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Friday, 21 October 1904

Mr SPEAKER - I was on the point of calling the attention of I he honorable member for Bourke to the fact that he must discuss the Bill, and not the conduct of the honorable member for Moira. A personal explanation may not be d'-'bated.

Mr HUME COOK (BOURKE, VICTORIA) - Of course, I bow to your ruling, Mr. Speaker, but the honorable member for Moira was one of those who complained of my action in wasting public time.

Mr SPEAKER - The personal explanation of the honorable member ' for Moira may not be debated.

Mr HUME COOK (BOURKE, VICTORIA) - I did not desire to refer to his personal explanation, but to what he said last evening. However, the matter is of no great importance. The fact' is 'that a great deal of time was deliberately wasted yesterday by those who complained of my action. I was willing to proceed with my speech, but at twenty minutes tQ eleven .o'clock, when the debate was . ad;journed, the House was tired, and honorable members wished to go home. . The importance of this measure warrants us in occupying same little time in discussing it. Its issues, are so wide, and the amount of money proposed to be expended is, comjparatively speaking, so large, that I, foil one, would be the last to complain of a full and fair consideration _ of the whole , pro'posal. Then, too, the Prime Minister last night made a very vigorous attack upon theprinciples of the measure, and as the report of his speech will be sent all over theCommonwealth, those Who differ from him have surely the right to state their views, at reasonable length. I do not know 'how the Minister of Trade and Customs feels in regard io the matter ; but I should" think that,' after the attack which was made on the principles of ' protection, and q£ bounties, which I imagine are dearest to his heart, he will be induced to put beforethe House the opinions of the other half of .the Government on this subject.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member is stating the Minister's views for him.

Mr HUME COOK (BOURKE, VICTORIA) - The honorable member for Parramatta reminds me of those insect pests in the district which he represents, which spoil all that they do not destroy.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Very severe; but it comes from an insect.

Mr HUME COOK (BOURKE, VICTORIA) - I asked last night why it is that free-traders who oppose the Bill continue to repeat the question. "Why is there a need for a bonus?" They affirm that our deposits of iron ore are very Large, that their quality has been proved beyond doubt, that there is a certain market here for the iron that may be produced, and that under these circumstances there is a good opening for capitalists without State assistance in any shape or form. These statements are pertinent, and require to be answered, and I shall endeavour, to the best of my ability, to reply to them. The first answer lies in the fact that the business of manufacturing iron is distinct from almost every other. It requires the investment of a large amount of capital - an amount so large that probably no individual would be prepared to enter upon it. Those who might be disposed to combine together upon a co-operative Basis, or upon the share system, would naturally be timid about incurring a large outlay unless they had some assurance that they would be able to obtain a satisfactory price for their goods.

Mr Fowler - Are not those good arguments in favour of nationalizing the industry? ; Mr. HUME COOK.- If the honorable member will kindly wait until I have concluded my remarks, he will find it unnecessary to ask that question. Those who are most deeply interested in the iron industry, of Australia are the importers, and we know . from, past experience that whenever an attempt is . made to bring locally-produced goods into competition with the imported article, the- importers combine together with the object of crushing out the local production. Evidence was given before the Iron Bonus Commission, that the price of iron, which stood at £8 per ton, was reduced to ^3 10s. per ton immediately local competition was threatened in New South Wales. As a consequence of this the local iron works had to be closed down, and upon the local competition being swept away price's were restored to the original figure. Evidence to this effect was given by Mr. Robert Morison,. on the 16th May, 1903, at questions 2259 and 2260. Mr. Morison said -

When we were producing iron in the Fitzroy district, pig iron cost about ,£8 a ton; but afterwards it fell to about £3 10s. a ton, and that caused the works to be closed.

Mr Lonsdale - Was not that reduction owing to a general fall in the price of iron all over the world ?

Mr HUME COOK (BOURKE, VICTORIA) - No; not at that time. It was the result of an attempt on the part of the importers to crush out the local producer.

Mr Lonsdale - The local iron works had not the material with which to carry on.

Mr SPEAKER - The honorable member for Bourke is entitled to make his speech without the assistance of the honorable member. If the honorable member for New England, who has already spoken, persists in his present course of conduct, he will seriously interfere with the honorable member for Bourke, and will be acting very unfairly.

Mr HUME COOK (BOURKE, VICTORIA) - It is well known that tactics similar to those I have mentioned are resorted to in all. cases where local competition is threatened. In view of the conditions to which I have referred, some guarantee must be given to those who engage in the iron industry that they will be protected, for some time, at least, against the unfair tactics resorted to by the importers. In the absence of such a guarantee - such as might be given by the States Governments agreeing to take all their supplies for a time from the local manufacturers - it is necessary for us to grant' a bonus, or to adopt some other method. It has been stated that if the persons interested in this business could induce the States Governments to co-ordinately agree to take from them all their supplies for a certain number of years; at the average prices now obtaining, they would not require a bonus'; but it- is clear that the States' Governments cannot or will not enter into such an arrangement. Therefore, we shall need to give the manufacturers such a guarantee as would be afforded by 'our undertaking to purchase their output from them at a 'satisfactory average price, or pay them a bonus. Another reason is that our market, though in a sense fairly extensive^ presents better opportunities for the operations of trusts than do the larger markets of the world. After all is- said and done; ;£6, 600,000 worth of steel and iron- goods would be a. mere flea-bite compared with the. value- of similar, commodities annually consumed . 'in .other parts of the world. Our requirements in that direction could be controlled, in such a country as the United States, probably by one man. Under these circumstances we are justified in stepping, between the producer and the importer in order to secure to the public' ' benefits which cannot be. conferred under ordinary conditions. I find that the average imports of all classes of iron and steel goods, including metals and machinery, into the Commonwealth represent a value of about £5,000,000 per annum. That, of course, is the present importation. If our business grew as it might and should dch- as I" shall presently show - our consumption cif iron and steel goods would increase very rapidly in the near future. Taking, however, our present requirements as a basis, we find that something like 1,500,000 tons of iron ore would have to be treated each year, and in addition to that, 1,500,000 tons of coal would be used in smelting operations. Probably 500,000 tons more would be consumed, because coke is the principal fuel used in smelting operations, and we all know that a certain amount of waste occurs in the conversion of coal into coke. Therefore, we may fairly assume that 2,000,000 tons of coal would be required. Then, again, thousands of tons of various kinds of fluxes would be used. Incidentally, therefore, the iron manufacturing "business would af- ford considerable employment. I am not favouring the granting of these bonuses merely because they would afford employment. If that were our only object, the taunts and jeers of free-trade honorable members would be justified. At the same time, it is satisfactory to know that probably something like 3,000 person's would find employment in the iron industry, that some 15,000 persons would be sustained by the expenditure in connexion with it, and that the workmen would receive fair rates of wages, according to the Australian standard. If is estimated that fully .£500,000 would be required annually to pay the wages' of the operatives, and this fact must afford some consolation to those honorable members who observe that the adult population of the Commonwealth is decreasing, instead of increasing.

Mr Fowler - Where?

Mr HUME COOK (BOURKE, VICTORIA) - All over Australia.

Mr Fowler - The population is increasing rapidly in' Western Australia.

Mr HUME COOK (BOURKE, VICTORIA) - I grant that for the last year there was an increase in that: State.

Mr Fowler - And it is still going on.

Mr HUME COOK (BOURKE, VICTORIA) - Even so ; that does not alter the fact that for the whole of Australia the emigrants exceeded those coming into Australia -by over 6,000 persons. I am speaking of the Commonwealth,, and not of any particular State. The advancement of the Commonwealth is our concern, and, although we may rejoice when we see that this State or that is increasing its- numbers, it must be a matter of1 deep regret to know that the adult population of the Commonwealth as a whole is decreasing. It behoves us to find out the cause, and, if possible, to apply, the remedyI believe that we may check the present falling off bv" providing further employment for our people, and, there-' fore, the establishment of such an industry as that contemplated would 'be a step in- the right' direction. The honorable and learned member for Darling- Downs- has just placed in my hands the population returns for the Commonwealth. These show 'that there is a slight increase in all the States. But the addition of children to the total population will not make up for the adults lost to it.' We want, not merely the natural increase of births, but a regular inflow of adult workers in addition. The establishment of the iron industry, would help to find them' employment. Now it may be pointed! out that a large initial outlay would have to be incurred in connexion with the erection of the necessarybuildings and plant in connexion with the proposed iron works. These alone would provide a large amount of employment. It is not, however, this consideration which leads me to support the measure. I ammore impressed with the ultimate advantages which are bound to accrue from the production of the raw material which forms the very basis of our largest manufacturing concerns. Some reference has been made to Canadian experience. Some honorable members have stated that the iron industry in that country has proved a failure, and" the honorable and learned member for Angas some time ago endeavoured to prove, by quoting statistics, that the payment of the bonus, in Canada, so far from having stimulated the iron industry, had absolutely failed' in its object. Further than that, lie endeavoured to show that the position of the industry would probably have been better if no bonus had been granted. He showed that the production of iron iii 1885, two years after the establishment of the bonuses, amounted to 29,000 tons, and that in 1:900 the' output had increased by only 5,000 tons. On the other hand, the exports had been reduced from 54,000 tons in 1885 to 5,500 tons in 1900. These figures are approximately correct, but it is singular that ever since 1900 a very substantial increase has taken place all along the line. I took the trouble to extract from the Canadian Year Book, which was quoted by the honorable and learned member, the figures for 1901. I find that in the year following that quoted by the honorable and learned member, the production of pig iron increased from 5,503 tons to more than 83,000 tons - an increase which is almost unprecedented in connexion with that business. In 1902, 71,664 tons were produced, whilst the exports had also increased by leaps and bounds. In 1901, the export of iron ore amounted to 59,737 tons, and in 1902 it had increased to 527,310 tons - a difference in output of 467,573 tons. Surely these figures afford the best contradiction of the affirmation that there was no substantial increase in the iron output in Canada during the years in which the bonus operated. The honorable and learned member also omitted from his calculation one very important circumstance, namely, the increasing local consumption of the locally-produced article. In the Canadian Y ear-Book, the following footnote is attached to the statistics I have quoted -

The figures represent the excess of the total production of iron ore in Canada over the quantity of Canadian ore used in Canadian furnaces.

So that as a matter of fact the honorable and learned member took no account of local consumption,, and the figures which I have quoted represent an addition to that local consumption. Everybody knows that Canadian manufacturers are progressing at such a rapid rate that they are at once the envy and the admiration of quite a number of people. The proof of their growth is to be found in the footnote to which I have directed attention. . But the most striking testimony that one could possibly obtain of the successful operation of the iron bonus and the duty in Canada is that the American Steel Trust proposes to establish iron and steel works there at a capital outlay of -£2,400,000 in an endeavour to secure the Canadian market against the local manufacturer.' That trust is the greatest concern of its kind in the world, and if it could successfully compete in Canada without being under the necessity of taking its capital and furnaces there, we may be quite sure that it would do so. It would not incur such an enormous outlay without very great justification. Yet we know that that trust,, recognising the utter impossibility of competing with Canadian manufacturers in their own country, has decided to take its capital, engineers, and employes to the Dominion, with a view to commencing operations there. The same thing may possibly occur in Australia.

Mr Austin Chapman - The establishment of the industry will provide some employment. .

Mr HUME COOK (BOURKE, VICTORIA) -- We should then bring artisans here instead of, as at present, permitting them to send their goods here. Capital would be invested locally instead of elsewhere; I repeat that the greatest tribute which can possibly be paid to the success of the Canadian experiment is the acknowledgment of defeat on the part of the American Steel Trust by its transfer of capital to that country. The honorable and learned member for Darling Downs contributed to this debate not merely a very practical speech, but a very well considered one. He made one point which requires no emphasis at my hands. He dwelt upon the utility of establishing the iron industry from the stand-point of providing means of defence in case of national emergency. But there are other considerations which are almost as important. Within the past few weeks deputations have waited upon the Premier of New South Wales, asking him to give to local manufacturers certain contracts for the supply of engines for that State, or to undertake the work as a State concern. Only to-day the report of an interview with him upon the subject is published in the newspapers. In connexion with our railway construction generally, we are almost absolutely dependent upon oversea supplies. The deputation in question pointed out that during the past' five years something like ,£400,000 had been paid for engines and railway material in excess of what might have been necessary had there been local production. It would be a substantial advantage to our people to be able to purchase locallyproduced iron. Our manufacturers would not then be under the necessity of carrying such large stocks as they do at present. They would also be able to undertake contracts which they dare not accept under existing conditions, because of the uncertainty respecting supplies. At the present time, many contracts go to the old country, because local firms are not sure that they will be able to obtain a supply of iron, and also because they cannot definitely estimate its cost, or the conditions under which they will receive it. An assured local supply would therefore, mean a reduction in the amount of interest upon the capita] outlay necessary for the purchase of stocks. In connexionwith our railways there would be a very great advantage in the establishment of iron works. Indeed, the marvel to me is that under existing circumstances, one of our States has not seen fit to enter into the industry upon its own account. The largeest consumers of iron and steel in the Commonwealth are the various States Governments. In a great State like New South Wales or South Australia, where large deposits of ore exist, it is a wonder that the Government have not established works upon their own account, in order to supply their own needs.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The honorable member for Hume was in power in New South Wales upon two occasions, and he did nothing in that direction.

Mr HUME COOK (BOURKE, VICTORIA) - I am not concerned with what individuals may or may not have done. I am merely expressing wonder that those who have been in authority- - irrespective of whether they belong to the free-trade or the protectionist camps - have not recognised the advantages of producing their own iron for local requirements. The Premier of New South Wales, though a free-trader, realizes that something might be done in this direction. Speaking to the deputation which waited upon him in regard to the local manufacture of locomotives, he said -

During the term of office of this Government, it was its intention to take some very vigorous action in the direction of establishing that industry. The Government would not be frightened by being accused pf breaking some of the canons of their old free-trade principles.

To that sentiment, of course, I can 'only say, "Hear, hear." I am delighted to know that the New South Wales Government is prepared to take into consideration the advantages which they would derive as consumers of this material. As a fact, the States Governments would be the first to benefit by the establishment of the iron industry. In the next place, those manufacturers whose raw material is chiefly iron and steel would be greatly conveniences by having a local market in which they could purchase local supplies. Then it must be recognised that there will be great openings for a further consumption of iron and steel, not only in regard to our railways, but also in the manufacture of motor-cars. But the chief point which I desire to make has reference to an industry which hitherto has received scant attention in Australia. I refer to the business of shipbuilding. Honorable members scarcely need to be reminded that Australia is an island continent. In my judgment, our people have wisely determined to 'retain their European characteristics, and to maintain the British standard of living. Now, we are almost surrounded by other countries which are peopled with races entirely different from our own; and to whom at no distant date we shall sell large quantities of materials manufactured by Australians under Australian conditions. When we commence this export trade - as we inevitably shall - we ought to be assured that the ships which carry commodities to our customers shall be made in our own shipyards. Nevertheless, I fail to see how we can ever embark upon the shipbuilding industry unless we first undertake the manufacture of iron. In Britishspeaking countries there is no industry so great as that of shipbuilding. But we shall never succeed in establishing in connexion with Australian- affairs that position of which we sometimes dream ; we shall never make Australia not" merely the manufacturing but the maritime power of the Pacific until we have very largely developed the manufacture of iron and steel. We have a pretty extensive coastal trade at the present time, and if our population increases and our manufactured goods are to be transferred from State to State, that business must also increase. Consequently we shall require to employ a large number of shipping carriers. My ideal is that all these ships should not merely be locally-owned, but locally-built from locallyproduced iron and 'steel. Not until we have taken into consideration all the giant possibilities of this great enterprise shall we rise to the heights to. which we sometimes aspire. I hold that Australia will some day become the trade centre of the Pacific. It is rather remarkable to note that even now there are very great forces at work which are tending towards the consummation of that great end. In Japan to-day, efforts are being made which will eventually lead to the opening up of a large trade with Australia. The whole of the British-owned press in Japan is strongly advocating the utilization of British and Australian manufactures. Articles are constantly appearing in the newspapers there, urging Australia to wake up to the fact that America is gradually securing the Japanese market, which Australia ought to control. In an article recently published by Mr. J. W. Styles, after a visit to the East, some striking observations are made regarding what may be done in Japan and other countries. He says. amongst other things -

While we are seeking to enlarge our markets . on the other side of the globe, America is in deadly earnest securing for herself what will ultimately prove to be one of the greatest of the world's markets. As a further indication that she really means business, a huge cargo carrier, the Mongolia, a vessel of 22,000 tons, was on her maiden trip from San Francisco to the Far East.

He says further -

A marked feature of the awakening of the East, is that the wants of the people gradually increase through contact with western civilization. The vast number of troops now being fed, to some extent, on European diet, will have acquired a taste for stronger fare than they have hitherto subsisted on, and will, on returning to their native land, demand bread, meat, and butter.

Those are food supplies which they have not hitherto ' been using to any great extent ; but I agree with Mr. Styles that, as the result of the conditions under which they are now fighting, these men, who find that such food is necessary to their warlike operations, will, on returning to their native land, ask for more of our great products. I have mentioned these facts as indicative of the nature of the trade which some day will be done as between Australia, a European-controlled country,, and those who are not so controlled - our neighbours in the East.


Mr HUME COOK (BOURKE, VICTORIA) - If we are as selfreliant as we hope to be, and develop our resources as we ought to do, we shall attract :population to our shores just as the United States and Canada have done, and when' we have secured an increased population in this way, naturally enough, our surplus products will have to be exported, and where better than to the countries of our near neighbours, who at present are supplied from other places. This question, however,, is so involved with the fiscal issue, that it is almost impossible to consider it without reference to that matter.' There are honorable members in this' House who are prepared, I .believe, to vote for the bonus, but who would not be prepared at a later, stage to support the imposition of a duty to assist the industry. Others are prepared to support a duty, but are not willing to vote for a bonus. In my judgment, both will be required. The competition to which I have previously referred, and the unfair tactics and practices of which I spoke in the earlier part of my address, require to be continuously counteracted on behalf of the Australian public. In addition to the payment of a bonus, we shall, therefore, have to impose a duty to maintain the industry, and to secure to the consumer the advantages which local competition always means. But is is rather disheartening to me to know that, although we seem to have established the principle of protection in Australia, there is a never-ceasing assault upon it, and that for a long time to come, no definite stand will be taken similar to that adopted in America tb-day. In that great country, no one dreams of altering the protective policy. The value of a continuous policy is everywhere recognised. Even those who belong to what mav be termed the freetrade party in America, do not go to the length of altering the Tariff, save in such directions as might still be considered in Australia,, at all events, to be protective. My view is that Australia, like America, must have a continuous line of policy. When we have once adopted a policy for


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