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Friday, 18 March 1904

Mr KNOX (Kooyong) - I feel that the consideration of this question naturally divides, it into two parts; the local justification, that is, whether those who control matters in South Africa are in any sense justified in the request that they have made, and the Imperial or national view, which I, contrary to the opinion of some of my friends, think that we have a perfect right to take into account. I agree with those who have said that we have seldom heard from the Prime Minister a more eloquent utterance than that which !~.e delivered last evening. I heartily concur, too, in the sentiments underlying it. It will be disastrous to the interests of the whole Empire, if, after all that has taken place there, South Africa eventually comes under the influence of an alien race; and that is possible. The deputy leader of the Opposition, however, in a most practical way, showed that we are rather doing ourselves harm by magnifying our part in connexion with the war. Great Britain has never underrated that, and never will. So long as the Empire exists it will be remembered that Australia came to the assistance of the mother land in time of need.

Mr Conroy - For which the men who went got their pay.

Mr KNOX - Certainly ; but I do not regard the prospect of pay as the motive which prompted their enlistment. The real motive was the strong determination of the community to show that this part of the Empire is prepared to bear its share of the trials of the Empire whenever its assistance is necessary. Upon Imperial grounds we are, I think, justified in passing a resolution to declare that the House is or is not favorable to the importation of Chinese into the Transvaal. Perhaps honorable members may be interested in some facts which show the magnitude of the mining industry there. I shall quote from a work, The Mineral Industry, published in New York, which is recognised throughout Englishspeaking communities as one of the best and most authentic upon the development of the mining industry throughout the world. It .contains information and statistics relating to all countries, and an effort is made to collect the information from completely reliable sources. I know that no pains are spared to obtain absolutely accurate information in regard to Australian mines. It is here stated that the value of the ore lying within the depth of 6,000 feet, and a. length of 46.9 miles has been estimated at 233,560,709, and the output should average ^£30,000,000 per year. At this rate, it would take 42.5 years to exhaust the fields. While no doubt every effort is being made to produce as large dividends as possible, or to work the field for market purposes, those facts show that there exists an enormous deposit of mineral wealt h, which it is in the interests of South Africa to develop without unnecessary delay. I have here a sample of the ore. It is quartzite conglomerate, known as the Banket Reef, and was obtained at a depth of about 2,000 feet. If anything like it were discovered in Australia, the mining, and indeed all other industries of the Commonwealth, would very soon reach a very profitable position. But even if we had here the wealth of the Transvaal, I hope that no Chinese labour would be used to extract a ton of ore from the ground. That has invariably been my position. This sample of ore gives, on an average, 8 to 10 dwts. of gold to the ton. That is the general average of the deposits which have been developed. The honorable member for Wide Bay quoted an utterance made by a friend of mine a year or two ago, Mr. Harvey Patterson, who is chairman of the Mungana mine. I have had no directorial interest in that mine for nearly three years, though I to-day hold every share that was originally allotted to me. So far as the north of Queensland is concerned, I believe that a great deal of the work there could be performed by coloured labour with advantage to the white race. The mine to which my valued friend has referred to is upon an elevated plateau, and I do not think that the conditions there are such as to necessarily demand the introduction of coloured labour. In fact, I know of no mining undertaking in Australia in connexion with which large numbers of Chinese are employed. On the contrary, the Chinaman is what is known in the mining world as a "hatter." He prefers to fossick by himself, and work in his own direct interest. I wish to impress upon honorable members that there is no ground for the fear indicated by the Prime Minister in his speech, that the great gold deposits of the Transvaal are likely to be rooted out within a very few years for the benefit of a few capitalists. It will occupy at least forty years, working at very high pressure, to extract the enormous quantity of ore now known to exist there, and before that time has elapsed there will probably be further important developments.

Mr Poynton - Unless a mistake has been made in the calculations.

Mr KNOX - There is not much chance of that. I have a plan here, which , I shall be glad to exhibit to honorable members, showing the features of the deposit on the

Rand. The first line of mines is situated along what is known as the "Outcrop." Then as the deposit dips downwards from the surface, there is an intermediate line of mines, and still further away there are what are called the " Deep " mines, the borings of which extend to a depth of as much as 5,000ft. This uniform deposit extends laterally for the distance I have mentioned, and has been bored to a depth of 6,000ft. in what are known as the Deep Rand mines. Therefore, there would not be much force in the objection of my honorable friend. The feature of the Rand formation is its uniformity ; the gold contents of the stone range from 8 to 12 dwts. per ton throughout.

Mr Poynton - The honorable member will admit that we have had reports of a similar kind in Australia, and that they have not always been borne out by subsequent developments.

Mr KNOX - So far as reports are concerned, I am prepared to admit that, if mining were reduced to an exact science, all of us would wish to possess mining interests. We know, however, that, to a greater or less extent, the best of mining undertakings must be speculative, because we cannot ascertain, as a rule, what is beyond the point of the drill. The Rand deposit, however, has been proved along three lines, at a considerable distance apart, by bores and shafts, and it has been shown to be uniform to the extent I have mentioned. In fact, there is no other deposit of the same nature in the world, so far as is known at present, I know of no other ; and I have visited the largest of the mining fields in other parts. There is nothing to compare with the Rand deposit in uniformity. Therefore, the point raised by the honorable member would not in any way affect my statement that there is no fear that a number of capitalists will be able to root out the whole of the gold-bearing deposits upon the Rand within a few years. I say this with some knowledge of the large firms who are interested in the Rand mines, and who, probably, are troubled by no higher consideration than that of reaching the ore and getting it out at the cheapest rate and the greatest speed possible. There are two classes of mining investors. First, there is the legitimate miner, who tries to deal with a mine as with an ordinary quarry, and get out the stone as cheaply as possible for the purpose of extracting the valuable material, and, secondly, there are those who care nothing about the mine in reality, but who are wholly influenced by market operations. The latter class of persons always do harm to the industry, and their operations are to be deprecated. I do not for one moment say that this last" element does not very largely influence operations in what are known as "kaffir" stocks on the London Stock Exchange. It is well known that Rand stocks are not held entirely by British investors and speculators. They form I he medium of large transactions upon the Paris Bourse, the Berlin Bourse, and other large centres of speculative activity. In fact, any one reading the list of firms who control those great undertakings in South Africa will find the names of many men who, although they are domiciled in London, which is the centre of control, and may have been naturalized, do not belong to our own race. The development of the Rand mines, and the increase in the gold production which has resulted, has been of importance to the whole world,- and if the output could be increased by any legitimate means we should not interfere. In order to show honorable members that the labour difficulty is real, I desire to refer to the last South African Year Book, which occupies a position corresponding with that of Mr. Coghlan's publication. It is therein stated -

For some time past there has been no more pressing question in South Africa than the insufficiency of native labour. Although this shortage directly affects the mining districts, it is visibly reflected in the indirect influence it is exerting upon the progress of the whole country. Previous to the war, the maximum supply of African aboriginal labour available for the Transvaal was 96,704- In the closing months of 1903 it is less by some 30,000, or 30 per cent. The acuteness of the difficulty- and this is the point I wish to urge to show that there is a real demand for labour on the Rand - is best conveyed in the fact that the Transvaal Government has temporarily suspended railway construction in order that native labour might not be diverted from the mines. The position will be better understood by perusal of the official figures.

Taking the year 1903, I find that in January the number of white workers was 11,320, whilst in February it had increased to it,425. This increase continued till June, when they .numbered 12.460. The statistics available prove it is imperative that the mining companies shall obtain the assistance of black labour so far as they possibly can. For instance, I find that whereas the number of blacks employed in

January of last year was 50,499, in February it had increased to 54,000 ; in March to 60,000; in April to 63,000; in May to 66,000 ; and in June to 67 ,000. This book goes on to show that every agency possible is being utilized to obtain the services of native labour. In view of these facts, I scarcely think that the House is justified in indulging in a wholesale condemnation of the -proposal to introduce Chinese into the mines by declaring that more labour is not required. We know that Lord Milner himself supports the statement that additional labour is necessary. It has been said that the return received in London from these mines was all capitalized for market purposes. In this connexion I should like to quote from an authoritative paper, which was read before the American Institute of Mining Engineers, and sets out the financial conditions in the Transvaal. The author says -

At the outbreak of the war the total capitalization of the gold-mines of the Witwatersrand was over £70,000,000 at par, and at market prices about £147,000,000. A large part of these amounts represents worthless properties which have been floated during boom times ; yet, nothwithstanding this excessive capitalization, the mines yielded about 7 per cent, on the total capitalization at par, and about 3.5 per cent, on market prices. Eliminating properties notoriously without value, and also the capitalization of certain "deep level" properties which have not, as yet, reached a producing stage, we may pronounce the returns from bond fide investments and competent management to have been exceedingly satisfactory.

He goes on to say that forty-one of these companies divide between them ,£4,847,505, or about 15.6 per cent, on their nominal capital of £31,018,000. The market capitalization of the same companies is £82,555,000, and the dividends returned upon the capitalization represents 5.9 per cent. While we all realize that wild-cat schemes are inseparable from such gigantic mining undertakings, yet on the capitalization to which I have called attention it would be impossible to argue that these mines are not returning a fair interest. I would further point out that these goldmining companies - according to the statistics available, which are public property - have, not very much to complain of as regards the conditions under which they work. I hold in my hand a tabular statement of the profits which were made during 1899, when things were more favorable than they have been under recent conditions, which showed a considerable over-capi'talization in a certain direction - conditions which were disturbed by the war. I find that a leading mine made a profit of 20s. 8d. per ton of ore treated ; and it is estimated that, if it had been worked entirely by white labour that amount would have been reduced to 12s. 8d. per ton. In another mine the profit of 19s. 5d. per ton would have been reduced to 1 os. rod. per ton. In a third instance the profit of 22s. 1 id. per ton would have been decreased to 14s. 8.7od. per ton. In other mines the profits would have been reduced as follows : - From 12s. od. per ton to 3s. 2.3od. per ton; from 1 5s. od. per ton to 5. rod. per tcn; from 13s. 6d. to 2s. 6.5od. per ton ; from 9s. 3d. per ton to 2s. 5-74d. loss per ton; and from 13s. 2d. to 7-9od. per ton. I desire to show that, regarding these mines as purely business propositions, the owners have much to gain by employing other than white labour. The average wage paid for native, labour is 2s. 2d. per day, whereas the cost of white labour averages 12s. per day. That calculation is based upon the assumption that one white man is equal to two natives. Having regard to the profits per ton of ore treated, you will observe that the companies in question are making a larger profit than most of the great mines which are working in Australia. I have in my possession the quotations of the Transvaal Chamber of Mines for December, 1903. Taking the list as it comes, and without naming the companies concerned, I find that they made the following profits: - 20 per cent., 50 per cent., 30 per cent. 15 per cent., 1.12A per cent., 25 per cent., 50 per cent., 25 per cent., 10 per cent., 17 \ per cent., 25 per cent., and so on. Despite the fact that every mining enterprise, because of its speculative character, is expected to yield a much larger return than ordinary investments, I must admit that these mines are making very satisfactory profits indeed. I' wish to emphasize the fact that there is no justification for the statement that they can be worked out immediately. There is much gold to be obtained there, and it is desirable that it should be extracted as speedily as possible. As far as I am able to see, the mines are looking very well,, and all that they need is additional labour. The question is, what should that labour be? I am emphatically of opinion that the low-grade ore in the mines necessitates, in most circumstances, the employment of kaffir labour in conjunction with white labour. White men are employed chiefly to control the cyanide works, to direct surface operations, and to act as shift bosses. Very little white labour is employed in actual stoping or sinking operations, for . .the introduction of machine and power drills has greatly reduced the labour requirements in . that direction. I have dealt with the practical side of the question, and I repeat that, having regard to the large quantity of gold to be extracted, there is justification for the desire to secure more labour for the mines. The great question is whether we, as an integral part of the Empire, are justified in interfering by making a suggestion either to the British Government. or to the authorities in the Transvaal on the lines recently followed by the Prime Mini:sfer. From an Imperial stand-point, there can be no objection to the course pursued by the Prime Minister, and my only regret is that it should have been necessary, for him to take action. I am forced to admit that we have been somewhat under a misapprehension as to the policy to be followed in South Africa. We were under the impression, when the outbreak of hostilities occurred, that we were securing a united community there,- that the people of the Transvaal were to possess the advantages enjoyed by the people of Australia, and that the country was not going to be dominated by either a capitalistic or a labour class. .We were led to believe that free institutions were to be established, and that this was one of the objects of the war. I. am inclined to think that the motion proposed is unnecessarily abrupt, in so far as the use of the words, " That this House emphatically protests" is concerned.

Mr Watson - The motion has been amended so as to read - "That this House records its grave objection," and so forth.

Mr KNOX - I was not aware that that amendment had been made; but it is an improvement, and is in better form. Upon Imperial, grounds, and because of our desire to preserve the unity of the Empire, I feel that we shall be justified in expressing our, opinion, but in a form more conciliatory and dignified than that in which the motion was first framed. With the kaffir labour which is available the mine-owners are, in my opinion, obtaining excellent profits, and considerable developmental work is taking place. It seems to me, therefore, that an opportunity ought to be given to the white races - to the men who left Australia for South Africa - to obtain work in the mines. I have some interesting figures in my possession, but I shall refrain from referring to them, inasmuch .as it would be unreasonable for me to detain the House beyond the hour at which it is usual to adjourn. Had time permitted I should like to have dealt with the subject more exhaustively than I have done, for it is one on which I believe I am in a position to afford the House some information, and to convey to honorable members generally some knowledge of the difficulties associated with it. If I have succeeded in impressing honorable members with the fact that no injustice should be done to South African investors - that there is no intention on their part to simply tear out the gold from the mines without any regard for the welfare of the whole country - and that there is a large demand for additional labour in South Africa, I shall feel that I have not spoken in vain. On Imperial grounds and for racial considerations I think we are at liberty to express an opinion as members of this House, on so serious a proposal as the introduction of a large number of Chinese to South Africa. If carried into effect it will, I fear, tend to weaken the bonds of that Empire which we have spared no effort to weld strongly together. I will support an amendment to the motion, expressing such an opinion, which, however, must not have the slightest appearance of dictation.

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