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Tuesday, 2 October 1906


Senator CLEMONS (Tasmania) -25l- - When the debate on this measure was interrupted, I was dealing with the report of the protectionist members of the Tariff Commission on stripper-harvesters, and had referred to paragraph 16 of that report. I quote this further paragraph from the same report -

It is necessary to draw particular attention to the fact that the above-named factory cost of the Australian-made stripper-harvester is merely an estimate, based upon a deduction from facts stated by Australian manufacturing witnesses, who refused to give details or particulars of their factory costs and profits. Whilst strenuously contending that the invoice price of the imported machine should be fixed at not less than £60, they declined to disclose their trade secrets by stating their own factory costs and profits. It is necessary also to draw attention to the fact that the above tables, as far as they relate to the Massey-Harris and International Harvester Companies, are based upon the "Customs duty of £5 4s. 7d., according to the invoice price of ^38 odd ; by the re-assessment of invoice valuation the invoice price for the purpose of duty has been increased to £65, involving an increased duty of /a 17s. 1 id. If that increased duty be deducted from the profit of the Massey-Harris Company they would then only show a profit of 3s. iod., and if the same increased duty be deducted from the profit of the International Harvester Company they would only show a profit of £10 3s. 2d. It appears, however, from the evidence that the International Harvester Company has reduced its selling price to ^70 cash, and at that reduced price it would appear that, after paying the increased duty of £2 7s. nd., they would be selling at a loss of 16s. lod. ; at the same time, the representative of that company denies that they have ever sold machines at a loss. The increased duty, he said, was paid under protest, and his company is in hopes of getting it refunded.

With which hope I cordially agree -

When asked to explain on what particular items he could reduce his costs to enable him to sell at a profit at the reduced price of £70,Mr. L. H. Cowles said a reduction could be made in respect of the invoice cost of £38 10s. iod., and in the cost of sale.

This is an important statement, because it really means that the representative of the International Harvester Company said that their cost of manufacture could be reduced below the price originally quoted and used by the Tariff Commission as the basis of their calculations. I do not think that, at present, I need deal any further with that part of the report, which was signed and framed by the protectionist, members of the Commission. I now propose to quote material statements made by witnesses in answer to questions, because I think it is only fair for me to bring their evidence under the notice of the Senate. I have spoken about the mode in which the Commission ascertained the cost of manufacturing harvesters. I shall be ready to refer any honorable senator to the questions and answers which supplied the Commission with the facts. I shall take first of all the evidence given by Mr. Moore, who represented the firm of T. Robinson and Company, agricultural implement manufacturers, of Melbourne. In answer to questions 15825 and 15833, .he said that the cost of their raw material for each harvester was about the same as was claimed to be the original invoice price of the International Harvester Company's machine, that is £26. He added that wages involved 30 per cent, of the cost of the machine, that cost being the selling price. From these statements, Mr. Patterson deduced - and he made a fair deduction - that as £26 was 70 per cent, of the cost of the locally-made harvester, the whole cost would be £$7 3s-'j and, adding thereto 10 per cent, for overhead charges, the factory cost would still work out at under £41.


Senator Findley - Who is Mr. Patterson ?


Senator CLEMONS - Mr. Patterson is the representative of the Massey-Harris Company. I believe that even the protectionist members of the Commission will readily admit that nothing could have been more straightforward than the manner in which he gave his evidence on oath. He shirked no question, he evaded no detail, however small. He was perfectly willing to meet every question, and to give a complete and exhaustive answer. I do not believe that a member of the Commission had the slightest doubt as to the< truth of his evidence. If he did not disclose the 'whole truth, that was the fault of the Commission, because we had no witness at any time, or on any subject, who was more ready, with one reservation, to disclose all the facts bearing On the cost than he was, and that reservation was the submission of his books to a chartered accountant, or to the Commission, if Mr. McKay and other "Victorian manufacturers would do the same. Mr. Patterson said, in his evidence, that the extra, charges in the factory, of Massey-Harris were only 4 per cent. I m'erely quote that detail in order to show that when he allowed a margin of 10 per cent, to Australian manufacturers, he acted in a generous spirit. He proved to us conclusively that his own firm's expenses for the incidental items come to only 4 Der cent, but, he said, "I readily grant 10 per cent, to Australian manufacturers." I now come to the evidence given by a witness of whom, I frankly admit, much might be said. I have, I suppose, only to mention Mr. Weickhardt, when every honorable senator will at once recognise that I have named a witness about whose evidence there can be differences of opinion. He was an ex-employ6 of Mr. McKay. I suppose that mv experience in this matter is not unusual, but I have to say, with great regret, that, during "the course of our work, we more than once were forced, reluctantly or otherwise, to come to the conclusion that nothing could be more difficult than to get evidence from an employ^ of a firm - that it could only be got when, to use an Irishism, he was no longer an employe


Senator Findley - The only opportunity which a man has to speak is when he gets his quietus.


Senator CLEMONS - I agree largely with the honorable senator, and it is a great pity that any one has to make such an admission with regard to the workmen of Australia. It was brought home to us more than once in the case of not only this industry, but many others, that working men were either so tied clown to the necessity of working in that particular employment, or so harassed by fear, that if they left they would not get other employment, that it was an almost impossible task for us to extract the whole truth, and certainly these men were amongst the principal class who could have given evidence.


Senator Millen - It may be taken for granted that if they could have given evidence favorable to their employers the road would have been made easy for them to give it.


Senator CLEMONS - We had, unfortunately, instances of the kind suggested. I remember an instance of an employe, who, I am sorry to say, was evidently giving his evidence because he recognised that it was to his advantage to do so. No doubt an attempt will be made to disparage, perhaps to discount entirely, the whole of Weickhardt'^ evidence. But, so far as I could judge, his attitude was quite fearless. He challenged contradiction in every, possible way. He went into the most minute details, giving names and dates. He gave a lot of evidence with regard to employes of McKay, but I venture to say that, in no instance, did he refrain from communicating the names of men whose wages were low, or doing all he could to put us in touch with a man. He said : "That is .the name of a man who was employed by McKay on wages sometimes as low as 10s. a week, and that is his address as I last knew it. If the Commission want to hear from the man they can call him to substantiate or to deny my evidence." No man could have attempted more fully to show his bona fides than did Weickhardt.


Senator Trenwith - Did the Commis-. sion call those men?


Senator CLEMONS - We did not, but the 'challenge was made public to McKay, in fact, to every one connected with the industry, to refute anything which Weickhardt had said. I shall deal presently with the way in which the challenge was accepted : but at present I prefer merely to quote from his evidence. He had been a foreman for two years in McKay's employment. He certainly had had the best of opportunities to ascertain what the cost of manufacturing a harvester was. He gave his evidence in a most direct and unswerving way, with regard to not only the cost of manufacture, but also every cost incidental to the inquiry. Summarizing his evidence, he said that the highest estimate which could be placed on the cost of the material was .£23, the cost of wages was £9 17s. 2d., and the overhead charges were 5 per cent., or £1 2s. iod., making a total of £34. That sworn evidence was given by a man who for two years had been employed by McKay as a foreman, and who certainly must know, if a man employed by McKay at any time ever could know, what the cost of manufacturing a harvester was. I propose to refer to a portion of his answer to question 64825, because I think it bears out what I have said. I cannot read the whole of the reply, because it happens to be part of Weickhardt's original statement, but it is well worthy of the consideration of any one who wishes to ascertain as far as he can from the evidence what the facts are -

 

It is obvious that, in summarizing and adding the incidental charges, and bringing the total cost up to ^34, Weickhardt was acting as Mr. Patterson did, in a generous spirit towards McKay.


Senator Styles - Would the honorable senator mind reading the passage again?


Senator CLEMONS - I shall read from the beginning of the previous paragraph -

Now let us look at the cost of material. 'Castings cost, finished, 14s. ner cwt. ; sheet metal, 16s. 6d. per cwt. ; timber, about ros. cwt.

T desire to show that Weickhardt gave his evidence in the most direct and specific manner possible. Not merely to a general summary, but as to all the items.


Senator Trenwith - What department did he supervise?


Senator CLEMONS - I cannot recollect.


Senator Trenwith - I think I can help the honorable senator. He was a tinsmith.


Senator CLEMONS - I only know that he was a foreman. On page 191 4 (question 73770) there is the following piece of evidence from the same witness -

Do you say that the cost of each of these harvester machines in labour is £y 10s. ? - I am allowing £10 to give them the benefit of the odd shillings and pence. I have worked it out in different ways, and I cannot make it come to more than that. I can give particulars, if necessary, as well as the names of the men, together with the .wages they receive.

I could of course quote more, but I do 'not wish to elaborate this point more than is necessary. I desire to draw attention 10 the salient features regarding the implement itself. I will refer to a question" put to a witness named McGregor, and to his answer. It is to be found on page 1874 (ques.tion 66195) -

Your computation of £§ is approximately 30 per cent, of the whole. I understand you put the cost of wages at ^'9, and material ^20? - Yes, making ^'29 in all.

This witness was a farmer, but he had had some practical experience in the construction of these machines'. He had used them also, and knew more about them than perhaps the ordinary farmer would do. He must have had particular knowledge, or he would not have made that statement. It largely corroborates Weickhardt's evidence, and I think it is especially material to the case. Before I leave the witness McGregor I would say that amongst other statements he made was one to the effect that Mr. H. V. McKay told him that the factory cost of the machine was £30. We had no reason for supposing that this man would have made such a statement if it had not been perfectly true. It was quite in harmony with the evidence of other witnesses as. to cost. I come now to the evidence of Mr. Rees, an engineer connected with Hawke and Company, of Kapunda. His evidence is to be found on page 1687 (question 47863) -

The complete machine costs 3d. a lb. right through ? - Something like that.

I do not attach particular importance to an answer so vague, but draw attention to it, because it is another way of estimating the cost. ' On the ascertained weight of the machine 3d. per lb. would work out at something under £30. We ako had some evidence from another farmer named Nowotna, whose testimony was, very sEN. ficant. It is to be found on page 1882 (questions 66409-10). It is to the effect that the witness was a shareholder in the McKay Company some years ago, and that a local manufacturer of machinery at Horsham constructed 50 machines for the company at ^50 each. If a small firm in an up-country place could make these machines for £50 at a profit, the witness argued that it should be quite possible for a firm with modern up-to-date equipment to make them at a much lower cost. From that argument I do not suppose any one would differ. I wish now to refer especially to the evidence given by Mr. Geo. Bult, who was an employ^ of McKay's, and was sent by McKay to refute the evidence of the witness Weickhardt. I think I said in an earlier part of my speech that while the witness was sent by McKay to reply to Weickhardt's evidence, and while his evidence does purport to be a refutation of many of Weickhardt's statements, Tie was absolutely silent with reference to the cost of manufacturing the machines. Further than that, he absolutely refused to give any evidence on this most important point of our inquiries. The following are some of the questions and answers forming part of Bult's evidence (question 66517, page 1886) : -

Did you read Weickhardt's evidence wilh regard to the manufacturer's cost of producing the harvester ; did you see where he estimated the cost at ^30? - Yes, I saw that.

What have you got to say about that, or do you wish to say anything? - I am not in a position to criticise that part of the business, and I don't think Weickhardt is.


Senator Henderson - From what source did the Commission receive the information that this witness was particularly commissioned bv McKay to give evidence?


Senator CLEMONS - I do not think there is the slightest doubt about it. The evidence shows it. He came to refute the evidence of Weickhardt, and was an employe of the company.


Senator Trenwith - That does not prove that he was sent by McKay.


Senator CLEMONS - It does not prove it; but I do not think that any one can have any doubt about it.


Senator Trenwith - As a matter of fact, the employes themselves passed a resolution to the effect that Weickhardt was utterly unreliable.


Senator CLEMONS - If the honorable senator will look up the evidence, I do not think he will have any doubt that

Bult came before the Commission for that special purpose.


Senator Henderson - I did look it up, and that is why I asked the question.


Senator CLEMONS - I can assure the honorable senator that the Commission asked him, and that he made the clear statement that he had come for that specific purpose. He came with a long written statement. There is no question about that at all.


Senator Trenwith - Is there not more evidence that he was sent by the employes than that he was sent by McKay?


Senator CLEMONS - If the assertion is made that the employes induced Bult to give evidence, I have to say again that the men were called together bv McKay and asked to appoint some one to attend and refute the statements of Weickhardt. There is no doubt about that.


Senator Henderson - I think it is a subject well worthy of ventilation.


Senator CLEMONS - I quite agree. Bult's evidence goes on -

You are not prepared to deal with that at all? -No.

Either with that or the cost of the labour in producing the machine ? - No.

You do not wish to enter into that? - No.

While much that is significant may be obtained by positive evidence, there are times when a negation like that seems to have more weight and value than a direct and positive statement. Consider the circumstances. Every one knew that one of the main objects of our inquiry was to ascertain the cost of these machines. It was known that McKay himself, on more than one occasion, had refused to give any information on the subject. Attention' was specially drawn to the fact that Weickhardt had given evidence as to the cost of production. This man Bult came to refute Weickhardt's evidence. He knew that no part of Weickhardt's evidence was considered more important, and that nothing that he stated was of more tangible and definite than the cost of producing the machines. He knew that they had been sold at a minimum of £85, and that it had been asserted that the cost of production was only £30. Naturally, it was expected that when Bult came before the Commission he would be ready to go into that. For those reasons, I say that, while we attached considerable importance to the positive evidence, this negative evidence was extremely eloquent.


Senator Trenwith - Did Bult deny the statement of Weickhardt that the wages were as low as he said?


Senator CLEMONS - Bult made, various denials, but I can say quite honestly that his contradictions were not highly satisfactory. There were many gaps not filled up, even by his evidence, and when he was pressed as to certain individuals, times, and places, he failed to answer the questions. I admit that he gave a denial to many of the statements made by Weickhardt.


Senator Trenwith - That is what he went there for.


Senator CLEMONS - He went there for the purpose, and he would have been a poor witness if he could not have made out some sort of a case. I say without hesitation that the balance of credibility was with Weickhardt's evidence, taking the word of one man as against another.


Senator Drake - But Bult had no written statement as to the wages ruling at the Sunshine Harvester Works.


Senator Pearce - Bult said in his evidence, " I was asked on Saturday afternoon to give evidence on behalf of the men."


Senator Trenwith - Senator Clemons said that- Bult was sent by McKay to give evidence, whereas Bult says that he was asked bv the men to do so.


Senator CLEMONS - No doubt if I chose to spend the time I could convince even Senator Trenwith that a great deal of Weickhardt's evidence could be absolutely relied on. The question arose as to the cost of iron, which is the chief raw material used in this industry. It has been asserted, without the slightest foundation in fact, so far as I- know, that the cost of iron is greater in Australia than it is in America. I am bound to say, however, that these assertions made from time to time by witnesses were merely' expressions of opinion based on no official record, and, as a matter of fact, that opinion, while honestly given, was sometimes really wrong. There is also evidence which some persons may be inclined to say is no good, because it comes from Mr. Patterson. I hope, however, that we shall not hear that said, because I believe that Mr. Patterson was honest in his statements. That witness quoted facts and figures from official documents relating to the cost and. so forth of iron in various places. He said that the price of pig iron in England was £2 8s. ; in Toronto, £4 2s. 2d. ; in Pittsburg, £3 is. 6d. ; and in Sydney or Melbourne, £2 17s. 6d. The table he quoted clearly shows that the cost both in Canada and the United States was higher than in Australia at the same time. Mr. Patterson also quoted figures relating to bar iron or mild steel, the price of which in England was £6 10s. ; in Toronto, £8 6s. iod. ; in Pittsburg, £1 10s. ; and in Melbourne or Sydney, for Belgian iron, £fi 4s. gd. ; and for English iron, £1 10s. I do not think there is a member of the Commission, who is not convinced that iron is cheaper in Australia than in America or Canada. Now I come to the question of wages, and the payment for overtime. It has been asserted that Mr. McKay has to pay higher wages than he ought to, or that he is handicapped by what he has to pay for overtime; and I shall quote Bult's evidence on the point. Bult, in answer to questions 66533-8, said practically that the employes are required to work overtime if necessary, and that for such overtime they are paid at no higher rate than for ordinary time - that the men do not even get an allowance for tea - and that it is not the practice to pay overtime in the agricultural implement trade. That was the evidence of the man who was sent by Mr. McKay, or, if Senator Trenwith objects to that, the man who was sent by his fellow employes, to give evidence.


Senator Trenwith - I think that would be the fairer way to describe the position.


Senator CLEMONS - We had evidence as to the wages paid, and a comparison with those paid in Canada. I shall quote the Massey-Harris factory as compared with the factory of Mr. McKay in the matter of wages, and the comparison comes out in this way : Fitters in the Massey-Harris factory, £2 13s., as compared with £2 us. 6d. in McKay's factory; joiners, £2 15s. 5d., as compared with £2 ns. 3d. ; painters, £2 16s. 8d., as compared with £2 15s. 6d. ; blacksmiths, £3 4s. sd., as compared with £2 9s. 6d. ; moulders, £2 16s. 8d., as compared with ,£2 10s. 6d. The evidence was clear and unmistakable that higher wages are paid in Canada than in similar factories in Australia. I think, perhaps, I might again refer, incidentally, to the enormous cost of distribution. I have already said that, in my opinion, those costs are far too high, and that they are largely at the root of the trouble, if there is any trouble, in this and other industries in the Commonwealth. Of all the witnesses who came before us, there was none who confessedly was so lavish - so wanton almost - in his expenditure on distribution as Mr. McKay. I think it will be found from the evidence, that he spends an enormous amount in advertising. It is within the knowledge of every honorable senator that no man connected with any Australian industry indulges more lavishly in advertising than does Mr. McKay.


Senator Pearce - We have only to look at the back page of the Bulletin to see that.


Senator CLEMONS - There is hardly a newspaper in the Commonwealth which does not show traces of enormous expenditure in this direction by Mr. McKay. That expenditure may or may not be justified ; but I do not think that the farmers and others who use these machines should be compelled by legislative enactment to make up to Mr. McKay the enormous amount he distributes in various forms - I accentuate " various forms " - of advertising. The figures as to the output of these machines are very illuminating, and, being official, they are not in the same category as ordinary evidence.


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


Senator CLEMONS - It was asserted by Mr. McKay that he could not carry on without additional protection, which, of course, meant additional profits for him.


Senator Col Neild - Is it absolutely necessary in the interests of the Commonwealth that Mr. McKay should carry on.


Senator Trenwith - First of all, Mr. McKay never made such a contention as that he could not carryon without an additional duty.

SenatorCLEMONS.- Then why did he ask for the additional duty ?


Senator Trenwith - Because he was threatened with extinction by one of the most powerful financial institutions in the world.


Senator CLEMONS - I think that Mr. McKay invented that threat. There was no evidence that the threat ever materialized - we could find no source of origin for it except in Mr. McKay's own imagination. I shall not deal with that sort of statement, but with facts and figures. In the year 1899 the output at Mr. McKay's establishment was 301 machines, and in 1905 it had risen as he himself admitted to more than 1,500 under the Federal Tariff. It is generally understood that the output for last year was nearly 2,000. Mr. Bult, in his evidence, stated that in 1905 the output was 1,930 machines - a shade more than the output of 1904, which, I take it, means that the figures for the two years were pretty nearly the same. The total number of harvesters imported in 1905 was 1,730. We are confronted with the fact that one man made 1,930 machines in Australia, as compared with 1,730, which represents the total imports. When we remember that there are at least twenty-four other manufacturers in the Commonwealth, and that the total number sold from all sources was between 5,000 and 6,000, we can easily understand what a large and domineering position Mr. McKay occupies in connexion with this industry.


Senator Trenwith - Mr. McKay is the largest manufacturer; but what does the honorable senator mean by " domineering ?' '


Senator CLEMONS - I am sure that Senator Trenwith need not quarrel with that term, which may most properly be applied to Mr. McKay. The term applies not only to all that Mr. McKay has said, but to all that he has done. It certainly applies to Mr. McKay's attitude before the Tariff Commission, and it applies with extreme exactitude to his conferences with the Minister of Trade and Customs.


Senator Trenwith - What was the total number of machines imported in 1904?


Senator CLEMONS - I have the number, and I know that a great many remain unsold at the present time. I now come to another statement which was not given in evidence before the Commission, but which appeared publicly in a Melbourne newspaper under the signature of Mr. McKay. It covers the years 1901 to 1905, and is very instructive as showing what Mr. McKay has himself said, and actually published in a Melbourne newspaper, in one of his rare moments of frankness -

In the year 1901 the number of machines locally made was 1,500. There were none imported, and the total sales were consequently 1,500. In 1902 - locally-made, 500; imported, 160; total sales, 660. 1903 - locally-made, 2,000; imported, 500; total, 2,500. In1904 - locally-made, 3,500; imported, 1,700; total, 5,200. In 1905, the last available year, the sales of locally-made harvesters were 4,000; imported, 1,400; total, 5,400.

On these figures I make only this comment - that of the 4,000 locally-made machines sold, probably 2,000 were sold by Mr. McKay. It seems fitting that at this stage I should refer to another aspect of the business, and that is the export trade. Mr. McKay had established so enormous a business under the Federal Tariff, the efficacy and value of which he disputes, that he was in a. position to turn out and sell half of the total of locally-made machines sold in the Commonwealth in 1905, and, in addition, in that year he exported a great number of harvesters, chiefly to the Argentine Republic. In 1905, the total exports of harvesters from Australia numbered 419. I will not say that they were all Mr. McKay's machines, but it is admitted that nearly all were his; I think I may say that 99 per cent. of the machines exported were Mr. McKay's. These machines were exported chiefly to the Argentine, and, according to the Customs valuation, represented a sum of £30,192. In the seven months of this year, 1906, Mr. McKay has exported 484 machines, of the total value of £32,318.


Senator McGregor - That is very criminal.


Senator CLEMONS - No, it is very satisfactory. I congratulate Mr. McKay and the Commonwealth upon it. Senator McGregor holds an entirely mistaken view if he believes that it is criminal for industries to flourish in Australia. Such a view is not held by honorable senators on this side, and no one can say from anything, I have said or done that I could ever hold such' a view under any circumstances. Whether Mr. McKay has increased the price of his harvesters to the detriment of the consumer is another question. I. have shown that, under the Commonwealth Tariff, with the protection of a duty of 12½ per cent., he has been in a position to turn out 2,000 machines for local sale, and over 400 for export. It will, perhaps, be interesting to honorable senators to know at what price, according to his own sworn evidence, Mr. McKay sold his machines in the Argentine Republic. We know what he sells them for here. Australian farmers may be congratulated that, whilst, as consumers of harvesters, they have, in my opinion, and in the opinion of a great many other people, to pay far more than they ought for these machines, they are still very much better off than the farmers in the Argentine, because Mr. McKay sold his machines there, according to his own evidence, for the sum of . £140 each.


Senator Trenwith - No. They were retailed for £140 each in the Argentine, but Mr.. McKay did not sell them for that.


Senator CLEMONS - Then what happened ?


Senator Trenwith - The importer in Argentine did what importers everywhere do. When he had the people in his grip he held them there.


Senator CLEMONS - Mr. McKay, in his evidence, stated that he had, and probably has now, in the Argentine a person who is known as a purchasing agent. Senator Trenwith can define the functions of a purchasing agent as he pleases, but there is no doubt that Mr. McKay's machines have been sold in the Argentine at £140 each.


Senator Trenwith - That is what we should have to pay for them here if we had no local manufacture.


Senator Best - The honorable senator has referred to a sum of , £30,192 as the valuation of harvesters exported.


Senator CLEMONS - I am glad that Senator Best has mentioned that. It is significant that the sum to which he has referred is a Customs valuation. The figures I have quoted were supplied by the Customs authorities, and, according to them, in 1905, 419 machines were valued by the Customs for the purpose of export at £30,192, which Senator Best will see runs out to a trifle over £70 for each machine. In 1906, 484 machines were exported, and the Customs officers valued them for purposes of export at £32,318, which works out at a little less than £70.


Senator Trenwith - A natural consequence of the increased trade and cheaper production.


Senator CLEMONS - The export price given by Mr. McKay was under £70 for machines sent to the Argentine, where they were sold at just double that price, or £140 each. Mr. McKay might tell the Customs authorities that £70 is a fair price for his machine, but he cannot be accused of having ever sold, them to Australian farmers at that price.


Senator Trenwith - Wholesale dealing always carries with it lower prices than retail dealing. He never sold to an Australian farmer the number of machines he sent to the Argentine.


Senator CLEMONS - I am assuming that Mr. McKay must have given the Customs authorities £70 as the fair export price of his machine, and that is much lower than he has ever allowed Australian farmers to get his machines for.


Senator Trenwith - He has to add distributing cost.


Senator CLEMONS - Mr. McKaycan never be accused, to the best of my knowledge, of ever having sold one of his machines even at his factory in Melbourne for under £70. Seeing that Senator Playford has admitted that he did not pay any attention to' the report of the four free-trade members of the Commission, though they were numerically equal to those who framed the report to which the honorable senator did pay attention, I think I am justified in reading the conclusions to which they came, at least once, for the information of the Senate. They summarized them as follows : -

1.   That the facts do not justify the special prominence given to the subject of foreign competition in respect of stripper-harvesters, nor the alarmist statements made in reference thereto.

That paragraph is abundantly justified when we remember the agitation that was stirred up, especially in Melbourne, with respect to stripper-harvesters, and that whilst the Tariff Commission was sitting, and before they had completed their report on stripper-harvesters, Mr. McKay, who had given evidence before the Commission, was actually engaged in intriguing - I think I am absolutely justified in using such a term - with the Minister of Trade and Customs for the purpose of securing a higher rate of duty, and, if he did not succeed in inducing the Minister to do that, he at least succeeded in inducing him to put forward, what I say, is an absolutely false and unwarrantable estimate of the cost of the imported machines in the country of origin.


Senator Trenwith - It was based upon the importers' invoices.


Senator CLEMONS - It was not based upon anything of the sort. That was denied absolutely and conclusively as the result of an inquiry instituted by the Canadian Government. The Canadian Department of Trade and Customs, at the request of some one in the Commonwealth, made special inquiry into that matter, and the finding of the inquiry was absolutely contradictory of the statement made by the Minister of Trade and Customs that £65 was the fair value of these machines in the country of origin.


Senator Trenwith - The point I urge is that that was the valuation according to their own invoice in Italy.


Senator CLEMONS - If Senator Trenwith is going to rely upon that--


Senator Trenwith - I do not rely upon it; I merely state a fact.

SenatorCLEMONS.- The less that Senator Trenwith or any one else says about the incident in Italy the better for the reputation of Mr. McKay.


Senator Trenwith - I am not saying that it was proved.


Senator CLEMONS -All that was proved was that the whole thing was so ridiculous and contemptible that I venture to say that neither Mr. McKay nor any one else will attempt to defend it any longer. Senator Trenwith referred to a statement made in private correspondence from Italy, and pits it against the statement of the Canadian Government, made after inquiry.


Senator Trenwith - I do not. I do not say that it was correct, but I say that it was the basis of the estimate of value.


Senator CLEMONS - I will leave it to the Senate to say to which statement the greater importance should be attached. I do not think that honorable senators will attach any importance to the Italian correspondence. The second conclusion of the free-trade members of the Tariff Commission reads -

That the introduction of stripper-harvesters during the last four years from Canada and America has had the effect of increasing the demand, stimulating the skill and enterprise of Australian manufacturers, and supplementing rather than supplanting local production.

Every word of that paragraph has been conclusively justified by the evidence. We have proved up to the hilt that the demand has increased ; the competition, such as it was, representing only one-third of the total output, certainly had the effect of stimulating the skill and enterprise of the Australian manufacturers; and I say further that, instead of supplanting local production, the figures I have given prove that the most the importations did was to supplement it.

Sitting suspended from 6.30 to 7.45p.m.


Senator CLEMONS - The third finding of the four free-trade members of the Commission is -

That the manufacture within the Commonwealth is rapidly expanding, and that in addition to supplying the larger part of local requirements a considerable export trade to neutral markets is being profitably carried on.

With the absolute truth of that statement no honorable senator can quarrel. If is perfectly true, as the figures show, that the manufacture of stripper-harvesters within the Commonwealth has been, . and is, rapidly expanding. It is equally true that, in addition to supplying the larger part of the local requirements, a very considerable export trade to neutral markets is being profitably carried on. The fourth finding refers to the export trade, which I have dealt with. The fifth finding is -

That the conditions of competition in Australia do not necessitate any increased protection to local makers, who are at no disadvantage in regard to cost of manufacture except when their equipments and methods are inadequate.

I haw pointed out and given figures to show that the rate of wages in Australia is a little less than that which is paid in the competing countries, but in order that I may not be accused of not stating the case fairly or fully, I shall admit at once that to a large extent that statement is qualified, though, in my opinion, it is in no way materially altered by the fact that the method of production in Canada and the United States is not precisely the one which is adopted here. I refer, of course, to the number of hours worked, especially to the different system in vogue in those countries of adopting piece-work more than is done here. The subject of piece-work and payment by hours has come before the Commission in connexion with many industries, and, from the evidence given by many manufacturers in more than one industry, I am forced to the conclusion that they are inclined to think that they would get better results if piece-work were more largely adopted here. I am also forced to this inevitable conclusion, that employes have admitted freely and without pressure that it has one tendency, and that is to give higher wages to the better man. In the opinion of some persons it may, though I do not admit it does, press harshly upon men of inferior ability ; but, even if it does, it certainly has this, recommendation in the opinion of workmen who gave evidence, that it gives to a better man an opportunity' of deriving an increased benefit from his additional skill.


Senator Findley - Piece-work is not applicable to all trades.


Senator CLEMONS - I admit that in some cases it would be difficult to apply piece-work satisfactorily. I believe that in many industries it would result in increased profits and benefits to the manufacturers, and increased remuneration to many more able and efficient workmen. The sixth finding is as follows : -

That the evidence does not justify the fears expressed that the local industry will be seriously injured by outside competition unless the present Customs duty is increased. On the contrary, the evidence is clear that Australian manufacturers, by accepting reduced, but still ample, profits, could secure under the present Tariff a virtual monopoly of the whole trade, the price of the machine to users being much too great in relation to the manufacturing cost.

I should like to hear any honorable senator find fault with a single part of that conclusion. There is no evidence at present to justify any fear that the industry is likely to be seriously injured by outside competition. I admit that statements have been made to the effect that in the opinion of manufacturers, the industry is threatened, but so far there is absolutely no evidence which in the least degree justifies the expression of opinion that it is being crushed or injured in any way. I admit that a certain number of stripper-harvesters is imported, but I venture to say that no one in Australia will contend that mere importation to that limited extent constitutes a menace and danger to the Australian industry. I do not believe that the most ardent protectionist would say that. The Bill is nothing else but the clearest possible recognition on the part of the Ministry that hitherto the profits of the manufacturers have been too high, or in the words of the finding; -

Australian manufacturers by accepting reduced, but still ample, profits, could secure a virtual monopoly of the whole trade.

The reason for that finding is that if the manufacturers did accept reduced profits, which, of course, would mean a reduced price for the stripper-harvester so far as we could possibly ascertain by the evidence, importers, in order to compete, would have to effect some large economy, either in the United States or Canada, in the cost of production, or in Australia in the cost of distribution, which, as we all know, is decidedly less than that which is now borne by Australian manufacturers. The seventh finding of the four free-trade members of the Commission is -

That the request for an increased duty is not justified by the evidence, and that any increase, if made, would be prejudicial to agricultural interests, the continued development of which is necessary to the stripper-harvester industry.

There is only one answer to that conclusion, and that is that if we give to the local manufacturers the entire control of a commodity, the price will be reduced. That is an old protectionist argument, with which I do not intend to deal now. If there is any honorable senator who is so satisfied as to allow the Australian manufacturers to have an entire monopoly, feeling sure that, at the same time, the consumer would not be injured by the levying of increased prices, my answer is, " Do away with, any pretence of allowing the imported article to come in. Do not fool with the question of levying a duty of £10, or £15, or £20, but. if you have other legislation which would bring about the desired effect, do away at once with any moderate protection, and boldly say that the article can be made here, and that it would be for the benefit of producers, consumers, and workmen in that industry, as well as associated industries, to prohibit importation by one short but effective clause." There is no other answer to that position.


Senator McGregor - The honorable senator would not support that proposal.


Senator CLEMONS - I do not wish to be forced reluctantly to make a declaration about my future policv on fiscal questions ; but the time seems to me to be rapidly approaching when I and other men who sincerely believe in the policy of free-trade will be forced to accept, as the lesser of two evils, a policy of prohibition, trusting, to the experience of Australia to prove that it is a bad one.


Senator Trenwith - Let us speed the day.


Senator CLEMONS - I wish the honorable senator would speed the day. I am rapidly becoming tired of the demand for increased protection, because I recognise, as I believe the honorable senator recognises, that, if an increased duty, whatever it may be, be imposed we shall not have reached finality on this question, and that the day will come sooner or later when we shall be told by Mr. McKay, or his legitimate successor, that the duty of or £12, as the case may be, is inadequate to protect the local manufacturers against an inroad of importations, and we shall then be asked to raise the duty to £20, or some other amount, per machine. I would sooner once, and for all, face the question of complete prohibition of importation, leaving the Commonwealth to make its financial arrangements to suit, and affording to the electors an opportunity to judge, and judge decisively and finally, whether that is or is not a good doctrine for Australia.


Senator Dobson - That is a bold policy.


Senator CLEMONS - I am not pretending that I approve of it, but I conceive it quite possible that, as the years roll by, many of us may ask for a definite policy of that sort, so that we shall not be called upon any longer to tamper with the question by fixing a duty in one Parliament, and raising it in the next. We have no guarantee that whatever protection is now given to stripper-harvesters, Parliament will not be asked to reconsider it. The final recommendation of the four freetrade members of the Commission reads as follows : -

We recommend that stripper-harvesters be classed and treated as other agricultural, horticultural, and viticultural implements and machinery, n.e.i., and no change be made in the existing form or rate of duty.

In concluding my references to stripperharvesters, I desire to remind honorable senators of a fact which, possibly, they have forgotten, and that is that the demand for increased duties in connexion with this industry, as well as others which came before the Commission, arose largely from the cry, especially in Victoria - it was scarcely heard anywhere else in the Commonwealth; no echo of it, I believe, reached other States - that a great many of our industries were languishing, being starved, dying. Is there any man in the full possession of his senses who can apply any one of those epithets with any accuracy to the stripper-harvester industry? Can it be said by the wildest protectionist enthusiast that- there is any languishing about that industry, that it is starving, that it is dying? The facts give the absolute lie to such a statement. The facts, which are incontrovertible, and based on official statistics, prove conclusively that since Federation it has made enormous strides. The demand for increased duties, therefore, cannot be defended on the ground that it is a strangled industry. I do not think that that cry could be raised with regard to another industry with which we have dealt this session. If we trace the effect to the cause which is represented by the Tariff, we find that the stripper-harvester industry has made vast progress ' during its operation. What is the cause of the demand for an increased dutv ?

It is not because the industry is dying or languishing. What is the reason? I do not know, unless it is the tremendous personal power of the chief man in the industry in Australia. What do we find from the figures? We find, taking the last year again, that the total number of machines imported was 1,730. The total number manufactured and sold by Mr. McKay's firm was 1,930. All the rest of the manufacturers in the Commonwealth, at least twenty -three in number, produced 1,840. What is, then, the position as we find it? That one firm in Australia dominates - I am not saying " domineers " - the whole position. Are we, with our eyes open, to increase the facilities for that firm to dominate the position ?


Senator Col Neild - Who are the shareholders in the company ? That is what we want to know.


Senator Trenwith - I think it is owned by Mr. McKay's family.


Senator CLEMONS - I know nothing about the shareholders. I hope they are all Australians. I am glad to see any Australian industry flourishing. I am glad to see this industry flourishing. But there will be a danger, if Ave increase this duty, of producing not merely a flourishing industry, but an industry that may become a menace to the country. With regard to the Bill itself, the Government has recognised the desirableness of reducing prices to the consumers, and has therefore made an effort to make the operation of the duty conditional upon the price charged. I notice that Senator Trenwith who. at any rate, takes a keen interest in this matter of stripperharvesters - I hope I can say that without any kind of offence - has given notice of an amendment on this very question. His amendment suggests the danger to which I have alluded. On the one hand, Senator Trenwith has circulated an amendment which will operate as a safeguard to the manufacturer in enabling him to increase his price if an increase in the cost of his raw material takes place; but what safeguard has the consumer under this Bill ? The clause to which I refer is drafted on the assumption, first of all, that the cost price of these machines is going to remain fixed and permanent -for a definite number of years. It is also based on the assumption that the progress of the industry has reached its limit, and that the manufacturer's cost is not going to be decreased.

What guarantee have Ave that in Canada, in America, or in the Commonwealth of Australia, the cost of manufacturing these machines will not Se materially reduced in the future?


Senator Trenwith - 1 think it will be.


Senator CLEMONS - If it is, what guarantee have Ave that the consumer will get a corresponding reduction in price?


Senator Trenwith - None at all as to this Bill.


Senator CLEMONS - I am glad that Senator Trenwith recognises that; but, at any rate, he is taking steps to secure that if the converse happens, for any of the various reasons that may operate upon the industry, the manufacturer shall be indemnified against any consequent loss. It is time some one spoke for the consumer ; and I say that clause 4, read in conjunction

Avith the schedule, offers no guarantee whatever to the consumer of what ought to be guaranteed to him, that if, through the advance of scientific methods of carrying on the industry, and consequent upon the activity and ability of the producers, a reduction in the cost of manufacture is brought about, the consumer will get that benefit which he has always been entitled to in every country in the world. This Bill denies that advantage to him.


Senator Trenwith - The Bill does not provide it for him, but it does not deny it.


Senator Playford - Competition amongst the various manufacturers will provide for that.


Senator CLEMONS - Has not the consumer the benefit of that competition Avithout the Bill?


Senator Col Neild - This is a trust, if you like !


Senator CLEMONS - I quite agree with Senator Neild, and thank him for the suggestion. I read to-day an agreement which represented the transaction of a most vicious trust or combine.


Senator Col Neild - The most complete one Ave have ever had in Australia !







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