Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Wednesday, 4 May 1921

Senator GUTHRIE (VICTORIA) .- I am pleased to learn that the Government have decided to accept, to a large degree, the recommendations of the BritishAustralian Wool Realization Association, known as " Bawra." I am afraid I shall have to detain honorable senators this afternoon at some length because I have been asked by some of them at all events, to explain the whole position of the wool industry at the present time. I have been requested to deal with the recommendations of Bawra and what the Government intend doing. The matter is of vital importance to Australia. It is in no way a party question as it affects the whole of the Australian people, and not only the 80,000 wool -growers in the Commonwealth. It is well for honorable senators to consider the colossal task ahead of Bawra in view of the quantity of wool to be handled. Bawra is handling on behalf of the Australian growers 850,000 bales of stale wool, that is, wool that has been paid for, but which is Australia's share of the profits from the wool scheme conducted during the war period, when the clip was sold at 151/2d. per lb. plus 50 per cent, of the net profits on any surplus wool sold which was not required for naval or military purposes.

Senator Senior - Those profits were in kind and not in cash.

Senator GUTHRIE (VICTORIA) - Yes, because the cash was not realized. Some of the profits were taken in cash, and I understand that £5,000,000 will be distributed before 31st July to growers with wool in Bawra.

Small growers whose interests are. under £100 will be paid off in cash which will take another £600,000.

In addition to the 850,000 bales of stale wool there are 850,000 bales held for the Imperial Government, 1,000,000 bales of the 1920-21 clip still unsold, and on hand in Australia, plus 800,000 bales of New Zealand wool ex pool, which with the 400.000 bales of New Zealand wool ex 1920-21 clip still on hand makes a total of 3,900,000 bales.

Senator Crawford - Are the New Zealand growers represented on Bawra?

Senator GUTHRIE (VICTORIA) - We understand that the New Zealand Government, have, at the request of the growers, practically decided to come in. I do not know whether the Government have any definite announcement to make in that regard.

Senator E D MILLEN (NEW SOUTH WALES) - We can only confirm the honorable senator's statement.

Senator GUTHRIE (VICTORIA) - I am told on the best authority that the New Zealand growers are anxious to come under the operations of Bawra, and that there is a possibility of making it an Empire affair by South Africa coming in.

Senator Keating - New Zealand was not in the original Pool.

Senator GUTHRIE (VICTORIA) - New Zealand had a Pool of its own. With the 2,500,000 bale clip practically in sight from Australia and New Zealand the directors of Bawra will have 6,400,000 bales with which to deal. I give these figures because exception has been taken, both in- the press and elsewhere, to the salaries to be paid to the directors of Bawra. Their action in accepting such salaries has been very' adversely criticised in some quarters, but they have been working -

Senator Fairbairn - For a long time.

Senator GUTHRIE (VICTORIA) - Exactly. They had been working four and a-half years for nothing, and the organization which has been set up to deal with 6,400,000 bales of wool is going to have a very busy time. This is a question of vital importance and aft effort is being made to stabilize the industry. I am going to take objection to the Government suggesting, or .declaring their # intention, to . reduce the minimum reserve price from 9d. to 8d. per lb., because we know that the cost of production in Australia for the last four years has averaged 10.94d., or roughly lid. per lb:

Senator Foster - Does that mean that the poor wool growers have been making, a profit of only 20 per cent. '(

Senator GUTHRIE (VICTORIA) - Admittedly they did very well during the four years of war, but it must be remembered that if they had disposed of their wool in the open market it would have brought, more like 31d. per lb. than 15£d. per lb.

Senator Crawford - It is a minimum of 8d.

Senator GUTHRIE (VICTORIA) - There is no fixation of prices at all. It is a minimum reserve.

Senator PRATTEN (NEW SOUTH WALES) -. - Not a flat rate?.

Senator GUTHRIE (VICTORIA) - It is not a flat rate. The wool will be sold by auction and will be purchased by any one who requires it. At an. average price of 8d. or 9d. per lb. plenty of -wool would be sold at Jd. per lb, and the top price would be about 18d. to 20d. per lb.

Senator E D MILLEN (NEW SOUTH WALES) - That corresponds to the flat-rate of ls.. 3$d. per lb. at which wool was sold during the war.

Senator GUTHRIE (VICTORIA) - The whole scheme will be upon a similar basis to that which was in operation during the continuance of the Wool Pool. There are 848 varieties of wool in Australia, so that there must necessarily be many varying prices. Some wool will probably 'be worth, less than Jd. per lb., but not, of course, fleece wool.

Senator Senior - The minimum reserve price to which the honorable senator has referred will represent the mean price?

Senator GUTHRIE (VICTORIA) - Yes, the mean reserve price. The wool will be sold by auction, bo that if Russia or any country comes along and offers us 2'0d. per lb. for it, we shall not refuse ner offer. I consider that the total value of the exports of raw commodities from Australia during the next .three years will not amount to 50 per cent, of ' what they have been during the past three years. With falling exports we must have enormously reduced imports, and consequently the money which we have been collecting from Customs will very materially decrease. In the near future I do not think that the Government will have many incomes to tax. Certainly no man upon the land will have a taxable income. The importers, too, are in for a very rough time, and so, indeed, is everybody else. . I have heard very many people talk in a loose fashion about wool; but I am glad that the Ministry realize that the wool industry is the staple industry of Australia.

Senator Duncan - The Aye does not realize it.

Senator GUTHRIE (VICTORIA) - Several newspapers do not. They have never had a kind word for this staple industry in their lives. During the past three years we have been receiving an average of £4:7, 823,000 annually for our wool. This year, the amount derived from that source will fall to between £15,000,000 and -£18,000,000, and if some steps be not taken to prevent the market smashing entirely, it is probable that next year this staple commodity will not return us more than £10,000,000. A similar remark is, to some extent, applicable to meat. During ' some past years we have been getting £10,000,000 annually fram the export of meat. But owing to the present cost, of freight, and the slump in meat upon the other side of the world, we shall not export very much of that commodity during the next year or so.

Senator MILLEN (TASMANIA) - And metals occupy a very similar position.

Senator GUTHRIE (VICTORIA) - Exactly.

Senator Senior - How far will the production of wool in the Argentine affect the world's markets?

Senator GUTHRIE (VICTORIA) - That question has been brought before the Bawra directorate. If we put a reserve price upon our wool, our great competitor, the Argentine, which produces only crossbred wool of a relatively inferior quality, may undersell us.

Senator Bakhap - Is the cost of production -in the Argentine lower than our own cost of production ?

Senator GUTHRIE (VICTORIA) - It is a good deal lower than ours upon freehold land, but the difference is nob so much upon leasehold land. The wages which are paid in the Argentine are very much lower than are the wages paid here, and land values there are also lower. But Argentine wool is relatively of a very inferior quality, and if its people are going to undersell us, they will have to accept- less than 3d. per lb. for their product, because even with an average re- serve of 9d. per lb., much of our wool will not realize more than 3d. per lb.

Senator Fairbairn - The Government's suggestion is that the average reserve price should be 8d. per lb.

Senator GUTHRIE (VICTORIA) - Yes ; I main-, tain that that is too low a price alto*gether. Our city dwellers, and some 0f' our newspapers, do not appear to realize that all Australians live upon the primary products and the primary producers of this country. They do not realize that the humble sheep, which is so much abused by street-corner orators is responsible for 41 per cent, of the exports of the Commonwealth. The necessity to support Bawra arises from the fact that its organization is so great, and that it will endeavour to find and develop markets for our wool. Nobody is stupid enough to pretend that the fixing of a minimum reserve price for our wool when we produce only 25 per cent, of the wool of the world will for certain prevent the collapse with which we are threatened. But it will at least accomplish something. - We can, at all events, dictate in regard to merino wool, of which we produce 50 per cent, of the world's total production.

Senator Crawford - Did 1 understand the honorable senator to say that there are 80,000 wool-growers in Australia!


Senator- Crawford.- They cannot all be. wool kings, then.

Senator GUTHRIE (VICTORIA) - No. I have no sympathy for the wool kings of this country, because they have been enjoying a very good time for some years, and are consequently in a position to live, so to speak, upon some of their own fat. But statistics disclose that the majority of .flocks in the Commonwealth are held in small numbers. It is the duty of the Government to protect the industry from extinction. We hear a lot of talk about the basic wage for the workers in our cities. But it is our duty to try and assure to the primary, producers of this country, to the men who have to work twelve1 and eighteen hours per day, a living wage. The man who works upon the land is the worst paid man in Australia considering ohe hours he works.

Senator de Largie - He is sweated.

Senator GUTHRIE (VICTORIA) - Absolutely. At the same time, it is necessary to encourage manufacturing, but we ought not to overfeed manufacturers with artificial foods, i.e., over protection. The woollen ' manufacturers of this country have enjoyed extraordinary privileges in thepast,andtheyhavenot taken that advantage of them which might havebeen expected, considering that for many years their profits over thewhole of Australia netted 33 per cent. on their capital. Under the great appraisement scheme they were allowed to take the first choice of the wool at the appraised price - I do not suggest, that the Prime Minister was not right in insisting upon this condition - and which meant an advautage equivalent to a free gift to them of several hundreds of thousands of pounds. . Yet today our manufacturers are taking only 5 per cent, of our wool production. It is our duty to encourage in every possible way the expansion of the wool-manufacturing industry in Australia. The stabilization of the market will tend towards that. This move on behalf of . the Government is not one of price fixing. It is not intended to lift wool to an artificially high price, but merely to protect the industry and Australia from ruin. This stabilization will suit everybody except the speculators. Nearly all the propaganda which has been fired into honorable senators during the past two days has emanated from speculators, who would no doubt like to see the market price of wool down to 3d. per lb. Then they would put a few hundreds of thousands of pounds into it, and it would be a very good speculation. As a matter of fact, I know that syndicates have been formed for the purpose of buying wool, at perhaps one- third of the cost of production, and holding it for resale.

What is Bawra, and who are Bawra! It is right that the people should know that Bawra is the British and Australian Wool Realization Association, which has' a capital of £22,000,000. That is the estimated value of its assets. Its Australian interests are safeguarded by the fact that there are six directors in Australia as against five directors in London. The Australian directors are Sir John Higgins, who did such magnificent work for this country throughout the continuance of the Wool Pool, and accepted no pay for (hat work; William Stevenson Fraser, Melbourne, Managing Director Younghusband Limited, Vice-Chairman of Commonwealth of Australia Central Wool Committee; William Allan Gibson,

Melbourne, General Manager Goldsbrough, Mort and Company Limited; John Mackay, Sydney, pastoralist, President Graziers' Association of New South Wales; Charles Robert Murphy, Melbourne, pastoralist, Chairman Australian Wool Council; and William Riggall, Melbourne, solicitor, of Messrs. Blake and Riggall. Honorable senators will realize from the. calibre of these gentlemen that Bawra is well staffed. ,

Senator Bakhap - How does a solicitor come into the business?

Senator GUTHRIE (VICTORIA) - Because it is advisable to have a legal man on the directorate of an organization that is going to deal with 0,4.00,000 bales of wool.

Senator Duncan - Is there any representative of the consumer on the directorate)

Senator GUTHRIE (VICTORIA) - The consumer will be very well protected, if, as I hope, the result of this proposal will be the stabilization of prices. The members of the British Board of Bawra are Sir Arthur Home Goldfinch, K.B.E., DirectorGeneral of Raw Materials, 'Caxton House, Westminster ; Sir John Ferguson, K.B.E., Joint General Manager Lloyd's Bank, 71 Lombard-street, London; Francis Willey, Wool Merchant, Blyth Hall, Nottinghamshire; Henry Ernest Davison, secretary Dalgety and ComSany Limited, 4.5 Bishopsgate-street, Lonon; and James Alexander Cooper, Fellow Society Accountants,Caxton House, Westminster. With such directors, honorable senators may have confidence that the job intrusted to them will be fairly well looked after.

Senator PRATTEN (NEW SOUTH WALES) - I understood from the Minister for Repatriation that Bawra has already broken down.

Senator GUTHRIE (VICTORIA) - The organization has broken down, to a certain extent,, through the selfish action of a small section of graziers and the action of a couple of banks in London.

Senator PRATTEN (NEW SOUTH WALES) - That is a matter of opinion.

Senator GUTHRIE (VICTORIA) - Those banks virtually agreed at the last two series of sales that our wool should be valued at a certain price, and they would stick to the reserves, but they did not do so. They took advantage of the position and solid wool in London, perhaps grabbing the cash and reducing their clients' overdrafts.

Senator Crawford - They " blacklegged ".

Senator GUTHRIE (VICTORIA) - Tes, they "black-legged," if you like to call it such.

Senator THOMAS (NEW SOUTH WALES) - They arc nonunionists.

Senator GUTHRIE (VICTORIA) - They were nonunionists. The purpose of the present proposal is to bring back the few who broke away. Honorable senators may call them " blacklegs " if they please; but, as I might have an overdraft from cue of them, I shall not use that term. At all events, they did not play the game.

Senator Fairbairn - I think the honorable senator is wrong.

Senator GUTHRIE (VICTORIA) -What is wanted is to give the Government and Bawra the power to force those people into line. I have brought the matter up for discussion, because it is necessary that they should be brought into line. Why should 5 per cent, or 8 per cent, of the people interested, in wool be allowed by their action to break down the greatest industry we have? Why should they be allowed, to act contrary to the frequently expressed will of 95 per cent, of the producers of wool ?

Senator PRATTEN (NEW SOUTH WALES) - Senator Fairbairn says that the honorable senator is wrong.

Senator GUTHRIE (VICTORIA) - I am sorry if Senator Fairbairn: should think so.

Senator Fairbairn - I think the honorable senator was wrong in his reference to the banks: I will explain the matter when I speak on the motion.

Senator GUTHRIE (VICTORIA) - I know that the banks to which I refer have imported wool to Loudon and did sell below our reserve. I know that they did sell free wool on the market below tho prices arranged. I admit that they considered they had uo jurisdiction to interfere with the wool which was sent to them by their clients for sale.

Senator Earle - Did Bawra finance the wool-growers for the wool they hold ? .

Senator GUTHRIE (VICTORIA) - Bawra financed them to this extent, that it has already paid them some dividends out of profits on woo) sold. .

Senator Earle - But I refer to the 6,000,000 bales that Bawra is handling now.

Senator GUTHRIE (VICTORIA) - Bawra proposes to finance the- growers to a certain-1 extent by tho issue of bonds to the . value of £10,000,000, and by tho issue of scrip to the value 0f £12,000,000. I have no doubt that the bonds will be negotiable, and will be, worth their face value; but no one can say what the scrip will be worth, because that will depend on the prices that will be realized for wool. I hope that with the help of the Bawra organization, supported by the Government, a reasonably good rate will be realized.

Senator PRATTEN (NEW SOUTH WALES) - I think that Senator Earle wishes to know what is happening in regard to new wool.

Senator GUTHRIE (VICTORIA) - It is in order to prevent the new wool becoming unsaleable that the Government are taking the action they propose.

Senator Earle - Is Bawra paying anything for it as the wool is received ?

Senator GUTHRIE (VICTORIA) - No, Bawra is not paying anything for it. It is receiving the wool for sale in the world's markets by public auction. Men can sell the wool anywhere. There is no proposal to prevent a grower selling on his farm if he wishes to do so, in Melbourne, or in any other part of Australia, through the fifty-nine Australian warehouses, on the London market, in America, in Italy, or anywhere else, provided he gives a guarantee that he will not sell it below the equivalent of 9d. per lb. - if 9d. is agreed upon - gross in Australia. I should like to point out to honorable senators that this represents only 8d. on the farm. That is why I object to the Government's proposal to reduce the flat rate from 9d. to 8d., because that would represent only 7d. on the farm, which would not pay for growing the wool.

Senator Bakhap - Does the honorable senator say that there are fifty-nine wool warehouses in Australia?


Senator Bakhap - If we have a fixed price for wool, of what use are the fiftynine agents?

Senator GUTHRIE (VICTORIA) - It is not a fixed price that is proposed. I have tried to explain that. The Government do not for a moment intend to fix the price of the wool.

Senator Crawford - Will there be official appraisers for each lot of wool ?

Senator GUTHRIE (VICTORIA) - Yes, each lot of wool will be appraised by three thoroughly qualified and sworn experts.

Senator E D MILLEN (NEW SOUTH WALES) - With an appeal.

Senator GUTHRIE (VICTORIA) - Yes, I understand an appeal is to be allowed. Each grower will get what his wool is worth in the ratio of 8d. or 9d., whatever the minimum price agreed upon may be. I hope that it will be 9d., which, I repeat, is equal to 8d. on the farm, as freight and selling charges will amount, on the average, to 1d. per lb.

Senator Bakhap - There is to be a fixed minimum price.

Senator GUTHRIE (VICTORIA) - What is proposed is that there should be a minimum reserve, and all wool is to be sold by public auction. ' If the honorable senator cared to offer20d. per lb. for wool his offer would be welcomed.

Senator Bakhap - I have no doubt it would.

SenatorJ.D. Millen. - I understood the honorable senator to say that' some wool would be sold at1/4d. per lb.

Senator GUTHRIE (VICTORIA) - That is so, some wool will be sold for1/4d., but the whole clip will be so appraised that- there will be an average reserve price equivalent to 8d. or 9d. per lb., whichever the Government may decide upon.

Senator Foster - How are we to control the prices of wool in Australia through the Customs House?

Senator GUTHRIE (VICTORIA) - There is machinery in the Customs Act to enable that to be done. A grower will have to sign a declaration that he will not sell wool, and a buyer a declaration that, he has not bought wool, below the average fixed for the whole clip.

Senator Foster - That is for export purposes.

Senator GUTHRIE (VICTORIA) - Or for local consumption purposes either. The same thing was done while the Wool Pool was in existence, and the price was fixed at 151/2d. as an average. The Australian clip was divided into 848 types and there were over 600,000 odd lots, and the experts appraised that wool on a ratio of 151/2d., and, when they came to make the calculation, it was found that it realized within a few decimal points of 151/2d., and the difference was made up to the average of 151/2d. decided upon. The same machinery is available now for the sale of wool.

Senator Foster - Is it proposed that the 6 per cent, of wool-growers who have, so far, not come into the scheme shall be prevented from selling wool cheaper than the ratio of 9d. per lb..?

Senator GUTHRIE (VICTORIA) - No doubt they think they have been very clever and are getting the best of the odds., They rushed in and have taken the money, doubtless because they wanted it rather badly. Some one may have forced them to sell. That is all very well while the market is good; but, if we permit the whole structure to be undermined, if we allow the" speculators and syndicates to do what, they wish to do and bring about a smash so that foreign buyers may be able to purchase wool at 25 per cent, of the cost of production, we shall bring about a collapse of the industry. That is the reason why it is so necessary to bring these selfish men into line and why the Government intend to do what they propose.

Senator Crawford - The people referred to seized the life-boats to save themselves.

Senator GUTHRIE (VICTORIA) - Yes. Honorable senators must realize that if wool collapses it will mean the ruin of the country.

Senator Bakhap - That is admitted on all hands.

Senator Elliott - If this proposal is agreed to, when may we expect complete de-control of wool?

Senator GUTHRIE (VICTORIA) - When we reach some semblance of normal times, and the markets of the world can be encouraged to absorb the overplus of wool -with which we are at present faced. If we allow the wool position to collapse the whole of the securities of Australia will collapse - wool, skins, stock, land, and wages, which latter is important for Labour men to know. If the wool position collapses, the consequent unemployment will be very great. To show what it may be, I may say that already, because of a decline in the price of wool, there is considerable unemployment. In shearing a great many men are employed at high wages, fixed by arbitration. Those wages are too highin view of the present prices obtained for wool. There are a great number of wool sorters and other people employed to prepare the clip for market. This work has to be cut out at present prices, as it would not pay to elaborately prepare wool for market at 8d. per lb. This means that a number of men are thrown out of employment, and the higher the minimum price fixed the better it will be for the credit of Australia and for the employment of men in the wool industry.

Senator MILLEN (TASMANIA) - I understood the honorable senator to say that wool would be sold at an average of from id.' to 18d. per lb. What would be the minimum price at which the wool would be sent in?

Senator GUTHRIE (VICTORIA) - At its- worth, in the ratio of 8d. or 9d. per lb.

Senator MILLEN (TASMANIA) - Then some would not be worth sending in. .

Senator GUTHRIE (VICTORIA) - Even under the Wool Pool scheme, with an average appraised price of 15Jd., some wool sent in was declared to be of no commercial value. Some of it was sent to be fellmongered to give it a commercial value, and even then had to be sold as low as Jd. per lb. I hope that the sale of wool under the scheme now proposed will be carried out under the same, principle. It was in 1818, or over 100 years ago, that the first sale of Australian wool took place in England. We have been selling wool in Australia for seventy years. We have a splendid selling organization here now. Some vested interests in London desire the Bawra scheme to break down. The Australian wool selling industry has provided work for thousands of people in wool stores; it has provided commission for Australian brokers, and a section of the trade in London is exercising a strong pull to make the scheme a failure, in order that some persons in London may be able to realize considerable sums from the sale of wool as they did some years ago. The selling firms in Australia are a splendid lot, who have wonderfully fine buildings. Wool is much better displayed in Australia than it is in any other part of the world. The buying houses also deserve every credit. They have played the game, and have tried to help the industry.

Senator PRATTEN (NEW SOUTH WALES) - Is the honorable senator referring to the Victorian Association ?

Senator GUTHRIE (VICTORIA) - No; to " the whole of the buyers. I am aware that some of the Victorian section are objecting to this scheme, but I hope to prove to honorable senators that they . are wrong in doing so.. As Senator E. D. Millen has said, we know that what is now proposed will not be a complete cure for the tremendous slump that has taken place in the price of wool and most of our raw productions, but it is at least an effort to do something to provide a remedy.

Senator Earle - Considering the present price of woollen goods, would it not be a more effective remedy if a few more factories were started to consume wool in Australia?

Senator GUTHRIE (VICTORIA) - We have many factories already in Australia, and they consume only 5 per cent, of our production. If it were possible to double the number with' a wave of the hand, they would still absorb only 10 per cent, of our annual production.

Senator Earle - There was a scheme put forward to absorb one-third of Australia's production. o

Senator GUTHRIE (VICTORIA) - That is so, and I believe in it. It is away in the offing just now, however, although I hope it will come to us some day. Ten per cent, of our wool would supply the woollen goods for the whole of the people pf Australia. The idea of the Bureau of Science and Industry is not only for the manufacture of goods in Australia for the Australian people; it goes beyond that. It is a crime that, here in Australia, where we produce the most, the best, and the cheapest wool in the world, wo should still be importing more than 50 per cent, of our woollen material requirements. But, as I have just said, the proposal goes further, in that it looks to the manufacture of Australian wool, in Australia, for Australia, and also to supply other parts of the world. I do not expect to see that in my day, but I hope to live long enough, at any rate, to see the Australian people supplied with their woollen clothing necessities from Australian-grown and Australian -manufactured wool.

Senator Earle - What the people cannot understand is that they should be paying 300 per cent, more for their woollen goods, and yet we cannot get rid of our wool.

Senator GUTHRIE (VICTORIA) - If the honorable senator and other interjectors will permit me to continue they will see that I shall have answered their interjections in the course of my statement. Stabilization is' essential, and if we can only do something towards bringing that about, it will be our. bounden duty. Stabilization means confidence, both financial and industrial; it would help finance and assist kindred industries. If one does not know what prices are going to be, one is naturally unwilling to do anything. Stabilization should tend towards cheaper clothing, too, because a manufacturer will know that prices are going to be stable, and that he can go straight ahead. It will not be a case of his saying, " I am not going to buy to-day at 8d., and make up this stuff, and then find next week that the other fellow has been able to buy at 6d., so that he will be able to undercut me with his goods." Stabilization of prices should tend to the much lower cost of clothing.

Senator Gardiner - Is the period of six months, which has been mentioned by the Minister, sufficiently long?

Senator GUTHRIE (VICTORIA) - I do not think so. I am sorry that the period is not at least twelve months. I take it, however, that it is the intention of the Government to give the proposition a trial for six months, and then to see. how the scheme is going; whereupon, if advisable, let us hope it will be continued. The initial suggestion, namely, for a couple of months, was worse than useless.

The Minister for Repatriation (Senator E. D. Millen) has said that the Government did not think this proposition would cure the evil; but he wisely added that the scheme of Bawra was better than nothing. I would like honorable senators to study the suggestions which, so far, have been variously promulgated. They are recorded, bv the way, in the press to-day, and will be to-morrow; and some sections of the press, no doubt, will ''hammer" Bawra for all they are worth. They are -

(a)   That the Bawra wool be withdrawn and held over;

(b)   that Australia buy the British share of Bawra wool;

(c)   that gifts of wool, or sales of cheap wool, be made to Germany and other countries;

(d)   that there be no control.

I would like to deal with these ideas in their order. The proposal to hold over would probably aggravate the position, because it would not get the wool into consumption. It would mean that the trade would be working with a very heavy weight over its head. We would know that that huge accumulation was only being temporarily held off the market, and that at some time it was bound to be dumped right on to us - which would have the effect of knocking the bottom, not only out of raw wool, but of the market for those who were holding manufactured goods on hand. As for the proposition that Australia should buy the British share of the Bawra wool, that has been recommended by an honorable member in another place. But we are sellers, and not buyers; and we want the money. If such a position were forced upon the Government, namely, that they should have to buy the wool, they would be bound to take into consideration the cost of storage and depreciation of value. Some people say the Bawra wool should be held over and the free wool sold.

Senator Vardon - How much would we have to buy?

Senator GUTHRIE (VICTORIA) - We would have to buy back 850,000 bales of our own grown wool, and a " jolly sight " more, for that quantity represents " only the stock there now.- I admit that wool does not very greatly depreciate in value, but it is apt to get a little weevil into it, on the outside, especially if it is scoured wool, held a long time. There would not be anything like the degree of depreciation such as when weevil attacks wheat. We have had only enough experience to know that there is no great depreciation if wool is held for three or four years; but, if we are to buy and to hold over indefinitely, I will not say that the wool would not deteriorate. At any rate, the cost of storage in England, where the stocks in question are at present, would be very heavy.

With regard to selling cheaply to European markets, the outcome of that would simply be that, with the cheap labour and cheap wool available, Europe would dump its cheaper goods on the markets all over the world, and would completely take away British trade in woollen goods.

Senator de Largie - And what would be wrong with that, from the view-point of the consumer?

Senator GUTHRIE (VICTORIA) - Our own trade would go, with the British; and, in any case, we should look after the British manufacturers.

Senator E D MILLEN (NEW SOUTH WALES) - If wool were given to Europe, England would not huy our wool, since Continental manufacturers would have taken away their market.

Senator GUTHRIE (VICTORIA) - Quite so. This proposal is absolutely the silliest of all. The proper thing to do is to sell the wool to Europe at a good price, and, taking security, to give long terms.

Senator Fairbairn - It is scarcely a good price.

Senator GUTHRIE (VICTORIA) - What is not a good price?

Senator Fairbairn - I refer to the figure of 8d. per lb.

Senator GUTHRIE (VICTORIA) - Some of the wool has already been sold, for example, to Austria and Poland, on the conditions I have indicated, including long terms. The Bawra proposal is to restrict offerigs to feed the demand as stocks can be taken. The arrangement is to sell three bales of wool in England, allocating the quantities fairly, so as not to spoil the London market or that in Australia, and to sell three bales in Australia. Further, for every six bales, two out of the three sold in London are to be Bawra, and one new wool ; whilst the three bales sold in Australia are to be all new wool. It will be seen that the new clip is getting quite a fair deal, in that four of the six bales sold are to be new wool. After all, it should not be forgotten that we are dealing also with the property of the British Government, and that they hav.e paid us well for it. We cannot expect to hold both ends of the stick. There is no sug(gestion of the Government to prohibit trade. Wool will be sold at open auction, and there is no proposal to fix market prices. The opponents of Bawra are largely those who- are influenced by jealousy, or are speculators.

The Victorian Buyers Association has been mentioned. This is a very fine and genuine body which has done much to build up the trade iu Australia. But the letter of its secretary, Mr. Ford, published in today's press, is both biased and inaccurate, while the suggestion contained therein to buy up the wool is absurd. Mr. Ford says in his epistle that it is an excellent idea, if the money can be found \ And he goes on to say that the change of ownership would not restore confidence. Of course not! Then why suggest that the wool should be bought up? Still another absurd suggestion is to let 2,500 manufacturers each carry a stock of 1,000 bales. It would be a grand "spec" if we were to let the manufacturers have the wool at 3d. - their own price. Naturally, they would carry the stock without any ado. But if those manufacturers could get 1,000 bales each of old, cheap stock, as Mr. Ford suggests, what would happen to our new wool ? The manufacturers would not want it, for they would already have cheap stocks on hand. The accusations contained in the letter, to the effect that the growers are -not supporting the proposals of Bawra, are almost too absurd to warrant reply. Every organization, as Senator E. D. Millen has pointed out, has given its support, from the largest of the pastoralists' associations to the smallest farmers' organizations, and so do fifty-eight out of fifty-nine selling houses also lend their support. To publicly state in the press, therefore, that the Bawra scheme has not the support of the growers is not accurate.

Senator Duncan - And that is only putting it mildly.

Senator GUTHRIE (VICTORIA) - It is- The scheme is not only supported by practically all the growers of wool, but bv allied industries,' whose support was indicated by accredited representatives at, the meetings which considered the subject. However, a few people are against Bawra because they have personal dislikes. That factor has entered into tho matter, I am sorry to say, in a marked degree. There are people who have axes to grind. Some persons sold their wool before Christmas at wonderful prices, and now they have money with which to go into syndicates in order to buy other people's wool at one-half of the price which they secured.

Another consideration has to do with the request of the Fellmongers and Woolscourers Association for exemption. I do not know whether the Government have considered this matter.. The fellmongers employ a great deal of labour in Australia, and particularly in Victoria. Exemption has been asked for, and I may add that there is something to be said for the contention advanced by the- association. At a meeting this morning resolutions were agreed to as set out in this statement: -

1.   That in the opinion of this meeting it is advisable that Bawra wool should be placed aside for a definite period of, say, two years.

2.   That any restrictions placed on the free sale of fellmongered wool will ruin the industry. Skin wool should be free of control to enable the industry to regain its normal condition.

3.   That once scourers have bought wool from Bawra such wool should be free, as Bawra has received its price. ,

The financial factor governing the operations of the fellmongers and scourers is a fairly rapid turnover of their money.

The result of Bawra control would be as follows: - A fellmonger or scourer buying skins or wool in his ordinary volume and not being able to realize on his products, possibly for months, would only just be able to carry on as long as his available capital permitted.

There is a good deal in what the fellmongers and scourers put forward. I do not know whether the Government intend to permit any exemptions, but I would recommend that they should be very careful in dealing with the matter for fear that a serious blow be delivered to the fellmongering industry, which we all want to encourage, and which employs so much labour. The fellmongers could not just buy a certain line of skins, and treat them, and hold the ^resultant wool for six months or a year before^ realizing. They need to keep turning over their capital. However, if machinery can be introduced without upsetting the whole general scheme, I would be in favour of the requests being granted. ,

Senator Fairbairn - The honorable senator should make a specific suggestion.

Senator GUTHRIE (VICTORIA) - That is not for me, because I consider the Bawra directorate very able. Nor have I time to go into the matter of what concrete suggestions the fellmongers and wool-scourers mav put forward.

It is not necessary to further labour the fact of .the support of all the organizations for the Bawra scheme, since telegrams and letters from all the accredited bodies in the wool trade have5 been pouring in to honorable senators. When I was in close touch with those associated with Bawra, the suggestion was to make the gross reserve price at least 9d. I do not think I am giving away any secrets when I tell honorable senators that a very large section of the delegates wanted a much higher price than 9d. fixed. They wanted a price that would pay for the cost of production, namely, lid., but after a great many sittings, much evidence, and considerable argument, it was decided not to embarrass the Government by allowing a charge to be made against them that they were trying to bolster up one particular industry. And so it' was agreed to take 9d., which is 2d. less than the cost of production, and which, after all, is only 8d. on the farm. The average for the five years preceding the war was 9½d. to 9¾d., and during the war period the wool-growers got 15-^d., plus profits.

Senator Payne - Would not a higher price than 9d. have a tendency to restrict sales ?

Senator GUTHRIE (VICTORIA) -No. I am going to deal with that aspect of the question. Unfortunately, cheap wool does not necessarily result in cheap clothing.

Senator E D MILLEN (NEW SOUTH WALES) - The honorable senator must not overlook the interrelation of price with the quantity placed on the market.

Senator GUTHRIE (VICTORIA) - I do not. The position wants to be handled very carefully, and, therefore, Government assistance is required. Cheap wool, as I have already said, does not necessarily mean cheap clothing. The price paid for clothing to-day in Australia is nothing but a public scandal, because at 9d. per lb., the total cost of 7 lbs. of greasy wool required for a suit of clothes is only 5s. 3d. This is the amount which the producer gets at a flat rate of 9d. for his year's work, and upon which he is expected to meet his interest charges, high arbitration awards, and pay freight and charges, and buy woolpacks at exorbitant prices because the mill-owners of India have for some years been making a profit of 177 per cent. Is it not a scandal that the producer of the wool for a suit of clothes gets only 5s. 3d., while the purchaser pays from -£8 8s. to £10 10s. ? The difference does not all go in wages. The manufacturer has been getting a big .cut, the wholesale houses have been making immense profits, and now that they have over-imported, and are holding big stocks of dear clothing, they do not want to cut down the price. I think, however, that public opinion will force down the cost of living, and it should be our duty to tell the people the truth. i

Senator Keating - The honorable senator's calculations ought to be published broadcast in Australia.

Senator GUTHRIE (VICTORIA) - I want them to be. That is why I am labouring the point. The high cost of living is, I think, largely the cause of all this industrial unrest in Australia, and at the present time the high cost of living is not warranted.

I- have taken the trouble to get out a list of the raw commodities produced in Australia, with the exception of wheat, which, being the subject of a definite contract between the Wheat Board and the State Governments concerned, has been eliminated. ' The Governments having entered into a contract, I am not going to advocate its abrogation, although a great deal of pressure has been brought upon all honorable senators to do so. The people of Australia must not forget that throughout the war period the Australian farmers were only getting about one-half the world's parity for their wheat. Taking all the other commodities, I find that the average fall ir twelve months is 60 per cent., and yet according to the Statistician's figures the cost of living in Austraia, m compared with twelve months ago, is 13 per cent, higher^ instead of being lower. The wholesale houses and the larger shops are robbing the people. These are strong words, yet I believe in saying what I think. I am not frightened of anybody. Cotton, which is wool's greatest competitor, was 4½d. per lb. prior to the war. During the war it rose to 26d., and it is now from 5d. to 6d. Though it is now a little above pre-war rates, it is a long way better off than wool. The price of food grains, except wheat, has fallen during the past year 55- per cent., and meat from 45 to 50 per cent., but still the people are not getting meat at a reasonable price.

Senator E D MILLEN (NEW SOUTH WALES) - Prices' have not fallen in the retail shops.

Senator GUTHRIE (VICTORIA) - No ; and that is what I am aiming at. I say that we are not getting a fair deal. Meat is down to the producer 50 per cent., but is up to the consumer.

Senator Crawford - The excuse is that the butchers cannot find a market for the by-products.

Senator GUTHRIE (VICTORIA) - That is so, and in fairness to them the fact must be stated. We know that the price of all byproducts, hides, skins, tallow has fallen enormously, but still the retail prices charged, for meat are out of all reason. The whole sale prices for meat are frightfully low. If any man cares to go to the Melbourne meat market, he can get cheap meat if he buys sheep wholesale. I am glad to say that the men in our store are doing this, with the result that they are getting lamb for 3½d. per lb. In fairness to butchers and shopkeepers generally, it must be remembered that the cost of distribution is very high, and it is doubtful if they are getting a fair day's work for a fair day's pay, because of the pernicious " slowdown" propaganda which is being continually preached in this country. Sheep skins are down 70 to 85 per cent. ; hides are down 53 per cenT. and rabbit skins 78 per cent., and yet to-day we are practically paying more for boots and leather goods than we were twelve months ago. The present high, cost of living is due, to some extent, to big manufacturing profits, and in some cases to excessive pro section, with the result that many of the wholesale houses have been profiteering to an enormous extent, but now that they are loaded with high-priced goods they are endeavouring to retain war prices, although the market has collapsed.

Senator PRATTEN (NEW SOUTH WALES) - What has all this to do with the wool position?

Senator GUTHRIE (VICTORIA) - I want to show that the fixation of wool prices will to a certain extent stabilize the industry, and that stabilization of the wool industry will lead to stabilization of land prices and other primary industries. We do not want to drive the people from the land to the cities. On the contrary, we want, if possible, to persuade them to go upon the land.

Senator PRATTEN (NEW SOUTH WALES) - According to the honorable senator, tho policy he is supporting will give us cheaper imported commodities.

Senator GUTHRIE (VICTORIA) - I have said nothing of the kind. The high cost of living is largely duo to thA misguided action of Labour leaders, and this slowdown propaganda.

Senator Senior - Do you not admit that the output of a factory is as great to-day as ever it was?

Senator -GUTHRIE. - I do not say that our workers are all bad. I am not going to make any disparaging remarks about labour generally - not by any means The Australian, labouring man, with whom I have been associated, is as good as good as any of his class to be found in any part of the world, but, at the same time, a certain section is yielding to this slow-down propaganda. Can we. not find plenty of evidence of this in the frequency with which strikes occur? Does not the honorable senator admit that there has been a surfeit of strikes lately? And does he not realize that one effect of a strike is to put up the cost of living ?

Senator Earle - The t honorable senator said, I think," that high prices caused this industrial discontent.

Senator GUTHRIE (VICTORIA) - So it does.

Senator Gardiner - And is not this proposal a scheme to slow-down in regard to wool ?

Senator GUTHRIE (VICTORIA) - No. I am arguing in favour of the stabilization of values, of markets and of profits. Unless we hive some such stabilization we shall not know where we stand. The position is very serious. Indeed, it is desperate, and, therefore, desperate measures, if honorable senators like to call ' them such, are necessary to meet it. At a later stage I intend to move an amendment, if the Government insists on a minimum reserve of 8d., that the price be 9d.

Suggest corrections