainly did that; but the Minister, for reasons which seemed to him good and sufficient, did not comply with the request. The honorable member could then have availed himself of the opportunity I have indicated, to discuss the control of persons called, up for service under the Allied Works Council.


Mr Anthony - And cut into the budget debate?


Mr CALWELL - I have no doubt that there is still time to do it, if the honorable member feels so disposed. Probably several motions for adjournment will be moved by Opposition members before the termination of this sessional period. I am anxiously awaiting the adjournment motion on the subject of the amalgamation of the Australian Military Forces and the Australian Imperial Force. It will probably be moved within a day or two, and there is no reason why this other subject should not also be discussed on a similar motion. It is clear that the Department of Labour and National Service has merely made available information to officers of the Allied Works Council, whose sole responsibility it is to decide what persons shall be called up. In Victoria, however, officers of the 'Department of Labour and National Service were exceeding their powers, and were themselves deciding who should serve. When the matter was brought to the attention of the Minister, he issued instructions that the practice should cease. When the Minister was answering a question by the honorable member for

Dalley (Mr. Rosevear), the Prime Minister said, in answer to an interjection by me, that persons called up for service by the Allied Works Council now bad the. right of appeal to a court, which would determine applications for exemption on the ground of hardship. This is the practice in respect of a man called up for service in the Army, but middleaged men, the fathers of lads serving in the fighting forces, who are called up by the Allied Works Council, are ordered about by young, untrained officers, who are more or less irresponsible and many of whom, in many cases, have been pitchforked into their jobs. The Prime Minister said that provision for appeal had been made; but I have not been able to find any statutory rule dealing with the matter. I ask the Minister for Home Security (Mr. Lazzarini) to bring this matter under the notice of the Prime Minister, and to remind him of his promise.


Mr Lazzarini - I shall obtain the information for the honorable member.


Mr CALWELL - Every man called up for service should have the right of appeal, and, if no statutory rule conferring this right has yet been gazetted, it should be done without delay.

I desire to bring under the notice of the committee something in the nature of a racket. It affects the Department of the Interior, which uses considerable quantities of steel in connexion with war undertakings. The matter was brought under my notice by a constituent who has placed before me sufficient evidence to justify an investigation. Isteg steel is made by a patented process from Broken Hill mild steel rod. Without going into the details of the process, the result is a saving of 1 ton for every 3 tons of mild steel rod used in tension reinforcement, and a big saving of money, and of shipping space and handling charges. The proposition is amply demonstrated in the specific case of the predictor factory at Maribyrnong, which is a typical reinforced concrete building. I understand that this product has been used extensively throughout the world for its economical and superior qualities, not only by our allies, but also by our enemies. I am familiar with the attempts made by Mr. Charles J. Alison, of Melbourne, the holder of the Australian patent rights in respect of Isteg, to secure recognition and the use by this country of Isteg steel, and the obstruction that he has encountered at the hands of the combine known' as the Reinforcing Bar Merchants Association, comprising reinforced bar merchants of Australia^ who are the selling merchants for the Broken Hill Proprietary Company Limited. Before a product of this type can be used extensively in this country, it is necessary that it should secure recognition by the Standards Association of Australia, a body set up and subsidized by this Parliament. This association is expected to give decisions based upon the evidence, and not be influenced in its decisions by commercial interests.

In November, 1938, application was made by Mr. Altson on evidence and tests from other parts of the world, including the Building Research Station, of London, for recognition of Isteg steel to be used in Australia on the same basis as it is used in England, America, South Africa, New Zealand, and every other country - namely, tension stress 50 per cent, greater than that permitted for ordinary rod. In February, 1939, a committee set up by the Standards Association of Australia in Adelaide to investigate the claim recommended that Isteg be permitted at a stress of 25,000 lb. per square inch, which is slightly less than was claimed, but in August. 1939, without any justification, the same committee amended the recommendation in such a way that it destroyed the economic value of Isteg steel. It is claimed that the amended recommendation was the result of improper influences brought to bear on the members of the committee of the Standards Association of Australia by members of the Reinforcing Bar Merchants Association. In April, 1939, Mr. Benjamin Cox, managing director of Australian Reinforced Concrete Engineering Proprietary Limited, which company is a prominent member of the Reinforcing Bar Merchants Association, informed Mr. Altson, when Mr. Altson sought to collaborate with the association in connexion with the marketing of Isteg, that unless he gave either Mr. Cox or one of the members of their association control of Isteg steel, the Reinforcing Bar Merchants Association would make it their business to see that Mr. Altson did not make a shilling out of Isteg. Letters -were written which speak for themselves, and clearly show that what I have stated did, in fact, take place.

In July, 1940, Mr. Altson submitted a case in writing for the recognition of Isteg to the fight honorable member for Kooyong (Mr. Menzies), when he was Prime Minister of this country. According to the correspondence, which can be produced, the right honorable gentleman on receipt of the case sought advice from Mr. Essington Lewis, DirectorGeneral of Munitions. Mr. Essington Lewis replied that, as Director-General of Munitions, the matter did not come within his jurisdiction. It was purely a trade matter, or one for the Department of the Interior. Mr. Essington Lewis made this reply to the then Prime Minister, notwithstanding the fact that not only he, but also Broken Hill Proprietary Company Limited, with which he was and is associated, was fully conversant with the use to which Isteg steel had been put throughout the world, and knew the immense national value of this product in saving steel and money. Mr. Altson offered in writing to the Government, of which the right honorable member for Kooyong was leader, to forgo for the duration of the war all royalties that were due to him. This offer was never accepted by that Government. I say that this offer should have been accepted, and further, that the Government should have insisted that this steel be used in all reinforced concrete jobs, thus saving thousands of tons of steel, and also a considerable sum of money. After much negotiation, the right honorable member did obtain recognition from the Department of the Interior for Isteg steel. The department agreed to accept the standard set by the New Zealand Standards Association, which is on the same basis as that used in all other countries of the world, and advised the Commonwealth works directors in each State accordingly, but took no action to ensure that the economic possibilities of this product were made use of. To tell the works directors that Isteg steel could be used was of no use if those interested, in Isteg steel did not know until it was too late that there was a job going on, and the works directors had not any authority to tell them.

When the present Government came into power, Mr. Altson resubmitted the case to the Attorney-General (Dr. Evatt). Subsequently Mr. Altson had an interview with Senator Collings. The Minister made a thorough investigation of the whole position, and he is responsible for Isteg steel being used in the predictor factory building at Maribyrnong. This factory, which is to be erected, will be a typical reinforced building. The job was actually designed for the Department of the Interior by Australian Reinforced Concrete Engineering Proprietary Limited, a member of the combine to which I referred previously. The combine's price for this job of its own design was £1,090, and it was to have used approximately 52 tons of ordinary bar steel. The Isteg people were able to quote £S50 for this job, saving 22 per cent, in money. They were able to carry out the work with only 40 tons of steel, thereby saving 21 per cent, of steel. . This is only one example of the many losses that the country has sustained since 193S, losses of steel - one of our most vital commodities - and losses of money and manpower, amounting to criminal waste. These are the facts, and I say that this Parliament must secure proper recognition for Isteg steel. The Minister for the Interior should direct its use in all buildings, government and private, for the duration of the war. The persons responsible for occasioning such losses should be dealt with in the same way as persons who impede the war effort. There was a further development which followed the interest taken in this product by the Minister for the Interior. The denouement occurred on Thursday, the 17th September, 1942, when Mr. Harrison, of Messrs. J. McDonald Richardson Proprietary Limited, builders, the successful tenderers for the predictor factor at Maribyrnong, called on Edward Campbell and Son and informed Mr. Dugard, the firm's consulting engineer, that he required another two copies of the steel design for the factory. During the conversation, Mr. Dugard asked Mr. Harrison when Campbell and Son would receive the order, and Mr. Harrison said that he had come to place the order. There was then further discussion as to whether the material was to be cut, bent and delivered or simply cut to lengths and delivered. Mr. Harrison insisted that it be cut, bent and delivered, although, at a previous interview with Mr. Edward Campbell and Mr. Dugard, he had said that he wanted the material cut to length only, as he was in a position to do all the bending on a cheaper and better basis than any ons else. Mr. Campbell wanted to insist on this arrangement, but Mr. Harrison became very annoyed, and said that he would go to the Department of the Interior and notify it that Campbell and Son could not deliver the order. Mr. Dugard corrected Mr. Harrison on this statement, but Mr. Harrison maintained his attitude and left. Mr. Dugard brought the matter under Mr. Altson's notice. He suspected there was some ulterior motive behind Mr. Harrison's attitude, and insisted that Campbell should again communicate with Harrison and let him understand clearly that Campbell and Son could supply the steel cut, bent and delivered, or in lengths only, provided that the firm was given a reasonable time to do the work. Mr. Dugard did this. Mr. Harrison inquired the exact time for delivery, and was told by Mr. Jack Campbell that Campbell and Son could have the material cut, bent and delivered for £850, the first delivery to be made in from ten days to two weeks and deliveries to be completed in another four weeks, which was the arrangement originally suggested by Mr. Harrison himself, or in cut lengths only for £750, with much quicker delivery. Mr. Harrison said that that was no good to him, as he was ready for the steel, and claimed that the figure of £850 was wrong. He alleged that the price was to be £750, cut, bent and delivered, and that he would not buy from Campbell and Son and would notify the department accordingly. On Friday, the 18 th September, Mr. Hollins, of the Department of the Interior, accompanied by Mr. Harrison and Mr. Richardson, of J. McDonald Richardson Proprietary Limited, called on Edward Campbell and Son, and Mir. Altson was requested by Mr. Edward Campbell to be present. On arrival at Edward Campbell and Son's premises, Mr. Altson had a conversation with Mr. Hollins in which Mr. Richardson intervened. He explained that the order for the steel had not been received, nor had any notification been received as to when it was to be delivered. Mr. Richardson said his firm never gave orders, and further, that Campbell and Son had been notified two weeks previously by the department that delivery would be wanted immediately. Mr. Altson denied that Campbell and Son had received such notification, but Mr. Richardson and Mr. Harrison insisted that it had. Mr. Altson then showed Mr. Hollins the letter from Senator Collings stating that the Department of the Interior had been instructed by him to use Isteg in the factory. Mr. Richardson, who inspected the letter, adopted a sceptical attitude and the conversation broke off, Mr. Harrison and Mr. Edward Campbell talking in one part of the building, Mr. Jack Campbell and Mr. Richardson in another, and Mr. Hollins and Mr. Altson in yet another.

Mr.Altson put part of the facts in relation to Isteg before Mr. Hollins, who said that he had been greatly misled by Mr. Harrison and Mr. Richardson and that he would give Campbell and Son until the 22nd September to make the first delivery. Mr. Richardson then approached Mr. Altson in the presence of Mr. Jack Campbell and Mr. Hollins and said that he realized that Campbell and Son was very anxious to get its material into the job in order to show the Government and the works directors how good it was. He also said : " We are prepared to make you a sporting offer if you will get out of this job. We are prepared to give any sum of money you like to mention to any charity you like to nominate, even to the full amount of the profit that you would make if you got the job." Mr. Altson told Mr. Richardson that, even if he had £5,000, he " would not listen to his rotten idea ", and would leave no stone unturned to see that the material was used in the factory in order that the Government and the public would have the benefit of the saving that could be effected by using Isteg. Mr. Richardson certainly did not misunderstand what Mr. All;son had to say. He then very quietly, and even to the amazement of Mr. Harrison, informed Mr. Altson that Campbell and Son had the job and could have whatever time it wanted for delivery, even up to six months. After making a great effort and getting the men to work through the whole of the week-end, Campbell and Son was able to make the first delivery on Monday, the 21st September. At the same discussion, Mr. Harrison told Mr. Edward Campbell that Ben Cox, of the Australian Reinforced Concrete Engineering 'Company, could deliver his material on the Monday, and that, as Ben Cox had designed the job at his own expense, the designs costing £30 to £40, he should gat the order instead of Campbell and Son. Mr. Altson claims that the Reinforcing Bar Merchants Association, or one of its members, had paid, or was prepared to pay, J. McDonald Richardson Proprietary Limited a very large sum of money to keep Isteg out of the predictor factory at Maribyrnong. When it is realized that the builders, McDonald Richardson Proprietary Limited, would save £240 for themselves by using Isteg, it is obvious that somebody else was providing the money to try to buy Campbell and Son off. If the Australian Reinforced Concrete Engineering Company had secured the job and supplied the material, the builders would have been £240 worse off, making it obvious that a sufficient sum of money was coming from the Reinforcing Bar Merchants Association or one of its members. Furthermore, the saying of £240 by the builders will be retained by them, and no benefit in respect of this will go to the Government. In principle, this is wrong and not in keeping with the austerity campaign. On Saturday, the 19th September, in view of what had happened, Mr. Altson decided to bring all of the facts under the notice of Mr. Mehaffey who is Works Director for the Department of the Interior. He was surprised to learn from Mr. Mehaffey that the department had received a letter from the Reinforcing Bar Merchants Association objecting to the use of Isteg in the predictor factory at Maribyrnong and concluding by asking whether it was worth while for the association to tender in future in respect of any jobs. That indicates that there are combines and monopolies in Australia which are determined that profit shall come before ser vice, even in war-time. Some people in the community are concerned more with the money that they are making out of the war effort than with the protection that they may afford to the soldiers, or the community, or to the added servicethat they may give to the nation. Although a pagan enemy is almost on ourdoorstep, some venal men seek to serve their own selfish ends by preventing the use of a commodity for which they donot possess the patent rights or on which they are not likely to receive royalties.


Mr Baker - That is their contribution to austerity!


Mr CALWELL - They want theworkers to live austerely, while they make huge profits for themselves. The writerof the letter is one of my constituents, but his politics are not my politics. I donot know him beyond that, except that I believe him to be an honest man. Heserves on committees which the previous- Government appointed. There is sufficient in his charges to warrant an investigation by the Department of the Interior.. If his general allegation contains only a fraction of the truth, and if he can do nomore than prove that he was offered money in the form of a donation, to allow some one else to have the contract, thereis a case for action by the AttorneyGeneral against persons who are attempting to impede the war effort until they can arrange to loot the Treasury.







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