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Wednesday, 15 August 1906

Senator TRENWITH (Victoria) .- Many objections have been taken to the Bill, which, in my opinion, should have been deferred until we reached the Committee stage. Most of the arguments adduced have not been against the principle of the Bill, but against clauses which, if unsatisfactory, as possibly they may be, can easily 'be altered in Committee. In discussing the second reading what we have to consider is whether it is desirable to introduce legislation to prevent trusts or corporations carrying on business with intent to injure Australian industries. That is the principle we have tq discuss. If-it is not desirable to introduce "such legislation the second reading of this Bill should not be carried ; but if it is desirable that combinations or trusts, carrying on trade with the design to injure or destroy Australian industries, should be restricted then the second reading should' be carried. Some objection has been taken to the phraseology of the measure, because it provides that before an offender can be punished for an offence, there must be proof of intent. Surely that is eminently in the interests of fair play? Indeed, it would be monstrous to assume that we would accept legislation that would render it possible to make a person punishable for an act committed innocently, and without any intention of wrongdoing. That would be contrary to the spirit of all British law. This Bill provides that the making of a contract with the design of destroying an Australian industry shall be punishable by fine or imprisonment. It further provides that such a contract being made in contravention of the provision dealing with that offence shall be null and void. There are some persons who, while they offer no objection to the spirit of the law proposed, as applied to future undertakings, are afraid that this provision will be retrospective in its operation, and will affect agreements which have already been entered into. Speaking for myself, I have no doubt at all on the subject. lt is perfectly clear to me that under no circumstances can this Bill affect agreements entered into before it is passed. It is quite impossible that such agreements could have been made in contravention of a section of an Act which had no existence. Still I think the Minister of Defence would be wise if, bv some statement or other, he were to make that perfectly clear to the public mind, so that those who are now nervous on the matter shall be reassured.

Senator Playford - The AttorneyGeneral stated that in another place.

Senator TRENWITH - I think that the Minister of Defence should state it also in the Senate, and in terms as definite as they can possibly be made. It cannot be made too clear. Many persons are nervous and anxious on the subject, and it is as well that their minds should be relieved. I think it is perfectly clear that there is no intention to deal in the way of punishment with persons who have offended against the principle of this measure before it was introduced, because in clause 4, what is distinctly described as the offence is the making of a contract with intent. If such, an offence is committed in contravention of this Bill punishment will follow, and by a natural and proper sequence it will follow also that a contract so made will become null and void. This can have no reference to' contracts made prior to the passing of the Bill. There has been some effort to prove that the words " continuing in " refer in some way to the contract, but obviously they refer to individuals who continue, after the passing of this measure, in combinations at variance with the spirit of the law, or in contravention of its provisions.

Senator Millen - If on the day before the Bill becomes law, I make an agreement for twenty years, it will hold good all that time ?

Senator TRENWITH - I think so.

Senator Guthrie - Or for 100 years?

Senator TRENWITH - Or for 1,000 years, though none of us are likely to live so long.

Senator Guthrie - A corporation never dies.

Senator TRENWITH - That may be so, but individuals who make contracts with corporations do sometimes die. I am not now endeavouring so much to reply to objections raised in the Senate, as to remove anxiety which I know to exist in the minds of individuals outside with reference to the possible operation of this measure. I shall not proceed further on the lines of criticism adopted by other honorable senators, and which I have myself followed so far, because I do not think that is the proper course to take. The proper course on a second reading is to discuss the principles of the Bill, and perhaps incidentally to indicate some amendments which mav be sought in Committee. It is certainly not the proper course to object to the second reading of a Bill because the machinery clauses are insufficient or incomplete to give effect to its principle.

Senator Millen - Does the honorable senator think that that is a fair criticism of Senator Best's speech?

Senator TRENWITH - I should rather apply it to the, speeches made by Senators Millen and Symon. In view of the fact that there has been a departure from what I conceive to be the proper principle of a second-reading discussion, I think that Senator Best wisely, and certainly effectively, referred as a lawyer to some objections taken by lawyers to various clauses of the Bill.

Senator Best - As to their legal interpretation.

Senator TRENWITH - Just so. A point has been raised which, it seems to me, does not deal with the clauses of the Bill, but rather with our powers in connexion with such a measure. I refer to the constitutional question raised by Senator Drake : the question as to whether we have power, under the Constitution, to make laws dealing with the subject involved in this Bill, other than mere machinery laws for the continuing in existence of a company. In order to arrive at some idea of the true position with reference to our Constitutional powers, I purpose reading from the Constitution in this connexion. First of all. we have to remember that our powers under the Constitution are contained in a section of the Constitution Act which contains thirty-nine distinct paragraphs - each one of which, I venture to say, is independent of the others, and of everything but the covering portion of the section which provides that -

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order-, and good Government of the Commonwealth, with respect to-

We must read that portion into every one of the thirty-nine articles as if the other thirty-eight had no existence. The only possibility in which any one of the other thirty-eight can affect the thirty -ninth which we have in mind is in the event of its being specifically opposed to it.

Senator Best - Which they are not.

Senator TRENWITH - They are not. Senator Drake relied upon our* powers to deal with trade, and commerce as being contained in paragraph 1 of section 51 of the Constitution -

Trade and commerce with other countries, and among the States;

That is one matter with respect to which we have power to make laws for the peace, order, and good government of the Commonwealth. Then we come to paragraph xx., and we find that we have another power, namely, to make laws foi* the peace, order, and good government of the Commonwealth with respect to -

Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.

We have to read that bv itself if we are to arrive at a true idea of what our powers are under that provision of the Constitution.

Senator Best - And we have to give to each of the paragraphs the fullest interpretation.

Senator TRENWITH - It seems to me that that is the only way to read any one of these thirty-nine articles as I have described them. We must read each separately in conjunction with the covering portion of the section conferring the power to make laws for the peace, order, and good government of the Commonwealth.

I venture, as a layman, to say that, though of course, with very great diffidence. I have not so much hesitation in making the statement as I should have, were it not for the fact that lawyers in the Senate differ very much on the subject. I venture an opinion based, I think, on commonsense, that Senator Best's reading^ and the reading I have just given of our powers under the Constitution are the correct reading. I am, of course, supported in that view by the fact that, obviously, the same reading is followed by an extremely astute and careful lawyer in the person of the Attorney-General. It has been urged, first of all, that this Bill will be of no use, or that it will not accomplish the object Ministers have, in view ; and in some measure I am bound to endorse the latter portion of that view. I arn afraid that it would be very difficult indeed to frame any law sufficient to cope with the genius and lack of scruple exercised by commercial people. Unfortunately all our experience in dealing with commercial men, and in investigating their methods, leads us to the conclusion that to successfully cope with the accomplishment of making profit there must be a verystrong, very careful, and very comprehensive law. But I think that this Bill aims at restricting, retarding, and preventing an. extremely baneful form of commerce. If it fails in its object, that is no argument against it, except as showing that it is not strong enough. It must be remembered that one of the arguments urged against the Bill is that it is, stronger, more drastic, and more far-reaching in its provisions than the American laws, on which it is said to be founded.

Senator Playford - That is Senator Symon's statement.

Senator TRENWITH - Surely that is an argument in favour of the Bill ? American laws, obviously have failed ; and their design was largely the design we have in our minds. To make a law exactly like the American laws that have failed would be extremely stupid, but to take the laws that have failed as a basis for laws that we hope will succeed, is by no means stupid. We have seen the points on which the American laws have failed, and we are trying in this Bill to build more perfectly, and make a law more efficient on the basis that has been presented bv our American cousins. Failure anywhere, if we are wise, is, not complete failure. Every failure is an indi cation of the road to success, just as navigation is made more secure and certain for the future by every wreck on a previously uncharted rock. A wreck, of course, is a failure in a particular instance of navigation, but a wreck on a rock not previously charted is a success in that it points to the means of avoiding similar wrecks in the future. To that extent the American efforts to control monopoly are not a complete failure, because they are enabling the American people, I hope, to discover some means by which they can completely achieve what they have sought to achieve in the past, and what, unfortunately, they have only partially succeeded in achieving. Senator Symon spent a good deal of time in urging that no necessity or demand had been proved for the Bill, and Senator Millen, in some degree, followed in the same direction. I venture to say that Senator Pearce and others have given very strong evidence that, whether there is power to control trusts - whether there is power to check and retard their baneful operations - there is no doubt as to the necessity. Trusts exist in a form that is extremely injurious to the whole human family. In America the trust in its various forms - and I believe, in most instances, consisting of the same individuals - has taken control of the American people, and is imposing- on them disabilities and taxes of a most monstrous character. Mr. Charles Edward Russell, a writer who may be known to honorable senators, has recently published a most striking book on what he describes as the greatest trust in the world. The general impression is that there is only one greatest trust in the world, and that that is the trust which embraces all the trusts in the United States - that they are not separate institutions.,' hut one institution under several names. That is the trust with which, before I have concluded, I shall show we have been threatened in a most flagrant, and, unless we take some steps, extremely dangerous, manner. Mr. Russell says in most striking words at the opening of his book -

Iii the free republic of the United States of America is a power greater than the Government

That is what the trusts have come to - a power greater than the Government of 80,000,000 of people - greater than the Courts or the Judges, greater than Legislatures, superior to and independent of all authority of state or nation.

That is the magnitude trusts have reached in America.

Senator Dobson - Thatis greatly owing to corruption.

Senator TRENWITH - I am not now concerned with what trusts are owing to; I am dealing with) the fact of their existence.

It is a greater power than in the history of men has been exercised by king, emperor, or irresponsible oligarchy. In a democracy it has established a practical empire more important than Tamerlaine's, and ruled with a sway as certain. In a country of law, it exists and proceeds in defiance of law.

Therefore, there is some reason to doubt whether this Bill will be completely effective. That, however, is no reason for not passing the measure, but rather a reason for passing it quickly, and finding out, if we can, where lie its defects, and then framing a law which shall not be ineffective.

In a country historically proud of its institutions, it establishes unchecked a condition that refutes and nullifies the significance of those institutions. We have grown familiar in this country with many phases of the mania of money-getting, and the evil it may work to mankind at large ; we have seen none so strange and alarming as this of which I write. Names change, details change ; but when the facts of these actual conditions are laid bare it will puzzle a thoughtful man to say wherein the rule of the greatpower now to be described differs in any essential from the rule of a feudal tyrant in the darkness of the Middle Ages.

Three times a day this power comes to the table of every household in America, rich or poor, great or small, known or unknown ; it comes there and extorts its tribute. It crosses the ocean, and makes its presence felt in multitudes of homes that would not know how to give it a name. It controls prices and regulates traffic in a thousand markets. It changes conditions, and builds up and pulls down industries; it makes men poor or rich as it will ; it controls or establishes or obliterates vast enterprises across the civilized circuit. Its lightest word affects men on the plains of Argentina or the by-streets of London.

In another passage this writer speaks of the operations of the trusts, and says that to refer to the law in connexion with them is to " make the initiated laugh." We have had evidence in the last few weeks of the truth of that statement. J. B. Rockefeller, who is said to have an income of £8,000,000; and who lives in such a manner and style as to very difficult for him to hide himself, could not be found when he was summoned by the Courts in America to attend and give evidence. All the power of the American Government and of the Courts could not compel this man to come and do his duty as a citizen ; and he was not found until it was decided that, instead of his evidence, that of some understrapper in connexion with the trust should he taken.

Senator Stewart - They did not look for him.

Senator TRENWITH - His influence was sufficient to prevent his being looked for. I am pointing out the awful power of these combinations. However, there was no trouble at all in finding Mr. Rockefeller when it was decided that his evidence could be dispensed with. I refer to those baneful organizations in America to show the necessity for this Bill. It may be said that the facts disclose a reason why something more should be done in America, but that we have no trusts in Australia. Suppose, for argument sake, that that were true, it would not be a reason against the Bill. Legislation is ineffective in America largely because it comes too late. Those trusts had attained such a position, and such power, that legislation has proved ineffective to follow them. Legislation might easily have checked the trusts if it had been in advance, but it has proved ineffective to follow. I venture to say, however,that we have trusts in Australia in active operation, and I shall endeavour to show the method by which they work. It has been frequently declared during this discussion that this Bill is the result of the energy and activity of a single individual, who has been described in various terms of opprobrium as "Hugh Victorious" McKay, "Greddy " McKay, " Mean, Grabbing,, and Grasping" McKay.

Senator Best - And the " real McKay."

Senator TRENWITH - And the " real McKay."

Senator Pulsford - The honorable senator knows this gentleman very well.

Senator TRENWITH - I do; I 'know most of the manufacturers of Victoria very well indeed. I know a good many of the manufacturers of Australia. There are, indeed, many of them who are my own friends, and whom I have known for long. I made it an object of consideration for many years how best wecould assist by legislative action to develop the manufacturing industries of Australia. I do not know that it is any reproach to know manufacturers. I know both them and their workmen very well indeed; and in connexion with this industry, since the present difficulty has arisen, I have been in communication with several thousands of people. Touching this particular individual, it ap- pears, in the opinion of some people, to be an offence that he is now doing pretty well. I am inclined to believe, and certainly I hope, that he is doing well. "

Senator Pulsford - The honorable senator knows that he is.

Senator TRENWITH - As a matter of fact, I do' not ; but I have very good reason to believe it. But I do know, from actual observation, that there were very many years when he was doing extremely badly. That was when he was endeavouring, in the face of adverse circumstances, to develop an instrument" of production that has proved to be of value to Australia to the extent of many millions of pounds. At that time, as I say, he was doing very badly.

Senator Findley - In what year was he doing badly?

Senator TRENWITH - It was about twenty years ago. I have known him so long. I know of his struggles of long ago, and am well aware that he had to contend against the most adverse circumstances in the beginning. The invention of which he had possession, partly acquired and partly the result of his own genius, was them imperfect. He had to make trial after trial to get over the difficulties in connexion with it. After he had developed it, and had created a machine that was really effective, he had to contend with the natural conservatism of people who were afraid to risk a large sum of money in what might turn out to be a failure. Although Mr. McKay has been struggling along and doing some business during the last twenty-four or twenty-five years, it is really only six or seven years since this particular machine took hold, and it can only be within that time that Mr. McKay, or any one else in this country, has been doing well out of the industry. But honorable senators do not get up and fume with wrath when they hear of some person who, by reason of his inventive genius, is doing well out of some other industry. It is, for instance, a matter of common knowledge that the inventor of a little instrument that will go into one's waistcoat pocket, and the useful service of which is merely to prick the end of a cigar, has made a large fortune out of it. I do not hear of any one getting verywrath about that. It should not be a matter for condemnation, nor for the use of foul epithets and offensive names, that an Australian citizen has had the indomitable perseverance to stick to his work _ to hold on in the face of difficulties under which many men would have gone down. I should think that it is rather a matter for approbation and approval - a matter about which we ought rather to be proud - certainly not a matter about which terms like "greedy" and "grasping" should be used. It has been said that Mr. McKay is making .£30,000 a year. I do not know whether that be so. I hope that he is. But. if we remember that, throughout the whole of the early period of his manufacturing career, he was often in serious financial straits, and if we consider his period of well-doing in connexion with the whole extent of his operations, it would not appear to be a very large sum, after all. I merely mention that because I think it is due to ourselves that we should not look upon it as a matter for reprehension that an Australian citizen-

Senator Playford - No one does.

Senator TRENWITH - It has been, urged in this Chamber more than once with an accent of intense bitterness, and interms that are certainly not commendatory,, that Mr. McKay is now making a large sum of money.

Senator Stewart - Twenty thousand" pounds a, year.

Senator TRENWITH - I hope so.. Certainly he deserves it, for he has conferred upon this country a verv great- benefit.

Senator Stewart - Hear, hear.

Senator TRENWITH - Of course, he did rot do it out of pure patriotism. He did it as a business venture. But the result is that he has conferred an enormous^ benefit upon the arid portions of this Commonwealth, because he has enabled thosed'ry areas to be profitably devoted to wheatgrowing, which could not have been donewith ar.v reasonable prospect of success, except for the introduction of the harvester or a similar machine. I rememberhearing a member of another place, speaking, not in Parliament itself, upon thisquestion, declare as an agriculturist, that it was due almost entirely to thepluck, energy, and invention of the agricultural implement makers of Australia that" wheat-growing in our great northern areashas been rendered possible. That opinion was 'expressed by the Honorable Thomas Kennedy. Even if Mr. McKay is now beginning to reap the fruits of "his life'swork, no one ought to complain, and he certainly has the right to try to prevent- his labours being nullified and frustrated...

Senator Findley - He is not the only one who has developed the agricultural machinery of the country.

Senator TRENWITH - My honorable friend is quite right, but (Mr. McKay has been the only man who has been singled out for attack. The manufacturers as a bodyhave made an appeal. Here are some of the names upon it : T. Robinson and Company, H. V. McKay and Company, Beard and Sisson, the Clyde Engineering Works, New South Wales, Meadow Bank Works, New South Wales, Thomas Martin and Company, Gawler, May Brothers, Gawler, Hawke and Company, Kapunda, Rollin and Company, Nicholson and Morrow, and a number of others. These firms have r.ot been referred to; and that is why I have occupied time in calling attention to what seems to me to be the undue vilification of Mr. McKay in the course of this debate. There is another danger in connexion with trusts which it seems to me we have to consider. Senator Symon says that there are none in this country. Singularly enough, however, he himself has offered strong evidence of the danger. If honorable senators will bear with me for a moment, I will read an extract from his argument, in which he gave very strong evidence of that which he denied. Of course, Senator Symon adopted the attitude of an advocate. It is very Hard, I suppose, to a person who is continually engaged in. the legal profession to escape from the atmosphere of the Courts.

Senator Pulsford - The honorable senator is copying his example very well in that respect.

Senator TRENWITH - If that be- so, I hope it is a good example, because I like to be "weary in well doing." Senator Symon tells us in his speech that it has been alleged that the South Australian industry was crushed out. He did not say where that was alleged. I have never heard of such an allegation. I have heard it aliened, and I think the allegation is justified, that there is an extreme danger of not only the South Australian, but the Australian industry in stripper harvesters being crushed" out in the %'ery near future, unless some such legislation, as this is passed. But Senator Symon furnished the evidence in the figures which he quoted. He said -

In 1900, in South Australia, the International Harvester Company sold no harvesters; the

Massey-Harris Company none; McKay of Victoria sold twenty.

If the honorable and learned senator had taken the trouble to inquire he would have found that Mr. McKay was the only person in Victoria making them at that time. He was the man who had persevered against all difficulties until he had made a success of this machine.

Senator Findley - There were other Victorian manufacturers.

Senator TRENWITH - He was the only one of any consequence in Victoria. Senator Symon said -

In 1901 the International Harvester Company sold none; the Mas$ey-Harris Company none; McKay of Victoria, increased his sales to seventy ; Nicholson and Morrow, of Victoria, sold thirty-six; Robinson and Company, of Victoria, ten ; and the South Australian manufacturers sold none.

They had not started to make them.

In 1902 the International Harvester Company sold none; the Massey-Harris Company 52; McKay, of Victoria, 100 ; Nicholson and Morrow, of Victoria, 12 ; Robinson and Company, of Victoria, 25.

The first time that the importers declared that they were going to have this trade in their hands at all costs was in 1902. In that year they sold fifty-two. In 1903 -

The International Harvester Company sold none; the Massey-Harris Company, i2g; McKay, 175 ; Nicholson and Morrow, none ; Robinson and Company, 75; May Bros., of South Australia, 55 ; Martin and Company, 20 ; and Hawke and Company, 20. In 1904 the International Harvester Company sold 25 ; the Massey-Harris Company, 464; McKay, of Victoria, 360 ; Nicholson and Morrow, 35 ; Robinson and Company, 150 ; May Brothers, of South Australia, 200; Martin and Company, 40; and Hawke and Company, 30.

In 1905 - that is the last year for which Senator Symon gave any figures - the International Harvester Company sold 100 ; the Massey-Harris Company, 199 ; McKay, of Victoria, 250; Nicholson and Morrow, 45; Robinson and Company, 100 ; May Brothers and Company, of South Australia, 75 ; Martin and Company, 35 ; and Hawke and Company, 35.

What happened? In South Australia - where the machine is more generally needed and of greater use than it is in other States - the Australians and the importers sold in all 603 machines. Out of that number the. importers sold 290, or very nearly one half. Although one section have been in operation for only two years, and the other section for three years, yet they have already secured very nearly half the trade.

Senator Croft - They will get the other half pretty soon.

Senator TRENWITH - I think, as Senator Symon has shown, that there is a great danger that in accordance with the boast of these people, the trade will be entirely taken in the very near future.

Senator Pulsford - Did not the importers sell more .in the year before?

Senator TRENWITH - Yes, and so did the Australians, but the fact is that after three years' operation, these people have obtained very nearly half the trade in stripper harvesters. What the Australian manufacturers declare is that there is a very great danger of this Australian industry being entirely crushed out. Surely these figures indicate that that apprehension is not unfounded, and that is the justification for the Bill.

Senator Macfarlane - McKay is competing against them successfully in South America.

Senator TRENWITH - So far as I know, the outside companies have not started to export to South America. I do not deny that McKay was the first to export to South America. But sv.rely that is not a subject for reprobation.

Senator Pulsford - Of course not.

Senator TRENWITH - The fact that we have been able to develop an industry which will do an immense amount of good, which will facilitate the operations of our own agriculturists and enable us to initiate an export trade, is rather a matter for congratulation. It is an industry which we ought to exert every energy to maintain and to extend, rather than to condemn and reprobate as has been done.

Senator Macfarlane - No; we do not condemn it.

Senator TRENWITH - It is said that this is a Bill to prohibit cheapness, and prevent the consumers of Australia from getting bargains, and some persons have gone the length of saying that the consumer is not considered at all in its provisions. In this country, there are . very few persons who are not consumers. There are a few lawyers and doctor's and' thieves-

Senator McGregor - Thieves !

Senator TRENWITH - I do not use this conjunction at all offensively.

Senator Millen - To whom?

Senator TRENWITH - To any one except, perhaps, the thieves.

Senator Findley - It has no application.

Senator TRENWITH - It has an application. The man who will not work, but thieves for a living, is a non-producer. It happens that lawyers, doctors., clergymen, and some other persons are nonproducers - of course, it is not an offence to be a non-producer. In the Commonwealth there are very few non-producers, and therefore when we. consider the interests of the producers, we also consider the interests of the consumers.

Senator McGregor - Do not the thieves make work for the lawyers ?

Senator TRENWITH - I. would rather pursue the argument on my own lines ; in fact. I do not want to have attributed to me thoughts which are not in my mind.' It will generally be admitted that a producer, who, of course, is also a consumer, has interests both as a producer and as a consumer, but it will be admitted at once, I think, that the former are very much greater than the latter, because every producer produces in order to acquire from ' day to day what is necessary for him to consume, and, in addition, to put by some money for a rainy day, or to enable him to consume more liberally in times that are to come. Suppose that the accusation is true that in the Bill we are considering merely the interests of the producer. I reply that we are considering the interests of the consumer at the same time. But the statement is not true. The object of the Bill is to liberate the consumer from the machinations of persons who happen to be enthralled, enslaved, and taxed. In reply to Senator Symon the other evening, I interjected that cheapness is often the prelude to dearness. Cheapness is not necessarily an advantage, and it certainly is a disadvantage if the object of the present cheapness is to bring about a period of continued and extended dearness. There are numerous instances where combinations have resorted to cheapness in order to create dearness to be of an Increasing and enduring character. In his book, Mr. Russell says at page 177 -

The city butchers were solidly united, determined, and ably led. The public was aroused ; its sympathies were wholly on the side of the butchers. The people of San Francisco have convictions in favour of transacting their own business in their own way, and they seem to entertain much doubt as to the essential benevolence of monopolies. P.Iain intimations were made that if the trust attempted in San Francisco the methods it had pursued elsewhere, results (I translate freely) might follow inimical to the highest physical welfare of the trust gentlemen.

In their own interest, the people of San Francisco threatened physical violence against a proposed cheapness of the trust which was designed to kill existing competition, with a view subsequently to create dearness, and a recorded instance is given where, in Chicago, a butcher who resisted their efforts, had a shop started next door to him, where meat was given away. That is what my honorable friends opposite are looking for - something extremely cheap. Why did the trust give away the meat? That is what we have to consider, and that consideration underlies the Bill. Its object is to prevent baneful cheapness, initiated with the design of creating a monopoly, that is intended to bring about dearness extremely prejudicial to the well-being of the consumer and the producer. I propose to show very briefly some of the methods which the combination is adopting 5n Australia, as evidence that there is a very grave danger. In a statutory declaration made by Mr. Moore, of T. Robinson and Company, he affirmed that the representative of the American trust said to him, 41 We have 90 per cent, of the world's trade in harvesters, and we are going to have the other tenth, whatever it costs."

Senator Millen - Does the honorable senator attach much importance to what the commercial traveller for a company would say?

Senator TRENWITH - No, if it were not part of a chain of evidence; but I shall show presently that there is every justification for believing the statement, from the fact that operations have been entered into in the direction of obtaining at verv great cost the trade of Australia. The statutory declaration is some justification for believing that the statement is truthful. If that were all, I should not attach a great deal of importance to it. But what are the methods adopted? We have also evidence that these companies, in order to sell their goods in our market - a very proper thing to do - have resorted to extraordinary means. They have endeavoured at some cost to belittle the Australian product. Mr. H. V. McKay gave evidence on oath that they purchased some of his machines at a cost of £90 each, and sold them for ^75 each. There must be some other cause for losing ^15 on a machine than merely belittling the product of an opponent. How did this operate ? " Can I sell you a McCormick or a Deering stripper-harvester?" "Oh, no ; I prefer a Sunshine harvester." " Oh, do you? Well, I am astonished to hear that. But if you would sooner have a Sunshine we can sell you one for Do honorable senators see the baneful effect of the method?

Senator Pulsford - That is very thin.

Senator TRENWITH - It may be thin, but it is true. The statement is made upon oath, and is capable of verification.

Senator Findley - There has been no reply to that statement.

Senator TRENWITH - So far as I know, there has not been a reply to the statement of Mr. H. V. McKay. But that does not appear to be the only instance of the kind. In his evidence before the Tariff Commission, Mr. Mitchell stated that the outside companies resorted to the same method with reference to his machines. Referring to his seed drill, they said, " Can we sell you a ' Superior " seed drill?" The answer is, "No, I prefer a ' Mitchell ' drill." Then they say, "Oh, well, we can let you have a 'Mitchell,'" and they have, so Mitchell says, purchased his drill in order to have it to sell to a man who declares that he would sooner have a Mitchell drill, in order to prevent him from making a sale. He declares, and his evidence was given on oath, that on the back of their conditions of contract they have a provision that if purchasers do not like the " Superior " they can change it for a " Mitchell " drill. These are methods which cannot be described as generous. I do npt think they can be described as fair.

Senator Pearce - Do they offer to sell the " Mitchell" drills at a lower price than that for which Mitchell sells them?

Senator TRENWITH - I am unable to say. That is not stated, but with respect to the harvester it is stated that they gave ^95 cash for it, and sold it at ,£75.

Senator Pulsford - That is good business for McKay.

Senator TRENWITH - It would be, of course, if all the business were to be conducted on similar lines, but when the object of that business - the purchase of a few machines - is to belittle all the machines which McKay makes, and to create an impression that is not right, it is not good business for McKay, and it is not fair or honest business for the International Har- vester Company, or for any one else who adopts it.

Senator Mulcahy - They, do not make McKay's machines less effective by selling them for £20 less.

Senator TRENWITH - But they do this : If Senator Mulcahy, having no knowledge of these machines, desired to buy one, and some firm told him that they had a machine for sale at £&o or ,£90, and another which they could sell for ^75-

Senator Mulcahy - And which he had asked for. I am quoting the honorable senator's own story.

Senator TRENWITH - I am sure the honorable senator will permit me to continue. I use the illustration that he is looking for one of these machines. He hears that there are two on the market, one selling at -^80 or £81, and the other at £75, and being anxious to have the best he would very likely do as people often do, and as I frequently do myself, when I go to purchase anything of which I have no particular knowledge, and that is, assume that the best is the higher-priced machine.

Senator Millen - Then the higher the price which McKay puts on his machines the more people will look for them.

Senator TRENWITH._ That is my honorable friend's police court method of arriving at a conclusion.

Senator Millen - That is the conclusion from the honorable senator's logic.

Senator TRENWITH - The fact is that that is 'what was done, and it naturally might convey another impression extremely baneful. McKay was selling his machines in Victoria for £84 cash, and landed in South Australia for £90 cash. If the International Harvester Company or the Massey-Harris Company could sell them f°r £l 5> the inference might very naturally be that McKay was treating his own customers unfairly.

Senator Drake - No, the inference, according to the honorable senator, would be that the Massey-Harris machine was not as good, because the price was lower.

Senator TRENWITH - Clearly if a person had to give McKay £90 for a machine which he could get from the. MasseyHarris Company for £75, the inference would be that McKay was giving these companies an unfair advantage, and that might naturally raise a certain amount of indignation in the minds of prospective customers and lead them to say, "We will not have his machines at all."

Senator Drake - That is not the way in which the honorable senator was reasoning just now.

Senator TRENWITH - I do not suppose that even Senator Drake believes that the International Harvester Company gave £95 for McKay's machine, and sold it at £75 for the good of their health.

Senator Drake - The honorable senator was contending, that if a machine was sold cheaply, it would not be considered so good.

Senator TRENWITH - I believe that people would naturally say if the MasseyHarris Company or the International Company could sell for £t5, what they had to pay £95 for to McKay, those companies would be getting an unfair advantage as compared with the legitimate customers of the Sunshine Harvester firm. At any rate, there was an object in view, and I say that it was to belittle, to undermine, and to destroy the Australian industry.

Senator Stewart - Hear, hear; anybody could see that.

Senator TRENWITH - I go further, and I say from their own figures that they are now selling, and for many months have been selling harvesters at a loss of from £10 to £12. Are they doing that for the good of their health?

Senator Findley - The honorable senator will find it verv difficult to prove that.

Senator TRENWITH - I shall try to prove it from their own figures. They may not be capable of telling the truth, or they may resort to untruths as a method of diversion. I do not know, but they certainly ought to know, and I propose to quote their own figures, from several communications from themselves. Honorable senators will remember that the International Harvester Company sought to get their machines through the Customs at an invoice price of £26.

Senator Playford - They did get them through at that price for a time.

Senator TRENWITH - I was not aware of that, but I know that they sought to do so, whether they succeeded or not, and I am now testing their credibility. They _ sought to get their machines through at an invoice price of £26. Subsequently the valuation was raised to £38 10s., and later to £65. They made no demur of any importance to the raising of the valuation to £38 ios., but when it was raised to £6$, they said that that was monstrous, and they issued copies of a circular with a very badly drawn apple tree, which they circulated throughout Australia in tens of thousands.

Senator McGregor - For fun, I suppose.

Senator TRENWITH - For the good of their health. There is on the circular a representation of two machines, with the words -

These are the harvesters the local manufacturers are afraid of. The ones that sell foi ;£Si, and are invoiced to us at ^38 10s. iod.

I wish honorable senators to remember that. If that is true, they could not have been speaking the truth when they said that they were invoiced at £26.

Senator Pulsford - It may have been quite true. The £26 is the value on the ether side, according to the requirements of the Customs Act.

Senator TRENWITH - The invoice is the value on the other side, but the Customs adds 10 per cent, and' charges duty on the value on the other side, plus 10 per cent. But what I wish to nail down just now is this-

Senator Pulsford - The. honorable senator omits the freight.

Senator TRENWITH - Senator Pulsfordwill pardon me. I know that what I am saying is very irritating to a man of his temperament.

Senator Pulsford - I am more amused than irritated.

Senator TRENWITH - Then I am glad to hear it.

Senator McGregor - The honorable senator is very anxious to defend the swindler.

Senator Pulsford - I rise to a point of order. Is Senator McGregor in order in saving that I wish to defend the swindler?

The PRESIDENT - I do not think the honorable senator is in order. I did not hear the interjection, but the honorable senator ought not to make such an observation.

Senator McGregor - I withdraw it.

Senator TRENWITH - I would not charge Senator Pulsford with a desire to defend any person in wrong-doing. I do not think the honorable senator would do that. I do not wish to be drawn away from the point. What I desire to nail down is that these people declared that the machines were invoiced to them at £26, and in this circular they say, " invoiced to us at .£38 10s. iod." Of course, both of those state ments may be lies, but they certainly cannot both be true.

Senator Findley - The honorable senator is not putting the case correctly.

Senator TRENWITH - Then I should like the honorable senator presently to put it correctly. What I am stating are facts. They sought, and some people say, that they actually achieved the passage of these machines through the Customs at a declared invoice value of £,26, and yet in this circular they say "invoiced to us at -£38 IOS- i°d-" All I say, with respect to that is that, while both these statements cannot be true, it may easily happen that both are untrue.

Senator Drake - Is the honorable senator referring to identically the same machines ?

Senator TRENWITH - The reference would not be to identically the same machines, but to the same kind of machine.

Senator Drake - Then both statements might be true.

Senator TRENWITH - For the gratification of Senator Drake I will permit the honorable and learned senator to think that both, statements are true, because I have no power to do anything else. It appears to me that these two statements cannot both be true, though both may be' untrue, and subsequent statements of the company lead us to the conclusion that possibly they are both untrue. They give in the circular a number of figures, and they say - and hence reduce our profit as shown above to Ss. gd.

Senator Findley - The honorable senator should do justice to the circular.

Senator TRENWITH - Will Senator Findley suggest in what way I can do it more justice than I am doing?

Senator Findley - The honorable senator must be aware that the expense of ^27 referred to in the circular is in accordance with a statement made by Mr. McKay, and not by the International Harvester Company.

Senator TRENWITH - They indorse it, and thev put it down as representing the whole of their expense.

Senator Findley - They say, " If that be so."-

Senator Millen - Are these McKay's figures again?

Senator TRENWITH - No, this circular is a combined advertisement of the International Harvester Company and the Massey-Harris Company.

Senator Findley - The later figures referred to in the circular are those supplied by Mr. McKay.

Senator TRENWITH - The honorable senator is wrong, but he will have an opportunity to speak later on. These companies say in this circular - ami hence reduces our profit as shown above to 5s. nd.

That is, after all these charges ; and they add pathetically -

Is that too much ?

I venture to say that it is not. I admit that at that time they were carrying on business at a very moderate profit. But it appears that it was too much from their point of view. Subsequently an effort was made by the local manufacturers to secure an alteration of the Tariff from their point of view, and at a deputation the local manufacturers stated that if an adequate Tariff were given to them they felt confident that the increased output would enable them to reduce the price of their harvesters at once by £5. They made a promise to do that if the duty they asked for were imposed, and. further, to reduce the price bv another £5 at the expiration of a period of twelve months, making a reduction of £10 in all. The International Harvester Company and the Massey-Harris people immediately issued this circular : -

On 4th October, 1905, a deputation of local manufacturers of harvesters waited upon the Minister of Customs, and intimated that if a prohibitive Tariff were declared upon harvesters they would reduce the prices then ruling by £5 the first year, and another £5 the second year. They were, however, so far as can be learned from press reports, suspiciously silent about what the third, fourth, and subsequent years were to bring forth re harvester prices.

They go on to say -

On 7th October the harvester buyers of Australia got action - they got performance instead of promises, they got something substantial now instead of vague, illusory promises to be realized on in the dim future ; for on that date we made an open quotation on our harvesters as follows : -

Then follow various prices over periods with which I need not trouble honorable senators -

That is a " cut " of £12 10s. per harvester.

If thev were getting 5s. 9d. profit when they sold the harvesters at -f$t, what profit are they getting when they sell them at j£i2 ros. less? That is rather a difficult problem to solve. I am giving these figures as they appear under the authority of the trust or combine, of which we have every reason to be afraid. I shall quote another document to show how far we may rely on the members of this combine for truthful statements.

The PRESIDENT - Do I understand the honorable senator to be arguing that there is a trust in existence here?

Senator TRENWITH - My argument is to show that there is such a trust in operation, and that there is great danger to be apprehended from it. I thought I had made that point sufficiently clear. In a letter containing a reply to a leading article in the Melbourne Age - but which letter the Age did not publish - the Harvester Company say -

We wish to refer to leading Article in your issue of 17th inst., in which you criticise our recent action re harvester prices : -

You quite aptly state that it is evident that either our former price of £81 was exorbitant, or that our present price of £yo is a " dumping" price.

Listen to' what they proceed to say -

We have no hesitation in admitting that the former price of £81 was artificial, but we most emphatically deny that £70 is a dumping price, and in proof thereof would state-

Senator Millen - May I ask if the /ISi. which they admit was excessive, was the Price at which the combine, including Mr. McKay, agreed to sell ?

Senator TRENWITH - Yes ; and in order to sell at that price Mr. McKay had to reduce his charge by £3. This shows that Mr. McKay's entrance into the combination was. followed by a reduction in price from £84 to £81. Here we find a company which has no hesitation in admitting a lie.

Senator Pulsford -- Oh, no.

Senator TRENWITH - The company declared that it had insufficient profit at £8.1. and then had no hesitation in admitting that that was an "artificial" price. I have endeavoured to show, first of all - what is not disputed, indeed - that there is such a combination in America, and that its operations have extended to Australia: I have also shown by the figures presented by Senator Symon that there is a real danger of this combination crushing out our industry, in view of the fact that, after two or three years' operations, the combine has secured very nearly half the trade.

Senator Pulsford - What nonsense !

Senator TRENWITH - Senator Symon's figures show that to be the case in South Australia.

Senator Pulsford - Yes, in South Australia only.

Senator TRENWITH - I am now speaking of Senator Symon's figures in relation to South Australia, which is the State where harvesters are more generally required than elsewhere in Australia; and in that State the company has obtained nearly half the trade. I am in a position tosay in answer to Senator Symon, that there isvery serious complaint from the manufacturers of South Australia. I have a letter from Messrs. May Brothers, who assure me that their output this year is more than 50 per cent. less than it was lastyear, and this they attribute to the operations of American competitors - the foreign trust. Messrs. McKay recently, at a reunion of their work-people at Ballarat, declared that they have made 350 fewer machines this year than last, and this they also attribute entirely to the action of the Harvester Company.

Senator Pulsford - But the importation of harvesters is falling off rather than otherwise.

Senator TRENWITH - The honorable senator cannot make that statement on the figures which are available. The importation of harvesters in 1904 was between 400 and 500, while, according to a return presented to the House of Representatives, it had increased in 1905 to 1,700. I have not the figures for this year, but those I have quoted show a very alarming increase. Honorable senators say that, if we check the importation, we shall injure or ruin the farmer, and that, after all, we must consider our great producing industries. Senator Gould urged that the producing, industries are much more important than are the manufacturing industries, and that, whatever we do, we should be careful in fostering the one not to injure the other. I quite agree that in fostering the one we ought to be careful not to injure the other ; but I contend that in fostering the one we are advancing the interests of the other. There is no doubt that Senator Gould was wrong when he said that the agricultural, pastoral, and dairying industries together were more important than the manufacturing industries, measured by the magnitude of the output. The honorable senator was wrong, not only in reference to the whole Commonwealth, but in reference to his own State, which is amongst the least developed in manufacturing production.

Senator McGregor - According to its possibilities, at any rate.

Senator TRENWITH - As a matter of fact, New South Wales is amongst the least, if not the least, developed in this respect. The agricultural, dairying, and pastoral industries of New South Wales onlyaggregate a little over , £21,000,000.

Senator Pulsford - The honorable senator is immensely wrong.

Senator TRENWITH - I am quoting from Coghlan, though I dare say Senator Pulsford is a better authority.

Senator Pulsford - That is very likely.

Senator TRENWITH - Coghlan gives the pastoral and dairying income for 1902 as something over £15,000,000, and the average agricultural income for the preceding five years at a little over £5,000,000, a total of something over £21,000,000.

Senator Millen - What year is the honorable senator taking for the figures in regard to manufacturing?

Senator TRENWITH - So far as I know, the year given is 1902.

Senator Millen - Does the honorable senator regard that as a typical or normal year for pastoral pursuits ?

Senator TRENWITH - In order to be quite sure--

Senator Millen - Why does the honorable senator select the most disastrous year New South Wales has had? Because it suits the honorable senator.

Senator TRENWITH - I did not select the year, which happens to be the last for which figures are available.

Senator Millen - That is not by any means the last year for which figures are available.

Senator TRENWITH - It is the last year, so far as I know, for which there are complete figures.

Senator Pulsford - Would the honorable senator like me to give him the figures for last year, when the manufacturing industries in New South Wales represented £10,000,000, and all other industries £36,000,000 ?

Senator TRENWITH - What does the honorable senator call " manufacturing industries" ?

Senator Pulsford - All manufacturing industries.

Senator TRENWITH - I venture to saythat the honorable senator is quite wrong. Although I have not the figures, I cannot conceive it possible that the manufacturing industries of New South Wales should have declined from an output of £22,000,000 to £10,000,000.

Senator Pulsford - The honorable senator is including the cost of raw material.

Senator TRENWITH - Does not the honorable senator take the original cost of raw material into account in estimating the yield of the pastoral and dairying industries? There cannot be an output from pastoral pursuits and agriculture without land and stock, and the cost of this raw material must be taken into account. In giving aggregate returns, I adopt a course that is equitable, whereas Senator Pulsford does not show a fair comparison. Further, in reference to the argument that if we are not careful we shall injure the producer, I desire to point out that in the States where this kind of interference has been greatest, agriculture has been developed to the largest extent. The most highly developed agricultural State in Australia is Victoria, where there have been more restrictions of the character referred to than in any of the other States. Senator Symon, when arguing the other evening that we should be careful in imposing such' restrictions, proved at the same time that where they have been most resorted to the people have been the most prosperous. Senator Symon declared that the prosperity of Victoria is the greatest in the world, and, in proof, showed that the earning power in Canada is £16 5 s. per head, in the United States £14 14s. per head, in the United Kingdom £7 18s. fid. per head, and in Victoria .£27 19s. 6d. Surely we ought not to be afraid of passing this Bill because it might mean some apparent restriction, and thus injure the farmer. As a matter of fact, Victoria, compared with New South Wales, has many disadvantages as a farming country. Victoria has about one-third the area, and is something like half the age of New South Wales, and yet the former State, has over 1, 000,000 acres more under cultivation. At the same time, the average yield per acre is of more value in New South Wales than it .is in Victoria. The only reason why Victoria is so advanced is that she has had a different kind' of legislation in which so-called restriction has been a large element. There is another very interesting comparison between New South Wales and Victoria that may be very proper! v given without any reflection on either State. The Savings Bank returns may he said to be an index to the diffusion of prosperity amongst the people. Thev are an index of the power of the poorer section of the community to out bv something for a rainy day. Although New

South Wales is more, than three times as large as Victoria, and although she has a splendid agricultural and pastoral country^ the advantage of an enormous land revenue, and has borrowed during the last thirty years considerably more money than Victoria, yet, whilst 25 out of every 100 in New South Wales are depositors in Savings Bank, 37 out of every too are depositors in Victoria.

Senator Pulsford - Which people have the most money in the Savings Bank?

Senator TRENWITH - The New South Wales people, and that is a stronger argument for the position I am taking up. As a matter of fact, the New South Wales Savings Bank gives a higher percentage of interest, and gives interest upon larger amounts, than the Victorian Savings Bank does. Consequently the Savings Bank in New South Wales is a field for investment.

The PRESIDENT - Does the honorable senator think that that is relevant to the subject?

Senator TRENWITH - I certainly do. I am now dealing with the argument that it is unwise and dangerous to pass legislation of this character because it restricts the flow of commerce. I am pointing out that in a country where there has been the greatest amount of so-called restriction there is the greatest general prosperity.

The PRESIDENT - I think the honorable senator is in order.

Senator TRENWITH - There is another point. Coghlan points out by referring to the probate duties how wealth is distributed amongst the people. He gives a return showing how many persons in each hundred who die leave over ,£100 to be administered by the Probate Office. He finds that in New South Wales 16.65 per cent, of those who die leave over £100. In Victoria, the percentage is 24.18. That shows a very general 'diffusion of wealth in this State. What we are seeking is not the aggregation of wealth in a few hands. One of the charges against legislation such as I support is that it will make a few manufacturers wealthy. I point to these figures as showing that the State in which the people have been able to save the! most, as shown by the records, is that State in which legislation has been most in accordance with the ideas which I advocate. Coghlan goes on to say -

These figures show a distribution of property not to be paralleled in any other part of the world ; and in a country where so much is said about the poor growing poorer and the rich richer, it is pleasing to find that in the whole population one in six is the possessor of property, and that the ratio of distribution has been increasing with fair regularity in every province of the group. Victoria has the widest diffusion of wealth of the individual States ; South Australia comes next to Victoria; then comes New Zealand.

It is rather significant that the order of wide distribution of wealth is in the degree to which States have resorted to this kind( of legislation. Therefore, I think honorable senators will see first of all that I have shown that there is some real substantial danger ; and then that there is no proof of our general prosperity being retarded by taking such action. Some figures have been quoted, and I think I may say have hardly, been fairly quoted, by Senator Symon in relation, to the increase in the number of agricultural implement makers employed. Perhaps at this stage, however, I may ask leave to continue my remarks) to-morrow. Leave granted ; debate adjourned.

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