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Thursday, 20 September 1906

Senator PEARCE - No, but very nearly the same.

Senator Millen - I mention that, merely because it is a factor that the honorable senator seems to ignore.

Senator PEARCE - I can assure the honorable senator that the duties do not affect the case I am presenting, the difference being so small. If honorable senators turn to the evidence of Mr. Ferguson, they will there find the rates of duties in the various States. The point is that, so far as raw material is concerned, the manufacturers in South Australia had to pay duty prior to Federation, whereas since then at least one-fourth of their raw material has been duty free. The duty before Federation was greater than the whole cost of Australian leaf at the present time, so that, on the manufacturer's own showing, and on the facts as presented to the Commission, it cost more to produce tobacco in that State prior to Federation than it has cost since. There has' been no substantial increase in the price of foreign tobacco leaf since Federation. The position is much the same in the other States as in South Australia. It will be found that, on the whole, so far from Federation having made it more expensive to manufacture, it" has resulted in a saving.

Senator Col Neild - On so important a debate as this I think we aught to have a quorum present. [Quorum formed.]

Senator MILLEN - We have to assume that Senator Pearce, in making, the statement that Federation had made it less expensive to manufacture tobacco, was speaking from evidence submitted to the Commission. But, so far as I have been able to examine the evidence - and I have, I suppose, gone into it as exhaustively as any senator, even including members of the Commission themselves - there is a general consensus of opinion on the part of the combine witnesses, wholesale dealers, and retailers, that the rise in price was due to the Commonwealth Tariff. If Senator Pearce denies that statement, I should like him to indicate evidence to the contrary effect. In New South Wales, as the result of Federation, it is costing 3d. per lb. more to manufacture ; in Victoria, 9d. per lb. more; in South Australia,10½d. per lb. more; and in Queensland, 6d. less. I take the case of South Australia particularly because in that State, owing to the fact that no local leaf was grown, the manufacturer there had to obtain all his leaf from other States, or from abroad. Before 1901 imported leaf paid1s. 7½d. per lb. ; now1s. 6d. per lb. is paid on imported leaf, in addition to 1s. Excise.

Senator Pearce - There is a higher protectionist wall than there was before.

Senator MILLEN - That does not affect the point, which is that Senator Pearce contended that it costs less to manufacture a pound of tobacco in Australia to-day than it did before Federation.

Senator Pearce - What I said was that the leaf could be obtained cheaper than before Federation

Senator MILLEN - The honorable senator's statement was. that Federation had resulted in a saving in manufacture.

Senator Pearce - Hear, hear.

Senator MILLEN - That is a clear statement that the manufacturers can make tobacco at a lower cost than before. I am showing that the Federal duties have made it more expensive to manufacture. Before Federation; in South Australia,1s. 7½d. per lb. was paid; now 2s. 6d. is paid -1s. 6d. on the imported leaf and 1 s. Excise when it is worked up.

Senator Story - In Adelaide they use local leaf almost exclusively.

Senator MILLEN - Will the honorable senator indicate any evidence that supports that statement?

Senator Pearce - They certainly use more than they did before Federation.

Senator MILLEN - That is right enough; but when statements are made in this reckless fashion it tires one's patience. On the figures I have given there is a difference of10½d. against the manufacturers' working to-day as compared with the conditions before Federation. Let me illustrate the effect of the alteration. Before Federation the duty paid on 100 lbs. of imported leaf at1s. 7½d. was £8 2s. 6d. After Federation the duty and Excise on 75 lbs. of imported leaf come to £9 7s. 6d. The Excise on 25 lbs. of local leaf at1s. comes to £1 5s. That means that the manufacturers pay £10 12s. 6d., as against £8 2s. 6d. paid prior to Federation, a difference of £2 10s. on every 100 lbs. of tobacco, amounting to 6d. per lb. It may be asked why have I calculated on the basis of 75 lbs. of imported leaf arid 25 lbs. of local leaf. I do that on the evidence put before the Commission.

Senator Pearce - What evidence?

Senator MILLEN - The weight of evidence.

Senator Pearce - In 1905 the figures show that there were used in South Australia 55,000 lbs. weight of local leaf, and 140,000 lbs. of imported leaf. The proper proportion is 70 per cent., not 75.

Senator MILLEN - Even at 70 per cent, it is costing more to manufacture tobacco in South Australia to-day than it did before Federation.

Senator Pearce - I agree with that, because they used nearly 100 per cent, of imported leaf beforeFederation.

Senator MILLEN - The leaf was all imported, whether it came from other States or from America. But the point is that the manufacturers absolutely pay more to the Government on every pound of tobacco manufactured in South Australia since F ederation than they did before. It does not matter for the purposes of my argument whether they pay more by 6d. or £1. The argument is that it costs more to manufacture, while Senator Pearce's contention was that on the whole Federation, so far from having made manufacturing more expensive, has reduced the cost. That is one of the statements in which, I think the honorable senator has allowed his sense of fairness and his judgment to be warped by bias. Senator Pearce also said that there had been no advance in the price of foreign tobacco since Federation. I should like him to indicate the witnesses upon whose evidence he relies in support of that statement. Practically all the witnesses who were likely to know, stated that there had been a rise in the price of leaf. The honorable senator may say that he does not believe the witnesses because they are interested parties. If that be his attitude, well and good. But upon the evidence, it is not possible to come to any other conclusion than that the price of foreign leaf has risen considerably of late years. For instance, Mr. Benjamin quoted a circular stating that the cost of raw material had risen to a serious extent. Messrs. Snider and Abrahams, and Mr. Alston, tobacconists, testified that the price had increased lately. Mr. Cameron, Mr. O'Neill, Mr. Dixson, and Mr. Wilkins, all made similar statements. In fact, the evidence so far as I have been able to follow it, absolutely disproves Senator Pearce's statement that imported leaf is not costing more to-day than previously. Therefore, I say that Senator Pearce made his statement without justification. I invite him to show ire any part of the evidence which proves that the price of leaf has not increased. I should like to direct Senator Pearce's attention to one of those incorrect readings of the evidence which he has put before the Senate. This is one of the most serious of the instances; and I should say that it was the most serious, were it not that I anticipate that as soon as I drew his attention to the fact he will admit his error, and say that he has been misled - that he will withdraw a statement involving considerable injustice to those to whom he refers. Senator Pearce, as reported on page 2812 of Hansard, said -

We had one witness before the Tobacco Commission who, when he was asked why the trust *lid not raise prices, very naively said, "You do not suppose that we are going to raise prices while the Labour Party are conducting this campaign for the nationalization of the industry? You surely do not think that we are going to give them an argument to use throughout the Commonwealth? We are not so simple."

I say that there is not a single word in the whole of the evidence to justify that statement.

Senator Pearce - That is a statement I read out to the editor of the Tobacco Journal, who was a witness, and I asked him if it appeared in that journal, and he admitted that it did.

Senator MILLEN - But the honorable senator's statement to the Senate conveyed the impression that he referred to a member of the combine. The statement, or substantially that statement, appeared as a footnote to a letter in the trade journal, and that journal Senator Pearce handed to a witness, and asked the latter if it were true. The witness replied that it was not true; and yet Senator Pearce told honorable senators that one of the combine made that statement.

Senator Pearce - I did not say it was one of the combine who made the statement.

Senator MILLEN - Who are " we " ?

Senator Pearce - The witness was the editor of the Tobacco Journal.

Senator MILLEN - Can the editor of the Tobacco Journal raise prices? It would be more to the credit of the honorable .senator if he would say at once that he was not justified in using the word " we."

Senator Findley - This newspaper man was speaking on behalf of the trade.

Senator MILLEN - On behalf of the combine ?

Senator Findley - Yes, certainly.

Senator MILLEN - Senator Findley may profess to believe that.

Senator Findley - I do absolutely believe it ; this journal is the organ of the combine.

Senator MILLEN - I should now like to read to the Senate the questions which, led up to the extraordinary statement, which Senator Pearce says resulted in this " naively " made admission. Mr. H. B. Alston, a tobacconist, was giving evidence. Is Mr. Alston the editor of the Tobacco Journal ?

Senator Pearce - No; I put the same question to several witnesses.

Senator MILLEN - Did any one of those witnesses make the admission on behalf of the combine?

Senator Pearce - No; but the editor of the Tobacco Journal acknowledged that he put the foot-note there.

Senator MILLEN - It appears in a foot-note, but did the editor say that he had any other than his editorial authority ?

Senator Pearce - No; but we had pretty good reasons for believing he had.

Senator MILLEN - Now the honorable senator is guessing. The following is an extract from Mr. Alston's evidence : - 1379. Did Kronheimer Ltd. ever propose to you, or to retailers generally, to fix the prices at which you should retail the brands of tobacco which they distribute? - Never. 1380. Did they ever propose to you to fix the prices at which you should retail certain brands of cigars? - Never. 1 381. Then what is the meaning of the following letter, which appeared in the Australian Tobacco Journal, of 21st June last? -

Here is the letter which was addressed to the editor of the Tobacco Journal -


(To the Editor.)

Sir, -I would like to know, if you have the information at hand, whether the Tobacco Trust intends to make minimum prices at which their goods must be retailed. - Yours, &c,


Newcastle, 20th June, 1905.

To that letter the editor affixed the footnote, which is, in substance, the statement which Senator Pearce put into the mouths of "we." This is the foot-note-

It is very unlikely at present, while Sir William Lyne and other socialists are accusing the "Trust" of raising prices against the consumer, and declaring that the industry ought, therefore, to be taken over by the State. Kronheimers have shown themselves willing enough to help the retailers to stop the cutting evil ; but in the interests of the whole trade they would be foolish to give the socialists a handle to use in favour of State monopoly. - (Ed. A.T.J.)

The evidence then proceeded -

Do you think there is any authority for that statement? - The replies I gave to your questions are absolutely correct, so far as I am concerned.

Did they ever approach you or suggest to to you to fix the retail price of cigars? - No, sir, never.

And yet in the face of that evidence Senator Pearce made the statement which I have already quoted. Only one inference could be drawn from that statement, namely, that Senator Pearce desired to lead the Senate to believe that one witness connected with the combine had " naively " admitted that the combine was not so simple as to raise prices when there was likely to be a crisis in the industry. I had expected that Senator Pearcewould at once admit that he had made a mistake - that trusting to his memory he had used terms to which the facts did not justify. I take his present attitude to indicate that he stands by his statement. All I can do is to place the facts before honorable senators, and leave them to decide. But I repeat that there is not a single word in the evidence to justify Senator Pearce in referring to the combine in that way.

Senator Col Neild - I think there ought to be a quorum. [Quorum formed].

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