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Thursday, 16 November 1905


Senator TRENWITH (Victoria) - I think that the honorable senator who has just resumed his seat has laid down a proper dictum - that the public weal is the supreme law. It is from that point of view that I propose to discuss this motion.. It declares to start with - an indisputable fact - that the sugar business is mainly in the hands of one large company. Consequently, whether -it is baneful or not - and I do not propose to discuss that question - there is a monopoly. It is generally admitted that the tendency of any monopoly is to grow into a public bane - to grow into something which is prejudicial to the common weal. There are two ways in which the public are likely to suffer, and I do not think that we are compelled to prove actual suffering in order to show the banefulness of a condition that prevails, because any condition that is conducive to suffering should be avoided. If there is a monopoly, that, monopoly can absolutely control the selling price of an article. If it control's the selling price beyond what is necessary for securing a legitimate profit to the seller, it means a very large profit to the monopoly, and a very large aggregate cost to the community. But I do not look upon that as the greatest' evil in connexion with a trading monopoly. I think a greater evil is the hardship entailed upon the primary producers, the suppliers of the raw material. We have in Victoria at the present time a very striking instance of the evil to the producer of having only one outlet for his produce. We have in the tobacco industry an extremely lucrative business for the very few wealthy men engaged in the financial part of it. Tobacco grown in Victoria can be sold practically to but one buyer, though a number of persons are involved. The grower of tobacco is given no say in determining the price to be paid for it. The buyer, the monopolists - and I do not use the term offensively, because I have no desire to speak offensively of the gentlemen connected with the business - the persons who have the monopoly simply say, "We are prepared to give is., nd., rod.,. 9<3. per lb.," or whatever they choose, and the producer is absolutely at their mercy. It has been declared by competent experts that in the King River district, a part of Victoria which I know very well, very good tobacco can be grown.


Senator Keating - I have smoke'd tobacco grown there, and it was very good tobacco.


Senator TRENWITH - I have seen tobacco growing there, and the plants were luxuriant and beautiful. I am not competent to say whether it was good tobacco ; but persons who are tobacco experts have declared that it is excellent. Yet, in consequence of the monopoly that exists, those engaged in the growing of the tobacco have never been able to get a price that will pay them.


Senator Gray - Did it pay to grow it before? I believe that a large quantity was grown in Victoria years ago, before the establishment of the so-called combine.


Senator TRENWITH - A considerable quantity of tobacco was grown, but never what might be called a large quantity, in view of the total consumption of tobacco. It was grown because those who started the industry, were sanguine, when they knew they could grow good tobacco, that they would be able to sell their crop. But experience has proved that it has been a dwindling industry, and for no other, reason than that tb which I have referred. I therefore say that a monopoly is extremely baneful to the producer, who is an important, if not the most important, factor in the consideration of every commercial concern. There is also another evil, and a very great one, and that is the manner in which a monopoly, by its character, is enabled to treat its servants. The common weal, the public good, which, as Senator Gould has properly' stated, is the supreme law, surely involves the consideration of the interests of all members of the public, and not merely of persons who have invested their capital in, and who are engineering an enterprise. A monopoly of this character has the power - and I do not say that this company has used the power, because I confess extreme ignorance with- reference to this particular company - to absolutely dictate terms to ' the people who work for it. because there is no question of supply and demand in the ordinary sense, as they cannot find work at their occupation elsewhere. '


Senator Gray - Would there be any difference in the case of a State monopoly ?


Senator TRENWITH - I .propose' to show that there would. Senator Gould has said that experience has taught that enterprises conducted by the ingenuity of private individuals of skill and knowledge are invariably better managed than those conducted by State or other large corporations. I propose to quote at least one instance in connexion with which that statement is not borne out. The honorable senator will know something of a village in the old world called Glasgow. Glasgow had tramways that were run from 1871 to 1894 by a private company. They were owned by the Glasgow citizens, but with a perfect faith in the doctrine enunciated by Senator Gould that large corporations cannot manage a business as well as can intelligent private persons, the citizens of Glasgow leased the tramways they had made to a private firm-. Abuses grew up under the management of that firm. The people's interests were not considered, and honorable senators will remember that the commonweal involves the consideration of the interests of all the people. The only consideration attended to in connexion with the working of the Glasgow tramways was that of dividends for the shareholders in the company that had leased the lines from the Glasgow Corporation. To such a pass had matters arrived that men with wives and families to maintain were working for the company for 18s. per .week. They were so poor that they could not clothe themselves decently, not to say comfortably. The reflection rested upon the city of Glasgow that the men employed on its public means of locomotion were actually in a condition of indecency, their flesh showing through their clothes, because they . could not afford to buy new ones.


Senator Walker - Perhaps they wore kilts.


Senator TRENWITH - No; they had not even decent kilts. If they had been kilted they would have been all right. The public of Glasgow complained most strenuously that the corporation sought to impose i conditions on the company. I believe that one of the most important conditions which they sought to impose was that tlie company should furnish their employes with uniforms. The company! considered that the belief in the success of intelligent private enterprise was so embedded in the minds of the people that they would never dream of running the concern through the city corporation. They refused to make any concession at all. They said they were running the business for their profit, not for fun, or for philanthropy, and they would run it as they liked. Incensed at this, the Glasgow Corporation determined to run the trams themselves. I forget the exact date, but I believe it was some day in July, 1894, that the company's lease expired. When they understood that it was not to be renewed, the company refused the corporation any facility for making ready to run the trams themselves. The road belonged to the corporation, but they were not allowed to get at it to make necessary repairs, and the company would not sell the corporation their plant. In the face of these disadvantages, the corporation had to buy nearly 3,000 horses in advance, and to be at the expense of maintaining and training them. They had to buy a completely new set of rolling-stock and to be ready to resume the work of running the trams at 6 o'clock on the morning after the day on which the company's lease expired. Then the company met them with every possible opposition. They flooded the streets withbuses to prevent the trams making a profit, and yet, in the face of all these difficulties, the Glasgow Corporation in the first eleven months of their working of the trams made £34,000 profit. In addition to this, they extended the length of the penny sections, they introduced halfpenny sections where they had not previously existed, and in one month they carried over 2.000,000 more passengers than the private company had done in the corresponding period of the year before.


Senator Sir William Zeal - What rental had they received from the company? That is The crux of the whole matter.


Senator TRENWITH - I do not care what the rental was. What I propose to show is that in this instance corporation management worked immensely better than private management for the commonweal, though not for the company or its shareholders.


Senator Gray - One swallow does not make a summer.


Senator TRENWITH - When the honorable senator has swallowed this instance, I may be able to supply him with another. I am' proving, at any rate, that it is not an invariable rule that private enterprise works better for the commonweal than does corporate enterprise. However, I have vet to deal with the most important aspect of the change. I pointed out that the working people under the rule of the company received 1 8s. per week in wages, and were so poor that they could not clothe themselves decently, and a public outrage was created of which the people complained. The corporation reduced the working hours of the employes from sixteen to twelve. That meant that where three men were required to do a certain amount of work under the company, four men were necessary to perform the work under the corporation. That must have done something in the direction of removing the unemployed difficulty. If the result had been a great loss, honorable senators might say that- there was compensation in other ways, but I have explained that the corporation made a profit of £24,000 in the first eleven months. In the face of all the disadvantages with which they had to contend, they employed four men where only three were previously employed, they paid 25s. a week wages instead of18s., and they supplieduniforms, where the company supplied no uniforms at all. In this instance, at all events, it will be admitted that corporate enterprise operated with enormously more benefit to the commonweal than did the private enterprise that preceded it.


Senator de Largie - What about the poor capitalist?


Senator TRENWITH - I am not so much concerned about the poor capitalist, but I will say that if the poor capitalist was thrown out of employment he had at least a chance of getting one of the jobs created by the employment of four men where three had previously been employed to do the work. So that even the poor capitalist was assured to a greater extent than he could have been before, that he would not need to go hungry for want of employment, since vacancies at more lucrative wages were created for hundreds of men as one of the results of the change.


Senator Sir William Zeal - The corporation, to have done all that, must have previously sweated the lessees.


Senator TRENWITH - The difference was that the lessees managed, without any regard to the public interest, and the result of their grasping desire for dividends was to restrict the traffic on the tramways. The corporation worked the trams with regard to the public interest only: They increased the journeys which could be made for id., and instituted half-penny sections, with the result that there was an enormous increase in the traffic. The consumers, as represented by the travelling public, got an immense advantage, and the producers, if I may use the term, who worked the trams, and were themselves a portion of the Commonwealth, enjoyed immensely more comfortable conditions. I refer to the first eleven months, because I had an opportunity then of looking into the question. I happened to be "in Glasgow in the early part of 1896, and, through the courtesy of the public officials there, I had a long interview with Mr. Young, the general manager.


Senator Sir William Zeal - Can the honorable senator give the amount of rent paid by the corporations, because that is the crux of the whole question?


Senator TRENWITH - I have not that information. Senator Zeal is apparently in the habit of regarding everything from the point of view of rent.


Senator Gray - If a profit is made, and all those advantages enjoyed, surely we ought to consider the conditions under which the corporation took over the trams ?


Senator TRENWITH - I confess that it would be better for the complete discussion of the question if we knew the amount of rent, but I regard it as a. comparatively unimportant consideration. I think it highly probable that the rent is very little in excess, if at all, of the interest on the cost of construction. I have shown how the travelling public, as representing the commonweal, ]en joyed enormous advantages immediately the management was taken over by the corporation.


Senator Gray - There is- jno doubt about that.


Senator TRENWITH - I have also shown that the people who worked the trams also received enormous advantages im. mediately, so that the whole area of the commonweal was covered. I have learned that the Glasgow corporation are continuing the management of the trams on the lilies initiated, and that they are making large profits, in spite of the fact that the people have received concessions in fares representing from 30 per cent, to 50 per cent. Part of that profit goes to what is known in Glasgow as the "Common Good Account" - a term with which I am delighted. This " Common Good Account" is used to provide, amongst other things, rea sonably healthy, decent habitations for people who are too poor, under the competitive, private-enterprise system, to provide such homes for themselves. That is not called charity to the poor. It is called the "common good," and is good for the man who does not use these habitations, as it is good for the man who does - it is good for the whole community.


Senator Gray - Private firms have done the same thing over and over again.


Senator TRENWITH - Good private firms have ; and God bless them ! But private firms have failed to do this over and over again - they have done the converse very much more frequently. As Senator Gray said, " One swallow does not make a summer." But I am quoting an instance which may be multiplied by hundreds in the United Kingdom. I take Glasgow because it affords a striking example, situated as it is in a part of the United Kingdom not celebrated for wealth.


Senator Gray - The honorable senator would have some trouble in finding a richer place than Glasgow.


Senator Sir William Zeal - It is the richest city in the world! for its size.


Senator TRENWITH - I believe there are in Scotland a very large number of financiers, and a great deal of loan money goes from there to other parts of the world. But I am speaking of the people generally.







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