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Thursday, 14 July 1921

Senator ELLIOTT (Victoria) .- Like Senator Gardiner, Senator Fair- bairn, and others, I was, in my younger days, a diligent student of Adam Smith, Cobden, arid Gladstone en the question of Free Trade versus Protection. My beliefin Free Trade continued for along period, and, in fact, I was only converted to a policyof Protection as a result of Our experience during the recent great war. The reason for my long belief in-

Free Trade was that theoretically, there is no answer to the Free Trade arguments. If we support the axiom that every country should produce that which it is most suited to produce and exchange its products for those of other countries, there is no answer to the argument. But this axiom presupposes many things, included in which is one that other countries will adopt a similar policy. The main argument of Adam Smith was that other countries would follow Great Britain's lead, and that in a very short time we would have Free Trade throughout the world.

Senator E D MILLEN (NEW SOUTH WALES) - He also argued that, whether other countries followed your lead or not, it was good enough to stand on its own.

Senator ELLIOTT - But he laid great emphasis on what I have said, contending, as the Minister for Repatriation (Senator E. D. Millen) has pointed out, that such benefits would ensue that other countries could be disregarded. The fundamental argument, however, was that other countries would follow the lead. But that has not been the case. In fact, during the eighty years in which Great Britain has operated under Free Trade, I have not discovered any other country which has adopted a similar policy. On the contrary, other countries, such as America and Germany, have worked under a highly Protective policy, and have been able to establish within their borders and expand industries which originated in Great Britain, and which, according to the Free Trade argument, was the most suitable place for their development. Under the Protective policy of those countries these industries have been built up to such an extent that they are now able to more than compete with Great Britain on equal terms. Aniline dyes were first produced in Great Britain, where the raw material existed; but it occurred to the German scientists that this was a key industry, with which the manufacture of explosives was closely associated, and that it would be advantageous to make it a German monopoly. The Germans therefore proceeded to protect the industry in every way; and they encouraged their scientists to such an extent that in a very short period the in dustry was under the control of the German people.Similarly in America and Germany the cutlery trade, which was strongly established in Sheffield and Birmingham, has been transferred to countries operating under a Protective Tariff. The Germans deliberately set out to capture certain key industries, so that, if they achieved success, they would be able to cripple Great Britain intime of war. They knew that if they secured control over certain important manufactures, the establishment of other industries, which were dependent on them, would soon follow.

Senator Gardiner,in the course of his speech, stressed the point that if we built up protected industries they would combine to oppress the people; but, apparently, the honorable senator has never heard of Combines outside Australia. It is well known that the importing interests are equally capable of combining where there is no local competition, and the people are oppressed to a greater extent than they would be in the hands of local manufacturers who, at least, are under our own control. The honorable senator also asserted that the duties imposed are paid by the consumers in our own country; but, in fact, they are very often paid by the importers. Recently, the Argus published a statement that certain agricultural implements were sold in Free Trade New Zealand at a higher price than in Protectionist Australia, thus demonstrating clearly that the duty was paid by the American importer, in that case at all events.

Senator Gardinermade a further complaint about the high cost of woollen goods in Australia. In connexion with this matter I feel sure that if our industries are encouraged - and judging by the number of woollen companies which have been floated in Victoria recently, the position is very promising -we shall soon be able to cope Avith the demand, and the price ofwoollen goods in Australia will then be lower than at present. On this subject I may draw the attention of the Minister for Repatriation (Senator Millen) to the position of the Returned Soldiers' Co-operative Mill, at Geelong. This cooperative society was established to support returned soldiers and their families.

Senator E D MILLEN (NEW SOUTH WALES) - The honorable senator cannot say that. They do not expect to live out of the dividends.

Senator ELLIOTT - The company was formed for the purpose of providing employment for returned soldiers and their dependants. The articles of' association provide that no person but a returned soldier or his dependant may be employed, and also that the shareholders must be returned soldiers or their dependants.

Senator E D MILLEN (NEW SOUTH WALES) - They are not.

Senator ELLIOTT - According to the articles of association they must be, and I thinkthe Minister will find that I am right.

Senator E D MILLEN (NEW SOUTH WALES) -It is simply a question of fact, which can be cleared up in twenty-four hours. I say the shareholders are not limited to returned men, and I can give the honorable senator the name of one man to justify my statement ; but this does not affect his argument in any way. I am only saying that his statement is not quite correct.

Senator ELLIOTT - Well, the returned soldiers went into that venture in order to help themselves. I was one of those who advised them to do so. They had an assurance that the Government would be prepared to assist them in the same way that the farmers in Western Australia were helped, but, so far, that promise has not materialized. It would be a good thing for the Commonwealth, and for our returned soldiers too, if some such assistance could be given to this movement.

Senator E D MILLEN (NEW SOUTH WALES) - You would apply that to all the States, I suppose?

Senator ELLIOTT - Yes, in regard to similar institutions. This Geelong Cooperative Society's difficulty is in regard to getting outside capital into the venture, because the articles of association prevent any one but returned soldiers and their dependants from becoming members, and so I cannot understand the Minister's statement.

Senator Gardineralso said that boots were too expensive in Australia. I hold the contrary opinion, based on prices which I have observed in the various retail establishments. I am satisfied that, after making allowance for increased labour costs, the price to-day for the Australianmade boot is down to about the level of pre-war costs. It was also said that the reputation earned for the Australianmade boot during the war did a great deal to break down the prejudicethat had hitherto existed against the Australianmade article. Ministers, I think, must be aware of the efforts that were made to induce the Government to substitute the British for a supply of boots for our troops ; but the troops themselves determined to wear nothing but the Australianmade article, and I think that at the end of the war it was generally agreed that our troops were better equipped in this respect than any other troops.

Senator de Largie - Can you explain why our boot factoriesare now idle, and why they are not exporting and taking world's parity, like our wheatgrowers ?

Senator ELLIOTT - I believe there was a very great over-production of boots during the war, and that the present glut in the market is only temporary.

Senator de Largie - Why not export the boots?

Senator ELLIOTT - The . honorable senator must not forget that for a long time hides were very much above present values, and that when the slump came our boot factories were encumbered with boots that had been made from high-priced leather.

Senator Bolton - We are now told that a pair of boots costs as much as three hides.

Senator ELLIOTT - I do not know the details of costs to-day, but it is a fact that the bulk of the boot manufacturer's capital is, at the present time, locked up in high-priced stock, which they cannot get rid of without great loss.

Senator Gardineralso had something to say about bananas. It seems to me that there is no reason why banana cultivation should not progress to the same extent in Queensland and the northern parts of New South Wales as the growing of softstone fruits and citrus fruits has been developed in the northern parts of Victoria. There is no reason why, when the industry has developed sufficiently, bananas should not be as cheap as when produced under black-labour conditions in Fiji. We would then have this additional advantage : we would be getting the bananas cheaply, and have the money in the country as well.

I want, now, to direct attention to another soldier industry established in Victoria since the war. A certain' number of returned soldiers, who were stevedores) last year formed themselves into a co-operative company and started in business om the Melbourne wharfs. Becoming thus a company of capitalists so called, as well as stevedores, they were naturally v careful to see that claims for pilfering goods on the wharfs should be as light as possible, and I am informed that their enterprise has been remarkably successful. The men make good money in wages, and their company is earning high dividends. They are most particular in checking anything iu the nature of pillaging from the ships, as they realize it is to their interest that claims against their company should be as. light as possible. Their reputation is now so good that they are being preferred to other people, and I suggest to my friends of the Labour party that some of the unions engaged in this kind of work, as well as in other industries, might very well form similar companies and provide their own capital by investing their savings, as these returned soldiers did, although, of course, they were able to utilize their war gratuity bonds, upon which they obtained an advance from the bank sufficient to carry them on for the first few months. It appears to me that if these co-operative enterprises were established, and were working amicably, many of our labour difficulties would be solved.

Senator Gardineralso, and, perhaps, by way of a joke, made some remarks concerning the leadership of our Australian generals during the war. I can only reply that we had a very short apprenticeship in leadership, and so I am not going to defend the mistakes made, such as they were.

Senator Gardiner - May I say that your reputation was so high that it' could even stand my joking about it?

Senator ELLIOTT - I suggest to my honorable friend (Senator Gardiner) that he and his . colleagues had a much longer apprenticeship in leadership than we, and I venture the opinion that if, during the war, their leadership had been directed differently, the attitude of the people of Australia towards his party to-day would be very different.

There is another matter to which I desire to direct attention. The hospitals iu Australia at present are in difficulties owing to increases in wages and other working costs. In 1910-11 the maintenance costs of the Melbourne Hospital amounted to £42,196, and last year it rose to £74,000. Salaries and wages, for example, have advanced from £19,000 to £32,618,. and the dispensary costs from £4,552 to £9,100. The Minister for Trade and Customs (Mr. Greene) was sympathetic during the debate on the Tariff in another place, and exempted from duty alcohol, which is an essential ingredient in the preparation of most medicines. That concession resulted in a, net saving to the hospitals of £800 a year. I hope that the Minister will be able to see his way to make similar concessions iu regard to other articles which are almost as essential as is alcohol. By so doing no great injury will be inflicted upon the drug manufacturers of Australia.

Senator E D MILLEN (NEW SOUTH WALES) - I suggest that the honorable senator is now getting rocky upon his Protectionist principles.

Senator ELLIOTT - I am as ardent a Protectionist as is anybody, but there is a difficulty in dealing with these public institutions, and in raising nearly £100,000 for the benefit of poor people. If we can save a few. hundred pounds by the remission of duties upon articles which are commonly used in cur hospitals, it will confer a great measure of relief upon those who are endeavouring, under great difficulties, to keep these institutions going.

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