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Tuesday, 19 June 1906

Mr LONSDALE (New England) . - If proof had been given that there is unfair competition in relation to any industry in Australia there would have been some reason for this Bill, but neither of the Ministers who have yet spoken has shown that anything of the kind has occurred' or even now exists. We have had from the Minister of Trade and Customs the admission that this Bill is aimed especially at two foreign firms carrying on business in Australia.

Mr Wilks - What are their names?

Mr LONSDALE - They were mentioned by the Minister of Trade and Customs - the International Harvester Company and the Massey-Harris Company. The statement has been made that they are unfairly competing with manufacturing interests here, and that consequently a drastic Bill like this must be introduced to prevent such competition. The Attorney-General, who has just resumed his seat, gave us a long disquisition on the American law, and what it has done, but he has not attempted to show that unfair competition is taking place here. Although he was invited by' interjection to do so, he carefully abstained from accepting the invitation. He has indicated practically that notwithstanding all the legislation of the United States, trusts are still rampant and powerful there rr?-day. Every law passed there has failed to prevent trusts from carrying on their operations and securing a firm grip upon the commerce of the country.

Mr Webster - Does the honorable member say that because they have failed no other attempt should be made?

Mr LONSDALE - I say that their failure is perhaps an indication that this Bill will fail. We should base our arguments on experience. The experience of the past is the wisdom of to-dan but I do not expect the honorable member to be guided by it. What injury do the American trusts inflict upon other countries? When one inquires into the operation of trusts in America one finds that they are injuring not foreign countries, but their own people. They keep up the prices of the material to their own people, whilst they sell at cheaper prices to other nations. We have an admission in the speech of the Minister of Trade and Customs that such is the fact. One cannot read American literature without realizing that it is the case. The opinion of those who suffer is that what develops the trusts in America is what we have been trying to fight here to-night. Protective duties enable the American manufacturers to keep out the competition of the world, and to obtain from their own people a higher price for their products, whilst they sell at cost price to the people of other countries. I have taken the trouble to get some information about this subject, and to make some extracts, as I could not find very much information in the Minister's speech. So far as I can judge, there is no unfair competition here. The two companies I have alluded to were in a combination with the agricultural implement makers in this State. They are placed under no disadvantage, because the importing expenses, with the duty added, amount to about £20 per machine. Although they enjoy all that advantage, yet they claim that they are being interfered with, and that the competition is unfair. It appears to me, however, that they would lae able to completely destroy foreign competition, if they would only sell their machines at a fair price. But, seeking to get the highest possible price, they entered into a combination for that purpose, andi then they appealed to the Minister of Trade and Customs to raise the value of the imported machine, so that the duty might be increased, and he yielded to their request. In the press we read of a cry about how the local industries were being strangled, but when we come to examine the evidence of local manufacturers before the Tariff Commission, we realize that their machines ought to be sold for considerably less, and under the present duty could be sold at such a price as to absolutely shut out foreign harvesters. It is the local manufacturers who have helped to keep up the price against the farmer, but the Bill is brought in to protect the former, and not the latter. Mv objection to its enactment is that it is supporting a local monopoly. In America it is the local trusts which have created all the trouble and difficulty. The Minister of Trade and Customs wanted to make out the other night that the steel trust of America is a great competitor in the Commonwealth. The figures he gave are about the same as those which I took out. In 1904 our total importations of all kinds of agricultural implements, manufactures of metals, machines, and machinery, amounted to between £6, 000,000 and £7,000,000.

Mr Isaacs - Speaking from memory, the imports for 1905 amounted to £[7,250,000.

Mr LONSDALE - The Minister of Trade and Customs said that in 1904 the imports of these articles amounted to £6,980,000. According to my figures, the imports in that year amounted to £[6-5'7)793j but I left out some articles, such as electric appliances. Out of that sum, £[1,360,441 worth came from America, £[636,327 worth from Germany, £[4.280,255 worth from Great Britain, and £[260,770 from other countries. Threefourths of our total imports of articles came from Great Britain, and as not onefourth came from America the Steel Trust cannot send very much here. A great proportion of the American imports did not come from the Steel Trust, but from such companies as the International Company, the Steel Implement Company, vehicle and motor companies. Even if we were to credit all the American imports to the Steel Trust, not one-fourth of our imports would come from that quarter. Some of those persons who have to take their iron and steel from the Steel Trust make this statement in the Farm Implement News of 28th December, 1905 -

A few brief years ago we could all buy iron as low as $iS per ton, whereas we must now pay approximately $40 per ton, and a corresponding advance for everything in the metal line. When iron was sold for $18 per ton the methods of production were crude and expensive as compared with methods now in use. Improved methods and machinery have greatly reduced the cost of production, -and yet prices continue to advance. Prices should have materially declined.

Mr Webster - Does not the honorable member see that there is some cause for interference there?

Mr LONSDALE - In America there is a cause for interference, and those who are interested point out the steps which should be taken. Of course the argument has been used that when iron and steel was sold at $18 a. ton. it was sold at less than cost, and that, in consequence, a crisis was brought about -

Less than two years ago the President of the Great Steel Corporation testified -

This was before a Select Committee in America, which was dealing with this question - that bar iron and steel could be produced at a profit for $12.50 per ton, and for steel wc must pay $40, or over 200 per cent, profit.

Those who wished to use steel in America had to pay $40 a ton, when, as testified before a Committee, it could be produced at $12.50. The steel magnates, in order to try to excuse themselves, told the story that the low price of iron brought about losses and in consequence depression.

The steel magnates tell us that when iron was sold at $18 per ton it was a breeder of panics, but we recall the fact that in 1893 the Carnegie properties were valued at less than $10,000,000, and that after five years of panic and $iS prices Mr. Carnegie sold his interests alone in these properties for $360,000,000. This was 360 per cent, profit in five years, or 72 per cent, annually, and at panic prices, too.

Out of the American people, the trusts and combines are making their profits, and they are doing that because the world's competition has been stopped. If we are to have monopolies here, they will be developed in just the same way. If we are to pass a Bill which is to destroy competition with the manufacturing industries of these States it will bring about1 exactly what is brought about in America by means of trusts and corporations. While, of course, it would be of little use for me to vote against the second reading of the Bill. I shall seek to take such a course as will make its provisions very much less drastic than they are. The Farm Implement News of nth January, 1906, says -

Two suggestions are offered relative to conditions that enable the steel trust to rob the public by exacting exorbitant prices from manufacturers. The first is the Tariff.

According to those who have to deal with the Steel Trust, and to purchase their product, the Tariff is the great cause of the evil in America. It is not the fact that thev are able to combine as they do. but the shutting out of the world's competition, which enables the Steel Trust to increase their prices, to the extent that thev do.

Mr Wilks - The next thing they will do will be to capture the railways.

Mr LONSDALE - The article deals with the question of the railways. It says -

If the President succeeds in his efforts to secure a square deal for all shippers, one source of the steel trust's power to cripple competition will be shut off. . . . But the Tariff stands unchallenged by the President, and warmly* supported by influential statesmen, as statesmen go, who declare that the Dingley schedules shall remain unchanged.

Right through, these gentlemen take up this position, that the one way to get rid of the trusts is by means of altering the Tariff.

The only limit to the price on these semifinished products is the level on which foreign goods can be brought in freight, insurance, duty paid, For instance, in 1902 steel billets were gradually advanced until they reached $33, at Pittsburg. At this crisis Germany and Belgium shipped us several hundred thousand tons of billets, paying freight and $6.72 duty. The trust, realizing that it had carried the game too far, first endeavoured, through its political interference, to secure a ruling raising the duty on billets to $8.g6 per ton by classing them as bars.

That is what was attempted to be done here. But the manufacturers failed to get it done in America. The manufacturers of harvesters in this country, however, did not fail to get it done. In America, those interested fought the trust very strongly, and defeated them. Shortly after that, the price of billets declined, and importing stopped. In other words, when the trust was not able to get an increase in this way, they brought down their price and stopped importation. That is exactly what the harvester people could do here. They make very large profits. They can reduce prices so as to shut out importations under the present duty. Such being the case, there is no reason whatever for this Bill. The company refused to allow its books to be seen even confidentially by the Tariff Commission, because it knew full well that his company ^85 per machine to manufacture harvesters, and yet they had to sell them at £84. each. The manufacturers of harvesters in this State can make them for much less than that. If the Clyde Engineering Company, of New South Wales, cannot make them as cheaply as they are made here, would it be right to shut out the Victorian' manufacturers from competing in New South Wales? If would be an absurd thing to do. In these days, every industry ought to seek to adopt t ,he most improved methods of carrying on business. Yet this Bill is aimed at preventing the very competition that gives rise to improvements. Cream separators were purchasable some years ago for £50 each'. They can be purchased for about ^25 to-day. The improved cream separators will do twice the amount of work of, and are more easily manipulated than, the older machines. But if we had a company here making cream separators in the old style we could not get the improved machines under this Bill, unless the manufacturers resolved/ to put in the proper kind of machinery. The whole thing is a delusion. The statements in favour of the Bill are simply made to create a panic in the minds of the working men, so as to get their votes, whilst in reality there is no foundation for the allegations. With regard to the position of the agricultural implementmaking industry, I mav state that in 1900 there were 1,151 hand's employed in Victoria, and the output was of the value of ^244,544. The number of hands employed in 1904 was 1,496, an increase of 345 ; whilst the output was ^431,476, an increase of ^186,932. The total import of agricultural implements into the whole Commonwealth, including harvesters, reapers and binders, rakes, drills, and everything else, was of the value of £[332,156. Those are the figures of the Minister of Trade and Customs. They mean that if the whole of the implement industry were captured by local makers, and all the imports were shut out, only 600 men would be employed in addition to the number employed to-day.

Mr Webster - At what wages?

Mr LONSDALE - At current rates.

Mr Webster - How many would be supported indirectly ?

Mr LONSDALE - If all the men were married and had five children each 3,600 persons would be affected ; but, as a matter of fact, a considerable number of the 600 would be boys. We are passing a Bill of this drastic character to accomplish the purpose of possibly finding employment for 600 additional hands. The thing is an absurdity. As a matter of fact, I do not think that additional employment would be given to 6ob hands, because it is. well known that the output of a factory can be increased with a smaller number of hands proportionately. The more this, proposal is examined the more it will be" realized what a little thing has created all this trouble. I remember the Attorney-General waxing eloquent on the subject last session, and saying that a number of people would not get their Christmas dinner if the Bill then before Parliament was not passed. Any one must see that the manufacturers already enjoy an enormous natural protection. The importing firms must incur considerable expenditure before thev land their goods in Australia. That puts the local manufacturers in a much better position to capture the trade. The honorable member for Bland made a speech in Brisbane some time ago, in which he dealt with this subject. He is reported in the Brisbane Courier on 14th June, 1905, to have said -

There was nothing short of absolute nationalization of these trusts that would cure the evils they represented.

The honorable member means that the State is to take over the manufacture of these goods.

Mr Wilks - He cannot support this Bill, then.

Mr LONSDALE - He professes to support it. That is the position he takes up. The idea, of course, is to do away with private enterprise as far as possible. In this matter what we desire is fair competition, and not that we shall be shut off from the best that the old world can give us. We do not desire to be separated entirely from the people of other nations. This cry of " Australia for the Australians ,r is, to me, a bogus cry. That kind of thing; cannot be brought about. It is merely an election cry, and there is -nothing at all behind it. If honorable members opposite propose to keep Australia entirely separate from the rest of the world, they will1 very soon find themselves in difficulties.. " China for the Chinese " has been the cry and the policy of Chinamen in the years which have passed, and if a different policy had not been forced upon them they would have continued in their old exclusiveness. The men who talk of "Australia for theAustralians " would like to keep this country in the condition in which China has been kept for so long. I would remind honorable members opposite that Socialism is, to a very large extent, in operation in China. If we desire that this country of ours shall progress and reach a higher position, we must adopt some other policy. If we desire to retard its progress in every way, weshall pass such legislation as this, impose high protective duties, and go in for nationalizing our works. We shall thus make aChina of Australia, with all the exclusiveness of the Chinese, and shall reduce this? country to the position occupied by Chinatoday. I shall do all I can to modify the drastic provisions of the Bill. Whileendeavouring; to insure fair competition, I shall not support anything which would stop competition. The intention of the Minister of Trade and Customs in introducing the Bill is to stop competition, whatever the Attorney-General may say. So far as I anr concerned. I shall seek to have its administration placed in the hands of a Judge. I shall certainly not trust the present Minister of Trade and Customs to deal with these matters. So far as I am able, I shall do what can be done to take the administration of the measure out of his hands, because no one can read the honorable gentleman's speeches without realizing that if he is given the power he will discover that there is some unfair competition in order to prevent importations, and thus, instead of our farmers being benefited, they will be injured.

Debate' (on motion by Mr. Culpin) adjourned.

House adjourned at ro.49 P-m-

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