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Thursday, 16 November 1905

Senator WALKER (New South Wales) - To me the speech of Senator Trenwith was an intellectual pleasure, and I congratulate him upon having given the Senate much interesting information. He seems to think that municipalization and nationalization are equivalent. Each, I admit, is a system of collectivism, but I am sure that the honorable senator would not like to see all the municipal arrangements for Great Britain placed under one control. Glasgowis a municipality which manages its municipal business much better than the nation could do. It is in that sense that I refer to the great difference between municipalization and nationalization. I am rather in favour of municipalities having control nf the tramways, because they control the roads. But that does not affect the question of nationalization. Where does the Constitution permit us 'to nationalize an industry? I have not yet met a single lawyer who could point to any provision, of that kind.

Senator Playford - It cannot be done, according to Mr. Deakin.

Senator WALKER - Senator Givens admits that it cannot be done; but, in that airy manner of his, he says: '! We shall manage all that." I do not think 'that the Socialists will find it an easy matter to get the Constitution amended.

Senator de Largie - Is the honorable senator in favour of amending the Constitution in that direction ?

Senator WALKER - I am not in favour of amending the Constitution to nationalize any industry. The Senate is supposed to be the States' House. Queensland has a great interest in the sugar industry. It has £"500,000, if not more, invested in central sugar mills. There is no reason why it should not have its own refinery. I am really surprised that it has not.

Senator Givens - The honorable senator's company opposed a similar motion in the Parliament of Queensland.

Senator WALKER - I am not an apologist for the Colonial Sugar Refining Company ; I am only a small shareholder, as I have already told the honorable senator, and that does not affect my judgment one iota. I think of the good of the whole community perhaps just as much as any honorable senator does. I have no wish for the company to be a monopoly. Senator de Largie 'seems to think that because coloured labour is being employed Queensland is being depopulated. In 1859, when the separation from New South Wales was granted, Queensland's population was 23,000. Bv the time Sir George Bowen came out it had increased to 27,000. I went to Queensland when its population was about 35,000, and to-day it is over 500,000. What led to that great increase ? European immigration.

Senator Givens - Does not the honorable senator think that, for a period of about fifty years, that is a comparatively small increase ?

Senator WALKER - If in forty-six years the population has multiplied from 27,000 to 500,000, the probability is that at the end of the next forty-six years,, if it increases at the same rate, the population will be about 10,000,000. Some time since, the Age published an interesting article on the Colonial Sugar Refining Company, in which it seemed to favour nationalization. If nationalization is good for one industry, I suppose it is also good for another industry. I wonder if the Age will come out with a leading article advocating the nationalization of all newspapers ?

Senator Trenwith - Suppose that it will not, does that vitiate its other argument?

Senator WALKER - I am not saying that it does; but I do like persons to be consistent.

Senator de Largie - It would be better for the journalistic hacks on the Age to be public servants.

Senator WALKER - I cannot help thinking that what is sauce for the goose is sauce for the gander; but I am not sure whether the Age is a goose or a gander. I am not, I repeat, an apologist for the Colonial Sugar Refining Company. The arguments in favour of this motion have been based largely on the supposition that *t is a monopoly. If the premises of a speaker are wrong, the probability is that his conclusions are wrong. I maintain that the company is not a monopoly. Sugar refining is not even a protected industry. Take the large sugar refinery of Messrs. Poolman and Company. What do they refine?

Senator Staniforth Smith - A very small quantity of sugar.

Senator WALKER - Messrs. Poolman and Company import Java sugar, refine it in bond, and pay duty on the refined article. There is no protection, so far as the refining part of the business is concerned. As a free-trader, I am totally opposed to protection, and there is a great deal to be said against the long-continued bounties given to the sugar planters. I hope the day will come when we shall have a sliding scale by means of which we can reduce them. I am satisfied that that policy will be greatly to the benefit of the public.

Senator de Largie - The Government subsidizes the production of raw sugar by bounties, and by that means gives a preference to the Australian refiners.

Senator WALKER - But the refiner has to pay full prices for his sugar. It is absolutely untrue that the Colonial Sugar Refining Company is in any way interested in the Milliquin Refinery in Queensland.

Senator Givens - Did any one allege that it was?

Senator WALKER - If it is not, where is the monopoly?

Senator Givens - The company controls both the growing and the prices.

Senator WALKER - The Colonial Sugar Refining Company is both a grower and a refiner. It makes its profits partly from growing and partly from refining. I asked the manager of the company the other day how it was that so good a profit was made in a particular year, and he explained it by the fact that in that year there was a rise in the price of sugar throughout the world, and that consequently his company shared in that advantage. I may also mention, as proving that there is no monopoly, that I have heard that Poolman and Company, who at present carry on business in Melbourne, are also about to establish a Sydney refinery. There is no connexion' between that refinery and the Colonial Sugar Refining Company.

Senator de Largie - But the company practically controls the Australian trade, and could crush the other little companies out of existence.

Senator WALKER - I do not admit that at all. The statement that the company controls prices is absolutely untrue. It exercises no control whatever over the retailers. Once a purchaser has bought his sugar he can do with it whatever he likes.

Senator Givens - Can he buy sugar from any otherrefinery ?

Senator WALKER - Yes.

Senator Guthrie - And still get the rebate from the Colonial Sugar Refining Company ?

Senator WALKER - I presume so. \ Senator Givens. - I will show that that is not so, directly.

Senator WALKER - Senator Givens was quite wrong in the statements which he made about the cost of refining. It has to be remembered that large discounts come off the published selling price.

Senator Givens - Does not the company give rebates on the condition that a purchaser deals exclusively with it?

Senator WALKER - These are merely statements. The honorable senator cannot prove them.

Senator Givens - Here it is in black and white - in the company's own agreement.

Senator WALKER - Senator Givens was under the impression that the freight on sugar was only 9s. per ton. As a matter of fact, it averages more than double that amount. There is a mistake to begin with. Add to this the cost of sacks, harbor dues, insurance, exchange, &c, . and the total reaches more than three times the amount that Senator Givens mentioned. When alleged facts are given that are shown to be absolutely wrong, honorable senators are - unintentionally, of course - misled, and draw wrong conclusions.

Senator Givens - How much does the company pay to the Adelaide Steamship Company for carrying sugar?

Senator WALKER - I do not know. I am not. behind the scenes.

Senator Givens - Then how dares the honorable senator to contradict my statement ?

Senator WALKER - Because I have obtained my information from the manager of the company. Senator Givens has merely obtained his information from some newspapers.

Senator Givens - I am speaking of what I know.

Senator WALKER - Senator Givensis a very excellent man in his own estimation -and in that of others, of course - but he is notaccurately informed. My informant saysthat the total price mentioned by Senator Givens has no reference to the sales to manufacturers, and that, as a matter of fact, the manufacturers obtained their pure sugar for the year ending 30th June, 1905, at a rate which left the company a loss on the transaction. There is no reason why the central mills in Queensland should not have had their own refinery.Whydothey not ? It is not the Colonial Sugar Refining Company's fault that they do not.

Senator Givens - They would have to compete against a company which has a very strong monopoly.

Senator WALKER - The honorable senator would find it a very hard task to prove that there is a monopoly. I have shown that there are three refineries in existence; possibly four. There is the Millequin Refinery. Poolman and Co., and there is also, I believe, another in the Bundaberg district.

Senator Staniforth Smith - I do not think there is.

Senator Givens - I quoted my information from the Customs returns, which cannot be disputed.

Senator WALKER - My informant says that there are two large mills in the Bundaberg district, with refineries.

Senator Staniforth Smith - The Gibson Brothers have a large mill, but they are not refiners.

Senator WALKER - It is a fact that the Colonial Sugar Refining Company has invested more money in Fiji and NewZealand in the manufacture of sugar than in Queensland and New South Wales; and it enjoys no preference or protection for its refined sugar in New Zealand, having tofight for the trade there just as it does here, and getting it just in proportion to the ability shown to sell a good sugar cheaper than other people. This industry has been built up by specialists after fifty years of hard work. They had hard times in the early portion of their career.

Senator Givens - For how long has the company been paying 10 per cent. dividends ?

Senator WALKER - For a good many years. But, as Senator Pulsford has told the Senate, it is not an easy matter to work up a business on a capital of over £2,000,000. The capital of the company now amounts to £2,200,000. It has a reserve fund of £100,000, and a reserve for the equalization of dividends of , £165,000. It is carrying forward £87,000 of undivided profits. That makes, altogether, £2,552,000. I do not include the guarantee and insurance fund, because that, I presume, belongs to the officers. If honorable senators work out those figures, they will find that on its total resources the company is barely earning per cent. And, after all, is that a very -large dividend, considering the risk that the company runs? It has at the present time no less than £2,474,000 invested in refineries and sugar mills, a large amount of which represents plant and rolling-stock. It is quite true that the company goes on writing this amount down, butevery one who has any knowledge of machinery knows that that which may be up to date now may. owing to new inventions, be simply old iron a few years hence. The company is. therefore, bound, in common prudence, to write off considerably from the book-value of such assets as machinery. Furthermore, those who know anything about Queensland are aware that sugar properties have fallen very much in value.

Senator Givens - Nonsense !

Senator WALKER - I am interested in land in the Herbert River district, which can be bought to-day for £1 an acre, but which was mortgaged for£3 an acre. The mortgagor valued it at , £12 an acre, and actually refused £8 an acre for it. It is of no use for the honorable senator to tell methat sugar properties have not depreciated, because, unfortunately, I represent persons who have lost money in such investments.

SenatorFindley. - I expect that the monopoly has depreciated the value of the land.

Senator WALKER - No, the cause is the dearthof black labour. At present, it is estimated that capital to the amount of £7,000,000 is represented in the sugar industry in Queensland. As the Colonial Sugar Refining Company has only about £2,500.000 invested in Queensland, New South Wales, New Zealand, and Fiji, it is evident that upwards of £4,500,000 belongs to other people. Why do not the owners of that capital start a refinery of their own, if they are dissatisfied with the present system? It has been said that the company has issued its own shares at a premium, but I find this is incorrect. Let me tell Senator Givens that the articles of association of another large concern in which I am interested compel the premium on shares to be put to profit and loss account, but the board always transfers the equivalent to the reserve fund. It is considered that this premium is paidby new shareholders who come into the concern, and that it may legitimately be regarded as the property of the old shareholders.

Senator Givens - Does the honorable senator say that it is legitimate to pay dividends outof capital?

Senator WALKER - It would not be doing that. A person pays a premium to come into a company. That premium may legitimately be regarded as theproperty of the previous shareholders. There is nothing wrong in that. The honorable senator also told us that the percentage of refined sugar manufactured by the Colonial Sugar Refining Company was 80.6 per cent. Therefore, other refineries are responsible for 19.4 per cent. That is to say, the Colonial Sugar Refining Company manufactures about four-fifths of the whole. But I never heard that 80 per cent. constitutes a monopoly. Surely acompany would require to have 100 per cent. of a certain business to enjoy a monopoly. This company has been one of the very best employers of labour in Australia. It has been in existence for upwards of fifty years. A few years ago Sir Edward Knox completed the jubilee of his marriage, and the whole of the employes of the company subscribed towards a handsome testimonial to signify their deep regard for him.

Senator Givens - We know How those things are worked up.

Senator Gray - The honorable senator might be just to a good man.

Senator WALKER - I think the honorable senator must be a Calvinist, because he seems to believe in the utter depravity of human nature. Does he mean to saythat there can be no kindness between an employer and his employes? As an individualist, I do not believe in the Government control of industries, and, therefore, I am totally opposed to nationalizing the sugar industry, though I do not object to the municipalization of certain enterprises. Before I conclude, I wish to say a word or two about the terms of the motion itself. It commences by saying that a monopoly exists. That is not in accordance with fact. It cannot be said that a company that has 80 per cent, of a certain business has the entire control over it. It is also asserted' that the existence of the company has been inimical to the Commonwealth'. As a matter of fact, it has been the means of assisting many persons in the industry. I know how largely it has rendered assistance in the Mackay district, for instance. There is no compulsion. A person taking a lease is aware of the conditions, and if he takes it on certain conditions, what right has he to find fault ? If I believed that the nationalization of this industry would be for the advantage of the Commonwealth, notwithstanding my individualistic opinions, I should not greatly object to it. I am satisfied, however, that it is a great mistake to interfere unduly with private enterprise. The British Empire has been' buil't up by private enterprise. It is all very well when they see a business going on successfully for persons to come in and say to those conducting it, " We wall take this business from you." Those who have borne the heat and burden of the day in building up a business are entitled to the benefit to be derived from it. I have no doubt that many a young mam is only too glad to come into the business built up by his father or grandfather. It is all downTight selfishness, and this is a clear case of the "Have-nots" desiring to "get at" the "Haves."

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