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Tuesday, 2 October 1906


Senator CLEMONS (Tasmania) . - It is to be regretted that honorable senators have not had their attention more specially directed to both of the reports of the Tariff Commission upon the question of stripper-harvesters. It is quite true, as the Minister has stated, that the papers relating to the case have been circulated ; but, owing to the multiplicity of documents that have been distributed during the last few weeks, it is difficult for one to readily place his hand upon those relating to any particular question.


Senator Playford - Seeing that the honorable senator is a member of the Commission, he ought to be the last to complain.


Senator CLEMONS - I am not complaining of having been placed at any disadvantage, but I am pointing out that other honorable senators, who are not members of t he Tariff Commission, but who are quite as much interested as I am, have not been able to place their hands readily upon the reports, and to follow the Minister when he was dealing with this very important question. I shall find it necessary to refer at greater length than the Minister has done to the reports which I have indicated, because I feel it incumbent upon me to direct attention to the conclusions of the Commission which are based upon the very voluminous and exhaustive evidence taken by them. I might summarize the demand made in respect of stripper-harvesters as being one for increased protection upon the ground that under existing conditions the local manufacturers were unable to compete successfully with their rivals beyond the seas. It was urged by more than one witness that unless increased duties were granted, the local industry would be seriously imperilled, if not stamped out. We first directed our attention to the cost of manufacture, and the prices which the manufacturers and importers had been able to obtain from the public during the last three or four years. I shall have to refer to this matter in detail at a later stage, but by way of summary I may point out that the unanimous conclusion of the eight members of the Tariff Commission was that the cost of manufacture of stripper-harvesters within the Commonwealth did not exceed £41.


Senator Col Neild - Were the members of the Commission unanimous upon that point ?


Senator CLEMONS - Yes, decidedly.


Senator Col Neild - The Minister stated that there was a faction fight.


Senator CLEMONS - In the cases where the members of the Commission were divided as to their conclusion, the Minister took shelter under that arrived at by the protectionist members, but with regard to those points upon which the Commission were unanimous, the Minister was practically silent. He said nothing except what was extorted from him, by interjection, upon the very important point with which I am now dealing. As we all know, the first trouble that arose - if I may so describe it - was due to the action of the Minister of Trade and Customs in fixing upon an arbitrary sum as the value of imported harvesters at the port of shipment. The Commission had to investigate that point, and necessarily felt it incumbent upon them to inquire as to the price of manufacture, not merely in Canada and the United States of America, but also in (Australia. If there were any question as to the value of the evidence obtainable with regard to the cost of manufacture in Canada or the United States of America, information with reference to the cost of production in Australia would naturally be very useful as a guide. It has never been contended by Mr. McKay, or any other Australian manufacturer, that stripper-harvesters could be made here at a less cost than in the United States or Canada. Therefore, having ascertained that the cost of production in Australia was£41 per machine, we were safe in assuming that that outlay was not exceeded by the manufacturers in Canada or the United States of America. I may say, in passing, that no witness who came before the Commission was more consistently reluctant than was Mr. McKay to disclose many material facts connected with his business.


Senator Col Neild - Very naturally.


Senator CLEMONS - It may, or may not be, that such reticence was natural. Mr. McKay was told that it was highly desirable that he should make a full and free declaration with regard to his affairs, but at the same time it was intimated that if he declined the Commission could not take any steps to force him to do so. The Chairman told him that if he refused to disclose certain material facts he would do so at his own risk. In spite of that emphatic warning, however, the Commission were unable to obtain any evidence from him as to the cost of production. It, therefore, had to go to other sources. It had to endeavour to obtain this evidence as it best could.


Senator Playford - It was hardly fair to ask a man to disclose his cost of manufacture. It might, disclose the whole process.


Senator CLEMONS - Precisely. The comparison between what it costs to make and the price at which the machines were sold to the farmer would disclose what his profits were. But let me contrast Mr. McKay's attitude in this matter with that of the importers - both the Massey-Harris Company and the International Harvester Company. We had this satisfactory statement from both of them - that they would be only too glad to furnish every single item of the cost relating to the manufacture of their harvesters, provided Mr. McKay would do likewise. That challenge was open for above a week. The Commission gave Mr. McKay ample opportunity - urged him more than once, in fact - to meet them on fair terms, and to go into the figures with as much readiness as the importers had shown. But that challenge was never accepted, and to this day Mr. McKay refuses to make any statement as to his profits.


Senator Trenwith - Have the importers made their statements?


Senator CLEMONS - They have. The Massey-Harris Company has given the fullest and freest statement of every expenditure in connexion with its business. It has given sworn evidence as to every single detail and every small item. There is nothing omitted in the complete statement made by the Massey-Harris Company. That contrasts most favorably with the attitude of Mr. McKay, the basis of whose complaint was that the Australian manufacturer could not sell at a profit against the competition of the importers. The Massey-Harris Company and the International Harvester Company did not come before the Commission and say, " In consequence of the decision of Sir William Lyne,' Minister of Trade and Customs, which decision we hold to be unfair, we are unable to carry on business in the Com monwealth." There was no complaint of that kind by them. The complainants in the case were Mr. McKay and other Australian manufacturers. Under ordinary circumstances, when a complaint is made, the procedure is to ask the complainant to prove his case, or, at any rate, to make out a -prima facie case ; and it is just because the onus of proof was on Mr. McKay that the Commission had to come to the conclusion, which it did unanimously, that there was nothing - absolutely nothing - to warrant Mr. McKay's demand for such an increased duty, in! order that he might make a profit based on the cost of manufacture and the sale price. I have here an interesting document, which I propose to read, because it deals with the question of profits made by selling, at unfair prices, and also with the method adopted to obtain high prices. It is within the common knowledge of every one that two or three years back .an agreement was entered into in Australia, not only by the importers of stripper-harvesters, but by the manufacturers, with regard to the selling price. It originated with the manufacturers. The chief man in bringing about the agreement, I have not the slightest hesitation in saying, was Mr. H. V. McKay. Much has been heard of this agreement, but I do not know that it has been published. I think it worth, while to read the document in order that we may see what happened a little prior to the agitation for increased duties.


Senator Col Neild - What is the date of the agreement?


Senator CLEMONS - 1905. I will read it. It is as follows: -

Articles of agreement entered into this fourteenth day of March, Nineteen hundred and five, between the several persons, firms, companies, and corporations, who shall severally sign and execute these presents whereby the said persons, firms, companies, and corporations do hereby mutually covenant and agree with each other as follows : -

1.   This agreement shall govern all transactions in connexion with the sale or hiring of stripper-harvesters and attachments therefor entered into in this State of South Australia during the period beginning from the date hereof and "ending on the 31st day of January, 1906, unless superseded by an agreement of prior date, and everything will be done to carefully and faithfully follow its various provisos and terms, not only in the strict letter, but also tothe full intent, meaning, and purpose.

2.   Each party binds itself, its employes, agents, and representatives, to sell or hire -or offer for sale or hire all stripper-harvesters and" attachments therefor during the period abovementioned in strict accord with the prices and terms in the following schedule, and also to make all settlements in strict accord therewith, excepting only that any party may, if it so desires, Ax its prices higher than the prices shown in the schedule.

There was an opportunity, not for reduction, but for increase. Any one could put up the price beyond the schedule, but the agreement strictly bound all the parties not to put down prices.


Senator Fraser - If long credit was given, that was necessary.


Senator CLEMONS - That may be so, but such a comment does not apply to the sentence that I have just read. The agreement goes on -

3.   Schedule of prices : -







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