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THE PARLIAMENT OF THE OF AUSTH1\LLA.
REPOiiT OF TRtr.
ROYAL COMMISSION OX THR
SUGAR TOGKTHF.R WITH
MINUTES OF EVIDENCE AXD APPESDlCES
Pruented by Command; ordered to be printed, 4th December,
Printed and Published for the o f ,;,c r.f .. b -- A L BF.RT J. 'fuu F.TT,
Acting Governmen t P rinte r fo r t he S tale vf \ 'ict oria .
IJo. 59.-F.l388I.
1035
Royal Commission-Letters Patent (3)
Report-Introduction
Assumptions
Summary of Report
CONTENTS.
Part I.-Brief Summary of Existing Conditions
"
11.-Bounty, Excise, and Import Duty
, 111.-Growers, Millers, Refiners
"
"
"
IV.-Wage Earners
V.-Allied Industries
VI.-Beet Sugar â¢â¢ Dissentient Memorandum
Minutes of Evidence â¢.
Appendices to the Evidence
Index to Witneasea
Index to Evidence .. ..
â¢â¢
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GREETING:
lV
COMMONWEALTH OF AUSTRALIA.
GEORGE THE FIFTH, by tlte Grace of God of the Un£ted Kingdom of Great Britai-n and Ireland, and of the British Dom£mMui beyond the SerJs, King, Defender of the Faith, Emperor of India:
TO Our trusty and well-beloved Hrs HoNOR Sm JoHN HANNAH GoRDON, K.C.M.G., THE HoxoRABLE ALBERT HINCHCLH'FE, M.L.C., RoBERT MuRRAY McCHF.YXE AxoERSON, Esquire, 1IARTIN RowLAND SHANNON, Esquire, THO:\IAS WILLIAM CRAWFORD, Bsqui1·e.
KNOW YE thol. We do, by these Ot" Letters Patent, appoint you to be to inquire into antl
report upon the Sugar bulttstry in Australia, and more particularly in relation to :-(a) of sugar cane and beet,·
(b) Manufacturers of·raw and t"efined sugar; (c) Workers employed in the SttgM Industry; (d) Purchasers and Consumers of sugar; and (e) Costs, profits, wages, and prices :
AND WE appoint you the said Sm JoHN HANNAH GoRDON to be the Cha£rman of the said Commi-8-llioners:
AND WE direct that at any meeting of the said Commissioners three Commissioners shall be sufficient to const·itute a qum·um and may proceed uith the 1'nquiry 1tnde·r t.he.
AND further d?.'l'erl that 1·n the e1:cnt of the absence of the Chairman from an?/ meR11:ng of the said Commissioners, the Comtm'ssionns 1rrP.sent tnay appm'nt one of their number to act as Ch.airman during such absence:
A!\TD " ''"E dim;t thrd in the event of the t'Otes given on any at any meeting of the said
Commissioners being equal, the Chm:rman, if present, and if the Chairman is not present then the Commissioner appointed to act as Chairman in his absence, shall hatâ¢e a second or castt'ng t'Oie:
AND WE you v:ith as little delay as possible to report to Our Governor-General in and "rer Our sa1'cl Cmmnonwea:Uh the of your inqu.iries 1'nto the matters intntsted to you by the.se Our Letters Patent.
IN TESTIMONY WHEREOF llave caused these Our !.etters to be mwle l'atem ami the Seal of Our said Commomrealtlt to be thereunto affixed.
WITNESS Our trusty mul well-belot·ecl 'l'HOliAS, BARON Dâ¢:NMAN, " Member of Ihs Majest.y's Most Ilmwrahle Privy Council, Kn·ighl lfrand Oross of the Most Distinguished Order of St. Michael and St. George, Knight Commander (SEAL OF THE COMMON- of the Royal Victorian Order, Governor-Getteral and Commander-in-Chief
WEALTH OF AusTRALIA.) of the Commonwealth of AustraUa, this tuenty-fourth if,p.y of October, in the year of Our Lord One thousand nine hundred and eleven, and in the second year of Our Reign.
By His Excellency's Command, (Signed) JOSIAH THOMAS.
(Signed) DENMAN, Governor-General.
Entered on Record by me in of Paunts No. 4, pU{Je 426, this twenty-fourth day of October, OM I housantl nine hundred and eleven. (Signed) ATLEE HUNT.
GREETING:
v
COMMONWEALTH OF AUSTRALIA.
GEORGE THE FIFTH, by the GrMc of God of the United Kingdom of Great Britain and Ireland, and of the British Dominions beyond the Seas Kin. '] , Defender of the Faith, Emperor of India:
TO Our trusty and zt·ell-beloved His Hoxocn SIR .JoHx H.txxAH Ctonoox. K.C.)f.G., the HoNOl' RABLE .-hBERT HIXCHCLlH'E, ::\I.T..C' .. RonERT )!t:RRAY )!cCHEYNI! ANDERSOX, Esquire, RowLAXO Esquire, THOliAS
CRAWFORD, Esquire.
\VHEREAS by Letters Patent, is-9ued in Our name by Our Governor-General in rmrl over Ottr Cmnm-mwealth of Australia under the seal of Ottr said Comm.:m.wea!th, awl tla!Nltlu?. tuyenfy-fourth rfq.y of Ocl?[w, z:n the year of our Lord One thousand ni·ne hundrecl and elel'tm, lfe did nppoinl yun In l11⢠/â¢1 inquire inw and report upon th.e Sugar Industry in Austmli
AND WHEREAS since the date of the said Commission em Act entitled " An Act tu amend the Royal C?Jnm!'.ssicms Act 1902 " has been pa.Ysed into law, and it -is des irable tu i.ysue '' IU'!C Commission under a·nd by t·trtm; of the pou>ers contained in the " Royal Commissions Act 1902 " a.s amended by t.hnt Act for the tnenttoned in firstly recited Commission and in th£s Commission:
NO'V THEREFOHE WE do, by these Our Patent, issued in Our na-me by Uu r (.;o, ·enwr-Gen13ral of Our Com.nwnwealth of Austmlia, 11Jith th.P. oj Our Ferlera.l CO!tncil , and z :n pursuance of the Constttution of Our Commonwealth of Austmlia, th e "' Hoya.T ('om-missions Arl 1!!02- 1912," and of all Ofher powers him theret.o en.abling, appoint you to be and require awl rt-uthori.sP. you to inqttire
tnt<' and report upon the Sugar lndu.stry in Au.strali fl. and more p4rticulnrl!J in relation to :-(ct) Growers of sugar cane and beet;
(b) Manufacturers of raw and refined sugar; (c) Workers employed in the Sugar Indust·ry; (d) Purcha.sers and Consumers of suga-r; (e) Costs, profits, wages, and prices; (/) The Trade antl Commerce in Sugctr with other ; (g) The operation of the existi1U} laws of the Cmmnonwealth nffecting the Suyur Industry,· rmd
(h) A.ny Commonwealth legislat?·on rela.ting to the Sugar Industry which the thinu expedient:
AND \\-'E appoint ;1/0U the said Srn JoHN" HASXAH GoRDO X to be the Chaimmn of the .said AND WE direct that at any meeting of the sa,i d. three Commiss£on.ers shaH be sufficient to constitute a quorum and may proceed 1.oith the -inqnir;q under these Our Patent , notwithstanding the absence of the other Commissioners : AND WE further direct that in the event of the absence of the Ch.m"rman from any 111<'-eting of the said Commissioners, the Commissioners present may appoint one of their number to act as Chairman during such absence:
AND WE further direct that in the event of the votes git,en on any question at any meeting of the said Commissioners bei·ng equal, the Chairman, ij-present, and if the Chairman is not present then the appointed to act a.s Chairman in his absence, shall have a second or vote: AND WE further d1:rect that the inquiry to be ·made by you in pursuance of ihis Comm ission sh.all be deemed to be in continuance of the inquiry i·ntrusted to you by the firstl? J mul any evidence taken by you in pursuance of that Commission shall (or the of thts be b!j m
the sa-me manner and to the same extent a.s if that emdJJnce had been tal'en m pnrsurmce of tlus Commtsswn : AND WE REQUIRE you with a.s liUle delay as possible to report to Uur Uo lle m odJenera.l in and over Our said Commonwealth the result of your inquiries into the matters intrusted to yott by these Our Letters Patent.
IN TESTIMONY WHEREOF WE have caused these Onr Letters to be made Paten/ and the Seal of Our said Commonweatlh to be thereunto affixed. WITNESS Our tru.sty ancl u·ell-11elored 'J'HO.\IAS , H.\KOX n .lfeml1er of His Ma-jesty's Most CtJtmcil: ':fthe .llost
lJistingui.shed Order of Snwt .ltl!,chctel A (.
of the Royal Vidorinn Order: "!1d. of
the CommonwP-aUh oj th ts Jour/h. rl'':l of .'ieplembcr. 111 the year of our Lord One thousand nine ltunclred and tu·elce. in the lhirtl yecu of Our
(SEAL OF THE COMMONWEALTH OJ' AUSTRALIA.)
reign.
By His Excellency's Command,
(Signed) ANDREW FISHER.
(S iqned) lJH.V .lf A..V. Go ven wr-Gcnera!.
Entered on record by 1ne in Reyistet" ni Pcll ents .Yo. :i, pnqe 6ii, this fourth da.'J of Se,Jteutber. thousand nine hundred and twelve. J/. L. SIIEPIIEIW.
GREETL."i'G:
Vl
COMMONWEALTH OF AUSTRALIA.
GEORGE THE FIFTH, by the (}race of God of the United Kingdom of rJreat Britain and Ireland and of the British Dominions beyond the Seas King, Defender of tlze Faith., Emperor of India:
To Our trusty and 1oell-beloved WILLIAM .JETHRO BROWN, Esquire, LL.D., Litt. D.:
WHEREAS by Letters Patent, issued in Our name by Ou·r Governm-General in and over Our Commonwealth of Australia acting with the advice of Our Federal Executive Council, and dated the fourth day of September, in the year of Our Lord One thousand nine hundred and twelve, We did appoint the HoNORABLE Sm JoHN HANNAH GoRDON, the HoNOURABLE ALBERT HINCHCLIFFE, M.L.C., RoBERT !luRRAY
ANDERSON, Esquire, MARTIN RowLAND SHANNON, Esquire, and THOMAS WILLIAlll CRAWFORD, Esquire, to be Commissioners, and did require and author·ize them to inquire into and report upon the Sugar Indust1"1J in A ustraUa, and more particularly in relation to :-(a) Growers of sugar cane and beet ;
(b) Manufacturers of raw and refined sugar;
(c) WO'rkers employed in tile Sugar Industry;
(d) Purchasers and Consumers of sugar ; (e) Costs, profits, wages, and prices;
(f) The Traik and Commerce in sugar with otlter Countries;
(g) The operation of the existing laws of the Cmnmonwealth affecting the .Sugar bulustry ; and
(h) Any Commonwealth Le.g,:Slation relating to the Su,gar lnrf.ttstry wki.oh IM Commisst{ln thinks expedient:
AND WE did appoint the said SIR JoHN HANNAH GoRDON to be Chairman of the said Commissioners:
AND WHEREAS the said SIR JoHN H.u.TNAH GoRDON is unable, by reason of iU-lzealth, to contz:nue to act as O'ne of the said Commissioners ;
NOW THEREFORE WE ilo, by these Our Letters Patent, issued in Our name by Our Go'/Jernor-Getteral of Our CO'tnmonwealth of Australia, acting with the adt-ice of Our Federal Executive Council, and in pursuance of the of Our Commonwealth of Australia, the "Royal Commissions Act 1902-1912," and of all other powers him thereunto enabling, appoint you, as from the ninth day of Septemher instant to be one of the
Comrmssioners for the purposes of the saicl Letters Patent and to be the Chairman of the Comm·issione·rs c1ppointed by the said fi1'sl-me.ntwned Letters Patent in the place of Sm JoHN HANNAH GoRDON as fully and effectually to all intents and purposes as if you1' name had be.en inserted therein in the place of tkfll of SIR JoHN HANNAH GoRDON 111 herever in the said first-mentioned Letters Patent the twme of SrR JoHN HANNAH GoRDON appears :
AND WE DIRECT t1lat nothing in these Letters Patent shall affect anything done by the said SIR JoHN HANNAH GoRDON before the said ninth day of September instant :
(SEAL OF THE COMMONWEALTH OF AUSTRALIA.)
WITNE.S.S Our trusty and well-beloved THOMAS, BARON DENMAN, a Member of His Majesty's Most Honorable Privy Council, Knight rJrand Cross of the Most Distinguished Ortkr of Saint Michael and Saint George, Knight Commander of the Royal Victorian Order, Go'/Jernor-General and Commander
in-Chief of the Cotmnonwealth of Australia, this seventh day of Septembei, in the year of Our Lord One tkozwmd n,;ne hu,nirerl and twelve., anrl ,:n the th1:r,f year of rmr Reign.
(Signed) DENMAN,
Governor-General.
By His ExceUency's Command,
(Signed) ANDREW FISHER.
Entered on record by me in Register of Patents No. 5, paye 66, Pleventh day of September, One "wmand nine hundred and twelve. (.Signed) fl'l. L. SHEPHERD.
1041
REP 0 R T.
'I o His E.'l:cellenc!J the RrGHT HoNORABLE THOMAS, BARON DEXMAN, a Member of His Majes(IJ' s Most rlonomhle Privy Council, Knight · Gmnd Cross of the Most Distinguished 01·der of St. J.l1ichael and St. Gem·ge, Knight Commande7' of the Ro71al Victorian Orde1·,
Governm·- General and Commander-in- Chief cif the Commonu:ealtl' of Australia.
MAY IT PLEASE YouR ExcELLENCY-!. We, Your Commissioners, appointed by Letters Patent dated respectively the twenty-fourth day of October, 1911, the fourth day of September, 1912, and the seventh day of September, 1912, to inquire into and report upon the Sugar Industry in Australia, and more particularly in relation to- .
(a) Growers of sugar-cane and beet ; (h) Manufacturers of raw and refined sugar ;
(c) Workers employed in the Sugar Industry ; (d) Purchasers and consumers of sugar ; (e) Costs, profits, wages, and prices ; (f) The Trade and Commerce in sugar with other countries ;
(g) The operation of the existing laws of the Comrnmonwealth affecting the Sugar Industry ; and (h) Any Commonwealth Legislation relating to the Sugar Industry which the Commission thinks expedient ; have the honour to report as follows :-
2. At the outset we wish to place on record our deep regret that Sir John Gordon, who had conducted the proceedings of the Commission through the greater part of its work in the collection of evidence, should have been impelled through ill-health to resign the position which he had occupied with so much distinction, nnd
with so great an advantage to the Commonwealth. While he is in no way respon sible for the Report which we now submit, we are all conscious of the debt we owe to him for his efficient and exhaustive investio-ations ; and we are also conscious tltat our work has been lightened more than we ca;: say by the many luminous suggestions of
which we had the advantage while he was nssociated with the work of the Commission.
3. Your Commissioners entered upon theit· inquiry on the 25th Octo her, 1911. They have held 139 sittings, and have taken evid('nce from 4 4 7 persons interested in many various ways in the Sugar Industry.
4. In the course of their investigations Your Commi ssioners all the sugar-producing centres of.Austrnlia,. and hy P.uhl.i c advc.rtisenH·?t nnd tl!e circulation of specimen questions relatmg to the mdustry mv1t cd evu.Ien ce from nll mterested.
5. r our Commissioners nlso visited the capital cities of ew South ·wales, Victoria, Queensland, South A ustralin, and Tasmania, and publicly invited evidence in those centres. 6. Where it npptâ¢ared that the evidence of particular individuals was essential to the inquiry, steps were taken to their attendance.
...
Vlll
7. vVht·never practicable opportunities were taken of inspecting sugar mills a.nd retillf'l'ies, :md observing ti1e a.ctnnl eouditions under which the employes in the industry worked, and the provision made for their sustenance and accommodation.
8. Adv.antnge was tnken of the of Mr. J. C. Penny to Hawaii to
obtain ti·om l1im a report on the conditions of tl1e Sugar Industry generally in Hawaii. His report is given in an Appendix to the Evidence ; and we venture to believe that it will he tound to he of great interest and value.
9. We regret that n lengthy delay in furnishing this Report has been
oceasioned by litigation, prolonged over many months, and arising out of
our endeavour to secure evidence fi·om representatives of the Colonial Sugar Hefining CN11pnuy Limited. After the litigation just referred to had reached its first stage, when tl!e decision of the .Magistrate was given in favour
of the Commis:-;ion, the Corupa11y aJ.>plied to the High Court and obtained an interim injunction prohibiting Your Commissionel'S from requiring the Company to answer 1'111," questions or to produce any documents which were relevaut only to cert.aiu :;peeified suhjeets. As a result of the gmnting of the injunction Your Colllmissitmens were placed in a position very prejudit·ial, in their opinion, to the etl-ectiYe discharge of the duties imposed upou them hy Your Letters l.Jatent. If a question were put to the Company and an answer were refused on the plea, or the pretext, that it c:uue within the prohibition of the injunction, Your Commissioners were uuahle to reyuirc an answer witl10ut incurring the risk of
proceedings for C'nntempt of Court, nnd tl1e delays incidental thereto. Of the legal aspect of the- Court's action we nre, of couJ·se, in no position to express an
opinion. We desire, however, to state om· convictiou that the issuing of such injunctions under similar circumstanl·es must seriously impair the utility of Commissions of Inquiry as a means of investigating the costs of production and manufacture iu tlw t:ase of wealthy eorporations. In the present inf:tmwe, the situation was complit:ated by the facti' that the Commission had :llre:uly been long delayed hy the litigation previously referreu to, and thnt the conditious of the Australian Sugm· Industry were sueh :ts to render it imperative that tl1e Commission present its He port at tl1e earli<·st possible moment.
Under all the circmustauces of the case, the Commission dE:'emed it advisable to oht:lin such inf(>rmntion ns the Colll})a.ny were prepared to give. In justice to the Company we must add that in thei1· stat.Pment, returns and answers to questions, they gave us a grent deal of usef\tl informntion, but. their reticence on some
more especially as to the detail:-; of tlwi1· bnlan<"e-sheets, has prevented us fi·01n making our Report as complete in some important respects as we desired to make it.
10. We haYc to report that one of Your Commissiouers, Mr. Thoma:,; Wi11iam Crawford, whose a.id has been of gTeat assistance to us in the conuuct of our investigations and in tlw lllHIIY formal and informal discussions arising out of those investigatious, has preferred to express his opinions and conclusious independently and in a dissentient .Memorandum which is annexed to this Report.
. 11. We desire also to sny that, in the conduct of our inwstigations, and in the fr:amng of the present report, we have assumed :-(1) A loyal adltcrene<⢠to the policy of a White Australia. (2) The national importance, from the point of view of defence, of
efft'cting the settlemeut and cultivation of the tropical and semi tropical areas of the Australian continent.
12. Hesponsible persons will scn.rcely impugn the validity of these assumptions, differences of opinion may exist as to the consequences which they
or as to the means for giving practical effect to them. Their acceptance
no more than a due eousciousness of the progress of Australia towards
nat!onhood-the reeognition of tl1e ideal of a Commonwealth which be coherent, and politically self supnorting. While this ideal has been held in
times past hy an isolated few, the of recent event6, both within Australia and
IX
its borders, has given to the ideal n new Yalidity :md and a
VIrtually universal acceptance. Uutortunatt·ly. it is not Pasy to lldeqnately
to what extent our national problems, sociaL L't'Onomie, :\lul politi('al, eall in way or other for re-statement in the light of tlte to whieh we haH referred.
Many of the ideas which ·are still current, and not a little of the legi!'lntion which survives, have become antiquated thro.uglt of adjustment- to the new
responsibilities of Australian n:ltional life.
13. The problem of tlu:> relation of puhlic eontrol to the Sugar Industry affords a striking illustration of the truth of the statements 'Vhile
the wide divergencies of opinion which exi,.;t to-da.'· with respect to thnt p1·oblem are often the result of a mere ignorance of esstâ¢ntial data, they nre ,.;tiil more fre4uently the result of a failure to outgrow ideas, opinions or polif'ies wltidl lwlong to the limited outlook of pre-Fedeml times. The prohlem of th(· Sugnr ludustry to-day is
uot, save in subordinate a problem of industry, of wealth. or of production ;
it is primarily and essentially n problem of ,.;ett.lement and defenee. ;\ u· nation cau afford to regard lightly the development of iti' industries, the progress of its wealth, or the economic efficiency of its productivt⢠macltinl:'r_v. But. important as these things undoubtedly they as 1·egards the Sugar lndnstry. on an inferior
plane. The Common,vealth to-day is brought face to f:lCe with one of the gravest problems which has ever taxed the ingenuity of statesmansltip-that of the settlement of tropical and semi-tropical areas by n white popnlatiou ]i,·iug under stnndard conditions of life. And intimately associated with this prohlem i,., tlte question of
national defence. If the ideal of a Whitt.· .\ nstrftlift if' to bee< me au euduring
actuality, some means nm!'t be distâ¢ovPr<â¢d of estahli:-:hing industries witltin the tropical regions. So long ns these regions are urwecnpied. they nre an invitation tn invasion, as well a.s a source of strntegi<· Wt'a kill'ss. Grnnted so mu('h , it follows that the supreme justification for the protet't i"n ,,f the Sugn r Industry is the part that the industry has contributed, and will, as w<· hop<·, <·ontiune to eoutrihute, to tlte problems
of the settlement and defeuec of the nortluâ¢nt portion of tlte ..c\u,.;traliau eontinent. The recognitiou of the nature of this supt't'llll' is the first I'OJJclition of a
sound public policy in ⢷elation to the Sug-ar Industry. Helatin·ly to it , all othe1· issues are of minor importance.
14. Iu presenting this report we haYe tollowefl till' onlet· iudil'nted hv following syllabus:-
p AUT I.--BR£EF OF ExrSTl;\u DlTI
1. Phvsical arid climntic conditions (i) The soil and climate of the littoml
(a) Relation of sugar areas to Australian de1uand (b) Other tropical produch ...
(2) The Sugar Iudustry ami a Wltitc Australia (a) Suitability of sugar eulture !or ...
(b) Suitahility of httora I for wIt 1te )'.l'tt il·mtâ¢nt
2. Economic Structure (1) Capital (a) Growers (b) Millers
(c) Refiners
(2) Labour
3. Public aid and control (1) The Commonwealth (2) State of
4. The costs of the Sugar Industry
I, age
X Ill
xiii X Ill
Xlll
XIV
XIV
XV
xvi· XVl
XVl xvn XVlll
XVIII
XIX
XIX
XIX
XX
5. The importance of the Sugar Industry (1) Industrial (2) Social (3) Political
11. Que:-5tion of export trade
7. Some causes of discontent (I) The Net Protection
...
...
Page. XX XX XXI
XXI
XXII.
XXII
xxii
(2) Virtual abeyance of competition as a factor in the determina-tion of prices (3) Labour conditions .â¢â¢ (4) The system of Commonwealth contml ( 5) Consumers â¢.â¢
R. Conflict of interests .... ·
PART H.--BouNTY, ExcisE AND IMPORT DuTY.
1. Net protection to Sugar Industry 2. Purposes served by System of Bounty and Excise 3. Diminution in value of such system ,i. Other considerations suggesting abolition of system ;l. Statemeut of Cairns cane-growers ·
6. Altematives to present system. 7. Conclusion 8. Effect of abolition of Bounty and Excise upon net protection 9. Objections to increased import duty-
Burden to consumers .â¢â¢
1 0. Cost of " White Australia '' policy ...
11. Indirect consequences of unnecessarily high duties 19. Interests of allied industries ...
13. Difficulty of reduction of duties 14. Present high price of sugar Evidence suggesting present net protection adequate .. . 15. Evidence favouring increased net protection ... .. .
16. Conclusion as to import duty, assuming it to be fixed at a figure ... ... ... ... ...
definite
XXll xxn .. xxu xxiii
XXUI
XXIV XXIV
XXIV XXV
XXVI
xxvii XXV Ill
xxvm XXVlll xxvm XXIX
XXIX XXX XXX XXX
XXX XXXI
xxxn XXXlll 17. Fluctuations in foreign market prices 18. Consequences of fluctuations of foreign prices from points of view of the consumer aud the protected industry 1!). Conclusion 20. Objections to fluctuating duty considered
21. Method of fixing fluctuating duty :?2. Duty on raw and refined Sug::n· 23. Import duty on .Molasses ... 24. Duty on Sugar Machinery 25. Duty on lleet Sugar 2G. The Brussels Convention 2 7. Hecommemla tions
I'AHT TII.--GJWWEHS, MH.LEHS, HEFINERS.
J. Tlw prohlem of ensuri11g· eyuitable distrihution of profit.s
XXXlll
XXXlll XXXIV XXXIV
XXXV XXXVI
XXXVI
XXXVI
XXXVI
XXXVI
2. Distribution mainly dependent on pric£>s. Factors m ... XXXVIII
price
determination
3. These f.·wtors not reasonahly eftcctive in Austmlian Sugar ,l_ Refined Sugar ... .. . .. . ... . .
5 Haw Sugar
Cane-
i.
8. !J.
10.
Agt·cements between Mills as to prices nnd supplies Position of non-shareholding growers ... Grnwers not in a position to refuse supplies EvidencJ of Mr. Knox . . . . .. ...
â¢â¢â¢ XXXVlll
Industry xxxviii ⢠â¢â¢ xxxvm XXXIX
XXXIX XXXIX xi
xli xli
11.
12. 13. 14. 15. 16. 17.
18. 19. 20. 21.
22. 23. 24. 25.
26. 27. 28.
31). 31. 32.
33. 34. 35. 36.
37. 38. 311.
\ 40.
41.
1.
2. 3. 4. 5.
6. 7. 8.
!I.
10. 11. ] 2.
13. 14. Hi. 17.
18. 19. 20. 22.
24. 25. 26. 27.
28.
. Xl
Conclusion as to operation of competition in Sugar Industry as a factor in price determination .â¢.
Actual distribution of profits among of the industry
Colonial Sugar Hefining Co. Ltd.- .. . . .. ... .. .
Difficulties of exnmining into profits of Balance-sheets of, and supplementarv evidence relating to Summnry of position ... .. . .. .
Refiners and millers geuerally Conclusion as to refining and milliug profits Profits of g-rowers .. . .. .
of the growers
Suggested remedies--Revival of competition Nationalization of the refining industry Public competition and refining
Limitation of refining and milling profits Puhlic control of prices ...
Disadvantages of existing sliding scales of prices Objections to public control of prices ...
Proposal snid to be revolutiona1·y ... 4 Proposal said to he impossible No need for special legislation in Sugar Industry Mills may refuse to buy ; nnd Central Mills are under au obliga
tion to Queensland Government Production of a surplus Means of giving effect to policy Machinery should be Federal
Constitutional aspect of question The determination of price of raw sugar The determinati<;>n of price of cane Scheme suggested relative to Advantages of scheme â¢â¢â¢
Hecomnwndations ...
PART IV.-\VAGE EARNEHS
Importance of the worker Suitahility of white labour ... Medical testimonv Evidence of othe.; witnesses Remuneration of labour
National aspirations ...
Living wage an accepted po!icy . ... .
"Workers should share benefits ot protection Conditions of Northern Australia National importance of settlement ... Necessity for permanent ...
Encour.:wemeut uf other tropteal products ... Necessity legislation for the protection of Ia hour Helations of Colonial Sugat· Refining Company to Ia hom· Disach·antages of Sugar workers ...
LalJour in the Sugar Industry generally \Vages below a reasonable standard .. . The livin(,. wage... ... .. .
Cane-fiel(ls : Position of the cane-cutter 'Vao·es of field hnnds .. . ⢠.. .. .
for time lost through wet wcatl1er
Raw Suo-ar ).fills: Wages paid in .. . .. .
of recent strike-wages withheld .. .
.Mr. Knox's evidence in regard to wages withheld Mill nutnager's e\·idence on same snhject ...
xlii xlii xlii xlii xliii xliii xliv
xlv xlv x1vi xlvi
xlvi xlvi xlvii xlviii xlviii xlviii
xlix xlix x]ix 1i
li
Iii
Iii
liii liii }iii I iii
liv liv lv
lvi lvi lvi I vi
lvi I vi lvi I vi lvii
lvii !vii I vii !vii I viii h·iii I viii
lix lix lix lix
lx lx lx lx
Ix
xii
0 vertime 'Vages nnd eonditious in tl1e Refineries Improvement of conditions essentiai Living wage esseutia!
Abolition of Bountv sn;tem Alternative State assistance to improve ln.bour conditions Recreation
29. 30. 31. 32. 33. 34. 35. 36. 37.
38. 39. -!0. 41.
Drawbacks of rural lite ; some t·emedies sug·gested Savings Banks ... .. . . .â¢
.Mainteuance of effieiencv of the worker Profit sharino· ⢠l:l Reconlutendations
PAH'l' V.--ALL!ED INDUSTRIES.
1. Fnumer:ttion 2. Primrl .f u:ie case f(n· duty-h·<·e ...
3. Per Coutm-(1) Dauger of surplus of Australian procuced (2) Allied industries generally already have duly-free sugar for export purposes ...
(:1) They are proteeted by Tariff' on local market 4. Jam industry calls for special consideration 5. Jaw fmit-growers speeia11y concel'lled 6. Their grievances, rea.! o1· all<â¢ged, lnrgely due to other c:mstâ¢s
7. Resulting diffieulties in tile wny of recommending duty-free sugar 8. Difficulties of di:scrintiua.tion 9. The necessity for duty-fi·ee sugar uot proved at JH'esent price of jams 10. In any case that priee could he ra.ised .
11. Danger of collateral competition ....
12. Possibility of diminution of volume of fi·uit-growing indu:-;try con sidered 13. General summary of position 14. Recommendations
PART VI.--BI<:ET SuGAR.
1. Possibility of extension of beet suga1· industry, and question of whether such exteusion would he prejudicial to national interests 2. Idea of exnort trade illusory 3. Assumption that cane wiil always eiiJOY an economic superiority
over beet 4. State Governments and the beet sugnr industry 5. The possibili(lJ of a growing rivalry must be recognised â¢â¢â¢ 6. Relative claims of beet and cane sugar ... ⢠â¢.
7. Conclusion 8. A suggested remedy 9. Hecommendations ...
---------------------
I xi !xi I xi !xi I xi Ixii lxii lxiii lxiii lxiv lxiv lxiv lxiv
lxv )x,· lxv lxv
lxv lxv lxvi lxvi lxvi 1xvii lxvii lxvii I xviii
lxix
lxix lxix Jxx
lxxi lxxi
lxxi lxxii Jxxiii Jxxiii lxxiv ]xxiv lxxiv
1047
xiii
PART I.-BRIEF SUMMAHY OF PRESENT In the following summarywe confine our remarks to the caue sug·a1· industry. The heet sugar industry will receive :-;ep:trate consideration in Part YI. The main purposes of the present summary are to correct ::;ome of the illusions whil'h exist with respect to the cane sugar industry, to bring into clear relief the more elemental facts of the existing situation, and generally to pt·esent those facts in such a way as
will enable persons who may have little or no acquaintance with the industry, to realize the nature· of the problems with which we have to deal in other parts of the Report.
1. Physical and Climatic Conditions.
( 1) THE SorL AND CLIMATE OF THE QuEENSLAND LITTORAL.
The suitability of the soil and climate of the Queensland littoral for the purpose of sugar cultivation is sufficiently demonstrated by the progress of the Sugar Industry in the past. The occasional presence in ('ertain regions of floods and cyclones, the existence of pests, and the difficulty of clearing the land in the first instance, have undoubtedly retarded that 1wogress ; hut their influence has
probably been less deterrent than the inadequaey of the price paid for c:ute, the difficulty of securing efficient labour, aud changes iu legislation togetlwr with an uncertainty as to the course of future legislative poliey. Two matters appear to call for special mention :-
(a) While the a:rea, under, or admitting of immediate cultivntion, is sufficiently extensive to supply the Australian market, thf're are large areas still unreclaimed which are equally suitable for cane cultivation. These a1·eas will pro,·e more than equnl to meeting
the expanding Australian market for long periods to come, even a.ssuming the rate in tlu: increase of the populntion to lw greatly aceelerated.
(b) Large areas in tropical and semi-tropical Australia arc suitable for rice, coffe<·, cotton, rubber, &c·. The conelusion is sometimes expressed that such products are mon⢠entitled to prottâ¢dion than sug-ar. \Ve do not think tltl' condu<;;ion warr:lllted by the
evide11ce which has been submitted to us. ln any nts<â¢, tl1e Sugar Industry is established, and it has proved its suitability. At the saine time the Stwar lndustrv will not suffice for a com]'lete ' 0 solution of the problem of tropical settlement. )J uch of the land, thou()'h it may he suited for suclt ti·opieal products as we haH·
to. is i10t suited f(n· sug·ar eulti,·ation ; nnd sng:ar is grown
under conditions which preclude an export trade (r. "!fm (:i, QLwstion of Export Trade p. xxii). In this connexion we «lt·sire to dra\\ attention to the following extracts from :-
HOWAIUJ OI.JVEil :'\ EWI'ORT, Ins tructo r to the D e p'triiiH:IIt .,f A)!ri⢷u ltn rc. Cairu⢠.
473;). How lnng hnvc you been ir. the D ., parrtnclltl-1 think it wi !l 1,._. t!tirt <·e ll y⢷:or s uext rn nnth.
47;16. It has hee n ynnr ,Juty to stnâ¢ly the suitnloility ,,f .:\orther ll (Jn⢷··u; laud for tl,. . !'r"â¢lnetion nf tropical products, hu;, it uot ?-That is so.
4737. This Co111111 i,-,d " u f! IIJ!a!!ed 011 the 'l'â¢â¢·,otintl ,. f '":!:tr !'''' lnt·r i"''· i.., t it j , :.J ... .. much
interested in the acâ¢c:ourpauyi â¢â¢!! 'l'l⢷â¢ti <â¢ll of w),.,tl, r·r " r uo t ·:th⢷r l'rndiJo·r; _11 '"'' >11!!:11· 111o1 l·t" rofitahly in Norther11 Qtl!'t:JI;!atlll. . Tl_ ,. ·refâ¢.n ·. tlo⢠· ( ·,,11"""''.·11 wnu l.f JJ!_, ,. y o n '': P d 1 11 co,· thP thnâ¢e r·rrnc·tr â¢al L(·:od,- " ' rrtl.l.c r. n⢠·â¢:. and <".,fl,·c. "' lâ¢t· ttt ;.! ,J ,.. lrtlf·â¢· It â¢
nn er, we s tn " ""· ' · · . . · 1 ·
which snggest themseh·es tu rue nuder w!Jich !","''''" troJ â¢teal pro, ne t s ⢷<·trt (· rn this
xiv
country. We sh'lll be gla1 to hear yo.u· opinion u:>t only on rubber, rice, anrl coffee, but any
other ttopic.ll proluct which you think might a profi table industry in the northern parts
of Q .wenslanu. I will now ask you to state your views as concisel_y ns possible, while, at the
time, doing justice to your subject ?-I slloald think it exceedingly regretful if any inferenee
s ll â¢lu!d be
shall confine myself to a few of them. In establishing these industria:> there are considerable difficulties, which may be classed as follows :-First of all, an unconscious and natttml hias on the part of the settlers we introduce. We bring them from n. white country, an,!, coming from a white country, they are naturally more accustomed to dealing with industries belonging to a temperate climate. In coming to
tropical parts they meet with industries of whi.:h they have not e,-en heard, much less being acquainteu with the methods of dealing with thoile products whicb naturally Leloug to the climate and soil of .North Queensland. In entering into many, but not all of these tropical industries there i:! a period during which it is necessary to wait before any aetna! retnru from the capital inve. -;ted is received. But this is HlOJ'e thau ma.de up subsequently, because, although these products take time to come into be!lriug, they last a very long time, generally as long as the life time of a man. Again, an state of atfairs
plays an important part also where one is dealing with a permanent crop, and these industries have to with purely white labour, which makes it more difficult to start them than if they had started at a
time when, perhaps, the heaviest work might have been undertaken by other labour, as
was done in tbc Sugar Industry. Then, again, the effect of custom comes in, that is
the unavoidable and natural tendency to look round and see what has been done previously
in connexion with such industries. Allusions to previous efforts have, unfortunately, been made to the failures rather than to the successes. That is not a fair basis on which to judge
the possibilities of an industry, the industry has often been blamed when it is not necessarily the industry that was at fault. The individual is naturally loathe to blame himself. Nevertheless, these industries in some instar;ces, notably coffee, have been started up here without any previous experience whatever, but errors made in connexion with a permanent product are not easily remediable. lf an error be made in the planting of corn or cane sugar it is limited to the one season or, at most, a year or two, wheu it can be re-planted, whereas in the case of the failure of a product which takes five years to come into bearing it discourages the g rower to start again. Many of these plantations buing started without knowledge were foredoomed to failure, and a good deal of money was expended in attempting to open them. As a
number of growers have said to me, "If we had only started a number of these products with the know ledge we have now, we could have obtained a very different result." I think that statement would apply to many of the tropical products that have been started. The harvesting of these crops differs very much from that of cereal and other crops of a temperate climate. Tropical crops vary very much, and the work
of cultivation and harvesting has to be undertaken systematically and carefully, and we are, perhaps, in the position of not knowing how to begin. [n regard to that matter, I might quot.e cane itself; at first it was difficult for a white mun to cultivate and harvest cane, but now he can do so, and do it well ; never theless, a man must be experienced to earn good wage" at cane-cutting. Such experience with other tropical industries has not been obtained. In qnot.ing the non-success of these inliust.ries, such a fact thnt coffee at that time was worth 4!d. to 5d.,a lb., while it is now 7 to 8d., was very often omitted.
So, po!>sibly, if the industry were re-started now, it would be qnite a different matter. I would submit that. those products which arc adapted to the soil and climate nre 'far more likely of extended success than are temperate climate industries adapted, or endeavourc
uot meet with difficulties I do not suggest; it is to be nutieipated that they will meet wit.h Jilficulties similar to those with which sugar met, but probably not greater than can !Je ovcrcnme by the people if they set their minds to it. Of course, it is hnpossiulc to compete in open markets of the world under the conditions of labour existing in the Commonwealth wit.hout Therefore, t.o a
⢷onsiderable extent, success must depend on a bonu ;;. Bonuses are now availa!Jlc npon so me of these product;;, ami so far as they go they are good, but they are not sufficient to iiHiuce rhe further cultivation of them. In order that the bonus shonl,l tlo so, it should be upon the same ha;; is as that of sugar, namely, roughly, one-third of tho value of the raw products. These tropical products may continue for the lite time of a man; it must be borne in mind that this permanency means a permanen t asset to the country,
whether the individual passes away or not. Hence the planting of cocoanut or rubber trees, whether J.rongh t. to nmturity or abandoned, remain an asset to the country. and they can be re ·cnlti vatetl very often without re-planting. Most of these industries do not require a great amount of capital to be invested ; certainly not a great deal in large factories and machinery, which may in a short time become ont of date, and require to be put on the sc1·ap heap. The n.monut of nlllchiuery reqnireJ in many instances is small. Again, the product is very often not perishable, which is au important point in
p10neering work, when one is, perhaps, some distance away from transport faciliti es. Another point is their high bulk value, which enables tmnsport charges, which might otherwise appear heavy, to be mnch readily borne. Of course, there is no industry incapable of failure, and there must Lea certain risk
Involvetl, but, nevertheless, many of these industries can be shown to be sound propo :'lit.ion s.
(2) THE SuGAR INDUSTRY .AND A WHITE AusTRALIA. '\Vhile the soil and climate of the Queensland littoral is undoubtedly suitable for sugar cultivation, the questions remain whether the climate is suitable for white settlement, and whether the Sugar Inuustry is suitable for the employment of white labour.
(a) Suitability of Sugar Culture for White Labour. . . We have received a great deal of evidence on this subject, and we are of opmwn that no reason exists in the nature of things why white labour should not be employed on the sugar plantations or in the sugar mills. We do not mean by
XV
_this that we are satisfied all existing- conditions of labour in the Sugar
!ndustry. these conchtwns have unproved, and are capable of still further Improvement m ways to which we shall refer in Part IV.-'Yage Enrners. We limit ourselves to .the statement that, the work in the Sugar Industry is often
It Is suitable: or capable of hemg rendered suitable, for the employment of
white labour.
(b) Suitability of the Queensland Littoral for "White Settlement. · e entertain no doubt of the possibility of effective settlement, by a white population, of the Queensland coastal areas. Though a contrarv conclusion has been frequently expressed in the past, we believe that' the conclusion is based upon conditions which are no longer existent, or upon a failure to realize the physical adaptability of the white races to varying climatic conditions. one 'l'nn doubt
that the white population has proved itself slow to appreciate the need forappropriate changes in clot\1ing, diet, home conditions, and general mode of lite. Yet, despite this tardiness, the present population is a normally healthy one, with a fully developed physique, and a low death rate. Frequent references have been made in the past to tropical diseases. It appears to have heen overlooked that there are also
diseases which are virtually peculiar to non-tropical regions. Moreover, the tropical diseases themselves are largely preventable or capable of mitigation by improved methods of medical treatment, and by the progress of tropical medicine, hygiene, and sanitation. Indeed, the mere fact of settlement tends to limit the area of danger.
In one respect Queensland is particularly fortunate, since its littoral is flanked by high mountainous regions which in times to come arc likely to he used in an increasing degnâ¢e by the inhabitants of the low lands for purposes of recuperation or change. But, even under existing conditions, that the health record is satisfactory may be inferred from the following interesting evidence of Mrs. Elizabeth Teys, teacher of the
State School at Mossman, Queensland, the most northerly of the sugar centl·es :-Questions 1023-1029 ...... "Occasionally a child might have fever, hut I do not know of any one in the school who has had it. . ⢠. ⢠⢠. ⢠The general standard of health and the physicul standard here is as good or better than it was in the \Vest. It is not Letter than on the bnt the
attendance is better. ⢠⢠. ⢠. . . Only two children who have been in attendance at the school have died since I have been here (thirteen and a half years). One child was here for two years, and t.he other only
for 11ix months, and had consumption. Neither of them was born in the di5tl"ict."
Some witnesses, while not challenging the facts have stated, have expressed the opinion that the effect of residence for several g·enerations in the tropics might, or must, prove prejudiciaL "\Y e have seen 110 evidence to j this opinion ; and it appears to indicate an adherence to certain views, as to the inlH:ritauc·e of acquired
characters, which haye been generally discarded hy leadillg modern authorities. On the general question we wish to draw special attention to the evidence of an expert-PHILJP SYLVESTER CLARKE, Sydney, F.R.C.S., EdinLâ¢nrgll, :\lcdical l'raetitinnH, allll
Government Medical Officer at Port Douglas.
1827. You tender a written statement, date!l 4th November, 1911 ?-Y c5. · 4th l\ovemher, 1911.
To the Members of the Roval :Mo ssman.
I beg to place befo;e you the following wi th to the of !he
permanent settlement of the white man in the < h o_trlct s of ); .. rth !Ius
is closely connected with that of the adaptability of the wl11te to t_hn\·c, _ nud work 1u.
tropics. Unfortunately, we have no satisfactory precedent g n1ol e us â¢.11 problem. I he
recent important advances made in the subject of tropi cal me,ft c lu_e and loy uupronug o_ ur methods of preventing and treating the tropical inciâ¢lcHt al t(' the Quceu ,o land render
the outlook for white settlement far more fayornble than it would ha\" C bceu twenty years aJ!o In considerinu this question the colour of the white man woul
sunlight and other climatic tonuitions, why are th e E"qUim.nux 111
the Finlanders dusky, the Indians retl, the Maoris !.lack, th; _Galla nall\"b ou the L111 c th_e Lme Islanders most pale of Melanesian tue Fnegans !,J ack · In_1ll e d1stnct:; the
chief influences that exist teu!ling t(,e imlh i C: nal anti ra r!e de1en ora t1 ron may lâ¢t⢠CO IJ ,O iol ercJ under t be following heads :-1. The influence of heat and atmo;, pheric hnmidity.-In m:· t- xperi ence is rare in the
cane-fields; I have yet to meet with a. of thermic fev er. UnJ â¢J ubt edly. the nervous and mu ;enlar vigour of the field worker is diminishe,\ to a certain extent. . by the warmth nt the climate, but not to a degree incompatible with the satisfactory of IllS work .
2. The influence of 'J11 e orJinary epidernic di sea ;o cs :;u eh as influenza t_tnd di periodically in the cane-growing but are with a much lo"·er moâ¢taluy than wuh
similar diseases in the southern d1 stncts of Austraha.
XTI
The most cases of sickness in this (.\Iossman) district are the so-called Mossman fever malaria, dengue, ankylostomiasis, rhennJatie filariasis and diarrhcea. Most, if all, of these
troubles are eminently prevent&blt>. Filariasis, malaria! anti Jeugue fevers are certaiuly communicar.erl to m11n by mosquitoefl. Properly 1oarried out mosquito tle;;truct.ion, mosquito proof habitations, ami the use of' mosquito nets would emdicnte diseases. The incidence of Mossman fever would probably be diminished by the same precaution:<, us all 1he point to the fact that this fever is transmitted
to man by inoculation by so ,ne prol.ably so1re variety of mosquito. Ankylostomiasis is in almost every cal!e contracted by the hahit, common amongst the children in North Queensland, of walking abont with uncovered feet, therelâ¢y enabling the ernhryo IJO')kw rmns to enter the bocly through the 8kin. The prc,·entive me'lsure is ob,,ions. Re the rheumatic alfcctions. These could largely be prevented by
ordinary hygienic precautions. Mnuy of the present field .vorker:> are extremely careless in their habits. They retire at night dressed in their working clothes, still wet with perspiration, often to awaken iu the morning with an attack of lumbago or other rheumatic affections. The diarrhceal troubles could he prevented by boiling or efficil·nt filtration of the drinkina water, especially Juring
3. The influence of the climate on the healtl1 of women and chilt!ren.-Concerning the women, one commouly ht·ars the remark, "It impossible fi11· a woman to live a healthy life on the North Queensland cotlst.'' Undoubtedly, in this district many ,,f the women do not enjoy good health. This unflrtunate i!tate of things l attribute
The absence of qualified obstetrical ut tell!lanee in the past been a fruitful source of chronic debility amongst the women residing iu the coastnl towns. lle the health of the children.-! consider t.hnt , with proper cnre, the probability of a child born in this difltrict Jiying to attain the :ulnit age much greater than in the southern portion of the Common
wealth. This view I take from 1h e fact t.h11t onlmary epidemic diseases that affect children, viz., diphtheria, measles, and scm·let fever, nrc attendeâ¢l with a smaller mortality here than they are in cooler latitudes. The cheerful tuaunel" iu which p:uents allow their children to walk barefooted to school aceounts for the prevalence nf ank,\· loMnmi :tsis, wirh i1s at.tendant anaâ¢miu, amongst the children.
In rearing their childrcu, ,,f !he nwt.ht>u; here slavishly follow the precept s applicable to the 1·earing of children in colder The resnlt. j;.: that unhygienic practices, such a;; the o\·er-clothing of ehildreu, are eummon, and ma!eriaily t!iminish t.l!c vitality of the rising generation. 4. The influence of alcoholio: iutempcrance.-This in the past has been, probably, the most potent cause of sickness amongst the liel:l workers in With their natural resistinj! powtlrs
deteriorated by successive bouts of it is uot uncommon to see these men lying all night in an
intoxicated condition by the roaâ¢bicle, to fall lUI easy prey to the malarial and other parasite<;.
2. Economic Structure. (1) CAPITAL.
One witness, Mr. J. R. Paddle (Question 25644), says it has been computed roughly that the amount of cnpital invested in the industry in Queensland is £7,0u0,000-the capital value of. the machinery, premises, and land being put down at £2,500,000, and of the land aud fiums, &c., at £4,500,000. In addition to this, there is the g-rowing, millin!.?:, and refining in New South Wales, and the refininO' imlnstry in and AL.delaide. On the whole, it would seem fair to
that the fudustry in .Australia involves a capital of not less thau from
£10,0'. 0,000 to ·This capital is divided between growers, millers, and
refiners.
(a) Growers.
The G1"0wertt and tl1e Land.-The grent body of the gt·owers is composed of oceupiers and owners of smHll plnntntions varying in size _from about 50 to 200 acres. The official estimate fin· 191l of the number of whtte growers and the ncres cultivated, gives au average cultimtion of 2o per grower. proportiou
of the O'rowers are lessees. Bing·er:t and Fatrymead plantations, both m the district, are the only instnnces now existing where cane is grown in large
quantities by the mi11-owners themselves. 1 !te G1·ou:e1· Non·emplo,1}er -According to the Dr .. ·\. J. Gibson, then General Superintendent, Bureau of Sugar. Expenment Statwns, and now GPneral .Manager of Government Sugar Mtlls, Queensland (Questwu 9G82)-
" It would be difficult to stnte tile exact. figures in relation to growers who, with their fnmilies, do their own lu.hour entirP- 'y. In X o. 4 S 11g 11 r Bonuty tlistdct, in particular, where the a:eas under cane smaller, and rllliJ·yiug :!nd other industri(â¢i' are carried on ns wPil, a ,·cry ?f the work IS
clone by growers ant! their families. Ju or.hcr districts, much of the work â¢s. done the
grower anti his family on smnll arens ; but. in the majori1y of the cases, addtuonal luuour 1s reqmred to render assistance during the h:n vceting pel"iod."
â¢
1051
xvii
. Tlw Bounty.-The growers receive a Bouâ¢1ty on delivery of the cane at the The. Bounty is £3 per ton of recoverable sugar contents of the cane ; and it
IS given subJect tJ .certain regulations of which the general object is the exclusive of wh1te labour, and the maintenance of standard conditions (v. infra
3, Pubhc Aid and Control, p. xix).
f!rice [01· Cane.-The price paid for the cane is subject to seasonal fluctuations, and also to locality or to particular mill, and according to the
proprietary relations between gTower and miller, v. (b) Millers. These variations run f?r undamn_ged from about 8s. 6d. a ton to 19s. 6d. a ton. Generally
speakmg, the pnce paid by the mills runs from 13s. to 16s. per ton .
. Suf!m· Cane and Sugar.-The quality of cane varies with different species, With locahty, and with the seasons. Generally speaking, the cane is richest in sugar contents in the more northerly areas. Approximately, it takes from 8 to 10 tons of undamaged cane to make a ton of raw sugar.
(h) Millers.
Mill Owners.-A large number of the mills are owned by growers to whom the State of Queensland has advanced funds on the deeds of their freeholds for the erection of mills on a co-operative or quasi co-operative principle. These are generally described as Central Mills. Other mills described as Proprietary ai·e
owned by private individuals or companies. The Colonial Sugar Refiniug Company mills about one-third of the Australian output of raw sugar. JoaN RoBERT PADDLE, General Manager, Government Central Sugar Mills, Qneensland. 25569. What is the total number of co-operative mills in Qneensland ; name each ?-Thirteen co·operative mills borrowed money from the Government. These are :-Mossman, Mulgmve, Proserpine,
Racecourse, Marian, Plane Creek, Pleystowe, North Eton and Double Peak, Gin Gin, his, Monu⢠Bauple, Moreton and Nerang River. Cattle Creek and Meadowlands are also worked on co-opemt1ve principles, but diu not borrow money from the Government. 25570. How many of them (giving the name or the mill in each cnse) are (a) clear· of rlel.t to the Government, (b) up to date in their instalments of princi,lal auu interest tnOilay, tr.) in arrel\r with their
payments to the Government, and (d) taken over anJ now worked by the Government? As to (a) four, namely, Racecourse (Treasury paid in full and securities releaser!) ; Marian paid in full and securities released}; PleyRtowe (liability h'ken over by the Queensland
Bank Limited), and Moreton (Treasury paid in full and securities released). As to (b) five, namely, Mossman (£2,363 6s. lid. suspended and ma.rle payable, 30th June, 1924); :Mulgrave, North Eton and Double Peak; Plane Creek (£5,!35 5s. 2d. balunce arrears oi int.erest to 30th June, 1900, being paid off by annual instalments of £650, not considered as being in ami
(£1,191 6s. Ild. annual instalment paid in December). As to (c) nil . .As to (d) four, namely, Proserpine (arrears of interest to 30th Juue, 1911, £1,661. 8s. 3d:, balance of loan to 30th June, lYJ 1, £55,305 Os. 7d., total liability to Treasury, 3llth Jnne, 1911, £ ·6,!Hiti lOd.);
Gin Gin (a.rrears o: interest to 30th Juna, 1911, nil; balan"e of loan to S1hh June, 19 . 1, £_43,9H 1 '"·3d., total liability to Treasury, 30th June, 1911, £43,9!4 10d. 3d.); 311th
June, 1911, £9,119 Os Md., balance of loan to 30th ,June, 1911, £39,!3;, His. 3.1 . Iot.nl halnhty to Treasury, 30th June, 1911, £48,554 l8s.lld). Nerang River (arrears of to 30!h ,Tune, 1911, .£9,002 Ss.lld., balance of loan to 30th ,June, .£19,464 19s. Md., total habthty to freasury, 30th June, 1911, £28,467 Ss. 7d.). .All that have been in arrears have been taken over, aud tuey are
Proserpine, Gin Gin, Monnt Bauple, and Nerang River.
Millers and G1·owe.1·s.-As a rule, the shareholders in the Central Mills are O'rowers though a larO'e percentage of O'rowet·s are not shareholders, and this o ' 0
0
⢠l f I' Th difference of relationship to the mills has been a fmttftt souree o ( tscontent. e mills were looked upon as co-operative enterprises the of the gwwers.
Unfot·tunately, from a strictly co-operative pomt. of no set to the
holding of each shareholder ; and no guarantee extsts agamst dtscrmnnations of one sort or another unfavorable to the non·shareholders, for ex:unple, as regards the price paid for cane. Iu certain of the mill.s,. North Eton in the lfackay
District, there has been a tendency towards m the number. of co-op:r.ators, nnd even to the formation of a close body of mdmduals who m a positiO? to exploit non-shareholders if they choose to do so. Some of the nulls have these evils, and have guarded against them to some extent, at least! by provisions m their articles of association that the slmres cannot be separated from the freehold
security pledged to the Gercrnmcnt 111 respect to which the shares have been issued. 1'.13881. a
xviii
Mill-white Sugar.-While most of the mills limit their work to the manufac ture of raw sugar from the cane, some of the mills-notably Bingera, Fait·ymead, and Nerang-carry the manufacture a stage further and turn out a "mill·white sugar," which, though not so popular as refined sugar, is said to be as serviceable for most practical purposes.
(c) Refiners.
The conversion of raw sugar into refined is undertaken by two compames the Colonial Sugar Refining Company Limited and the Millaquin Sugar Company Limited. Of these companies, the former is far the larger, and it occupies, hy virtue of its refining and milling interests, ami its oversea trade, a predominating position in the Australian Sugar Industry.
(2.) LABOUR.
(a) Ctassfs.-A great variety of labour is employed in the Sugar Industry. The growers employ men as general field workers or as cane cutters-in the former case usually' by day labour, in the second case usually by contract. The mills and refineries employ a larger proportion of skilled labour ; hut both in the mills and in the refineries there is a good deal of labour which ma.y be classed as unskilled.
(h) Effect qf Bounty Regulations in Securing Preje1·ence fo1· White Lahour. The effect of limiting the Bounty to the growers who employ white labour exclusively, together with the deportation of kanakas and the general policy of the Common wealth as regards coloured immigration, have been so far successful that to-day less than 6 per cent. of the sugar is produced by coloured labour.
(c) Effect of Bounty on Wages.-The Bounty regulations have exercised a favorable infl.uence with respect to the standard of wages of field workers. Up to the time of the adoption of the General Order issued by the Minister for Trade and Customs in August last, while it cannot he said that the actual effect of the Act was to raise wages, it has unquestionably been the means of helping to prevent wages from falling below the bare subsistence level. In some instances, growers were paying a rate in excess of the minimum.
(d) The Efficiency of Labour.-Generally speaking, the standard of efficiency of the unskilled labour supply in the mills, and in the is not of a high order. This is due to several causes, including the intermittent nature of the employment, the unattractive conditions under which men have to live, and the fact that good men can earn better wages in other occupations. Latterly, as was admitted in evidence, there has been an improvement in the class of labour offering, and the opinion was expressed that if better conditions could be offered, a more desirable class of men would be attracted to the industry. A very large proportion of the labour required is drawn from the larger centres of population, the local supply rarely if e\·er
being equal to the dema.nd. (e) Accommodation.-At the mills accommodation is provided for the mill employees. When visiting the mills members of the Commission inspected the men's quarters. In some cases the accommodation is very inferior. The rooms are sma11 and badly ventilated, and the sanitary arrangements hre not such as to promote good
health. In the majority of cases, however, considerable improvements have recently been, or were being effected, due partly to the opemtions of the State Shearers' and Sugar Workers' Accommodation Acts, and partl.Y to a desire of some mill-owners to see that their employees are better cared for. In nearly evet·y instance the sleeping apartments were found to be badly kept ; in some they were positively unkempt and
dirty. This unsatisfactory state of affairs is attributable in a. great measure to the carelessness of employees themselves, and to the want of some system of organization and control in the care of the men's quarters. At nearly all the mills reading rooms are provided. At some there are spacious concert halls, and provision for outdoor
recreation. An extension of these attractions would doubtless help to reduce the intemperate habits about which there is so much complaint · (f) Wages and Hours of Work.-The minimum wage paid for field workers, other than cane cutters, ranges from 22s. 6d. in the off season, to from 2;is. to 30s. in the crushing season, per week and found ; and the regular working hours range from fn hours, including time going to and returning ti·om the fields. The wages of
null employees (unskilled labourers) range from tis. Gd. (with a bonus of 2s. Gd. for who remain to the eud of the crushing season) to 30s. yer week and keep.
Smce August, 1911, 30s. per week and found is the recogmsed standard wage
xix
for ordinary mill employees. The only Queensland mills which pay 27s. 6d., and add a bonus of 2s. 6d., are those of the Colonial Suo-ar Refining Company. In the New South Wales Northern Rivers sugar districts mill workers are paid at a less rate than ar.e same class of workers in the Queensland sugar districts. For instance: the
mnumum rate paid by the Colonial Suo-ar Refinino- Compauy at their Condong, water, and Harwood mills to adult of wl;om are married men)
IS tOs . per week and found for 48 hours, with a bonus of 2s. 6d. An additional bonus of 5 per cent. on their remuneration is to be paid this year to those whose wages are not governed by an industrial award.
During the crushing season the mills are worked hy two shifts of an average of hours each shift, or about 60 hours per man per week. All time over 48 hours is
patd for as overtime, at the rate of time and a quarter. At the Coll)l1ial Sugar Co111pany's refineries the minimum wage paid to adults is 7s. per eight hours day to engaged outside the buildings, and 7s. 5d. per day to those inside the buildings,
With .a bonus to eaeh of 2s. 6d. per week. At the Millaquin refinery, Bundaherg, the rate IS 7s. per day, or 42s. per week of 48 hours.
Cane is cut, except in very rare instances, on the butty gang system, the men electing their own ganger and dividing the total earning-s according to the number of days each mau has worked. The earnings of those employed as cutters on this system range from 8s. to 20s. per day, according to the quality of the the
conditions of the land on which the cane is grown, the capacity of the men forming the gangs, and the number of hours worked. Evidence goes to show thnt in some odd cases gangs have earned as much as 24s. per man per day by wot·king
exceptionally long hours on exceptionally good crops. The avemge enmings of an average gang working ten hours per day on an average crop may be tixeJ at, say, from Us. to 14s. per day. The men find themselves. As a guarantee of good fitith the usual practice is for growers to retain from 10 per cent. 20 per cent. of the
earnings until the completion of contracts.
·-
3. Public Aid and Control.
There has been both Commonwealth and State legislation with a view to supporting the industry and directing the conditions under which it be
carried on. · ·
(1) THE CoMMoNWEALTH.-( a) Imposes a Customs duty of £6 per ton on all cane sug.w (r.tw or refined) imported into and consumed in Australia. ; (b) Imposes an Excise duty of £4 per ton on all sugar produced and
consumed within Australia ; ,
(c) Confers a Bounty at the rate of £3 on the quantity of cane estimated to produce a ton ofraw sugar.
The Bounty is subject to certain regulations, which are designed to secure the exclusive employment of white labour, and the payment for such _labour of standard rates of wage. The ne.t result is generally expressed by that the .'ugar
Industry enjoys a net protection of £5 per ton. The stateâ¢:nent ts for .the
reason that, while the Excise is payable only on as tt mtn con sumpt�n,
the Bounty is calculated on the raw sugar producmg contents of the eane. Accnrdmg to our own estimate, the net protection may be put down at £.) 5s. per ton.
(2) STATE OF QuEENSLAND.-Queensland, heing the ?tate vitally interested in the promotion of the Sugar Industry, has m past assisted the in various ways. It has moneys for .the of the Central :VI,IIls ; It
bas taken over and operated certam Central M:tlls wluch m tl!e shareh?lt.lers . had failed to meet their obligations ; it h'ls sums procurmg scientific
instn1ction for the sugar miller and m comhatmg pests,
in procuring new ; and 1t h:1s passed ccrtam legâ¢slatwn with a new
to improving the hvmg condttlons of employees.
XX
As to the obligations of the. Central Mills to the Government, evidence given as follows :-,Jos EPH ,JAliES SHouT, Inspector of Ac;:ounts, AuJit Department,
25814. \Vhat is the total amount advanced by the Govemrr.eut to co-operative sugar mills, nncl the amount now duo ?-The total amount auvnnced tn Central mills, interest and capital, is
.£595,!:!30 12s. 3d. on the 1st July, 1911. The balance of loan on the lst July, 1911, WI:IS .£337,339 8d. That does not include arrears of The arrears of interest 11t that date were principally
on the Central foreclo ;; t>d by the Government, anil was £26,5i9 2s. 8d., bringing the total li:tbility to the Treasurer on the lst July, 1911,£363,919 2s. 4d. 2581 :'i. I s that from your latest report1- (Witness protluced report of Auditor-General to Parliament for the year 1910-11.) The figures 1 have been giviug are taken from it.
4. Costs of the Sugar Industry to the Australian Consumer. A white community which prefers to grow its own sugar in its own territory with, white labour, rather than purchase from abroad sugar grown by cheap coloured labour, must face the responsibility of making good the increased cost of production
under the higher standard of living and reward. Either the consumer or the taxpayer must pay. In Australia, under the Customs Duty, the cost is paid by the consumer. The incidence of the Excise and Bounty does not directly affect him except in so far a.s it . enables him, as taxpayer, to recover through the Treasury the difference between Excise collected and Bounty paid. At present, Australia's demand exceeds 250,000 tons per annum. Assuming that amount to be produced locally, and assuming, as experience warrants, that within a protected area, the ptice of the protected commodity will generally run to foreign market price plus freight plus duty, the present Customs duty of £6 a ton pledges the Australian consumer to the extent of £1,500,000 per annum. In actual fact, certain deductions have to be made:-
( 1) The present difference between Bounty paid and Excise collected of, approximately, 15s. a ton of sugar, means that the consumer recovers through the Treasury an amount which has varied for different years, but which tor the yf'ar 1!:111-12 was £198,167.
(2) The Australian output is not, as a matter of fact, equal to the Australian demand. According to the most recent estimates it fell 50,000 tons short. To this extent the consumer, as tnxpayer, recovers the whole of the incren.sed price.
(3) When, as recently, foreign mn.rket prices are high, the sellers
of refined sugar may not take full advantage of the protective duty. Pre-existing contrn.cts, the tear of decreasing the demand, or the fear of legislative action, and other considerations niay and do operate to the advantage of the Australian consumer at times when the foreign market price is abnormally l1igh.
(4) On all coloured-grown sugar the Commonwealth Treasury receives the full Excise, while paying nothing in the way of Bounty. As we have already said, approximately 6 per cent. of the Australian output of sugar is grown hy coloured labour.
When due allowance is made for the foregoing qualifications, it will he apparent that the Australian community is pledged to, in a sense, an annual subsidy to the Sugar Industry of over £I ,000,000 per annum, and that this amount will increase in proportion as the local production appmaches the local demand and in
proportion as the policy of excluding black lahour proves prohibitiv<'.
5. Importance of the Sugar Industry.
The importance of the SuO'ar Industry in Australia may he considered from I . f . 0 severa pomts o view.
(1) hDUSTJUAL.-(rt) Every industry cstahlished in the Commonw<'alth is n nlltional asset. 'Ve h:we ah·ead v referred to the estimate of from ten to millious pounds as represent:ltive vofthe <·apital employed in the Sugar Industry in the Commonwealth. The followinO' official fiO'm·es illustrate the relative imllortan<'e of 0 .-, the growing :md lllilling indu stries in New South Wales and Queensland.
xxi
Tlte tonnage of sugar pt·oduced in the se\'ernl States of yeady :
1870 1880 111190 1900 1910
Year. New South Wales.
Tons. 678 i,300 26,;)33 19,938
18,828
Queâ¢nsland.
Tons. 2.'3 i 15 .. ) il
rH .9n 92 .. ) i I
207,2 H
The following official table applies to the numbers of persons eno·ao·ed in the 31st December, l!lll, iu the four districts into which the lndustrv
IS dtvided for the purpose of administering the Bounty Reg·ulatious. fio-ures avowedly approximate. 0
Bount.'·. :\ot Earning Bount , .. c_; ranrt
White Labour. White. Coloured. · Total, Total.
No. I 5,935 107 727 834 6,769
No.2 5 524 90 465 555 6,079
No.3 8,;)33 a1 93 124 8,657
No.4 1,770 4 20 24 1,794
Total Queenslanâ¢l⢠21,762 23t 1,305 1,537 23,299
"
South Wales ... 3,525 12 113 Hii 3,650
⢷t! â¢ljl
"
Victoria. ... JOO 500
Total â¢â¢â¢ 25,787 244 1,418 1,662 27,449
"Exclusive of 3,745 white persons employed in fd.Ctories; exclushâ¢e of 360 colored persons employed in factories, total, 4,105. . .
i!ldustry of . such. importance as the foregoing figures indicate
necessarily unphes far-reachmg sttmulus to accessory industt·ies. Some of these are local, such as trade, dairying, gardening, &c. Others extend throughout the Commonwealth. Every State of the Commonwealth finds consumers fot· some of its goods in sugar-producing areas. In this connection, we may cite, as a concrete
e":a 11
mple, the e.lidence of Mr. William Gibson, of Bingem, as to one plantation and mt :-
. 22356. I claim that the industry requires the utm.)st considemtion from our in view of
1ts value t.o the Commonwealth. I am willing to give any information required, anâ¢l if there is
a.nythmg the members of the Commission would like to sec at Bingera, we shall be glaâ¢l tâ¢l show them. The following statement shows what a plantation and sugnr-mill means t o the pnblic in tm lc :-Revenue to railway per annum, £7,000; shipping company freights, £6,500; harbor a1ul whnrfagc, £1,000 ; firewood cutters, £2,000; merchants' accounts, £13,000; foundry, £4,000 : saw-mills, £1 ,500 ; cattle
purchased for beef, £.5,000; horses bought, £1,500 ; corn, £3,.500; other produce, £1,000; lim e, £300; flour, £!,500; coal, £1,000; wages, £45,000; cane-cutters' coutmcts, £21,000; mil way lines, perma· nent, 22 miles 2-feet gauge, miles 3ft. 6in. gauge, portable, 10 miles 2-fcet. gnu gc ; locomotive;; , 6; increased value of ian
(2) SociAL.-The industrial aspects of the Sugar Industry are less important than the social. The Suo·ar ludustrv is a contribution of the first importance to the policy of a White Australia. The cl;ange ft·om eoloured to white lahonr comlitions. is transformiug the character of the population of the C coastal area. 'Vlule
much remains to be done in the direction of encoura(fing white settlement, a great change for the better has alreadv been effected as reQ·ard ; th'e numerical ratio of the white population and their n;.rJrale. Further. as' a result of the of the
population in the littoral, a new has to the opcmug
up and settlement of lat·ge mland areas. The ot the fa ct hardly
over-estimated in view of the circumstance thnt these miami nreas. owmg to thetr elevation sea level, enjoy a climate of admitted excellem'l', au1l allow of a Yery varied cultivation. ·(3) PoLITICAL.-,VhiiP tlu · sor:ial a sped of tl1 e Su gar I is lllorc imp?rtant
than the industt·ial, tl1e · politi1:al aspect is perhap,.; nton⢠unportant tl1:1n Unsettled areas in the tropical part,.; of Australia n.ot. 01 ⢠.!." a .source of weakness. The v constitute a temptation to lllvaswn ; and 111:1_\"
to the white poliey a tâ¢otnpll'xion wiii ch llllbt we;tk cu .the clanns
of Australia to extenutl support. _-\s \\ C han· :-tlready n·.nt a rl>:t ·(.l. tlw nlt111ute, in our opinion the ('ffi.â¢1 :tive justitit·ati .. n of tlll' p1ytect iun "f tlll' hes
beyond 11 ue.-;tions of.inunstl'y wealtl⢠pt·odut"tlon. It illlht he :-;o ug ht m tl1 c very of A.ustl·aha as a. na.twn.
..
xxn
6. The Question of Export Trade.
No substantial export trade of Australian produced sugar can be anticipated, at nuy rate, for a long time to come. Such an export tmde, in competition with coloured grown sugar in Java and elsewhere, could only be maintained hy the payment of au export bonus so large as to prove an intolerable burden, either on
(I) The taxpnyer (if the bonus were paid hy the Common wealth Treasury) ; or (2) Upon the Australian consumers of sugar (if the bonus were paid hy the Sugar Industry itself, as under the German Cartel system). With regard to the latter alternative, the following passage from a recent work deserves quotation The usual margin between prices of raw and refined sugar in (_) ermany was 3s. 6d. pet· cwt., but when the Cartel was in operation it tose to lOs. 6d., and when the Cat·tel was abolished by the Convention, it
tell again to the normal figure. On 15th January, h02, a calculation of the profit arising from the Cartel, based on the prices of the day, gave the figure of 7 · 90 marks per 50 kilogrammes ; that is, nearly Ss. per cwt. of sugar consumed. This, calculated on a consumption of 703,507 tons, slwwed a profit of £5,rl58,495 for the industry, with which they could make contributions to those who lost money on exports. The German Cartel profit was sufficient to fumish a bonus of about 5s. 5d. per cwt. on the refined exported, or 4s. IOd. per cwt. on the raw sugar exported."-(Martineau, Suga1·, at lJage 125). .
7. Some Causes of Discontent.
(1) THE NET PnoTECTION.--The growers generally complain that under normal conditions of foreig-n market prices they do not receive an adequate return on theit· capital outlay. The explamttion which is commonly offered is that the net protection is inadequate. ·
(2) THE VIRTUAL ABEYANCE oF CoMPETITION As A FACTOR IN THE DETERMI NATION OF PrucEs.-The p1ice of raw sugar is not anived at as a result of compe tition. It is fixed by the Colonial Sugar Refining Company. Although the Colonial Sugar Hefining Company is not the only refinery, it refines the great hulk of the AustraJian raw sugar, and its single rival (the Mi11aquin Refinery) is a negligible quantity as a compet.itor. Further, while the Colonial Sugar Refining Company determines the price of raw sugar, the millers in turn deter mine the price to be paid to the growers for their cane. In general the determi nation is arbitrary, in the sense of being unaffected by serious competition. Sugar cane is not a commodity which can be ea.sily carried from mill to mill ; it
gravitates to the miJl which is nearest at hand, and with which it is connected by tram lines for carriage of the cane. Where several mills compete,
they have, at any rate in some cases, preferred to combine for the purposes of fixing prices or of apportioning areas of supply. While many of the mills are owned by growers, the growers who are shareholders are in a position to profit unduly at the expense of the gt·owers who are not, either by differentiating between
the prices for the cane, or by fixing for all supplies of cane a price sufficiently low to enable the miller to make up on his milling account what he loses as a grower. In the net result it may be said that the grower, who incurs the gt·eatest risks, and represents for national purposes the most important element iu the Sugar Industry, is the person who makes least profit out of the industry.
(3) LABOUR the opinion of a lnrge proportion ofthe employees
in the Sugar Industry generally, aud more especially of workers in the fields, wages are inadequate, the hours of labour are often excessive, and many othet· conditions are unsatisfactory. (4) THE SYSTEM OF CoMMONWEALTH CoNTROL.- While gt"Owers declare that
the returns on their capital and enterprise are inadequ:-.te, while empluyees in the Sugar Industry generally declare thnt theit· wages are unsatisfactory, a number of minor causes of discontent relate to the system of Conunouwe:tlth contl'OI. We have already referred to the prevailing opinion that the net protection ought to he
increased. Many witnesses have protested also ngainst the incidence of Bounty and Excise, some advocating that these should be abolished ; others that they should be equalized. While the Bounty Regulations have failed to assure a satisfactory wage to the employee they have been attacked bv growers as being in many respects unneces- sarily complicated and irksome. "
,
1057
XX Ill
(5} CoNSUMERs.-Consumers are proyerhially lono- sufferiuo- The fact that the price of sugar in Australia is ,·erv mnterialh· to the existence of the ⢠⢠"' ... l:) present yrotectlve fails to awaken any emphatic protest on the part of the Austrahan consumet· m general, 'Vhen, however, the purchaser of sugar makes the purchase for the. of the manuti1cture of jam, confectionery, beer, mineral waters, &c., the lugh pnce of sugar assumes a more serious aspect. The manufi1cture
of the commodities just retetTed to is a matter of o-reat importance to the Common wealth. Jt invo]yes the question of an adequate not merely to manufacturers, also to primary producers. The ti·uit growers, for example, allecre that the high
pnce of sugar limits unduly the market tor jam, and depreciates the v 0 alue of the fruit
employed in the manufacture of jams below the level at which cultivation is profitable.
8. Conflict of Interests.
Our brief refet·ence to some of the causes of existing discontent makes no pre tence to completeness. "\Ve here attempt to indicate only some of the more prominent causes. \Ve have said enough, however, to show that existing discontent does not speak with one voice. As a matter of fact there is very great difference of opinion,
not merely with regard to the nature of the reforms which are needed, but also with regard to those facts of which an exact knowledge is a necessary preliminary to sound ameliorative legislation. The consumers, and especially many of the manufacturers in allied industries, consider that they ought to have cheaper sugar. On the other hand, those in the Sugar Industry ask for an increase of the import duty,
which would, ot course, involve dearer sugar. 'Yithin the Sugar Industry
itself, the divergence of opinion on many subjects is emphatic. Large
numbers of the growers are averse to the Bounty Regulations, while the
employes were favorable to their retention as a means of assuring a
certain · standard of wages. Large sections of the growers maintain that they are exploited by the millers, either as to price paid for cane, or as to the methods by which the price is assessed, while millers contend that they pay as high a price for cane as the price..pbtained for raw sugar permits. Complaints were frequently made by the non-shareholding growers who supply the Central Mills as to forms of
discrimination, especially as to prices paid for cane, and in some cases as to combinations among Central Mills to deprive the non-shareholder suppliers of the benefits of natural competition. In reply it was claimed that the shareholdet·s entitled to some privileges in re ... turn for their freeholds
for the advances made by the State (besides undertakmg other responsihihtles from which non-shareholders were free, and which at least some of the latter at the inception of the mills had distinctly refused to undertake), and further, that where provision was made for non-shareholder growers to acquire shares on r.easonable
terms there was little, if any, inclination to avail themselves of the oppmtumty. _The refiners (more especially the Colonial Sugar Refining C?mpany). arc sometimes representRd as a model combination of economic efficiency w1th the h1ghest of business integrity. At other times they arc represente_cl as .a monopol_.r wh1ch
uses its powers of exploitation to the fullest extent compat1hlc w1th the avmdance of starving primary producers out of existence. 'Ve have endeavoured to the real facts of the many problems which were presented to us, and to suggest the remedies which to us hest to
secure justice to all parties in the industry, the fultilnu;nt of those natiOnal purposes to which reference has hecn made, far as may he
practieable, the interests of the Australian pubhr m their 1lual capacity of taxpayers and consumers.
XXIV
J.> ART H.-BOUNTY, EXCISE, AND IMPORT DUTY.
1. 'Ve have already explained in Part I. of this Report that the Bounty, Excise, and Import Duty result in a net protection to the Sugar Industi'.Y which may be assessed approximately at £5 5s. per ton of sugar. 2. We have also stated that the Bounty Regulations l1ave served useful purposes in the past in promoting the white labour policy, and in improving the standard of wage. The system of Bounty and Excise has also served, to a slight extent, the purpose of promoting a due apportionment of profits among the various branches of
the Sugar Industry. Out of the net protection of £5 5s. per ton of sugar, the g-rower receives a Bounty of approximately £3. Further, the excess of Excise over Bounty has meant a substantial contribution to the Federal Treasury. The net gain to the Treasury for the year 1910-11 was estimated at £157,055.
3. The progress of events, however, has materially diminished the value of the Bounty and J· xcise system. (1) For practical purposes, the transformation in the fields from coloured to white labour is now virtually an accomplished fact. Ninety-four
per cent. of the labour is white labour. (2) Since the introduction of the Bounty Regulations, considerable progress has been made throughout Australia in the direction of securing a living wage and improved labour conditions p:enerally.
That much rtâ¢mains to be done will be generally conceded. But the development a.nd extension of the systt·m of 'V ages Boards, and the establishment of both Commonwealth and States' Courts of Industrial Arbitration, express in legislative form the will of the Australian people to insist upon :1 fair standard of wage and of
lal>our conditions, not merely in protected, but in all industries. In other words, the policy of " New Protection," so far as it affects the wage-earner, is coming to he regarded as a merely transitional phase in the progress of public regulation of industrial conditions.
far as concerns an Excise (imposed on manufacturers who pay
less than a standard wage) the policy was dete1111ined to be unconstitutional by the High Court. So far as concerns the Bounty (limited to producers who pay a standard wage) the application of the policy of the "New Protection," while it has undoubtedly achieved useful purposes in the past, is open to so many objections and is so limited in its ambit that the necessity for more direct, more effective. and more extensive action has been recognised by both the Commonwealth and by the States. (3) The futility of the Bounty aud Excise :-;ystem, as a means ot
promoting a just apportionment of the protiti of the industry, has become increasingly manifest. The virtual of eompetition in the Sugar Industry, which lms :llready been the suhject of reference in Part 1., places the control of prices in the hands of large industrial coneerns. Under these circumstances, it is not
possible, by giving a.t o11c stngc in the proeess of produetion and manufacture, and by taking at another stage, to determine to an\' :tdequate extent the profits of diftercnt pnrtics eng·aged in industry. ( 4) The growing recognition uf the national imp01t:mce of till' Australian
Sugar Iudustry diseotwts the fact tlwt the Bounty systtâ¢m, takeu iu conjunction with the Excise Duty, bas hcen a som<·c ofrcrcmw to the Commonwealth Treasury. The fact appears as an argument against, rather than in favour the retention of the Bounty and .Excise system. We see no adequate justification for a tax ou the
Sugar Industry; and the renl alternative which presents itsclt' to us is either the abolition of Bounty and Excise or their equalisation.
XXV
, . 4. It would not necessarily follow from the foregoing that the Bounty and Excise system should he abolished. But that conclusion is sugo-ested bv other con- siderations to which we shall now refer. 0
â¢
(1) The costs of :ulministration amount directly to about £7,000 per a.nuum. A substantial addition must be made, because the Bounty is paid (as it should be paid) when, or shortly after, the cane is delivered at the mills, while the Excise is only levied (as it should be levied) when the goes into consumption.
[n other words, the Treasury has to pay the interest on the money in the me:mtime. When it is remembered that the Bounty paid in 1910-11 amounted to £630,()10 it will he appreciated that a considerable expenditure is involved on this head. When it is
also remembered that both the Commonwealth and the States are pledged to the policy of a living wage, the expense involved in an independent admiuistration of the Bounty Regulations nppears inconsistent with a due eeonomy of the national resources.
(2)
(3)
(4)
By the great body of the growers the Bounty Regulations are regarded as irksome in their practical working. This is perhaps not of grave importance in view of the possibility that the Hegulations might he simplified. Still some weight does attach to the fact.
'Vhile tlte growers naturally favour the Bounty, as a body they dislike the Hegulations incidental thereto. We propose to quote, later ou (section 5 ), some extracts ti·om the evidences which illustrate the attitude of growc·rs in relation to this subject.
It is a much more serious ohjection that the Bounty Regulations are partial in their operation. They apply only to growers, leaving the employee of the millers and refiners unprotected. It is an obvious auomaly that the one class of profit earners who g-et least return for the capital which they invest in the Sugar Industry is the one class which is subject to the control of the Bounty
Regulations.
As we have seen, one objed of the Bounty system has been the of the wao·es and general conditions of labour of the
white employee in Sugar Industry. The Bounty is only given where the wages and conditions comply with c·ertain tests which the Federal Parliament broadly defines. By the dceision of the High Court in the Harvntcr Case, the regulation of wages and conditions of labour within a State is n mattet· of State, not Federal,
cognizance. as the Court deelnred in that case, tlte snhstance mtlter than the form of :m Act is to he it would appeat·
that section 4 of the Sugar Bounty Act of 910 was nltm 1 .:ires. 'Nc were informed that tltis had heen affirmed by
eminent counsel who hnn· hcen eonsulted on the point: hut that the question had not heen ht·ougltt before tlll' High hy the
O"t·uwers fot· judicial determination, lest tltl' of tltl' .Aet
respect to Bou uties should he dec_lared a IHI
tltc payment of the Bounty he tlterehy Jntpc·nlled . A:-;snmtng the conclusion ahove statl'cl to he c·oJTc·c·t, tit<· pn·!'⢷nt systt·tn of Bounty anci_Excise he n?t wholl\ justic·1.â¢.
as a eotnpltcatt·d d<·YH'c⢠hy I·_ederal l taxes_
an industt'\'. itH'lll'S c·osts in adnttnt4ratwn and the ltalnltt.,· of interest loans. in order to do solllf:tlting- wltic·lt lll11 1 l'l'. till' existing Constitution it ltas apparently 110 rip:ltt tiJ do.
As a result of the Bounty I:egulatiun:-;, :1 e<·rtain anwnut of discretionary power is left in tlte !t:mds of tlte .the
daY. This appem·;.; to us to be n g-r:n·e oh.redton ; 1t mntes the intrusion of political nnd it introclures an (')ement of
instability into the industry.
XXYI
( 6) One curious result of the payment of Bounty on the weight of cane, with no prescribed limit on individual suppliers as to sugar contents, was brought under Your Commissioners' notice. The following extracts will explain :-
:-; .. MANSON, Manager, Isis Central Mill.
20156. But even without that, are there not times when they would lose the cane altogether; w hcreas they at least get the Bounty and something over?-Yes. Sometimes n crop is taken off so that the grower may get the Bounty, and not for what be will get from the mill for the cane. II. L. Pot:LSE:-f, Farmer, Childers.
20666. Your position is that, at present, cane under a certain standard is worth nothing, Lut the mili takes it., aud yon get the Bounty on it?-Yes. 2066i. And for that reason of the growers are in fi1rour of the coutiunance of the Bounty?-
w. A. GIBSON, Director, aiarburg .Mill.
26154. It is grown originally for cattle fodder, and what they do not want they put through the mill and claim tho Bounty on it?-Yes. 26155. And the genâ¢-ral taxpayer has to foot the bill ?-It is all registered un
26\.)6. It might be described ns rather a humorous sitnaliiJn from the point of view uf the general taxpayer ?-That is true. 26157. It i8 not as bad as some instances we ha\' e heard of, where frosted cane worth 6J. per ton got a .£3 Bounty ? -We paid 8s. 6d. per ton for frosted cane not worth more than 3s. or 4s. Of course, 8s. 6d. rer ton is our minimum price.
26158. Yon make up for that cane by averaging the price for the better quality of cane ?-Yes. ,J. General Manager Millaquin Sugar Co. Ltd.
22710. Evitlence has been given to-rlay to the effect that cane has been crnslwtl at the mills which it won it! have paid no mill to crush, but it has simply heen crnshetl in order to enable the grower to ohtain ihe Bounty. Thnt is to it is a kind of fraud on the Excise, is it r.ot?-1 do not know whether it is
true or not. 22i 11 . You have not done it ?-1 will not say that, but that was in 1908, when I was fairly new at the gnmc. ·
22712. It is snid to have been done on the authority of a Cabinet Minister-I do not know whether ti at is so or not ?-I think tho Minister sent up word that the Bounty would be paid owing to the very had season on all cane, however badly frosted it was. When cane is badly frostetl the P.O.C.S. is very low, antl not only gives us no sugar, but it actually takes sugar from the other cnr:e going throug-h the mill. One customer came to me that year and said, " Mr. Johnston, your manager will not take my cane." I !'aid, "I suppose he has his reason for it." He saiJ, ".For God's sake, get my cane off. Yon krâ¢ow the
J\finister has agreed to pay Bonuty on everything." I said," But it is no good. It will only spoil the other cane." Then he said, ''Well, I will send it in for nothing. I have to cut it, even if yon do not take it and cart it away.'' I said to him, "Well, I do not want the cane for nothing, and I wnnt to help yon all I can," and I gM·e him 2s. 6tl. a ton for it. It is not many times that I have done good actions, hut it has followed me ever since how I bought cane for 2s. 6d. a ton; and yet my manager refusrd to take the cane from them. Mr. Hartnell, my mannge1·, is here, ami be can corroborate what I say.
It will be noticed that the above evidences are mainly from the Bundaberg district. The impression left upon our minds is that, as a general rule, the cane on which Bounty was claimed was up to the standard upon which the rate of Bounty had been fixed.
5. Many of the above stated objections against the Bounty and Excise system, together with certnin other matters, are referred to in a statement which we think should be included in this report. A. F. ,1. Dt:AI'Et:, Ch:airmau of Mnlgra1·e Mill.
261:l8. You told me yesterday that you would like to present t.o the certain thnt
were formulated aud agt·ecd t.o at a meeting of growers?-res. These opinions were formulated at a meeting of the sugar-growers of the tli;.trict. Between 70 and 80 of them met together anti di scussed th e of laying before 1 he Commission onr j'Jint opiniou on all matter:> that we con sidered we could
upon ; that i,:, the non-contentious matters. From that meeting a representative committee wns
appointe I, a111l that rrprci!Pntntive committee, together with all the witnesses who handed in their names as men who "ill come before the Commission, were then asked to meet ami dmw these questious up. They met, some 20 in nun1ber, and the qnc!ltions were all agreed upon (The document w11s then
reaâ¢\, as follows):-The nndersigued cane-growers ,,f the Hambletlon, Aloomba, and Babiuda districts have agreed on the matter set out below:-f.-COLOURED LABOGR.
Tl.ey nrc of upiuion thnt the Sugar Bounty nntl Excise Acts have fulfille .l the purpose of the from black to whit.e labour collllition;: , nnâ¢.lthere should not now be any
to colunn.: d labour.
n.-REBAH: AND Exci5E.
They further tl:ink that to maiutain the industry and to prevent the possiLility of such re,·ersion the Excise shonld Le continued on all produced from cane grown by coloured labour. Further, 1t large number t·f cane farmers are of opinion that the Excise and Bounty shonld be absolutely abolished : while they are unanimously of the opinion that if this be not ·lone tho amount of the rebate an;l
must be made equal.
1061
xxvii
III.-)lATTERS lllPEDI.SG THE DEVELOPltE:ST OF THE lNDUSTRT. . In supp.!rt of view;; we desire to point out that. the effect of the Excise and Bouuty legisla·
twn nt. Is that the upon us au unfair tax nf 6d. for every ton of
we produce! w1sh t.o .emphasize the Important fa ct that no other agricultural imlmtr,> in the
C..omm?nwealt!l 1s .sumlarly penalized . :1gainst the nmnber of harassing regulMions that are !10m tune to tuue unpns etl upon n;:; b,,. the I< cderal Go,·ernment. The followiu"' Re"nlntions arc specially Irksome :- " ( l) If n man desires to start nmlmaiutain a sugar farm he mu,;t register as a producer, gi\'ing full details null description of the property.
(2) If he to for rebnte, 11 <:omplicated pl an of tl:e fal'lll ha,; to be prepared and
;ubm1tted nllll of by the Custom 8 authoritie!'. and hi8 farm may be
IIIIo se\'eral registered areas. (.J) He is bâ¢JUnd to notiCy the authorities when he is about to cut his cane ; aud further nutifv them whe n he shifts hi,; cane -c utt ers from oue registered area to another. â¢
(-t) Wilen applying for rebate helms 10 specify the area from which the cane has
been cut, anu the date tâ¢f its registratiou, and make a declaration as to what wages he ha8 paid, the uuwher of chippe⢠s, plonglunen, fencers, cooks,
carters, anti boys employed, giving their rate of wages nnâ¢l price if done by contract. (·i) Ry a very uujnst Rcgnl a tiâ¢)n wla cnenr there is any dispute between employer and employe in the lll HihJt' of wagc8, how ever 1rivial or uufouuded, the whole of the employer's Bonnt.y e1trn et.l or to lâ¢e earu .. tl is wi1hhelJ tmtil the point in dispute has
been settletl, which mnv tJIJl hu for some months. The delav entailed works most hatshly in the case of the small fatmer, a111l might he avoided by holding a sum
sufficiently large to cunr the particular di spute in case the findinl! sl:onld be agamst the employer. Where a charge has IJeen made of a contravention of the Act or
Regulations iu the matter of the employ ment of coloured lal our, then-(i) the :o;tatement of the complainant should Le (a) specific, and ('â¢) on oat h ; (ii) nn immediate inttniry should follow. Disputes and accusations nn i.ler this head nrc frequent, very often ill-founded or nllll alwsys press hartlly on the farmers of weaker finandal position.
(6_ \ wish to euler a strong protest against the Regulation enforcing pnymcut of wages on wet days, when the men tl o not work. Unde1· the pre\·ious couditions, an employe wn :; housed un
I u t.he iuterests of t.l1e t>mpl oye the Hegulation in que:>! ion i;; 1a s it means
that the fnrmers emplolJ liu.Ie or no labour during the wet. portious of the year, which in this djsttict is the "off season." This means thnt the lnh<â¢ure1·, iiJstentl of being comfortnO!y hcused aud feu during the wet weather, h11 s to be tullled adrift. 'Vc are uot nwnre of any nt.her industry in which this system (i') It is prescriheu by Regulation that no labourer shall earn less than 22:;. 6d. per week and
keep in the " off season," and 25s. per week ami keep in the harvesting &eason. Instances have occurred where work has been let on contract, and, owing to such causes as intemperance, incapacity, or attt>ution to his privnte affuirs the contractor has not enrne
sufficit>nt to earn such a wage by workiusr; fair and rcnsonable hours. The rebate is thus jeopnrtlizcu-a course which we regard as unfair.
These Regular ions are canied into effect wi thout any notice w hatsoevet·, iuterfering b"th with tho existing contructs and with the financinl arrangements previously made by the farmer:<.
6. In \'iew of the se\'eral to the Bounty Regulations stated,
the question nnturally arises whether the which these Reg-ulatwns lun·e
served might not he achieved hy meaus less open to ohjection.
(I) The primary purpose for which the Regulations werl' originally suhstitâ¢1tion of white for coloured labour-has
as we have already pointed out, substantially achieved.
Ninety-four per cent. of the labour in the ti(.:lds is now white labour. It has been su o-gested In· some mtness(.â¢s that th(⢠C⢠, ⢠⢠⢠abolition of the Regulations might result 111 a reversiOn to coloured labour ; hut this could he prewntecl 111
ways, e.g.-(a) The substitution for Buuuty mad of an Excise tax
on th(.⢠producl· of growers employmg- coloured lahour.
(/1) Till' provision , either by Commonwealth m: by State legislatiou, that colour('d lahour should he p:ud the same mtes as whit (.⢠labour.
(c) The direet prohibition, by legislation on the part of the sugar producing States, of the employment Q{ coloured labour in the canc-fieldi.
...
XX VIti
Of these alternatives, the last-mentioued seems to us to be preferable, at any rate, so far as Queensland is concerned ; and we understand that the Queensland Government is quite prepared to act in the direction indicated. So far as concerns New South Wales, where the settlement problem is not so important, it would be relatively
immaterial whether State legislation directly prohibited coloured labour in the fields, ot· insisted . upon the same living wag8 for white and coloured labour. It may be noted, moreover, that New South Wales only produces about one-tenth of the Australian output of cane sugar, and that in that State the industry is likely to decline, partly through the rivalry of other torms of cultivation
not availahle on the Queensland littoral, and partly because ot the climatic advantages enjoyed hy the Queensland areas for cane culture. These facts, viewed i!l relation to the relative unimportance of the settlement problem in New South 'Vales, suggest the desirability of discriminating between the policy of a
\Vhite Australia (which is primarily a matter of Immigration) and a policy of excluding from employment coloured aliens already within the Commonwealth. There is a certain amount of coloured labour within the Commonwealth for which employ ment must be found. If that labour does not come into
competition with white labour in one sphere it will in another, either as wage earner or as producer. It is, iudeed, probable that competition in the latter sphere is more to he avoided than in the former. The whole problem of colomed labour appears to have originated mainly iu n policy of coloured immigration, and in the fact that coloured labour was cheap. The policy of
coloured immigration has been discontinued ; and if the rates of wage for colouretl and white lahour for similar work he the same, the dang-er from that source ·would also cease to exist iu any substantial form. The danger could only arise on the assumption that the coloured labour is more efficient than white. ( 2) The secondary purpose of the Bounty Hegulations-the maintenance
of standard wages and conditions of lahour-can be, and in our opinion ought to he, secured by legislation (either Commonwealth or State) embracing the wl10le of the industry and not applying, as the Bounty Hegulations apply, to one selected portion of the
industry. We cleal with this in Part IV., Waye
Em·ne1·s.
(3) The utility of the Bounty Hegulations as a means of promoting an equitable distribution of profits among the various branches of the Industry is so obviously inadequate that the
retention of' the Regulations on this ground would be wholly Tlw true solution of the prohlem indicated is
a matter of gn·at importance, and will receive due consideration in Part III., Millers, and
7. Un the whole, we arl'i\'e definitely at the conclusion thnt tl1e system of Bouuty and Excise slwuld he ns soon as may be pmcticahl(â¢, :mel that, with n \·iew to tllis aholition, such actiou should be taken as we indicate in the Recom llll'lHlntions at the conclusion of this part of om· Heport.
8. The Customs Duty on c:ane suo·ar is £6 per ton, raw or retinecl. As we have shown in 1-'m·t I. (p. xix.), tl1is means a pl'Otecti?n to the a which
111ay hl' approximately assessed at.£;) 5s. )'l'l' ton. ll1e proposed ahohtwn ot. Bouuty and Exeisl', p⢷estHnin. !.!" the Customs Duty to ⢷emain stationary, would menn an mcrease in tl1e l'rotedion of approximately 15s. per ton. Wllt'ther this inc1·easc would justitiahle is a 'luestion to which Your Connnissioners have given caretul
,·ousidemtion. 9. While we assnJill' that the llllport lJnt_v should he suffi,·ieatl_y high to l'nahle e\·en· branc:h of th e industrv to conduet its husimâ¢ss at a reasonahle profit, pavino- empJo,·ees o-enerHif\, a )j,·ino- wao-e, we m·e stl'Onglr of opinion that any increase in" not be without of the.
various obiections to a llio-h Tariff. Amouo- these ohiectious the foremost is, ot ;] ;:, 0 J course, the burden which a high Tariff lays upon the consumer. 'Vlâ¢enever any one
106:1
xxix
class engaged iu an industry is not recetvmg· what it considers an adequate return, it naturalh: demands a hi()'heL' protective dub· without trouhlino· to inquire whether J 0 A an undue absorption of the profits by other branches of the 1ndustn·, or any other cause, responsible tor the alleged grievance. Anci' the demand is
not unhkety to be conceded for purely political purposes under a system of party go':'ernment, since the various branches of an industry are relatively organized while the general community of consumers is not. In the long run tlte consumer, of course, pays. The normal tendency is for the price of a commodity within
a protected area to be fixed at the price of the commodity in foreign markets, together with freight and duty added. Sugar is one of the necessaries of lite; and there are special reasons for keeping its price as low as possible at a time when the cost of living is increasing with great rapidity. Increased wages to the wage earner,
for example, will mean relatively little if competition with the outside world is so completely excluded by high import duties that capital can pass on the whole of its resulting oblig-ation to the consumer in the form of enhanced prices. 10. The pmctical coincidence of consumers of sugar with Australian citizens
requires that the question should be viewed from a national standpoint. According to a return tahled in the Senate, December 18, 1911, the year's estimated consumption of sugar in Australia was 253,494 tons. Assuming, as will probably he case, that this amount will be soon produced locally, and assuming the import duty of £6 a ton
to effect a corresponding increase in the price of suga.t· on the local market, the Australian consumer is pledged to, in a sense, a subsidy of approximately £1,500,000 per annum. There is a further fact to he borne in mind. E,·en when sufficient area is under cultivation to meet the local demand, that area will he only a fmctiou
of the total area for which employment must he fouud if the general problem of settlement is to he solved. The situation would he very materially affected if there were any prospect of building up a substantial export trade. But as we have
already pointed out (p. xxii. ), we do not consider such a trade to he within
the sphere of practical politics, taking iuto consideration the nature of outside com petition which would have to be met in the world:s markets. 11. Apart from. the objections just urged, some indirect consequences of unnecessarily high duties, though generally admitted, are frequently disregarded in
practice. We limit ourselves to consequences which ha,·e an immediate henring upon the Sugar Industry :-(1) Ove1· p1·oduction.-An unneccssnrily bigh duty, imposed in respect of a commodity with regard to which an externai mm·ket cannot he
anticipated, is a direct eawomngement to the produ(·tion of an unprofitn ble SUll)lus. (2) Slack productiou.--As Dr. Maxwell remarked in hi:-; rf'port to Sir William Lyne in 1905, "The measure ofprotN:tion aftorded to the
Home industry should he that amount whiel1 is indispensable to maintain the Home produl'er, using the most modern means of producing, against the foreign producer. If_ 1
thc men:-;me pro
tection is raised to enable the Home prouucer to contmuc to compete by the use of obsolete methods, n tt·ihutc is offered to i
in education, in agriculture, and in i1ulustrial cffi« ·itâ¢JH :y, the ultimate results woultl he nnu.-h more The amlthe exr:ril'IH"t' tllat the
Tariff ma.v have au undesarahl<· mftuen(·e 111 promotmg Trusts. :\Ir. President of tl11.: American Sugar Trust, Wl·nt so f.'U"
ns to that '' Th<· mother of all Trusts is the Tm·iff"." \Vhile
the existence of Trusts in free· tm«lc couutri('s dis1·otmt:-; this swecp ino· aeneralisation, it must n·t he apparent that :tn unnccessarih· dutv. unless n;ith strin!.?:ent h)'
0 .I l '--' .. . . \:)
to eliminate <·xtcrnal ('Om petition, rcndt·rs tllf' formation of Trusts more ensv, and their despotic <·outrol nâ¢nrc· t·ff'cctin· :111d endurino-. A('cordin.g to Profc·ssor Clnrk, au eminent Ameriean authority Tru:;ts, "The honest whom for our good we must
protect, is crushed under a high duty as be would not he under a low one." (The Problem of 59).
XXX
12. Apart from the objecti(\ns to the unnecessarily high Tariffjust considered the burden on the and such dangers as over-production, and slack produc tion-the fact must not be overlooked that sugar is an essential constituent in the raw material of many important Australian industries-especially jam manufacture . . We discuss this subject at length in part V., Allied lndusb·ies.
13. To raise a duty which is shown to be inadequate may not be an easy matter. To lower a duty which has once been imposed, and under which vested rights have been acquired, is an extremely difficult matter. " Work for Tariff reform," as one eminent writer J'emarks significantly, "is a thankless task."
14. To the foregoing argument it may be added that the high price of sugar recently prevailing abroad makes it possible to charge a high price for sugar in Australia. If at present, £5 !ls. per ton is not an adequate protection, twice that amount might not be adequate when foreign market prices drop, as they are likely to do sooner or later, to at least £6 below recent prices. It is true that, for one reason or another, full advantage of high foreign prices has not been taken by the Colonial
Sugar Refining Company in fixing the price of refined sugar in Australia. But the Australian price rose very materially in 1911 and These fluctuations in the Australian price, due to fluctuations in foreign market prices, suggest the question whether the import duty, instend of being fixed as at present, should not fluctuate in accordance with the foreign market prices, rising as those prices fall, falling as those prices rise. The suggestion is one to which we shall return later on. For the moment, however, we shall assume that the established system of a fixed import duty continues in force; and we address ourselves to the question whether the present net protection of approximately £5 5s. per ton of refined sugar may be regarded as adequate. The majority of witnesses in the sugar districts whom we examined were in favour of a very substantial increase. Those witnesses, however,
were interested parties ; and it is difficult to assess the precise value of their evidence. The following citations may be quoted as suggestive of an opinion that the present net protection is adequate :-JoHN DRYSDALE, Sugar Planter and Millowner, Lower Burdekin.
7330. Do you think that the present duty of £6 a ton is sufficient, or do yon think it should be raised ?-In this district we c1m get on very well with it as it is. It is very difficult to say it ought to be raised. A. J. GIBSON, Ph. D., General Sâ¢Jperintemlcnt Bureau of Sugar Experiment Stations, Mackay.
9682. In conclusion, I WC\Uld draw attention to remarks contained in the 1910-1911 Report, Bureau of Sugar Experimental Stations, page 3, in which it statetl that, " The altering economic conditions of the industry in cultivation, harvesting, and manufacturing demand a t the present time a very close ,;tndy. With the increasing cost of the unit. energy year by year in all brand1es of t he industry, it
becomes imperative that newer anti impro'l'"ed method:< he :icla pted to maintain the ir11lnstry under the present f!onditions." As the author of the above, and in justificntit>u of the I may s t.nte that my occupation
brings me into personal touch with ever·y distrif't tmcl sngnr mill operating in Qurenslautl, so that T am in a posi tion to make comments. It is useless to argue th:lt in any one brunch of the inclnsll'Y that a maximum state of efficiency has loceu ani ve(lat.
It is brought home very forcibly to me that t he successful cane cnltivutor is tl.e man who is paying strict atteut.ion to the of cultivation, green manuring, careful selection of pl ants of the highest
commercial value, rotation of crop, and the judicious use of artificial manures. In the manufacturing businesR there is a vast difference between the etfieiency of factories and, in rny opinion, in the extraction of sugar from the cane at the rollers nl onc, this difference amounts in some cases to 10.12 per cent. below the best work, while the gencrnl nvt-ragc would be about 2 to 5 pet· cent.
less.
In audition to the above, there are also losses in process of manufacture, which make n
considerable difference, and place the weil-eynipncd factory under scientific control in a favourable position There are factories in Qneenslantl which are well equipped, and do very good work, but neverthe lel!s, with the more recent improvements in mill machir1ery, none of them can, in the strict sense of the term, be considered right up-to-date.
In my opinion, if progress is to be maintained, one of the leading factors will be the employment on a well trained and well organized body of men, who are able to apply modern !>eientific methods along practicable commercial lines to all branches of the industry.
J. R. PADDLE, General Central
2 .-,563. I will give yon a little more of Mr. Drysdale's e>idence :-· "79i 5. Did yon give us any information ns to what y ou though t was a lidng wage in this district. Did you say 8s. a day ?-I said about a day.
" 7976. Eight shillings a day is very much less than the wages in the lowest grades before the is it not ?-A little less, not much."
106r.:. . - â¢'
xxxi
Woulcl you not say that a profit of 20 per cent. per annum would enable a miller in the first place to pay n living wage ?-Yes.
25.564. Certainly to pay a man 8s. a dav ?-Yes. 2.556.5. Taking fil'e years, it would enabled :'lfr. Drysdale to ha\'e paiL ! a better price for cane aynd yet would have enabled him to have obtaine.l a profit on his:>'iu,lu5trial undertaking?
es. ⢠25.566. That being so, nntlnot going any further than ::\Ir. Drysdale's mill, under the same conditions, the duty would be high enoug h to give the labonrer a living wage, the raw sngar manufacturer
a fan profit, and the grower of cane a fair price for hLs cane?-Yes ⢠. . 2.5567. us to t!.e conclu;;ion that where a mill cnnnot do tha t., either the mill is not
suffie1ently snp['ll.eLi w1th cane, 1·r the management is not. efHcicnt ?-Yes, want of elficicncy . Will you admit that the taxpayer ought not to pay a higher limy than is !> nfficient to
protect an mdustry efficiently mauaged, and that he ought not to be taxed for inefficiency ?-He certainly should not ⢠⢠. 2.558 0. all these improvements haYe been achieveJ, do y ou think under present Tariff
cond1t1ons the m1lls will be successfnl ?-Possibly ; there is a tendency to impro,-e matters generally. 25ij8}. If they had been properly sitnated and under efficient management would the present Tariff have the!? to be successful, and if they are efficiently managed they would still become paying proposttJous ?-1' e11.
2.5582. In the face of those two conclusions, what reason is there for raising the Tariff on sugar ? -So far I do not ;;ay that there should be any increase. 25583. As a reasonable man, you do not think the taxpayer shouM have the Tariff to
enable an inefficient concern to make a profit ?-No. E. W. KNOX, Ge!leral Manager of Colonial Sugar Refining Company. . 26822. Do you think, in the [net J import duty at £ 5, that is high enough to allow a
fan· ret.nrn for the capital in the different. b1·anches of the indust.ry, ant! fair wages to the employes? Yes, if you leave the industry alone.
15. Among the mass of evidence submitted to us in favour of an inc1·ease in the present net protection, we select the following a.s specially worthv of consideration :- ·
H. L. PoULSEN, Farmer, Childers.
20469. While there thus is a constant decrease in the returns f1·om the lund owing to gradual exhaustion, there is at the same time au increase in the working expenses from causes as hereinafter shown. There has been a steady increase in the cost of labour, both wages and contract, in horse flesh, horse feeJ, cost of repairs, implements, and various other items. _With age the land gets more overrun
with weeds.
C. E. Sugar Plantation PPOprietor, Fairymead. 22191. What is the freight f1·om Java ?-I it \vould cost 7s. 6d. or lOs. a tnn to send it
down to Sydney. It is, perhaps, a higher test sugar than we make, 96 test, that is £12 1s. 22192. Is that higher than the average price of sugar for the la st eil$ht year:; ?-f tl11nk so. 22193. Then it does not seem to bear out your statement that Java can laml sugar here cheaper than you make it. The average price of sugar for the la st eight yenrs has heen something like £11 10;;.? -That is a little lo\\'er, and is Cot· a low<> r the one is 96 net titre, an.I the other 9!.
22194. 'Ve have had it in evidence all through that the Colonial Sugar Hefining Company':; refined sugar is the finest in the worhl ?-That may" be, but I llo not suppose it. has as high an amount of sugar nil out·s, but it is whiter. We have bali ours analyzed, ami it contained 99·84 p er cent. of nnd that
left a small margin for impurities. 2219JA. Would you get as much for your sugar ?-:Xo, because of the colour. One tl ru p of intligo in a tank as big as this room will colour the whol e of it. The difference between £12 for ,Java sug1u· 81111 whatever our Queensland price is, is partly t1ue to quality ; it doE' s not g ive a hi gher by the
polariscope, but the are l11ss harmful iu Java than they are he i'C. \Vhen. P oo!man was running
his refinery, he almost invariably bought Javn sugar, he dul not care whether he pnlll a httle he got his sugar so easily retined. We cannot help that in our as country n?l suclt a
typical sugar country as is Java, ant! we ha ve to make the bes t of tt. We con;.tJ <>r .-\n5traha ts a very good country, but it is not the best for everything. 22196. The dutv is £6 a ton, anJ £4 a ton is paiâ¢l by the sugar mauufaeturcr, wh ic h is lleductetl from the grower, is it n.ot ?-If Java sugar is bought, the has to G·Jverument £6 a ton if
he buys it for his relinery. If he .bup Quee nslatul snga r for loi s refiu ery, he to pay £4, the
nclvantage in favour of Qneenslandts £2 a ton. 22197. In addition to t.hnt £6, there is the cost of frei::ht, in snmnce, exehange, &c·., whi ch brings the price up to ,£; 12 los. a ton for .J ava sugar, is tbnt su ?-:-1 rhin k ,J r, the whole tl1iug for £6
c.i.f.e. They load very big cargoes, ami they semi 1,000 tons 111 oue bott om. 2219!;. The harbor dues on foreigu cargoes are four higher than on local cargl)es-there 5s difference ?-But it would he a long way from our frei g ht. We pay 17 6 ,1. a ton to get onr sugar to Melbourne, and ,Java sugar ca n get tht⢠re for 7s. 6Ll. _ . _ , â¢
22199. But that comes on t. of the £12 lOs., so 1t .Jocs not enter wto the .-:'io.
22200. With to thi s average pri ce fl f £ II 1 Os. for Australian raw suga r at the port of ship·
ment., would uot the refin ery have to pa;· fr eight ou r,,_ w sugar, anâ¢.l uL;r⢠the cost of
which would hn ve to be mlded to th e £II 1 Os. wh ic h th <: m11ls ha ve rece t vet! , a not lwr £1 a ton ? I s not compurinu them at all ; 1 IJa \'e made oul no fi gures . I am merely stattng tha t Java sugar can wa c £ 6 . f . . r l
get into S.) dney, I believe, at c.1 . . e. 111 111ue o g ut.
:xxxii
22202. Then you say that during the la s t t en years Java sugar has not been able to compete with t he Australian article in price ?-Java is e xpamling Yery rapidly , and the pr ice is coming down, an
WILLIAM GIBSON (Gibson and Howes Ltd.), Bingera. 22364. Since 1904 the rate of wn ges has increased, I estimate, 30 per cent., nn tl t he hours
of labour h ave decreased 27 per ce nt. in the mill. That makes 57 per cent. in favom of t he working man. Cane has increased in price, and the faqner forgets that we h ave to pay £ l mor e in E xcise th a n in 1907, which means that in 1907 we bad to pay 2s. more for our ca ne in E xcise, so our <'a ne has incr eased in cost 20 per cent, Fi,ewood has g one up 20 per cent.; coal, 30 per cent.; sawmill t im ber, 25 per ccut. ;
beef, 20 per cent.; horses, 50 per cent.; and we have the Workers' Compensation A ct, la nd tax, income tax, which all mounts up. HoN. A. GrnsoN, M.L.C. (Gibson and H owes Ltd.) , B ingera. 23055. Do you think the present import duty of £6 a ton should be rai ::; ed, or is it s uffici e ntly
reasonable to protect the industry from the consumer's p oint of view ?- I h ave gone into t hat ques tion very seriously and carefully. I feel almost ashamed to say tha t I t hin k the dnty onght to be more than £6 a ton. But speaking my own Lonest opinion on the matter, if we had that £6, without any encumbrance, it woulJ be all right; but there are so many obstacles put in the way that it makes it very difficult an
very irksome work. 23056. You are referring now to the Bounty Reg ulations ?-Yes, and t o the inspec tions that lia,' e to take place. I think there s hould be a duty of another £1 , making it £7 p er t on, and if the other £ 1
which does not now come to the grower, were given to him, I t hink it would be a very fa ir and reasonable thing. E. W. KNOX (in his statement of his Company's pos ition). 26844, (33.) As t o (a) the position of th e company must first be consider ed in relation to the Tariff. In tbh, respect there is a widespread beli ef that the sugar refi ning lmsiness is heavil y protect ed by the incitlence of the sugar duties. This is wholly erroneou s, for the refiner works in bond, and pays the full import or excise duty on the s ugar when it leaves the refi nery. If the refined sugar is prc
doubtless the difference between these duties which h as gi ven rise to the beli ef th a t the refiner enjoys a protection of £2 a t on, and such would be the case if the refiner pa i
to the company during the years 1906-10 inclusive, recei ved £2 l s. 8d . per ton more than the company paid for their imported supplies during the same period, t he figure s being :-
Australian raw sugar Imported raw sugar
Per ton.
94 net titre in Bond. ... £12 10 0
10 8 4
Additional cost of Australian sugar ... £2 I 8
(34.) Thus it h, es tablished bey ond ques t ion the fac t. t.hat both t heoreti call y and ac tuaily the company's refining business is conducted purely on a fr ee-trade basi 8 And it mus t continue to be conducted on this basi.s so long as our agreements for the purchase of Australi an ra w 8ugar are drawn, as at present, i1~ a manner which automatically insures to t he pr oducers of such sugar the very fu llest mark et
equivalent in price. ⢠.
(35 .) Indeed, it is certain that wore we to deal year in and year out with impor ted sugar exclusively, we could bny to bet.ter ad vanta. ge than now, because under present conditions our suppli es of Australia n sugars are oaly s upplemented when an ascer tained s hor tage renders this necessary by t li e purchase of small quantities of forei g n s uga rs to wards t he end of t he 8eason, which is a n u11 f:wo 11 rable time for operating. For ins tan ce, in 1909- 10, the failu re of t he Q ueensland crop wa s anticipated, and we impor ted 77,408 ton s of J a va s 11gar a t a cos t of £ L l s. per ton ( import d11 1y paid) below th e pri ce paid fo r Australi a,n
sngar in th at year (exeise d ,if y paid).
16. In considering the value of the evidences cited as suggestive of the conclusion that the present net protection is adequat e, two important · facts must be borne 'in mind. In the . first place, the ·evidences were elicited at a time when sugar was high in price. In the se cond place, the evidence, generally speaking, assumes a rate of wage materially below that which, in our opinion, should be paid (see Part IV.,
Wage Earners). Taking into consideration the more important factors of the problem-on the one hand the fact that the margin of. profit s in refining and milling is unnecessarily high (see Part III.), the undoubted scop e for improved efticie ncy in milling and growing, and the claims of the consumers and of allied industries to cheap sugar-on the othei~ hand, the increasing costs of production generally, the urgent need for a substantial -improvement in the r ates of wages, and the necessity for
meeting the competition of Java sugar,-we are compelled to conclude that the removal of the tax on the Sugar Industry involved in t he abolition of Bounty and Excise should not be accompanied by any diminution of the prf:Sent Customs Duty of £6 a ton. In
t1
11
J :
Jle to compete with ning- down, and we n get a good marke t , ill be over -supplied
es of sugar will b e
ent., 1111d t he h ours f the working ma n . cise than in 1907,
e has i ncr eased in
ber, 25 per cc ut. ;
t, land tax, inco me
or is it suffi ciently ' into that ques ti o n
to be more than £6 anv encum brance , ve;·y diffi cult a nd
pections t hat h av e and if the other £ l
fa ir ancl reasonab le
lation to the Tariff. ily protected by t he d, and pays the full ar is prc
the refi ner enjoy s a r the Austra lian as 8 those gi ven in the
ho sold their output than the company
nd.
0
4
8
ly and actuall y the
ust continue to be
sugar are drawn, a s very fu lles t market
1pplies of Austra.li a n y hy tlte purcha se of rn fa von rub le time fo r t e
e paid for Aus tralian
Lggestive of the .t · fact s must be
ime when sugar king, assumes a aid (see Part IV. , factors of the
ning a nd milling red efficiency in dustries to cheap rally, the urgent he necessity for
nclude that the n of Bounty and ) us toms Duty of which we deem
borne by wages ;, if the Customs
106
~xxiii
.buty be fixed at a definite figure, it should be not iess tLan £6 10s. Australia is pledged to the maintenance of the living wage ; and we feel entitled to assume that the Australian consumers of sugar, who are virtuall.r coincident vvith Australian citizPnship, will be prepared to pay for the furtherance of an object which is admitted
on all hands to be of the utmost national importance.
17. It is a familiar fact that the world's prices for sugar, as for most other commodities , fluctuate considerably. As prices in the world's market rise, they tend to bring about over-production. Over-production ends in prices which may be ruiuously low to producers. Tliis is so common a phenomenon as to lead one
eminent economist to observe that there is no such thing as a nnrmal price. The implied distinction between an imaginary normal price and an actual ai-erage of prices is of g reat importance for the purposes of estimating the incidence of pro tection ; and it deserves, in our opinion, far more importance than it appears to have received.
18. ,Vithin a protected area, especially where local production does not equal local demand , tl1 e primary factor in the determination of the price of the protected commodity js the necessity for meeting external competition. If the local market is subj ect to Trust control, ::i s in the case of the Australian Sug:::tr Industry, price flu ctuations are Jike1 v to be less marked in the home than in the world market. The ·
Trnst will be able to.; keep up local prices wh en foreign prices are unusually low, at any rate for some t ime. On the other hand, when foreign prices are mmsually high, the Trust ·will probably not take full advant::ige of the rise for fear of inviting legi slative intt.,rfereuce. So far, the Trust may be regarded as a beneficent
in stitution; but its influence, as Australian experience shows, is more Jikely to be exerted in the direction of maintaining high prices to the consumer than in the
( 1) "'hen foreign market prices are abnormally high, the consumers within the protected area are burdened with prices quite
unnecessarily high for the purposes of protecting the local industry. In July, 1911, the Colonial Sugar Refining Company was (1uoting its lA sugar at £21 12s. 6d. On 3rd November, 1911 ( four months later), it was quoting the same sugar at £24 2s . 6d. The explanation of this rise must not be looked for in any
corresponding increase in Australian costs of production, but in the fluctuations of the world's market prices. Whereas the Hamburg price on 3rd July, 1911, was £11 for sugar of 88 n.t., the price on 3rd November was £16 15s.
(2) When foreign market prices remain for any time at an abnormally low figure, then, assuming the fixed import duty to have been assessed in the first instance at a not unnecessarily high figure, the local industry is being carrried on at loss. The loss may
not be equally shared between all branches. Far more pr(?bably, the larger business concerns wm throw the loss on the primary producer. But even supposing the loss to be shared all
round, the condition of things is very unsatisfactory. The larger husiness concerns may be able, as a result of profits accumulated when foreign market prices were high, to stand the resulting strain. The smaller concerns, and the primary producers more
especially, a.re threatened with extinction. This is especially the case if, as may well happen, the period of low foreign prices for sugar is coterminous vdth a period when, for local reasons, the local industry is in 3: bad way.
19. Ia the opinion of Your Commissioners, the conclusion is irresistible that · the Impo1 t Duty, . instead of being fixed at a certain amount, should fluctuate accord ing to foreign market prices1 falling as those prices rise, rising as those prices fall. YS'. l.1881, C '
l I
I
I
xxxiv
The cohclusion appeai·s to us to be implied in the expression of opinion of a competent sugar expert-Dr. A. J. Gibson. 9682. lucreased protective duties. I am not in favour of high protective
methods in all brnnches ot the industry, so that all those e11gaged in it (in suitable lo cnliti e;; ) shall receive a fair return for their labour and cRpital expended. The importation of fore ign s 11 g ar tihould receive closer attention, a11d apply the Preservation of Australian Industries Act whe ne ver i t was fonnJ that the foreign article was competing nnder unfair trade conditions. With au effective Sta,tis tical Brnnch .the
Commonwealth · should be able to control importations and decide the necessity for th em and otherwise. An excessivel.Y high ?rntec ive duty would lend quickly to an over production of s11gnr within t he Com-111ortwealth. It must again be etnphasize
Au indirect testiniony to the sai.ne effect vrns given by Mr. C. E. Young of Fairyinead. 22174. For a firm ,vorking in a large way, it is far bett-er to get a r egular pri re than an up-and down price. I think that fact contains n. lesson :for us, wheu we arc den lin g wit It t he price o f canP. If
you want to get the highest price possible for cane, then you must take 1he low es t p r iee p oss ibl e when conditions are adverse. I think it would pay the Java m:inufacturor, who is m:1ki11 g 80,000 ton s of sug u.r. to take a regular price; their profits for one year were £328,000. I thi nk i t is l>t31te r for Lh e ca ne g ro-w er to have an even price going along a series of years, than to go very much up and dow11. 1 am not in favour
of the analysis system of buying cnne, because it exposes a farm er to ups-nnd-do wns , an d t h e farmer generally, if he is working a small area, has not enough capital to s tand ups-and-do wn s ; ·whe n h e goes do"i-n into the cold bottom, he gets frozen out.
-~0. One important witness, Mt. E. W. Knox, General MaHager oftl1e Colonial Sugar Refining Company, was opposed to the suggestion we have made. He urged that a fluctuating duty "would introduce more uncertainties still iu a b usiness which i~ uncertain from beginnning to end." To us it seems to need no demonstration that the fluctuating duty, by tending to standardise the prices of cane, raw sugar, and refiqed sugar, would work rather in the direction of dimini shing th an increasing the uncertainties in the Sugar Industry. It is, moreover, quite within t he region of possibility that if the witness just referred to had represented the grower s, instead of .representing the millers and refiners, his views as to the expediency of a fluctuating
duty would have been different. We do not think it would he unfair to state
that the general scheme of prices for cane, raw sugar, an
connection with local cost~ of production. That an International Conference of sugar producing States, or, possibly, an International Sugar Combine, should have a power of determining to so large an extBnt, even indirectly, the price to Australian consumers of an Australian produced and Tariff protected commodity, appears to
us a condition of things which cannot be justified by argument or by practical necessities.
21. We are not unaware · of the existence of objections and difficulties which might be urged to the proposal we have suggested. But ·we believe that the objec tions are far outweighed by the advanfages. We believe also that the difficulties could be easily overcome. All that would be necessary would be to state a standard price for Australian sugar of 1 A grade. The duty payable on importation would
then be the difference between that price and the foreign market price of similar sugar as stated from time to tin1e by the Customs Department in the Conimnnu:ea!th Gazette, say, at intervalEi of three months. The "standard Australia11 price " should be based primarily on costs of protluctio11_:__a11 estimate of which is implied in every fixed
import duty. We say primarily, because other factors would have to be borne in mind. On the one hand, assuniing the price representative of 1\ ustralian costs of production to be, say, £22 for refined sugar IA grade, and assuming that the London quotations are accepted by the Australian Customs Department,
as the basis of the foreign market price, and that the price of a sirn il ar
grade of sugar, f. o. b., London in bond to be £18, the freights and insurance
p~yabl-e b_y t~e importer of refined sugar from London, in addition to the duty of £4 (the difference between £18 and £22) might enable the local refiner to ~barge, say, £24-a price e:t' l~ypothesi excessive. On the other hand, it is ,highly 1mprobahle that any suhst:rnti:-tl importations from London would he made in view of
tho fac In tli 1~ the y e
]900 1901 1902 1903
1904 190[.i 1906 1907
1908 1909 1910 Fir ·t Rl
]900 1901 1902 1903
J 90·J 190:-, 1906 1907
1908 1909 1910 Firs !
i s g i v
l' fe
·w lii(
r epr inte the arno
fore he Corr the
hist ⢠thar f0re nrin
the fore fore tot'
·wo1 res] ind· elin
on~ Su<
1 06~
the fact tliat such importations would imply double. charg~ on frei$ht and insu~·ai1~e. In th is <·onnedion, the following Return of Importatwns of Sugar mto Australia for the years 1900-11 deserves notice :-
1900 1901 ]902 1903 ]904 190&
1906 1907 1908 1909 1910
Yca. r.
First six mouths, 1911 ...
Year.
1900 190[ 1902 1903 1904 19o r; ]906 1907 1908 1909 ]910 Firs L six months, 1911
Fiji.
C\\'t.
8,171 l 3,88ii 500 119,049
66,094 5l,b98 18,0:H 54,766 198,611 403,467 131,097
109,252
£
5,304 9,725 525 62,197 32,286 27,479 10,693 30,402 106,184 219,600
72,977 65,419
Java.
cwt.
1,070,537 1,452,868 1,234,754 l ,350,900
489,860 356,002 712,545 5,153 138,214 1,510,349
522,351 188,088
Hong Kong and China. Mauritius. Oerman,r.
cwt. £ cwt. £ cwt. £
16,361 12,166 3(!3,396 201,911 48,7 ll 34,018
36,887 29,372 l 69,()55 127,184 93,723 65,74u
20:,ug 160,464 418,480 280,442 8,307 3,942
247,475 190,844 95,855 7C,444 ... .. .
127,137 99,166 71,253 49,622 ... ...
12,033 6,205 78,399 57,723 ... ...
8,862 5,483 99,567 6\566 ... . ..
831 502 62,391 43,672 l 1
157 108 54,004 39,02:! 1 1
5,202 3,648 74,761 54,2.56 10 4
278 216 26,398 19,533 ... . ..
86 68 26,400 18,519 ... . ..
Other Countries. Total.
£ cwt. £ cwt. £
652,645 71,601 42,740 1,518,777 948,844
875,359 203,861 132,669 1,970,279 1,240,055
675,102 2,288 1,564 1,865,478 1,122,039
719,867 17,316 10,9813 1,830,595 · 1,054,338
230,013 6,358 4,033 760,702 ' 415,120
184,475 338 275 498,670 276,157
357,809 511 365 839,519 439,916
2,547 209 135 123,351 77,259
100,126 61 54 391,048 245,495
845,228 178 127 1,993,967 1,122,863
313,940 42 43 680,166 406,709
115,200 25 23 323,851 199,229
K.B.- Co1111try of origin figures commence with year !906 ; for previous Jears country of shipment is gi VC'll.
Taking into consideration the vari'Ous fattors to which we have prev,iously referred when discussing the fixed import duty, mo.re especially the increase of wag'â¬s which we lleem necessarv, we cannot recommend a sum ofless than £21 Hls. a ton as representative of the costs of production. vVe include 'in costs of production a fair interest on cnpital as well as a living wage to employees. Whether, for the purpose of tlic Australian standard price to which we refer any addition to, or deduction from, this amount should be made, and whether the Customs should derive their declarations of . foreign mnrket prices from the London market, ate questions which we think should be ta ken into consideration by the Customs and Statistical Depart1.m:nts of the
Commonwealth. As regards the Australian st::tndiud pt·ice, it is not improbable that the first statement ,vould have to be revised ; but that is no new r>henomenoR in the l1istory of Tariff legislation. Indeed, ithe need for revision is less likely to occt1r than under a system whel'e the import duty remains at a fixed figure regaruless of foreign market prices. We confine ourselves here to the statement 0:f -a general principle, which we think of the greatest importancB. If that principie were adopted, the local industry would be protected by high duties when there was a glut in the fore~gn ma'rket, while the Australian consumers would profit by low '
would tend to standar
22. We have given some consideration to the question whether a differentiatim.I ~t1.ght to ?'e mad~, _as regards the Customs Duty, between raw and refined sug;ar, Such a d1fferentiat10n would be made presumably in the 1nterests of the refinmg
i mhtstry, :m
:23. SeYeral of the witnesses whom we examined affirmed that an import duty on would be of servit·c to the lot·al industry in enabling it to utilize an
importaut by-pt·oduct to greater advantage. \Ve are of opiniou that :t duty of £1 lOi. a ton should he imposed on imported molasses.
24. In the course of our investigations, the opinion has been expressed that the dnty on sugar machinery is insuffieient. \V' e feel that the suhject is not suflil'iently within the scope of our inquiry to justify our making auy recommendation on the suhject. Nor have we sufficient evidence to enable us to form an opinion. \Vc cite, however, the following extract from the evidences:-
FRKDERICK lronfonrHler, ::\faryhorouglr.
19918. Are you the manager of Walker's Jjmited ?-I am tire nranagiug dir·eetor of \Va.lker's Limited. 19919. Do yon desire to give evidence before the Commiâ¢sion on matter;; affecting the Tariff on machinery ?-Yes. The Tariff has been too low to enable us to compete sati:;factorily with the
makers d sugar machinery in America, Germany, Frauce, 1111<1 Great Britain_ Those ai'C the fum· competitors we meet in open competition every year. The rate.> of wage.-; that we pay nre so rnneh higher than those paid in the countries I have mentioned that the construction of any Rugar machiuery we undertake does not yield us a profit.
19920. What are the rates of wages yon pay ?-Mechanics, from to llR. -hi. to their
tra\les ; some trades get lis. 4(1., an:l some II s., for eight hours a day. 19921. Whnt is the minimum wages paid by yon ?-The minimum wage is 7s. for ordinnry I thourers, mul for mec]ranics II s.
25. Our attention has been drawn to the prt-sent difi(â¢r<â¢nti:ttion betw<'<'n tl1e Customs Dnty of £6 on eane sugar :md £10 on hect sugar. W<' deal with the B<â¢et Industry in P:wt Vf. of this R<'port. But the present seems t!JC right place to deal with the difterentiation just mentioned. It was m·ged that the differentiatiou, by narrowing the at·eas of possible supplies, tended to :-:trengthen the present control of the Austm.lian Sugat· hy the Colonin.l Sug:u· Retiniug Company. The
of that. Cnmpnny, Mr. Knox, however, expressed himself as of opinion
that it was inoperati,·e in practice. As the appears to us to
serve no useful purpose, we recommend its abolition. Jt is a survival from a
pet·iod when there was a danger of the Bounty-fed sugar of Europe l>eing dumped 011 the Australian market. But this danger has been removed hy the Brussels Conveu tion, which has been recently i·enewLâ¢d (Appendix 12). Should the daug<·t·
26. A question referred to the Commission, in a Memorandum from tilt> Customs, calls for mention here. The question is as follows :-" Tlte method of payirw Bounty, so as to avoid the imposition of sm·-charg·es in othet· eonntritâ¢s upon sugars on the ground that they are Bounty-fed." The Bmssels Conv('n
tinn fixes a sur-tax at approximately £2 lOs. per ton. Any eountt·y in whit·h net protective duty to the loeal protltH'Cl' exceeds this sum comes within the definition of " Bounty-fed." In Australia such a net proteetiou would be wholly inadequat<â¢. It seems, therefore, quite impossihle for any ingenious adjustment of Bounty, Excise, a uti
Import Uuty, which would be sufficient to preserve the local iudustt·y, to escape tht⢠definition of" Bounty-fed sngat·." \Ve may point out, however, that since 1910 Grent Britain h:1s :ulmitted Bounty -fed sug·ar without imposing· a diffenâ¢ntia I duty; aud that in the present year Grent Britain has witiHlmwn altogPthet· fmm tlte Conventiou.
27. Wt> l'('('0Jl1111Cild-
(I) That the Bounty and Excise he a.bolislwd, provided that t.lw
Commonwealth Governmeut, hy (·o-opemtion with tlw States or otherwise, take whatever steps nuty he necessary to promote wl1it(⢠lahom· policy, and to ensure tht⢠maintenance of a living wage in the Sugar Industry generally.
1071
xxxxn
( 2) 'I I.at, pendiug t lte abolitiou of tlJC Bmtnt.'· and Ext·isl', the ;llllOllllt of till' Bounty he raised to the t'tjUCllizntion , if pmcti
cahle, to date ns from bt July, 191:!, in view of tlte Speeial Order of August last raisiug the wages.
( ;) ) TJ.at the Customs Duty on sugar, raw or rdined, ::ohonhl fluctuate in :wcordance with toreig·n market prite:s, fillling as those priees rise, rising as those pt·iccs fall. ( l) That the amount of the duty should be the ditiertâ¢nec hctween ti.n·eign
market pric(⢠of sugnr, of gmde Ntttal to 1 A (as declared from time to time by tlte Depat·tlncnt of Cu::otoms ), aud :t standard priec for Australian refined sugar fixed ou the basis of nut les:; than £21 lOs. n tun (1A gTadc) as of J\ustralian
costs of production. (5) Tlmt the Import Duty he the s:m:e for hel't as for cane sugar. (6) That an Import Duty he imposed ou at the rate of£ I 1 Os.
per ton.
\
xxxviii
PART IIL-GROWERS, M!LLEBS, l{EFINERS. ] . No pro h1 em with ·which Your Commissioners lrnve lrnd t o
rnilJing, refinin g . Some of the data of this problem are the ::,u hj ect of brief r efol' e uce in our Summary of Existing Conditions ( Part I.) In the present P n rt, we p ropose to give a more adequate st,1te1nent of
2. The equitable- distribution of profits among the variou s sections of the Sugar Industry primarily depends upon the prices of sugar cane, mw sugar, nnd refined sugar respectively. Where competition is keen throughout :rn indu:-;t ry , th0 prices of commodities produced at the several stages of the industry may he assumed to be proximately fair. Even where competition is not actual, it may be potential, as where a large business C,Oncern which is not subject to immediate competi t ion pay8 a fair price for its ravv material, or charges a fair price for its output, throngl1 fear of bringing new competitors into existence. Even where neither actual nor p ote11ti:1l competition exercises an appreciable influence upon price determination, fair prices may result from collective bargaining.
3. It would be fntile to contend that the foregoing factors are wh olly
inoperative in Australia with respect to the prices of sugar cane, raw rmgar, and refined sugar respectively. It would be no less futile to coiitend that th eir operation is reasonably effective as a means of securing an equitable distribution of tli e profits in the Sugar Industry. To discover the extent to which they operate in prac ti ·e, we have to consider in detail the several commodities to which reference i mad '.
4. For practical purposes, the price of refined sugar in Australia i.· fi .,cd hy t11c Colonial Sugar Refining Company Limited. The absence of netual competiti on among refiners is evidenced by the fact that the rival refinery at Milbquin an t om ntitally follows the lead of th8 Colonial Sugar Refining Company ( Q. 22G 79 ). P o ten tinl
competition can have little significance within an area where a dominant company i. · already in the field and the rn·1rket is too limited to invite new concerus t o ente r npon a war of competition. Coll ective bargaining is inoperative. What actually happens is that the Colonial Sugar Henning Company fixes the price subject to two main qualifications. The price must not be so liigh as to encourage large importation s of refined sugar by other persons or companies. On the other hand the price nrn . t l;e
at least high enough to admit of refining profits ,vhile paying for raw sugar a price sufficiently high to avoid squeezing pi·oclucers of the raw material out of existen<'e. Mr. E. \\'. Knox, when giving evidence on behalf of the Compa ny, cli sc1airne
Bingera Sugar Plantation :---23018. w·ha.t is the average difference in pri ce between refin ell s ugar a nd mill ·white su g nr i11 tl1e market ?-Mill white snga. r is g enerally from £ 1 to 30s. pe r ton lowe r than r efined sngar. . 230~9. We have the following letter written by your .firm :-" Our ll8W season's Bingera 1 A stJgr1r 1s now available, and we are posting you under separate cover sample of same. Price we are asking for
this sngar on rails Sy dney or Newcastle, whichever you prefer, is £21 7s. 6d. per ton. less 2 } per cent., 30 days , or 30 clay s cash. Should the Colonial S1war Refinirw C ompany advanc~ price previorn~ to l j f O O ~
{.espatc 1 o · your onler from plantation, we would have to charge the advance, but ~h ould they rednce i he fi g ure previous to despatch,. we .would invoice at the lower fio·nre." You regulate your prices by tlie
Colonial Sugar Refining Company's price for refined sugar ?-Iu 0 a. sonso, yes. \Ve have to hr £1 to 30s.
under the Colonial Su~ar Refining Company's 1;ualit.y of sugar.
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C11illjli'll,'-' en111lnt IJt> ,.;nit! t⢠: 1 ;_⢠it:t i'nt'nn·d l,y any ·<'(llllpetiti
l!<>t ⢷n ti;d. The only 1 ·i ,·n! t'i·fi:ti.' l'_,. fd !,- into lint· witlt t!J,. Colonial Hefi ning (' I â¢. ., . . ⢠I 0 I I ' 1 ⢠⢠,. 0 I ll lljl:lll_" IOI' i'(';),.;OIIS \\' !ll' ! , rl'O i\1 :1 â¢lll,.. l ll(' · S }:Olllt o[ YH:\1'. ) 0
reg:mkd as conl'lnsin·. Collel'l iYe h::rg-aiaiu_e:·, :t :::. n f:d⢠. in price clt'tt>l'lllinntion, may he rt.·ganle
<'Olllpdil'it>n with tht· ct:lnnred QTo\\·n Sl!!.!.' ll' .-> t' .T;:,·n. tl 1e ,· llli :.::k comhinP to in sist upon m 0rP liberal tt' nns, ._the 'or (·oultt'lwnfh· l1e dnnbtful.
The Cuinnial Stt!:!,'ar Hefiuin(â¢' ColllJlilll\·, IH· Yir tue of its Q.'l'f'ate r .... l'u wc⢠r :s :md " ' J .. .._ .. otlter :loh:wtng t·:-, must in the vn cl gPt \Yay. G . . As the Colonial Rt·lininp: Cnntpnuy tll(' prices o f raw sug:n·, so
tlt e mills tix tl w priet' tor sil p;n r l'nne witl1in their nrens . Competition
het\nâ¢c·n mill s is in lll llSt ('ctSe5 intpns,;i hl e owing to t!te lmlk and the peri,lt:thlt· nntnre of the <::me. The CHIIC' must he taken to tlw mill ncare4 at hand. nnd ('O IItH:dcd with the litâ¢lds by tmm lines. Collel'tiYe hnrg-nining is a uegligihle f.:dor for sen:ral rPasons.
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it fail s to protect growers a da;;s (sin ct> tlw mill ,., hard10lflc·r wltu is n o-rower i:-; :tlJle to hnlance lti s los;,:c⢠. as ll\· ltis 4.. ⢠â¢
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7. \Vitl1 r<'g nrd to those nre:ts in wllif·lt tlH· mills an· in sttilil'it·llt
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' · JORN D1uSDALR, Sugar Planter and Millvowner, Lower Bur
7147. Although they may not be a combination, still, so far as the arrauge me nt to !Jay tbe same price operates on the grower, it has the r-:ame effect as a combination, has it not ?-Tliey do not compete n.gainst each other. 7148. So far as the effect on the grower i s concerned, it is a combinat.ion to pay on e price ?-Yes, to pay one price,
HoN. ANGUS GrnsoN, Managing Director (Gibson and Howes Ltd.), Bi11 gcr:1. 23792. What is your practice with regard to ·competing for the purchase of cane ag:1im,t your neighbours, the Millaquin Coy. 11nd Ji'airymeacl-do you enter into what you beli eve t o be t heir p~trti cular areas, or
23793. What are your reasons for not encroaching upou their zones ?-\ Ve do not req uirc to ; we are fairly well supplied with cane. 23794. Are there some years during which you have been fu11y supplied?-Yes . 23795. Might you have bought more cane if you had gone furt her a fi el
23796. Have they kept off your preserves since ?-Yes. 23797. And you have kept off theirs ?-Yes. Since then we h a ve not been parti,:nl a r lww we moved. We are friendly, and we would not encroach on one another's preserves, a nd there is n o occa sion . for it. They give the growers iu some places more than we do, and in o the r places l ess.
8. The practical failure of competition as . a fa ctor in the determination of the price of cane might be supposed to be unimportant so far as concerns the Uentral Mills, since these mills purport to be established on a co-:- operati ve basis. But, apart from the fact that the large majority of mills are Proprietary mill s, th e Ce nt ral Mills
are supplied in varying degrees by growers who are not sharehold ers in the mills. These non-shareholding growers can be, and frequently have been, exploited by the mill shareholders-for example, by being paid a lower pri ce for their ca ne ; or by being paid a price for their cane which, though the same as that paid to 8lwrel10lclers, is so low that only the milling profits have enabled the shareholding growers t o get a fair return on their total capital outlay. In this connexion we may cite t he fo llowing from the evidences :-
A. STEVENSON, representing Pioneer Farmers' Association and Ca ne Grow ers' Union , Mackay . 8757. We beg to corn~ct an impression that prevails-that the major ity of farmers in t liq M ackay district are shareholders in co operative mills. The greater percentage of Mackay far mers have no share holding interest in any mill in the district, and in the Qentral Mills, with one or two excep t. io ns, a higher
price is paid for shareholders' cane than for non- shareholders'. Unless a farm is purchased which carries shares, it is almost impossib le to become a shareLolder in a co-operative mill. Perforce, the majority of cane-g ro,vers in thi s dis trict are s nppliers to either privale mi !ls or to
what are, to all intents and purposes, privately-owned mills. The price of cane is based 011 Lbe fir s t offer s made by the refiners for raw sugar (usually £SI 7s. 6d . per Lon). Then, whc u a bo 11 t1 :; o u t b IL price is
received, the shareholders in avowedly private mills simply appropria te it, saying th at, liaviu g paid tbe price agreed upon for cane, they are entitled to any extra money whic h th ey may obt a in by way of legitimate profit. .
The supposed 90-operative mills, by iiaying a higher price for s har eh olders' cane, a s against non-shareholders' cane, practically adopt the same attitude; whilst one mill in this d is trict, ere ct ed nuder the Sugar Workers Guarantee Act, in addition to favoring its shareholder s with a hig h e r price for cane, paid a di~idend of 3s. per share on the whole of its share issue.
GEORGE JOHNSON, Farmer (a Shareholder in t he Double Peak Sugar Company), Mackay.
9866. Is yourcontention tbat you are not getting a fair deal as compared witli tb e 13 me n wbo own the company ?-I do not think so. It is not only in regard to price tha t there is differentiation, but in respect to many other little things as well. . . . . . . .
9867. So that., in a matter like that, preference is given to the shareholders ov er th e non-share holders 1-If my credit notes were compare tl with the credits of shareholders w ith equal quantities of cane at tlie beginning of the season, you would find that the shareholder s had been a bl e to get mos t of their cane off in the earlier parts of tbe season. It is a differential treatme nt, a11
plough out cane which would probably have given me 20 toos of cane t his year. . 9868. Is there any other mill you could go to ?-It is not possible. I am eight miles from the
ra1lw.lly. .
9869. You have to take their terms or starve ?-Yes. 9870. And the result is that this one-time co -operative mill has crystnlli %ed into n. small monopoly? -It li.pp ears to be something in that line. I submit, for the infor n1 ntion of the Commiss ion, a copy of t he 0orth Eton Company's agreeweut1 w4icf~ ,,v at;; ,sent out to ns1, · ' '
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T. W. PEELE, Secretary, North Eton Sugar Co. Ltd., Mackay. 10066. How many non-shareholders have you supplying to the mill ?--About 65. That includei:; the Double Peak shareholders. 10067. What proportion of the cane supplied to the mill is supplied by shareholders . arnl uon
shareholders respectively ?-About one-quarter by s l1areholders.
10068. So that they were ren.ping 1, profit from the cane supplied by three-fourth s of tlie s uppliers to the mill ?-Yes. 1007 4. Can you s tate how many original 1:,hareholders there were ?-Rouglily spcakiug, aLouL 20.
10075. Thcsr assets are gradually dripping into the pockets of the 12 ?-Yes.
T. HoDGETT, Chairman Cattle Creek Sugar Co. Lt,l. , Mackay. 11661. Under the arlicles ofassoc;iat.ion of your company, you have the right, have you not, if you clioo~e, to pay the bonus ouly t o tbe shareholders who supply the cane?- Yes.
11662. Could you pay eveu rnore for cane to t.lie shareholders than to the non-shareholders ?-I 8 11 ppose we could; but we have never dono it. I do not think the articles of association provide for it.
There is nothing to prev;ent the director::; refusing cane from those who are not shareholders. Share h olders would have the preference.
W. J. EDMONDS, Director Marian Central Mill Co. Ltd., Mackay. 10021. Do you know many cane-growers who have been successful ?-Not a great number.
10022. The cane-growers who h a.rn been successful, and who can sell out at a con siderable profit, are those gentlemen, are they not, who ha.v e c,mbined cane growing with nrnnnfacturin g ?-Probably the majority wonld be.
10023. On those facts, manufaeturing has been more profitable thaa eane~growing ?-Yes, there is uo doubt about that.
9. It follows from what has been said that neither competition nor co-operation lias prnved an adequate protection to tlie growers as a class. The really operative check upon the millers in fixing the price of cane is not, generally speaking, competition (actual or potential), but the necessity of keeping the mills supplied. If
the miller does not IJav the O'l'Owers a subsistence }JricP. the O'rowers can discontinue ,, ::, ::, supplies. This operative check upon the miller might be a reasonably effective check if the growers were in a position to refuse supplies. · Unfortunately, speaking of the great body of growers on the Queensland littoral, they are not in a position to employ · this weapon effectively. They have invested their all in their farms, and they have
no alternative form of cultivation to which thev can turn in self-defence. In this connection, we may quote, by way of illustration; the remarks of Mr. Thomas ~mith, of Innisfail. 4706. Dm·ing all tho time I haYc owned the land l have endeavoured to utilize it in some wny th1,t woL1l d be profitable. After s pe nding money in selecting the land, and fulfilling the conditions, l thought I sho11hl Lltilize the land, and I ltave tri ed scYc ral things with that object in view. I tried rice, but I
found tlrnt under the existing labour conditions I conlcl not make ends meet . I put cattle on it, but they t11rned out most unprofitahle. This is not a. CO!rntry for cattle, and they
reproclnee. I tried Augorn go:Lts and common goats, but without financial suecess. I was endeavouring to make the land p ::ty if I c ould, Gut I foil ed ignominionsly upon all t.hese pursuits, a11d I am satisfied wi th in my own mind, after giving several things a thorough trial and worki.Hg J,ard myself, that not liing c au Ge produced in the north proJ.itably on the land except sugar. I bad my sons with me, and in each enterprise tlmt we un,lertook ,ve worked as ec 11nomieally as poss ible. I do not know auy white men in
this district wlio are making a living from bananas. I was inqniri11g about. it a week ago when I was down on the southern branch, nnd learned that there had been two or tltree who attempted it, but without succ;~ ss.
10. The essential facts of existing conditions are disclosed in the evidence of Mr. E. W. Knox, General Manager of the Colonial Sugar Hefining Company, who speaks with very exceptional knowledge of the whole industry, an
27003. . . . . The cane-grower in a particular neighhourbood hr1 s not competition amongst
buyers for his cane, lias be ?-How cau he? He canuot have offered iuclucemeut for two mill-owners at once to put up mills.
27004. Then it is s u ffic ient to say that h e has no competition ?-No.
· 27005. Then what is the guarnntee he enjoys tbat h e will get a fair p1ico ?-His guarantee lies in our contract, his safet.y Jies in tho facr, taking the termo made ont iu our st:.i.temcnt, we have paid more thtar 1
1 1
the mills paid wliich have been er(:!p t~c.! Gy G9vcp1mep~ p19µey~ as ~o w hic;h the grower bad no risk a a . 1 , .. 1
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27006. You are spe::i,lcing of yonr company-I am speaking of mill::; genernlly. The Gulk of the evi,leuce so far seems to show that whether Lho millers exercised their powers justly or not, tho fact is they have the power to fix the price for cn.ne. The price for cane is not fixeu liy competition like most
commodities ?-No, it cannot be. 26994. Do you take the position that your company, tlio11gl1 it e1ijoy::; tho power to fix prices for sugar cane, raw sugar, and refined sugn.r, rps p ectively, exerci ~os that pown with ru,tsomiLle regard to other branches of the indust.ry ?-Unque,,tionably; I cnn say quite definitely wo sometimes maintnin the
price on an occasion wl1en I myself was inclined to reduce it, in order that tuu mill-owners, from whom wo p 11rchased sugar in Queuus land, might get tlie advantage. Of course, we derive ::;o mo advantage ourselves too. 27558. In your en
27559. I do not know that th e assnrnption wonld li e a safe one?-] do 1iot soc h ~> w I can say any more than that. We regard the Mosaic law as binding on us . I co1il L l not t>iL)' any morn.
11. In the preceding argument we have been chiefly concerqu(l to ::,how how inadequate is the operation of competition in the sugar industry to insure a reasonnble distribution of profits among its various branches. The refiners dictate prices to the millers; the millers dictate prices to the growers. Such dictation is not necessarily inconsistent with a reasonable distribution of profits, presuming the refiners and
millers exercise the power, which they possess, sn bject to the injunction to love one's neighbour as oneself. A priori, aµ expectation that snch an injunction would be observed in the conduct of ·business concerns would imply a more sangniue view of human 11~ture than caµ "be clairp.e
more safe to assume as typical the attitude of Mr. John Drysdale, of Piouecr Mill, Lower Burdekin :-7927. Dealing with the last five years, I must still pres::; yoq to pnt n fig11re 011 wlmL you think, having regard to the nature of this business and its pres ei1t p f)s ition , woulJ. bo a fair int ro ' t on your
1..:apital ?- As much as you can gei. 7930. What would you put it tlown at ?-Fifteen per ce11t., or rnorc, if you could ()'et iL
12. Whether Mr. Drysdale's attitude can be regarded as typicn 1 may he open to question. We h:we, however, dee1ped it our duty to inquire closely into tl1e profits which, as a nrntter of fact, are made in the various branches of the 8ngar Industry, and we now proceed to state very generally the results of our investigations.
13. At the outset it is necessary to consider briefly the Colonial Sug::tr Hefining Company. 'This Company refines, on the averngc, not le s than thre '-fourths of the entire output of Australian produced raw sugar. Its mil]s, for the manufactur.e of raw sugar from the cane, deal with n10re than one-third of the Australian output. It has a distillery. It m::ikes manures and acids. Its policy, iu the words of one
witness, "is to titilise everything." It imports snch raw sug:ir from abroad as may be necessary for the purpose of meeting the Australian demand. It also conducts a profitable business in Fiji nnd New Zealnn~.
14. In our examination into the Comi)any's profits we were limited by an injunction issued by the High Court. As we have already explain ed in our Introduction to this Report, under all the circumstances of the case, especially in view of the need for presenting this l{ eport as early as possible, Your Commissioners decided to obtain
such information as they could without recourse to fdrther litign.tion. As a result of this attitude. our Report is not as complete in some important respects as we shouid wish to have made it. It is true that the Company in its Statement (Question
2fi844) ga·\'e some figures indicative of milling an
Company's :figures a long and laborious if not impossible task. In Your Conunis sioners' opinion, an examination of the balance-sheets of a company ought to reveal the extent to which rnch figures ~s those referred to might be accepted as accurate. \Vhen, however, Your Commissioners sought to obtain a Yiew of the true position and profits of the Company from its balance-sheets tbey were met vyith evidence
which, if not inconsistent, seemed designed or adapted to throw the veil of secrecy over the facts with respect to which Your Commissioners were seeking enlightenment. Mr. Knox, in giving evidence on behalf of the Company, said-" The inquiry, as we make it out, is to inquire as to the Sugar Industry in Australia, and as to the cost of
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107
xliii
profit attaching to the work thP-re. In connection with that, you asked what was the cost of sugar we are making, what is the profit from it, what rnargin of profit wo have from the sugar we arc refining. We are pn~pared to tell you. From tliat you get all the i11formation which could be of any possible service to you in arriving at µ,
conclusion as to Au~tqilian nffairs. In our cnse you take ho]d of a company wl1ich has HS large a capital outside Australia as in it; and capit&l outside Australia, is entirely beyond tho control of the ( ornmon wealth in every shape and way. We cannot admit tho Corn 111 ission l 1ns the small est rigl1 t to inquire as to that portion of Otll' business. Directly you begin to go into om general profit and loss account you come into tl10 profits t lint are made in that portion of the business, and thnt is whore wo come to an issue as to disclosure. ,,re say it is very unfair, very improper." (Qµestion 26929.) The Cornpany's Returns, howevrr, state - " 1 'he books have mmer been kept in such a way as lo sh aw sepam!e(IJ t!,c projits mrule in anct out~ide tho Comrwmweatth."
(Questions :2G882, par. 17n.) "T!te business /;ei11g trealt!d as a whole, our books do uot show 11 lutt profit lws be,m derire.-l fi·om th e working nf any milt 01· rnil(s . " (Questi@s 26882, par. 17b.) "I am not able lo sa,_11 ( what 1n·11 1wrtion of the capital is in'l'Csted in A!lstrn!i1t ), becrwse no portion (!/' th e r:apitat ol the compan,y lias eDer been eai·11ut1 keel .for investment on' a11.y particnf·,r 71/an, anrl the·re are no entries making sur·lt op1iropriati01ts in a11.1J of' our books." (Question 2G882, par. 6.)
15. The Dalance Sheets of tho Company, as a matter of fact, indicate, since the inauguration of the Conimonwealth, aµ annual dividend of not Jess than 10 per cent. on the snbscribrd capital. In adclition there have been some bonuses. For the year onding 30th September, 1912, the dividends (i11clusive of bonuses) llH10unt to 12~ per ccut. Bnt in order to ascertain the real dividend -we have to take into consideration tho fact thnt at Vfl,rious times profits li:we heen capitalized by the issues of shares
( wholly or partially paid for out of profits), £625,000 lrn s been capitalized in this way. Now, a nominal dividend of 12! per cent. on nominally 11aid-up cnpital of £3,000,000 is in reality a dividend of approximately 15! per cent. on the actually paid-up capital of £2,375,000. In addition, over £8Q,1100 has been added for the same year to the Balnnce of tlie Profit and Loss Account. Taking into consideration the fact tlrnt the Balance to l'rofit and I-1os~ Account, Septom ber, 1911, was £ 12 3,tj:44, 1:1,11d benring in mind tliat the 09111pany has a further disclosed Reserve JaiJellecl Ueplacement and Depreciation Fuud of £500,000, the conclusion would appear to follow that the
Company q1jght have distribpted with perfect t,af'ety the £80,000 carried for the year to the Balance of Profit and Loss Account. Had this been done the dividend would have exceeded 19 per cent. on actually subscribed capitnl.
16. The dividend (plus bop.us) of 15! per cent. above referred to must not be taken as normal. It represents, indeed, the maximum attained i~ a year when the price of sugar was high. But we have to remember the large addition to the Balance of the Profit and Loss Account for the same year, and that the Balance Sheets give no indication of the extent to which declared profits have been diminished by appropria tions to other purposes. The general policy of the Company has been to declare a dividend of 10 per cent. on nominal capit~l, and to utilize surplus profits in the creation of reserves and the extensions of plant. "Since 1890," saidl\fr. Knox, in giving evidence, "we h&ve told the shareholders from time to time that a certain amount of profit was kept in hand, and was being used in the development of the business. We have also told them that at the present time practically our investments outside Australia have been covered in this way." (Q. 26918). '( Quite recently we told the shareholders that the whole of our assets-I forget whether we used the term 'in Fiji' or ' outside Australia '- have been covered by undivided profits. I forget exactly the words used. The assets outside Australia are between £2,000,000 and £3,000,0QO." (Q . 27345.) Obviously, in a sound financial concern, the results of this expansion of business must be expected, sooner or later, to reveal themselves either in increased dividencls, or in bonuses, or in capitalization of profits, or in some other form. Bonuses to shareholders, and t~e issue of shares to shareholders payable wholly or partially out of profits, are the
ostensible forms in which the shareholders of the Colonial Sugar Refining Company profit by a renunciation in the past of the policy of declaring maximum possible dividends.
2i34,J.. Mr. E:ater, in 1ji e statement l referred lo of October, 1911 , mi1l yo u pay less than 5 per cent. on ilie cost of your totnl :v-sef;, Woll, £187,0 00 for the half-year r epresents !i per cent. on
£7, f,00,000 . Tlie total asso ls 1li~clo~od in your Bnlance Sheet only amou11I, to..£4,082,000, say, £ 5,000,000 for pnrposo of cp~pnlation. That, loaves a snrplu s of assets nndisclose1l which is yonr "Inner Reserve," or whatever yon like to call it, of £2,500,000 ?-Yes.
xliv
ii34;, It really £3,000,000, loeeau:;c, on !he liability ;;ide i;; the item, all\!
llcpreciatio11 FuHd, £;,oo,OOO,'' which should COIHC nlf t.hat £.!i,OOO,OOO. So, really £4,MlO,OOO i:; your 11cf total of anrl yon earn a â¢Ji,·i.Jcnt! 011 a c·apitnl of £7,,-:00,000, which leaves surplus
nmlisclosccl, au inlier rcsene of £3,000,000 ?-If yon have lâ¢ec11 readin:.r those reports, yon would have seen that quite receully we told the ,harehoJclcrs that the whole of our asscts-I fot·gct whether we used the term '' in Fiji" or "outside Australin ''-have bceu co,·ered by mulivide1l profits. I forg-et exactly the words ntieâ¢l. The a ssets outside nrc lâ¢etween £2,000,000 anrl £;i,OOO,OOO, tbat is the whole cxplauation.
2i3-41i. It is \·câ¢ry ingeuious. Yon ;a,·e enough profit out. of the Australian husinc;;s to raise 11 eompetitor i11 Fiji ?-\\"hat we :;aid was the amount i11vest.cd outside Australia. corresponded with the of that amunnt during the fifteeu yenr:;. In other words, we had not been rec1uiretl
to bring into the accouuts the An,; lralia. If you will turn up tLe speech uf 27th October,
1!)10, you will r-cc for your:;elf. 2i347. The paid-up cash capital is nuly nnd after payin;.{ your divideud, you put nsidc
.£3,000,000, plns ,£62.),000. Cap;talized in were clistribntetl ?-I eonlrl not answer that
offhanâ¢l. 27a4R. I have worked it out, an.J ynn will see that it i;; correct?-The £625,000 is nil disclosed profits. It is right. in that sense. 2i349. I will pnt it in another wny. The nctnnl amount of en:;:h pnitl np uy :
the. stated capitnl of the company ?-Yes 27350. Jn n,Jllitiou, there ure £:3 ,000,000 of inner reserves ?-Those nrc the facts, as far as the acconntti aru concerned. Bnt. there is orâ¢c filet you do not know of, which is this: The shareholders in the Victorian Sugar C ompHHy, btdi>rc anwlgumation, had to pay up £400,!'00 t.o get. clear. That compRny
lost £400,000 iu t.he crisi:; of 1884. That might clear away any misunderstanding.
'l'hc financial position of the Company as disclosed in the evidence thus appearo to be as follows :- ·
Amount paid hy shareholtlers in cash Shares capitalized out of profits and among shareholders. . . .
. . £2,3'75,000
so distributed 625,000
Making the capital ull which divitleuth> arc
paitl 3,000,000
The compa11y in addition au inner or umlis-
c1oscd reserve of, say 3,000,000
that the true capital of the company is, say £6,000,000
This ntt'
17. The foregoiug conclusion becomes irresistible when we remember that other milling and refining concerns, conducted exclusively in Australia, and without tlte enormous advantages of large scale organization, are also able to show substantial profits. As regards the mills, other than those worked in conjunction with
refineries, the eYideJwe submitted to us demonstrates that, assuming moderate equip ment ami reasonable effieieney of management (including therein a due regard to the fru ·t that the price for cane must not he fixed so low as to squeeze growers out of existence) ltigh profits <'illl lw madt' under the average of prevailing prices for raw sugar and sugar cane respPdively. \\'hilr son1e CPntral Mills, having failed for one reason or another to tlaâ¢ir ohligat ion;-;. been taken o\·cr hy the Government, the
majorit.'· of them ltn \"(' bee n Pnn bled to pay working cxpensP;-;, to pay and
redemption instnltnf'nts 011 JllOilt'Y borrowed fr0111 th e Go\·ernment for erectiOn, to increase their plant, and at the same time to accumulate profits for other purpose;-;. It is true that tltesP mills han been spet·iallv favoured with respect to the low rate of interest nt wltich thP_v horrowc·d mo1wy for ;nill erection. But. Proprietary mills been no less sm·f·Ps:-:ful. Knox, speaking for the Colonial Sugar RPfining Company, nsserted that lllilling "'";-; n morf' profitable inwstment than rPfining. As that. ('ompany mills oyer mw-t bird of 1'11P A w4ral ian out put of raw sugnr, it. may be expe!"lf'd to know
th e ('Xact fads. \\·,, rnay add that .\lr. KHox':o: PvidP!Wf' on this point wa:-: irt acc-ord
x1v1
20. fhe injustice which is being done to the growers under existing conditions derives an additional significance from two facts. In the :first place, where, as in the case of some of the Central Mills, there is a virtual coincidence of growing and milling interests, the evidences go to show that, under the hitherto prevailing rates of wages,
both the miller and the grower can get a fair return on his capital and effort. In the second place, while the growers, millers, and _ refiners represent the great bulk of the capital which is invested in the Sugar Industry, the relative importance of these classes, from a national point of view, must be determined by re:ference to the exte:n.t to which they severally contribute to the great problem of the settle
ment of the tropical or semi-tropical areas. Most of the refineries are established in temperate regions. Mills may, and in a number of cases do, represent the capital of persons living in the temperate regions. Wage-earners come and go . The growers, as a class, are tied to the lands. It follows that they possess a unique importance and a special claim to legislative protection. It appcurs to us an intoler
able condition of things that the dass which it should be the fir st object of the protective policy to protect, should be the class which receives the least, and a quite inadequate return on its capital and effort . We see exemplified in the conditions of the Australian Sugar Industry that "squeezing of the primary producer" which is one of the recognised dangers of modern capitalistic organisation. The fact t hat the evil
has not reached the magnitude it has attained in some other countries may be conceded. But we take it that Australian statesmanship should seek to prevent as well as to ameliorate-to deal with evils as they arise wi'.thout waiting for them to reach a stage when any remedy must involve far-reaching social and industrial dislocation.
21. We propose to consider some remedies which have been suggested to us, or have occurred to us, in the course of our investigation:-(1) The revival of competition as a factor in price determination. (2) The nationalization of the refining industry.
(3) P ublic competition in refining. (4) The limitation -of milling and refining profits. (5) Public control of prices.
THE REVIVAL OF COMPETITION AS A FACTOR IN PRICE DETERMINA'fION.
22. The view has been frequently expressed that the problem of m 1 .o polistic control can be dealt with most effectively by legislation in protection d fajr competition. The value of such legisiation, under particular conditions, cannot be questioned. But where; as in the case of the Colonial Sugar Refining Com pany, monopolistic control is the result, less of the pursuit of "predatory " methods of certain American Trusts than of large scale industry, ar._d a hjgh efficiency
of organization, an attempt on the part of the State to enforce a return to
competition, would imply a premium on inefficiency, a recurrence to the wastes of the competitive r2gime, and a disregard of the advantages of large scale organization both in steadying the market by preventing over prcduction and crises and in securing a relative permanence of employment. One curious advantage of large scale organ.ization was indicated by Mr. J ohn Allis on, who made the fo llowing statement as representative of the Cane Growers' Association at Gin mn :-
Question 21863, page 782).-Were the competition between the existing refineries in Australia more keen the present import duty would be of little value as a preventative against the introdaction of cheaply grown black labour sugar. Indeed, we consider were it not for the control which the aggressive monopoly, the Colonial Sugar Refining Company, exercised, the Australian market would be flooded with cheap black
growi1 sugar. We would point out that the competition induced by Poolman refineries before they were absorbed by the Colonial Sugar Refining Company for the protection of the industry, caused a reduction in the price of sugar, a,nd therefore in the pr.ice of cane, owing to their extensive importation of cheap black grown sugar, though the £6 .impost duty operated fully against t hem.
As regards the mills generally, they enjoy from their local situation a natural monopoly as purchasers ,of cane, and legislation for insuring free competition would only apply to the exceptional cases where mills may come into competition. Even in these areas no legislation can prohibit the "honorable understanding."
THE NATIONALIZATION OF THE REFINING- INDUSTRY.
23. The refineries are the controlling factor in the Sugar Industry. If the refineries were nationalized by the Commonwealth Government, public authorities would fix the price of refined and raw sugar respectively; and they could also make the
xlvii
payment 0 £ the :6.xed price £or raw sugar conditio,nai in the case ~£ each mill upon a payment by that mill of a fai~ p_rice for the cane. Any profits resuJtmg fro~ th_e control of the jndustry would find theu way to the public purse. Despite these md1~putab~e advantages, we cannot recommend the course suggested. Several reaso1;1-s, 1~ t~eir cumulative aspect, cortvin_ce l1S t~at, at a11y rate for the prese~t,_ the nat10nahzat10n of the refineries would be mexpedient. These reasons may be briefly stated:-
(1) The Efficiency of the Refining Indu_stry as_ it i~ at present carried on. Advocates of the · public ownership of mdustnes rightly dwell upon the
avoidance of the wastes of cofupetition. But, in the case of the refining industry in Australia such wastes are negligible. Further, taking into consi_ deration the various difficulti e~ with which public ownership has to contend, and the. high efficiency of the present re~_ ning business in Austra~ia, we do not .. thin~{ that thB P"?,blic ownersh~p of the refinenes would prove as financially successful as tne present pnvate ownership.
(2) Costs to the Treasury.-The cost of r'1ationalizing the refining industry would in olve an initial capital outlay of some millions by the time allowance had been made for the costs of tefineries, good-will, floating capital, &c. To secure a fair interest on this capital outlay without penalizihg consumers \vould, we believe, be difficult, if not impossible.
(a) Although the Colonial Sugar Refining Company makes large profits, those profits accrue in part to their overseas trade and business, their ownership of sugar mills, and their dealings on the market. ~ (b) Such profits as it does make dn its refining ate made under existing
conditions-conditions which give to its plant a value in excess of earrning capacity under the altered conditions which would be involved in nationalization. In the general result, we cannot avoid the conclusion that the Commonwealth Treasury would be involved in a heavy financial loss, unless it were prepared to Ii1ake higher demands on the consumers than is necessary under a system of private owned industry subject to appropriate regulation.
(3) The Speculative Character of the Refining I ndustry.-When it is proposed, as we assum that the advocates of natiortalizatioh do propose, that the Commonwealth Government should buy out the refineries at their present value as a going concern, it is impossible to ignore the statements of experts to the effect that the time is not far distant when the rivalry of mill white sugar by discovery of new processes will materially depreciate the value of the refined article. The making of mill white sugar has made rapid progress in other countries. A new prdcess has been submitted to the
Commission. (Compare also the Batelle White Sugar Process-Appendix No. 3 -and the proposals of Mr. J~ R. Paddle for treating liquid sugar-;-Apperidix No. 8-a proposal which was favotably bommented upon by Mr. J. C. Brunnich, Agricultural Chemist to the Queensland Government. Q. 25927.) These various processes are in tbo experimental a stage to be made the subject of specific recommendations by your
Commissioners, but they havB an important bearing upon the proposal to nationalize existing refineries. There is a possibility that the day is not far distant when the business of sugar refining will be relatively of much less importance than at present. If this condition of things should come about, and if the Commonwealth had purchased the existing refineries, while th-e Refining Companies might be grateful, the public Treasury would be likely to incur a heavy finanpial loss.
We believe that the foregoing considerations constitute in their cumulative aspect · a convincing reason for seeking some other way of. ensuring an equitable distri bution of the profits of the Sugar Industry among its various branches.
PUBLIC COMPETITION AND REFINING.
. .24. The suggestion has beeh made that, since refin,ers ai;e in a position to control p~rnes 1~ t~e Sugar Indus~ry generally, the Comm_onwealth might enter into competition w1~~ ex1stmg_ concerns with a view to keeping down the price of refined sugar, while ra1smg the price of raw sugar. We cannot recommend the adoption of this suggestion:-
(1) The suggestion is probably due to ah exaggeration of refining profits. Th~ profits of the Colonial Sugar Refining Company are largely due to items other than refining.
xlviii
'J'h n F
in to nationalization.
(:C) lf tlte ( 1 otnlllonwtâ¢n lt11 Hdit' N)' t'Jlttâ¢rr
regular supplies of Australian raw sugar, and in getting its refined article regularly on the market. It would be expected to pay high prices for raw sugn.r, and tu accept ]ow prices for refined sugar. It would, moreover, come into competition with a long-establisht: d business conducted with a very high degree of efficieney. We have frequently had occasion to criticise the Colonial Suga1· Refining Company from various points of view, but we do not hesitate t.o e:>..'}lress our admiration ( If the economic efficiency which characterizes every brandt of it:;; businesg which has come under our notice. (4) Tn order to prove really effective for the purposes we have now in view,
tl1 e Commonwealt h Refinery would have to proceed on a large scale. This would imply a duplication of refining plants in Australia quite inconsistent with a sound economy of national resources. For the · foregoing considerations, as well as for others, we are of opinion that t.hc proposal to establish a Commonwealth Refinery is impracticable.
J_.Il\fi'fATION OF REFINING AND MILLING PROFITS TO A FIXED PERCENf'XGE ON CAPITAL O u TLAY.
25. \Ve are of opinion that. the solution of the problem of price dete11nination i not to be found in the limitation of milling and refining profits :-(1) The suggested solution would afford no guarantee of securing tha.t protection to the grower which should be the chief object in view.
(2) I t would be as likely to tell for decreasing efficiency in milling and refining as to tell for a more equitable distribution of profits. (3) The proposal under consideration might well be nullified to a large ext.ent in practical operation by concealment of profits, e.g., stock
watering, renewal of plant when depreciation is allowed for, extensions of plant, secret manipulation of reserves, nepotism, extravagant salaries to directors, managers, &c., &c.
PUBLIC CoNTROL oF PRICES FOR RAW SuGAR AND SuGAR CANE.
26. The cost of growing sugar-cane is difficult to estimate. Apart from fluctuations in land Yalucs, allowance has to be made for floods, cyclones, scarcity of ra.infa11, pests, &c. The cost of the manufacture of raw sugar, and of sugar refining, ean be calculated with relative certainty. Hence the question arises whether it would not be possible for public authorities to arrange a sliding scale according to which the price to be paid for raw sugar and sugar-cane respectively would yary in a fixed propor
tion to the selling price of refined sugar-due aUowance being made for milling and refining costs, inclusive of depreciation and a reasonable percentage on capital outlay. The sliding scale of prices would, of course, be no novelty. The Colonial Sugar Refining Company, as we have seen, pays £9 7s. 6d. per ton for raw sugar when the selling price of refined sugar is £19. For each £1 increase in the price of refined sugar, the price of raw sugar is enhanced by 18s. Further, the Colonial Sugar Refining Company has, at one time or another, made overtures to the growers for the adoption of a sliding scale of prices with respect to sugar cane, although the growers, for reasons not difficult to understand, have generally preferred the offer of a straight-out price. Other millers have paid for cane, or have offered to do so, on a sliding scale.
27. The disadvantnges of existing arrangements or offers ns to a sliding scale of prif'es are < ·hi efly- two--(1) The growers rarely share any part of the honus paid to millers of "I Ks. for every £1 increase in the selling value of refined sugnr.
(2) Th e sliding scale, in so far ns it is in operation, is fixed, not hy ('om petition, nor by co11 cc tive hargaining, nor by an impartial ltOll y , but Ly private concerus whicL (â¢njoy a more or lnnHo po
list.ie coutrol.
xlix
28. The difficulties to which allusion has just been made could, as we believe, be ov.ercome by legislation constituting machinery for the purpose of insuring that the pnces for raw sugar and cane respectively shall be determined, not as at present by party to !1 bargain, but by some authority or authorities empowered by law to act
m the interest of all parties. \Ve believe that along these lines is to be found the ideal of the problem of insuring an equitable adjustment of the profits of the
among its various branches. Before proceeding to work out this suagesbon
m we think it desirable to consider some preliminary objections which ha;e been submitted to us, or have occurred to us, in the course of our investigations.
29. It has been urged that the proposal is revolutionary. \Ve are not disturbed by this objection. The industrial organization of modern society is rapidly changing, and, more especially in some of its branches, calls for novel legislation. Within the Australian Commonwealth, probably no more striking example could be adduced than the
Sugar Industry. The existing methcds of price determination place a virtually despotic control in the hands of the purchasers. The substitution for those methcds of a public control of prices is one way out of existing difficulties. In our opinion, the other alternative is nationalization of the refineries. We have already given our reasons for not advocating nationalization. 1\loreover, Australia has already pledged itself to the determination,
by public authorities, of the price of labour. One witness expressed the present situation as follows:-" The grower is the Devil and the deep sea." The
grower has to pay a price which is fixed by public authorities for labour, while he receives for cane a price which is fixed by the miller. \Ve see no reason why the principles \vhich underlie o"Gr industrial legislation for the protection of the wage-earner should not be extended to protect the grower. Parliament (whether Commonwealth or State),
following the analogy of legislation for fixing the price of labour, might adopt either of · three alternatives :-(1) It might fix prices by law directly-the policy of the Legislative Minimum. (2) It might arrange for representatives of the va.riOl:s branchâ¬s of the industry to agree to a scale of prices-the policy of Wa.ges Boards. (3) It might intrust the determination of the sliding scale to an impartial tribunal-the policy of Compulsory Arbitration. As to the choice between these various policies, we shall
venture to express an opinion later on.
30. One objection which has been urged is that prices can only be fixed by the conditions of supply and demand, and that the public control of prices is therefore impossible. We venture to make the following obserYations with respect to this argument:-
(1) The argument is generally advanced by those who are, as more interested in the maintenanee of the status quo than m arnvmg at a just solution of a difficult problem. \Ve believe that the growers would welcome the proposal we suggest. So expressly
admitted in evidence by many growers, and is imphcd m the state ments of the Combined Mackay Farmers' Association and Cane Growers' Union of Australia (21297). l\Ir. P. Kuwan, VICe President of the union just mentioned, said in his evidence (Question
11542) :-
"By Way of Regulation.-It would be necessary to form and a permanent trust or
commission, representing the workers, growers, consumers, and any other tl1at would have to be taken into account , to regulate prices and conditions from time to time, so as to msnrc to c':⢷n· Qt.te co:anectcd with the sugar industry a fair deal. The knowledge that no section .was rect> i\·in q .mo:e than tt s rlue share would be the means of allaying the unrest which now prevails tn the sugar dtstrtcts.
In taking the circumstances of the sugar industry into con sideration , I. won!â¢lli.ke to in.qm' ss on the Sugar Commission that it is the farmer and worker who carry most of the n sk the
industrY. The manufacturer of raw sugar can and docs make sure that on ce. the cane ts dcltnred to.him, a certain profit is to be made out of each ton of cane. The refin er is Jus profit onc r he tahs delivery of the raw sugar. Both the refiner and the raw sugar manufacturer fix: t hetr term s. The farmer has to, in practice, take whateYer price is offered. Having spent up to £13 an acre of cane, that .acre
must be sold, e\·en though only a slight profit, or even no proftt at all , ts made. The rates patd to the workers do not permit of a married population depending sol ely on the sugar mdustry .
F.138Sl.
(2) \Ve are quite at a loss to see why there would be any greater difficulties to be overcome in regulating the prices of raw sugar and sugar-cane than ih regulating the price of labour. J>
I
(3) We are also at a loss to see why, if prices can be fixed as they are at present by one party to a bargain, they cannot be fixed by a public authority acting in the interest of both parties. The prices of raw sugar and sugar-cane in Australia at present are fixed, not by laws of supply and demand (within the Tariff wall), but by refiners in the one case and millers in the other. We have already dwelt on this fact at some length ; but we cannot refrain from quoting here the
following significant extracts from the evidence :-WILLIAM ALEXANDER GIBSON, :Managing Director of the 1\'Jarburg Sugar Company, 1\Iarburg.
26127. By the Chairman.-You n.re the successor in the lHarLurg Sugar Mill of Mr. Smith, who has given evidence ?-Y cs.
26131. What did you pay for cane last season ?-We have two prices for cane. We pay by weight. There is one class of cane grown principally for cattle fodder, and when there is a surplus we take it and pay 8s. 6d. per ton for it. It has a very low sugar content. 26132. What are the sugar contents ?-It varies from 7 per cent. to 9 per cent. Then there is the other cane which we approve of, and for it we pay lOs. per ton.
26133. For cane containing 7 per cent. of sugar the Colonial Sugar Refining Company's schedule price is 2s. per ton. How can you afford to pay 8s. 6d. per ton for it ?-We give lOs. per ton for the bett-er class of cane, which is really worth more, and that cane makes up for the loss on the lower quality of cane. We strike an average.
26134. The lower class cane is principally grown, not to make sugar, but for cattle feed ?-Yes. Our district combines cattle rearing and dairying with sugar growing. · 26135. Then the general taxpayer, who is supposed to be paying through the Customs to encourage the production of sugar as sugar, appears to be paying for the production of cane as fodder pro tanto? Yes, to a certain extent. We get the balance of it.
HoN. ANGUS GIBSON, M.L.C., Managing Director of Bingera Sugar Plantation, Bingera. 22995. I understand you are the managing director of the firm of Messrs. Gibson & Howes ?-Yes. 22996. And, therefore, you are responsible for the general policy of the Company ?-Quite so. 22997. When, at the beginning of the season you are fixing the price of the cane you buy, what do you take into account-supposing the base price of sugar is £9 7s. 6d. or £9 lOs. per ton, as it has been for a number of years ?-We generally make an examination of the district, go round, and have a look at the cane, see the conditions, and find out how much cane there will be to supply to the mill. Then we have to look at the quantity of cane to find whether it is going to be a paying concern. We have to look at the cane from the point of view of the quantity in the fields, and we sit down and make our calculations as to what is going to come out of it. We read the "Sugar Journal," the "Louisiana Planter," and other sugar journals, and try to find out what are going to be the world'e requirements and supplies, and we try
to find out, if possible, just how that sugar is likely to be introduced into Australia. With all that infor mation before us, we say that we can pay so much.
JoHN DRYSDALE, Sugar Planter and Mill-owner, Lower Burdekin.
7189. To the 39 growers who have declined the agreement, you are paying for cane 13s. per ton, while you are paying those who have signed the agreement 18s. lld., taking the price of sugar to-day as a basis ?-Yes. 7190. Then, if, as you admit, 18s.lld. is a fair market price, a price which will yield you a fair profit
as manufacturer, you are getting from these 39 growers a profit of 5s. lld. per ton in addition to the profit you reap, after paying 18s. lld. ?-Yes. 7191. Is this document a copy of the five years' agreement-[handing it to witness] ?-Yes, this document seems to be a copy of it :-
Memorandum of .Agreement made and entered into this ............ day of. .......... .
one thousand nine hundred and ......... . .. between John Drysdale, for and on behalf of the Australian Estates and Mortgage Company Limited, of Kalamia, and Drysdale Brothers and Company, of Pioneer, Lower Burkedin, in the State of Queensland, sugar manufacturers (hereinafter called the "l\fill-owners,") of the one part, and ........... . of. .......... .in the said State, cane farmer (hereinafter called "the farmer"), of the other part; whereas the mill-owners have recently arranged to increase their crushing power, and whereas the farmer is the o;mcr (insert in fee simple or leasehold, as the case may be) of certain lnnd situate in the county of Gladstone, parish of. ........... ,
which said lands are planted "·ith sugar-cane; and whereas it has been agreed between the mill-owners and the farmer, that, in consideration of the mill-owners increasing their crushing po"·ers as aforesaid, and also in consideration of the mill-owners agreeing to pay to the farmer for cane the prices regulated as hereinafter appearing, he, the said farmer, would enter into and execute this agreement.
Now this agreement witnesseth as follows :-. (I) The Farmer, for himself, his heirs, executors, administrators, and assigns, agrees to sell to the nHll-0\1-ners the whole of the sugar cane grown on the hereinbefore-mentioned lands, during the period of fin⢠:cars, ending with and including the crushing in the year 1915.
108[1
1i
(2) The price to be paid by the mill-owners to the farmer for sugar-cane shall be as follows :-The S1ll1:l of I6s. 6d. per ton ra:w sugar is at £12 ton loaded on trucks, with one penny rise fall for every shillmg mcrease or decrease m the price of sugar above or below the said sum of £12 per t-on; and for the purpose of avoiding fractions in the price to
be paid for cane the nearest shilling in the price of raw sugar shall be taken (that is to say) :-if the price of raw sugar is £12 Is. 7d., the price of cane shall be calculated on £I2 2s. ; and if the price of raw sugar is £I2 ls. 5d., then the price of the cane shall be calculated at £12 Is. ; and if the price should be £12 ls. 6d., then the price of the can6 shall be I6s. 7!d. (3) Subject as hereinafter the price of raw sugar as set forth in paragraph 2 hereof shall he by the price paid by the Colonial Sugsr Refining Company Limited for the time being for 94 net tttre sugar, and payment shall be made by the Mill-owners aforesaid, at the time and in manner
(that is to say): By monthly payments on the amount of cane delivered, a certain part of the
price, not exceeding one shilling per ton, to he retained by the Mill-owners till the beginning of July in each year, when the price to be paid for the cane is finally settled and ascertained. (4) The price hereinbefore mentioned shall he subject to such deductions as may be made hy the Colonial Sugar Refining Company Limited, by reason of over-production or otherwise.
(5) The farmer agrees to supply the cane to the in the manner and subject to the
conditions upon which cane is usually supplied to, and receivt.>d at, the mills, and in such quantities and at such times as may be required by the Mill-owners. In witness whereof the parties hereto have hereunto signed their names the day and year first hereinbefore written.
Signed by JoHN DRYSDALE for and on behalf of the Mill-owners, in the presence of And by the said In the presence of JoHN ALisoN, Farmer, Gin Gin, representing the Gin Gin Growers' Association.
21863 (page 781).-Financial-Taking the first year w1der review (I907), the prices for ca:1c at the Gin Gin Central Mills, as fixed by Dr. Maxwell, were as under:-lls. 6d. per ton for Stand-over cane ; lOs. 6d. per ton for Highland cane.
These priCilS were subject to deductions for frosted and burnt cane, so that even with Is. 6d. per ton additional, the average price paid for cane on that season's deliveries amounted only to lis. 7d. per ton. The average tonnage per acre being 17·4 tons. The following year, under the same control, the prices fixed were as above, with the exception of Stand-over cane, which was paid for at the rate of lis. per ton. These prices were, however, 1n :Jject to the following reductions :-
Lowland cane, killed by frost, Is. 6d. per ton ; Highland cane, injured by frost, Is. per-ton ; Burnt cane (accidental), ls. per ton; Burnt cane (otherwise), 2s. per ton. These deductions brought the average price to 9s. per ton, and out of 36,010 tons of r.:l'lc, 8,927 tons received full price. The growers, however, received an additional payment. of ls. 5d. per ton on this year's deliveries, which brought up the price to lOs. od., but later they had to refund i-('.rd. per ton of that additional payment, as they had been overpaid to that extent, so that the avera:;e price for that year was 9s. 9l"8"d. per ton. We would just here like to draw the Commission's attention to the fact that in 1908, 36,010 tons of cane were purchased for £16,220, whilst in 1909, 23,930 were bought for £13,422 ;
that is to say: we received for 12,030 tons of cane the sum of £2,798. By paying such a low price for cane Dr. Maxwell was able to show a good profit in some of the Central Mills under his control. The tonnage per acre was 13· 88 tons. In 1909, Dr. Maxwell's successor fixed the prices as follows :-Stand-over cane, 12s. 6d. per ton ;
Highland cane, lls. 6d. per ton ; Lowland cane, lOs. per ton. The average price paid for the season being lis. 2d. and no additional payment was made. The average tonnage per acre was 10· 5 tons.
31. Apart from the objections just considered that a public control of prices is revolutionary and impossible, the ?een urged no exists for
singling out the Sugar Industry for speclalleg1slatwn. to thJH , the obvwus is that the conditions in the Sugar Industry are exceptwnal, and call for exceptional legislation. We have here .in mind, less national which _industry
serves-though this aspect 1s of und?ubted Importance_ m vtew of of
the class most useful in settlement with the class most m need of legislative aid-than the practical of _as a factor in We know of
no other industry m Australia m which the of pr1ces Is to so large an
extent in the hands of one party to the bargam. 32. It has been urged that, although prices may be fixed under public control, no law could compel the miller or the refiner to bay. It hcts also been urged that, with ,reaard to the Central Mills, the State of Queensland has a vested interest in the main
of the present system until those mil!s have discharged their indebtedness to
DZ
lii
the Government. We consider these objections together, because they both have their appa.rent origin in a misunderstanding with respect to the pmposes of any rational scheme for the public control of prices. The objects of such a scheme wou:d not be to prevent any branch of the Sugar Industry from making reasonable profits, but to secure a reasonable distribution of profits. If it were found upon such reasonable distribution that one or more branches of the industry were not securing an adequate return on capital o·utlay, then the Import Duty would have to be raised. We believe th1t when once the scheme was established, it would be recognised by all parties, and by the State of Queensland, as a just solution of problems.
33. One possible objection to public control of prices is that public control, by giving a public guarantee of fair prices, would result in the prcduction of a surplus. There might be, for example, a surplus of Australian-produced sugar; or there might be a surplus of cane supplied at one or more of the mills, i.e., a greater supply than the mill could crush. As regards the latter surplus, the difficulties could be overcome as at present by mutual arrangement between millers and growers. As regards the surplus of Australian-produced sugar, we do not think it likely to occur for some years
to come in view of the expanding local market. Should it occur, however, a difficult situation would arise in view of the facts that exportation must involve a loss, that sugar is not a commodity which can be stored for indefinite periods, and that, being one of the necessities of life, no great increase in the local demand would be stimulated by lowering the price on the local market. The situation would not, however, be wholly novel; and it might be dealt with as under existing conditions:-
C. E. YouNG, Sugar Plantation Proprietor, Fairymead. 22221. (Witness.- . . . . . If you have a consumption of 200,000 tons, and there is a
surplus of 20,000 tons, you sell the 200,000 at the regular price, and you export the 20,000 for what it will fetch. 22222. That is the Cartel system ?-Well, Russia doubled its output under that system. 22223. That is possible where there is a private combination amongst refiners, but how would it be possible here ?-Our good friends, the Colonial Sugar Refining Company, would carry the thing out for us with the greatest ease. All we have to do is to arrange a glut by good farming, and then approach
the Colonial Sugar Refining Company and say that we have so much sugar, and ask them if they will export 10 per cent. of each man's raw sugar. 22224. Could that be carried on indefinitely ?-It could, for one year. 22229. If, under an £8 duty, the area under sugar was increased materially, you would immediately have a heavy glut ?-If you have to export a large quantity at a low price, that will reduce the price locally. If you send only 10 per cent., it does not matter much what the surplus is sacrificed for, but' if you send
out 50 per cent., it will lead to a drop in the price in Australia, and you will be unable to make ends meet? -It would immediately cure itself. 22230. Supposing the industry were in the hands of "our good friends" as you called the Colonial Sugar Refining Company, they would keep up the local price, no matter what price they were getting for the surplus in foreign countries ?-But the consumer would pay the same price for sugar here.
22231. Would it not be rather exasperating for the consumer within a tariff wall of £8 a ton to know that he was paying 4d. a lb. for his sugar, while sugar he was taxed to produce was selling in Timbuctoo for 2d. a lb. ?-It would no more upset his equanimity than it does in America.
WILLIAM GIBSON (Gibson & Howes, Ltd.), Bingera. 22365. Evidence was given the day before yesterday that the Colonial Sugar Refining Company limited the quantity of sugar you are allowed to put on the Australian market. Is that so ?-At the present time we have no arrangement with the company. Some years ago, if my memory serves me right, we thought there would be a surplus, and the company made an arrangement with us, as it did with the other raw millers, that if the Colonial Sugar Refining Company had to export, we would have to bear a proportion of the loss. That was a mutual arrangement. I know there was more sugar produced that year than was required; at any rate, the company had to carry forward a very large quantity of sugar, and it never asked us for one penny interest on that outlay. The Colonial Sugar Refining Company has not brought that matter up since ; I think the arrangement of which I speak was 4 or 5 years ago.
Jf the surplus tended to recar, the deduction in price, the fact would indicate that the pt·otection was unnecessarily high; and the proper remedy would be to lower the Import Duty. Otherwise thet·e would be introduced into .-\ nstt·alia some of the objectionable features of the Cartel system.
34. We have spoken hitherto, of the public control of prices. The expression is designedly ambiguous. It evades the difficult question of the spheres of Common wealth and State action. It says nothing of the particular machinery which, whether State or Federal, is to interpret public control in definite executive action. other circumstances we might have felt entitled to leave such questions to the const.de.ra tion of Legislative Assemblies. But, as we have recommended a departure from extstmg legislative practice in Australia, we feel it to be our duty to consider briefly the means for giving effect to the policy which we have advocated.
I iii
35. At the outset, we venture to the opinion that the machinery should be Federal. Several reasons, taken eumulatn·ely, enforee this conclusion upon us:-(1) The burden of protecting the Sugar Industry is borne by the consumers of the Cow_momyealth. ·
(2) The purposes which are served by the Sugar Industry, more especially the. settl:ment defence of tropical or semi-tropical areas, are m a special sense, and give to industry a unique national
sigmfieance.
(3) The Import Duty (the amount of which should be assessed from time to time by al!thor!ties in organic relationship with the authorities which control pnces) 1s fixed by the Commonwealth Parliament and could in the nature of things be fixed by no other body. '
(4) The price. of raw could not be fixed by any one State, since the
are established in The absurdity of invoking
legislation and accessory machmery m four States when the same object can be achieved by Commonwealth action must be apparent. (5) Assmning, and we see no other conclusion possible, that Commonwealth authority should control the price of raw sugar, it follows by inevitable
sequence that the same authority should control the price of snll'ar cane. "\Ve do not "'-ish to call in question for a moment the of the States to self-gm·ernment in matters of purely local concern ; but we are quite unable to resist the conclusions that what is impera
tively needed in the case of the Sugar Industry is a single controlling ultimate authority, and that such authority must in the very nature of things derive from the Commonwealth. If sugar-cane were pro duced only in Queensland, the conclusions just suggested would follow
with less force than they do. But sugar-cane is already produced in New South Wales on the Northern Rivers; and, in time to come, it may be produced in the Northern Territory.
36. We are aware that an amendment of the Constitution may be necessary. But we believe that the passing of such an amendment should not be difficalt, in view of the national importance of the Sugar Industry, the burden imposed upon the Australian consumers by the continuance of the sugar policy, and the various reasons which we have urged for securing by Commonwealth authority a just distribution of the profits which accrue in the Sugar Industry as a result of the protective policy.
37. But, assuming the to obtain, by from
the States or by amendment of the ConstitutiOn, the necessary powers to give effect to the policy which we there _remains the. question of, the means whi.ch
should be ad')pted by that Parliament m the exerCise of 1ts powers. So far as t.he pnce of raw sug.tr is concerned, the question does !lot appear to us to dtfficulty.
The price of raw sugar should as hitherto, the. of sugar.
There should be, as at present, a shding scale. But, m our ?PilliOn,, that. scale should be fixed, not by the refiners, but b>' the. ( That
Commission, after making a more complete estunnt e of costs than tt h:u; possible for us to make, shrJuld fi.x a seale of pri<:cs for raw sugar whtch will allow a fair return to the rcâ¢fiacr on a basis of costs of man11faeturl'.
:J8. The t'Xf'l'cisc of public C' li!trol in nâ¢latiPu _tn t_b_ (' priec o!" s Hgar-c:mc is a ?I?rc fliflicult
insuperable objections to any singl e sc h('mc - . .
(l) A"' we have alrea dy indieat cd in P;trt tlwrc Propm·tary nulls and Central :\Iills. S·; me of tlw Propruâ¢tar.\· m!lls arc small concerns; s nme arc large ; some arc owned by the Colonial Sugar Refining Company. Of the Ce ntral )!ills, some ha w bee n take!l o\·cr by
QJ('cn.slat:d Government. These latter be obvwusly outs.]de of 0 ,tr prcsc:'t altogether. Tlw reltef of the gro,wrs supply mg tlv··3e. snleh· the Q :ecn'dard (} â¢WJTmcr.t. Thr;t Gc, nrl'.ment, it nt i.;Y be p Jiii.tLCl not it: the pc:; ition t v ward<> th(' gruwers a.n
ordinary bu yer, whr:sc Interests ar(' , to a large extent, l!ntagonistlc
liv
to the seller. Moreover, that Government must be assumed to have supremely in view one object, viz., to make the whole concern a success in the interests of the growers. If the growers are not satisfied, their remedy must be sought in appeal . to the State authorities. (2) Mills vary, not only as to ownership, but also as to the proportion borne
by the capacity of the mill to the supply of available cane. To fix a universal price for cane would involve the closing down of many mills. We are not convinced that this would be to the interest of the growers. Half a loaf may be better than no bread, especially as we believe would be the case, the assurance to growers of a farr price under all the circumstances of the case would stimulate growing industry, and thus tend to secure a full supply for mills now only partially supplied. Such a supply would enf!Jble the mill to pay normal prices. (3) Mills sometimes enjoy special privileges from their locality which would
enable them to pay a slightly higher price for their cane (e.g., Questions 1092-3). (4) The supply of cane differs greatly in quality as well as quantity. Occasionally, the cane is grown mainly with a view to fodder. Bu.t
even when grown mainly with a view to sugar contents, there are large variations in different types of cane, in different localities, and in different seasons. Even assuming these differences non existent, cane may be frosted, &c. To make allowance for all these divergencies, without in:flicting injustice in particular instances, would be extremely difficult, if not impossible .
. J. R. PADDLE, General Manager, Central MillM. 25585. What, in your opinion, is a sufficient price for cane in each of the four sugar districts respectively, to enable a cane-grower who works his farm with reasonable skill and industry, to get a fair . return for his labour and capital, assuming a farm of 50 acres of average fertility ?-It is a difficult matter
to say what is a sufficient price for cane. If it were possible to bring all conditions into line, then 15s. would be considered a· sufficient price, exclusive of the rebate, but owing to conditions being very much out of line, namely, varying rainfall and temperature, the growth of the cane being more rapid in the north, and its quotient of purity higher (according to variety), the freedom from frost. in the north, as compared with the south, the shortage of caue-I mean mills working only from one-half to two-thirds of their full capacity-all these things conspire to bring about this differentiation in the price of cane.
39. Under all the circumstances of the case, we conclude that the price for cane should be fixed for each mill on the \Vages Board System, that the owners of the mill should elect a representative, that the growers (who are not owners of the mill) should appoint another representative, and that the Chairman should be either a member of.
or be appointed by, the Inter-State Commission. The Board so constituted would fix the price for cane on a basis that would allow to the miller fair manufacturing profits, proper maintenance, and proper writing off for depreciation. The Board might adopt the system of payment according to the sugar content straight out, or according to the sugar content varying in conjunction with the price of refined sugar, or according to the total average results of the mill straight out., or according to those results taken in conjunction with the refined sugar, or according to any other scheme which commended itself to the Board as likely to be just to all parties under all the circumstances of the case. It would stipulate what reductions should be made for damaged cane. It might also provide that in case of there being a surplus in the Australian output of raw sugar, involving the necessity for export at a loss, and a diminution in the price received by the mill for its raw sugar, there should be a revision of t·,he award as regards future supplies.
40. We have already anticipated some of the objections which may be urged against such a scheme. 'Ve believe, however, that it would work equitably in practice as, on the whole, the Wages Board system has worked in practice. We indorse the opinion of Dr. Gibson (9682)-
I am of opinion that most difficulties can be overcome when both part.ie11 to a dispute come together and reason, and are prepared to exercise a liberal spirit of compromise.
lv
. There course, difficulties in carrying out any scheme of reform. The
practical question Is, what are the a.lternative remedies? We have considered those and give _an unhesitating of opinion in favour of the scheme here
outlined. Meanwhile, we venture to pomt out some of tl1e positive advantages of the scheme-( I) Prices would fixed, not by ?t:.C' party to a bargain, but by an authority representative of _both part H .'s. Th!s would not only involve a more just
settlement of pnces, but \You.ld gtve to the growers a sense of having afair deal. Neither the growers nor the millers would always be
satisfied. To expect so much would be to expect too much of average human nature. But both the millers (as to the price for raw sugar) and the growers (as to the price of cane) would be relieved frcm the necessity of submittiv.g to the clicte.tion of prices by the purchaser. (2) A real community of interest would be established between millers ar.d
growers. The grower Wt.mld be interested both in the efficiency of the mill and in mainh:.iuing supplief;. The price of raw Sllgar being fixed by the Inter-State Comll'ission., the problem of securing the maximum of profits possible would be a problem in which millers
and growers would have a common interest instead of being, to the extent to which they so often r;re under existing conditior.s, antego nistic parties. (3) A new stability would be given to the growing and milling interests.
If those interests did not receive a fair return on their capital, it would no longer be possible to sa.y, as at present, that the fact was due to an unfair absorption of profits by one branch of the industry. Growers and millers alike could approach the Commonwealth Govern
ment for an increase of the Import Duty with an assurance which it is impossible for them to give under the existing conditions. (4) The new stability thus given to the industry, and the additional encouragements given _to the growers? would result in the _further
promotion of those Important natiOnal purposes to whwh we have so frequently referred. The consumers of Common
wealth would know that the burden placed upon the1r shoulders was not resulting in enriching monopolistic concerns, hut in the achievement of national ends.
41. RECOMMENDATIONS.-(1) 'Ve recommend that the Parliament ?f Commonwealth should endeavour to acquire, by an amendment of the ConstitutiOn or otherwise, such powers as would enable Commonwealth authorities to control the prices of raw sugar and sugar cane.
(2) We reeomnwnd, should :-; ueh powers be acquired (n) t.hat the price of nm f' UWH h<' fixt>d 011 a scalP hy tlw luter-State
Commission ; (b) that the price of cane be fixed by a Board for mill
of a tive of the. growers, a of ! nullers,
and a chamnan to be appomt1'd hy the Inter-State ComHIIS:-;Ion.
I vi
PART IV.-,VAGE EARNERS.
1. Importance of the Worker.-In the problem of how, by whom, and for whose benefit, the Sugar Industry should be controlled, the labour interest is larger than that of any other According to Mr. C. E. Young, of Fairymead (see
Question 22260 et serz.) the cost of labour in the field represents !;.11 per cent. of the whole cost of production of tlw cane, and in the sugar mills 59·68 per cent. of the cost of manufacture (excluding price paid for cane). Other evidence suggests 75 per cent. and 50 per cent. respectively.
2. Suitability of Laboztr.-As we have already stated in Part I.
there appears to he no reason to doubt that white labourers can satisfactorily perform all the work of the sugar fields. In fact, according to the evidence obtained by the Commission that view of the case is now almost universal. It is a view founded upon accomplished facts.
3. A considerable amount of medical testimony was given (e.g., Dr. P. S. Clarke, Question 18t7 ; Dr W. W. Hoare, Question 11545 ; Dt·. A. Breiul, Question 6t;8.)) ; and it may safely be said that the opinion generally held by medical
witnesses is that the white nmn can lead a healthy life autlreat· a vigorous family in tropical Australia, pt·ovided he adnpts ltimself to his surroundings as regards diet and clothing, and avoids Hlcoholie excesses, whielt, while injurious in any cJimate, are particularly debilitating in the tropies, :md a fruitful sâ¢)lll'e<' of si<"kne:o;s amougst the
workers in the Sugar Industry. 4. In addition to the medi('al eviJcuee n lnrge nmount of h.>stimony was g·iveu by other witnesses to the cfie<·t that the adoption of white lnbour had had a. beneficial effect generally, and the virtual unanimity of opinion against any proposed return to
black labour conditions was remarl\able. In this connection it is iuteresting to -observe that one witness (Mr. Robert Adams, of District, Question 10718) stated as his experience that the lads reared in the district made the best farm hands. !l. Remuneration '!l Labour.-If white labom· is to eontinue to be obtainable
iu anything like satistiiCtory quality, it must be more adequately rewarded than it has hitherto been. In the past, Hnd up to tlte 5th A_ugust last, when the Minister of Custc,ms raised the minimum rate for field labour, wages in nil branches of the industry were undoubtedly too ]ow. They lll'C too low in t!1e sugHr mills of both Queensland ami New Sonth Wales. The minimum wage under the Maekay W'ages
Board determination-which is rommonly adopted in Queenslmtd mills- 30s. per week and fouud. Jn the South \Vales Sngar Mills tltl' miniu-,um paid is 20s. pet· week nud found, and bonuses of 2s. Gd. and 5 per ceut. This subject is dealt
with elsewhere.
6. One of the chief among the convietions of the Austmlian people is the belief that ill-paid 1Hbour is inconsistcut with n sound system of niltionnl economy, and it has becou1e a rutioual aspiration that the Australian people shall he healtlty citizens rearing ltealthy families, nut! that the industrial lite of the <·ommunity shaH be so regulate<.! that tlte workers, who form the pltysi⢷al h:wk hone of' tltc uation, shall he sa\·cd from !taring to Jive at n stmHiard below tl1:1t to kt·ep themselves
ami their families in :1 state tlf' tuere hodilv cfii⢷ietu·L ... .. 'i. Tile rate uf \1 ages makes the stanthtnl of li\'iug ; :llld r our Commissioners believt⢠tltat it is now the Hccepted policy of .-\.ustmlia that there slâ¢all he, if possible, iu everr industn, a minimum wao·c sufiit·it·nt to enable sul'h a staudard of Jivine- ⢠. 0 ._. to be mniutnined as will meet tltc needs of Austt·nli:m eitizeusltip tor tlte ordinary comforts and tleccucies of eivilized life.
8. Following upou that belit·f; we are further of opiniou that consumers would not willingly continue to pay the present hea,·y tax upon sugar-a tax upon C\'tâ¢ry meal at every table, and paid ehietl_y, as all taxes upon tootl staples are, by the working classes-if they beliPved that the million a ycal' so exacted weut to the support of an industtT in which the workel' is paid lei's tl1:lll a minimum wage of the standard indicated. ·
1091
I vii
9: Conditions of Northern A ustralia.-In their general bearino-, the forecroinO' obs<'n·atiOns apply. to every protected industL·y within the wealth. 0 But
there are vet·y spcctal reasons why SLlch a standard wHge shonld be P''id in the Suo-ar tmd. why the consumC'r, out of whose pocket the protits come,
npou rewnrd to I:1bour .. The position of its tropical areas
to Austrnbn. \\- hether it will he possihle to save them
frot!l ahen un-aswn at all ts by many authorities . ag-ree that it is
desu·ahle to sa\·c tht·m, and that Ill order to do thi.: thev must be permauentlv
settled hy a white population. ' · "
10 .. As have pre\·iously in ."ut· remarks as to the necessity of settling
regwns {Part I.), the solutloH ot this tretw·ndous prublem, if solution be
posstble, must he in a spit·it of tin·-sighted policy. It cannot in any of its
asp(â¢cts be left to the dtctation of Directors m· Sltanâ¢holders in search of dividends. In the of tltc Nation, the issll(·s are f
of£. s. d. â¢
11 If these tropical regious arc to he> settled nt all by white people, it can
on! Y be accomplishcJ unJct· conditions which will indu<·e a settled anJ married dass of who, with their families, will form a permanent resen·oir of labour for
the industry, :mtl a c·lnss frvm whi('h the indept·ntlent g1·owet·s may he recruittâ¢d. 12. M oreon·r, Your fe e l tlaa t t.hl'Y c;umot too stt·ongly
emplutsise tl1e tlwt, ns a popul:lting; uwdiu111 , sug·nr growing lms 11arrow limits. Exportations of Australian-grown sugm· nt a profit heiug out of tlw qu('stion, the industt·v is l'Ja,.tic· onlv to the extl'nt of tiH· dlâ¢JJI:tlld within tl1e Commonwealth ; nnd it must· hc· supplt'lll('llted hy otl1e1· industt-i<·s if our hâ¢1tilc⢠tropical areas m·c· to he eveu spat·st·ly "dth·cl. TIH· f
believed, gradually supply the lahom· uec·ess;H·y for tlw produc·tiou of c·offee, COl'OR· nuts, fhtits, ri1·l', rnhh<·1·, and till' mauy otltl·t· for whieh .\'ortill'l'll Australia
is so emiueuth· snitlâ¢tl. c\·idcut·v of :\lr. II. ( ). Xewpurt, lluestiun 4735).
Some nf t!Jes t· industries. if tl1e,· to c·stahlisl1ed, Juay l'Clfllire higher
protection tl1rouo·h the taritt' tlrau tlr.t·v now rceeiH·. But the\· e:tll Hen·t· he estab lished at nlJ uuiZss tlw worker tlw fimu uf ;\ wage suited to his
necessities in the tropies -his due sl1:n·e of the pa icl hy the· consu11wr to support such industries. 1 In the of Your ('onuuissioncrs it to expel'! to
happen unless protective tariff's are for tl1e proted1011 of
labour. Experienct⢠has shown that snell l<:>g1slat1011 the. wm·ke1·s eannot
effh·ti,·cly proteet themse]ves again:-;t au rt:tnr11
II\· resortino· to the ruinous metlwd of the strik<'. eontinnnt1on ot tIns opu11o11 l';llle the Connuission in connexion with thl' Colonial Hetiuing Com
pany's mills in .1'\ew South 'Vales. At milb adult as <·ngi!lC
drivers' :l ssist:wts and those in tltc lw:n·y worl\ ot and tnwkmg
sngat·, were paid ouly n week and timnd, with a honus of :!". rd. a to men
who remained to the end of the season. FrotH 1st .January, _ 1 !.1 1 addtttona! hun us of 5 pet· cent. was pnid. (Questions 1 fi[>!H- ;;) I 11 where 111 m?st
distriets the Colonial Sugar Refilling Co1np:my Ira:-; to c·unlpl'tl· for J:tlwut· wtth Central and othet· mills, working· under a sta11dard tixed .h." tire <1_1!1'" Board
and tit<⢠B1·ishane Strikl' Coutct·elll'l', tiH' lowc"t wage for adu_lts 1." :! 1:' . (,d. a and found, witlt a bonu" of 2s lid. p<·r \rec·k 11_11'11 wlt11 1·c·tnat11 ttl I tlw tl1c
season. The disp:1rity hetw1â¢en 111 f!!l l l'll:'laud .. wlll'n· tlw.le
petitio11 t(w mill Jahonr, a11d in :\ew ::South \\'all·,;. wlll'l't' ( nlllf':llr .' 1111
competitor, suggest..; :m adh(·l·e n«· e in pra..t_ie1· to tire . la11 ot aut.l 111
labour. In tltis connection we may rptotl' trolll tlte .. ndl'ltl 't' ol. L. \\. h.Hox .-. l'·. ·J) ( ·· t · c 1 â¢1(1 ',-.;H 11ar. fi!l) .. r ,· al <·m o·ld . ·]'(' :okill;! ,f lal"'ilr ,.,nolitil>ll!l I.- ol )_ f!- lit< .. - ' .. ⢠⢠' I . . ·· f' · · · .1· 1. 1911 ,.· .. 1, II " ,. 1rik â¢â¢ , . ., ,, ,a,· . .. ln⢷r.: '"'" " "' 1,·. 11w h::t-1 . Jo .d â¢l I \\ Ci t: a1r, eX.l :; f.lll" Ill ⢠<1 v. , 1'· ' ·'1 ⢠1.. .. " . ⢠. .. .. 1 · · · . . :. 1, there 110t n 11 y tlilli c ulry i 11 ,;ee nrin g llt ··ll '" :-n 11 1!" ' uod !. · llo o· ⢠t:.llol:tr⢠of ta11 " 1"' " ,upp: allll .J c malld, of COIII'SC? . . · ··-o-·> ' 1 t ) '1 1 .. J '11,c 1 .. ,1 ·' -l ·tJ p ;·,r·l Ioiii " " ' !.!'â¢: ll â¢: ralh· n ⢷'"']'! "â¢,l 111 .\ ii ,fralla? t ⢠-.-... ...,. 4 ' ⢠' ⢠⢠⢠⢠⢠Answer.- How do yon mcnn . . . Q · 2-()-3 'l'l1r.1·c ., 1." ., , ... ,,,f 1.,.,11 ,· Jâ¢C'' I'Io.: lo-.Ja,· iu .\n.-lraha .. ,·J ,, rhwk rl.ar a fa 1r wage ' I .- ⢠⢠... . ⢠⢠⢠⢠I . I . . . ⢠1 · 1, · t. . . f .. 111 ,1,h· 11 11 ,J ,Jt. 111 n o â¢â¢ l. (If t·nf!r,t· . \\. t:t l , ."" ,a,· 111 I ' " ,l:;l t·lll< ·ht c:munt be tldmc< II! Clllb " · ⢠⢠. · 1 · · 1. · .. 1 1 . 1 I f I ' t .. J· .. > \ll- 11'1: 1' -J c"niJ â¢a\' fiJ illl' i lt lll !: OU I l:tl f' OIII I , J til It \I â¢II' f , IJ! JC amounts to t JC act t tat 1 can ⢷ . . . ⢠evidence.
I viii
Mr. Knox's attitude is in evident conflict with modern economists of standing. To quote the words of a recent writer :-,,We are passing from the era in which the subsistence of auy class of our workiug population can be lefr to the uncontrolled fluctuations of supply and tlemand and the higgling of the market.. A saner regard f.â¢r social order and enforces the need for regulating competition in tho labour market by laying down a level bereatii "hich no wage bargain will be legally permissible."
H. It would ap}Jear, however, that the Colonial Sugar Uefiuing Company, whil'11 pt·actically dominates the .Australian Sugar Industry, is not satisfied to stand alone in the endeavour to enf()l·ce the law of supply and demand in lahour. lt has endeavoured to persuade tlte growers to combine with it to the same end, or at least t.o secm·e their " vote and influC'nce" against an.y statutory regulation of wages. 1 n a circulat· (tendet·ed by :\Jr .. J. A. Wnre in evidence: QuEstion 10418) which the Company sent to gt·owers, relative to the price of sugar cane tor the years 1911,
1912, and 1913, nnd which was published in the Austmlian Sup;m· Jounwt of 4th November, 1909, page 2S7, the following passage " \\" e pmpose to pay to the suppliers the whole of the ndvanlnge to be derived from the reduction of the Excise duties so long as the margin of profit now obtainable by us is not reduced by enforced changes in our p3y-sheots. Any advance in wages arising from tmtural causes we will bear, but the loss
that may ensue through atte111pt:; to iuterfere wit.h the operations of tile laws of nature must be chargeable against the increased price that results from tho change;; in the â¢lnty, because tho mar-gin of profit . uow left to us will not stn11tl auy rctlndion.''
!;) In this cil'cnlal' the Colouinl Sugat· Henning Company not only :mnounces that it nc:.lheres to the theory of supply and demand iu the lahour market. The Company nlso uses, in a veiled though obvious way, pecuniary iuducem(â¢nt to secm·e the adhesion of the gTowers to the same poliey.
lfi. Tl1e Su,gar JVorl:!'rs.-As re:â¢gards the workers employed tor the season only, who constitute a. large pmportion of the totnl number of men employed, the work is suhject to a numbet· of disadv,l.ntages as compnred with continuous employment. Amongst the:o:e may he mentioued :-:-
(I) The cost uf getting to the pl:u·e of <'mployment and home agaiu when the work lms censed, which in the case of manv men who do not permanently reside in the district ma.y be taken to amount to ti·om £3 to £-! per man on :m average. Though this is some times paid hy the grower (sec Qu<'stion 378!1}, it is more usually paid hy the wage ca.ruer. (2) The loss of time thus occupied 111 gomg to, returning from, and
waitino· for the wol'l\ . . ( 3) ..\-.; to a m:u1 e111ployerl only part of tltt⢠year, the true value of his wages lw ai'wertainetl hy d<>dneting time in securing
otlwr work.
( t) The almost unin·rsal practit·e in the :-;ugar Industry, both in tltc tield :llld in the mill, is to pay tlw wnges uf the workers engaged by tltc wm·k once n mouth. As tlw United States Jndustrinl
Commissiun put it, " de:â¢fel'red payment means an
Your Commissioners, slwuld lw disl"ont.inu<.:d. No adequate t·casoll wns gin·n why the ap:ut from su<'h advances
as he might recci\·e througlt the good will of the employer,
give the employers :t month's credit f(.H' weekly wages.
17. 'ill. lite Suxor lmlustJ:lf p:tmeral(tj rwd JVoge.'l J1airl thrrein. La.bour in the Sugar Industry fit lis iuto titre<' hroad di ,·isious :-(1) Tlw field-in whieh it divides itself iuto two classes, VIZ.:-
(o) The eane (h) Tlte geueral hand. (2) The Raw Sugar Mill. (3) The Refinery.
109:1
lix
18: In each .of these and except the cane cutters, the
wages pmd at the time the Comm1sswn took evtdence were below, and, in the case of the Coloninl Hetiuing South \\':1Ie.:-; )lills, distressingly below,
the standn.rd of a tcasunnble hnng wage. fhe Comnusswu touk e,-idence showing !he paid in ?f iu field, mill, and refinery, and the
mformatwn thus gamed will, 1t IS hoped, he ot tnture value. \Ve here confine ourselves chiefly to the fundmuentnl question of the liYirw wage-meanino· hv tlwt a wao-e t. th I . 1 · 1· ·1 ⢠l · R "'
0
⢠;.,
u e c taraeter prenous y me 1catcu m t ns eport.
9. to what the living wnge shonltl be in the sugar-growing districts, we
lWl)' pon1t out that 60 per cent. of the gwwers who were examined on the question, 33 per cent. of those interested a s directors, maMgers, and owners of mills, and 98 per cent. uf those who e\·idt:' IICl' on behalf of the workers. aoreetl that it should l
. 0
le 8s., at least, for au eight-hours day. "Tit It thi:-; (â¢stimnt< ⢠the Commission agrees.
. 20. 'l'l1t Cane Cutta.-- Tltt· only workers wlto h;n-e been pnitl a liviug wage luthertu Jun·e been tlu.' enue cutters. Cane euttiuo· is \!'lâ¢nei·allv let lw conh·act to gangs. The work is <·xtrcmely an.luuus, and, g·enerall.v, oul)· mf>n in the
lwime of lite are fit fc)l' it. Tlae t·.trnin:.!·s of e:lllt' etttters ,-an- o-reatlv, runniuo- Ull to I . . 0 ⢠0
as ngh as 24s. tâ¢er d
tlae Hf'port of tltc U uited lnJustrial in the fi,Jiowing words:-
" Pieec-work, oper11t iug npou till' in :!us trial grce,J of c·nl'lc workman, witlt a gonl ,; c l hcrorc hiua cnc:la day, is uncpteslionlllâ¢ly aulnptetl to .I raw our his c utire lend,; to u\·er t-xertiou, exhnusts Loc.ly au,l mincl, ancl t.he trnolc lifr! of lice w orker. He miut!l hi s ,·ita!it_,. into c·oin."
21. Furthe1· ohjection was made to the 1111 tltc ground that cnut⢠tin·mers put their Cline-cutting work up fin· tt·tu.ler to tlu· t·heape:->t hidders, aud that the result was undesirahle eompetition among the workt-rs On tlw whole, l10wever,
the balance of opinion was in tin-om· of an open fi eld, as far ns eaue cutting is
concernetl; and we arc relnctnnt to an intertt>rence with t IIC' only hr:mch of the industry in whieh workers h:n·c heen hithl·t-to a hie to l'
obtained of deterring payment of a percentage of tlu.· amount dnt· 011 <'ane-cutting coutracts u uti I the completion of the <"On tract. In some cast·,.; w ltere, u ndcr such a conti·act, a forf(·itnrc occurred through a eaJtl' <'Utttâ¢r ll'aving !tis jul., the fin·feitcd money was distrihntcd among st the 1111:'11 who n·mained in :md fulfilled til(' nnclel"thc
eontract. In othl'rS, it was talâ¢en hy the cmpln_n-r \\'!tilt⢠it was
concedt>d that the n:·tention or a small :llllllllllt ll) in,..nrc· tltc· due fnltihll('llt of :1 t:Ontract \\'aS just and the ColllpJaillt W:lS that !Itt⢠JIO\\'I'r tllll!-' g·in·n \\:IS ,._llllll'tilli('S used harshly :wei to tht⢠injury of tlw wurkl'r.
':!:l. Tlw (h·nt·r!ll Fitdd llrtnd.-'flte ruling: tuinittllltlt W
put down.at :!2s. 0tl· per \n.·ek in off an1l :25:-;. in tl_1c hu sy for a
ten hours cl:tv With hoard and lodo·m;..:· lltt·se wt·n· :t1 tltat tlluc· lite llllllllllllln rates â¢' I 1:'> 1 .â¢. ,
stipulated for h_y the :\lini-;tc⢷ undl'r the S11g·ar . .:\ .. -t : 11· w:1 ge was
inadequate and mtwh hclow tltat now p:ucl lot· s_u11tlar \n:.rk 1!1 uthet·
industries in the other St.ate:--. In t Itt⢠I nut md us try at :\I t1 d 11 ra ( \ letona) and
Henm:11·k (South .-\ u stmlia), for in:--tan⢷t⢠... dipp1 ·r !111'11 â¢â¢ harrow '?ut
from uip and p;:wgers" are p:tid l s . per ltnllr. . h·utales_ f' llttl_ll).!' 01'
stone-fruit rec-eiv e !Jd. ]11'1' lwur, nncl other l'llljtloyt·t·:-; 111 ,-.,nne<·tJOII With ltarrcstmg ope ratious, wlll'ther lllalc or h:malt·, il'co\'1'1' _ n ·ars â¢â¢ ra!.:.'l', rPcc·in· I:-;. ))1'1' !tour. .
2a. Since the ( 'omtni,..siou :--at in Qm·en:-;l:uul mul Xt·,,· South \\·ales, the Minister for Customs has dcdarcd a minimu111 wngc for field lnhuurcrs of Ss. for a ⢠day of cigltt hours. This .is t.lte fir,.;t time in the history of the Sugar lndusti·y in which it has heen authont:ltn-cly propo'-ed to pay worke rs: other than cane-cutters,
a living wage.
lx
2!. In connection with field labour, we desire to bring under the notice of the authorities the fact that the stipulation made bv the Minister for Customs as one of the couditions for payment of Bounty that no" deduction should be made from the wages for wet days, while adhered to by many of the small growers, is openly disregarded on some plantations. For example, Mr ,V. A. Thorne. manao-er of
Fairymead Plantation (Questions 23516-2.3534), admitted that a man's be stopped on account of wet weatbet·. Again, at Question 25fl88, Mr. James Clark, of .-\shgTo\·e, st;ites thnt they Mrc a ware there is :1. rcO'ulation reo·ardinO' wet weather "-.,; .0 ' hut they have not been guided by it. The situation thus created is unfair to those who loyally obey the rule intended for aiL In the cases just rctt>rretl to there were breaches of specific conditions laid down by the Customs Department. Evidf'nce was also tenuered that on the Fnirymead Plantation the men were unfi1idy treated by being compelled to pay ft'es to a hiring agency which should have been· paid by the employer. (Questions 2372!i-23791, 24292-24303.) 25. Wages and Conditiom· in the Raw Sugar i11ills.-Prior to the strike which took plnce amongst the men employed in the industry in Queensland in June, 19 11, the minimum wage ranged from 22s. Gd. to 30s. for n week of 58 hours' work. A compromise was effected, and the uniform minimum wage was raised to 30s. and keep for a week of 48 hours ; but complaint was made in evideuce that though all other mills paid the increased rate, the Colonial Sugar Refining Company paid only t7s. 6d., with a bonus of 2s. 6d. additionnl, pnyable only if a man remained to the end of the senson. In justiee to the Compnny, WP :.-honld ndd that the :wcommodation pl'Ovided iu its mills compared more than tavoumhly with that provided in other mills. But we do not think that thi . ..; constitutes a justiticntiou for n depnl'tnre ti·om the standm·d fix(â¢cl, esjwei:t1ly h:wiug in Yiew the fiwt tlwt that stnnd:u·d was below tlw of the living wage as intt>rpreted in other States. 2f{. Complaint was also mncle iu evidence that, the strike was orer, the Coloni .I :-}ugar Refining Company for some time tl) pay f'onsidenthle sums of money to some of its employees who returned to work, although the agreement for settlement (au agreement made by the Australian Sugar Producers' Association, to whose funds the Company eontributes) contained a clause that no ,·indictive spirit should be shown towards the men at the conclusion of the strike. 27. The General ofthe Colonial Sugat· Refining Company Limited, in giving evidence in Sydney, stnted-Wheu the men struck work at Hamblet!ou Mill, t.he Company relaind all the wages then iu lnulll, Lut after the trouble wns o,·er pniJ the wnges withhehl to all the men whose whereabouts were known, with the exception of ten. The latter hat! J.eJn found guilt.y by the Local Courl of breaking the !lgrecmcnts tn:lâ¢lc bet.,vecn tllem anâ¢l the Comp:my un.lm· the )fastet·:> an.J Act, and were fiuetl and on.lered tâ¢> pay costs. The penalties , ho\\·c,·cr, were not. pait!, ami consequcnr.ly t be:;e mcn wct·e not entitled to recei,·e auythiug out of the wages retained, for these <'nly amounted to £11 4s. 3.J., whilst tho liucs and costs auwuutctl to £36 I e., on! of which the Company is eutitleJ to reeâ¬i ve £::!4 I I s. I ,;houltl mit! t.bat. we offered tu pay iuto Court the wages 1)elo,ging to the men who wcru tined, Lnt were toltl by the Clerk of Petty Scssi .. ns that the aut.horit.ie.-; could uot take this mon1â¢y tlutt the Company shonlâ¢l retain it. lumltlitiou '"the >IIIII of .tl I :hi. held by the Co111pnny, there j,- an :UliOIIut. due to ol' the men whereal.,,uts we euultl 1101 asecrtuin which will he pniâ¢l 11\'Cr when I heir ai'C known. :!X. Tla is is tire ex pia nation otti.â¢red by tltc· Gc·neral \l :Htag·er iu Odolwr, I !II :wd it llt:l v ill' to represent tlte :ttt.itHclc of tire Comp:my ; hut it with c·videtwe gin·u ll\· tlH· ('ololli:tl Su.!.!·ar Hetiuing Cotnpnny's l1wal lli:IIHI!.!'CI' nt ill on tltc 14ilt 1911, tl11·c·e nwntlts :tfter tltc Jate ( i:Jtlr .\ ngust, I from wltidt tlte .\gnâ¢ement fiw tltc sdtltâ¢ment of the strike took ctti.·ct. B. 1:. Hn .Er, :.\Ianagcr, llami,Jc,fon ::\!ill. :l:i!d. ⢷ I h·n 'era ,r;lll'tllent of the tuolli'Y withheld ;tt llamhledooli :\Iii! frâ¢â¢lll 1u en wlttJ broke their :l;_{l't! t! liH'IIf :-(fl) Fr,Hu dw,.;c who diolnot rd1tr11 to work-:ll.i lllell, . .!::If -J ,- . (f-) Fr-nu tllt .St · who .lid rc turu '" work- -.i 111 <' 11 , f:? ·l 6.1. " Tltat. lllen wlto did retnr11 to work applieu fur tlrl·ir utuney ;111J g·ut no is shown h,· the eviueuec of ll. G. \VooJ, labourer, Halllbledon (who states that about £5 to £6 was due to him.) 2560. Did you go back after the strike Y cs. 2561. Did they keep that money ?--1 ha\' e not got it yet.
lxl
2.'i 62. Did you ask for it ?-Once or t wi ce" .
2563. What was the answer ?-One said I mi g h t. gl't it at. the enrl of t.be ;:etb< on, nllll the other snid he knew nothing about. it. 2564. \Yho he know nothing nbont it '!-:Mr. Plummer. 256ii. Who said yon might get it nt the end of the stJn
Y
2[,66. Did you believe that when t he ;; trike ;.et.tleâ¢l ami enble were;;, be
- C!<,
Al!!o AnTRU'R \Vnm, labourer, Hambledou.
256i. Yon 1v ere on<> of those who went on strike. \Yonltl ,·on have "'On e lonck if ihere hn·l her, n a joh ?-Yes. · "'
2568. Yon ,,-ere willing to go bnck ?-Yes, they reckoneâ¢l the positiou wa;; II lied, ntlll t hc\' kept the money thnt was dne to me. ⢠â¢
2i.69. H ow much did they keep ?-Ahout £6.
. 29. custom in the Sugar Industry whet·e men nrc kept is that
pay for IS calculated onlJ on the nwmw part ·of the wnge. But the board
and lodgmg of a man are as much part of his wages as the cash he recei\-·es. The cost thet·eof can be ascertained without difficulty, and we are of opinion thnt oyertime should be cnlculated upon a sum equ<11 to the total emolument-consisting of both wages and keep-which he receiYes.
RO. Wages and Co11ditio11s in the Refineries.-The only refiners of sugar in Australia are the Colonial Sugar Refining Company and the Millaqnin Sugar Company. The former have refineries at Brisbane, Sydney, Melbourne, and Adelnide, nnd the latter at Bundaberg, Queensland. The conditions of employment in each are about the same. The minimum wage paid to adults by the Coloni:tl Sug:tr Refining
Company is 7s. for work outside the refinery and 7s. 5d. for work inside the refinery per day of eight These rates are not less than the minimum rat<.â¢s paid in the raw sugar mills, with the added ndvantages of a bonus and that employment is continuous throughout the year. The men are also entitled to the benefits aftorued hy n well
organized Provident Fund and Benefit Society, to which the Company snhscribes £1 for each £1 paid by the employees. (Q. 27286, 27:291.) The couditions under which some of the men have to work appeared to us to he Yet·y trying. This is pnrticulnrly so in what is teclmicallv known as the "wash-house,'' where the men work in a ,·erv humid atmosphere nothing hut a loin cloth. \Ve were told in cYidenc e tha't these condition3 are unavoidable and nre the same in nil refineries in other pnrts of the world. Your Commissioners arc firmly of opinion that the minimum wage
for adults in the refineries should he at least 8s. per eight-hour da.y.
31. Improt·ement nf Con,litions Es.\entioi.-A geneml view of .la.hour conditions in the sugar di stricts leads to the conclusion thnt existing comht10ns of employment are not such as to encourage sufficiently the permanent settlement of a reliable class of workers. Assuming the permanent settlement of su eh a ('lass he one of the objects fot· which the consumer pays the lteavy tax .on sugar, object is not heing accomplishecl at a mte of progress commensurate wtth the cxpen
32. The first and absolutely essential thing neces!'ary t? procure lu!!tC'r is the establishment of a living wage of the standard prcn ously tkscnhcd. 1 he tropical an
sufficient only for the ot noma1ls who :u·c wtth baf'hclor of
life. The case wa s put in a nutshell hy :\lr. l'...dwat·d ConpC'r, a t::uw Iarmer nt
Nerang :-" 17869. Have ; Q U r1ny Iâ¢J make wl.iclo wu ni J lo cl p tâ¢J c uâ¢: â¢J UI" n ;!e permane nt
in the di strict of a which would furru a fl:SCI"HJir of for t i1C indu â¢try !-.\l .. r c for the
men is the only I can make. Our arc " ' '' v C' r;· lan>ratJIC' to lll ii UCC
men to c-.mc in."
33. lJfacltineo;.-In n previou s part of this Heport, we rc(· omm ctHicd the abolition of the Bounty System. As we there out, til? a
means of excluuino- coloured labour from th e tields, IS op<·n to vnrwu s olâ¢.Je<·tJOns and should he superseded hy direct legi sl:ltirC' nction.
lxii
34. As regards the question of industrial conditions in the Sugar Industry generally, viewed in relation to means of betterment, several alternatires suggest themselves-(1) \Ve undersbmd that it is heing proposed to ask the Australi:m
people to sanction an amendment of the Constitution empowering the Federal Parliament to control industrial conditions throughout the Commonwealth. Presuming snch an amendment to he adopted, we see no reason why the Fcâ¢deml authorities should
not deal with the lahour prohlem in the Sugar Industry as iu other industries.
(2) So far, however, as the Sugar Industry is eoncerned, in view of the urgent need for improving the labour conditions, and having regard to our recommenda.tiou of an increase in the protective duty on sugnr, we feel entitled to assume that the Governments of Queensland and New South Wales will be prepared to act in
co-operation with the Federal Government for the purpose of giving efrect in substance to the recommendations which we have made after a careful examination of existing conditions.
(3) Apart . from any amendment of the Constitution, and apart from co-operation of the Governments of the Common wealth and the sugar producing States, the sugar workers in the two concerned are able, under the Commonwenlth Conciliation and
Arbitration Acts, to bring the subject of lahour conditions in the Sugar Industry under the Commonwealth Arbitration Court. Should such a course be taken, we venture to anticipate that the Court would find in the evidence we have taken, and in the conclusions we affirm in this Report, useful datn for the purpose of effecting a long-deserved justice to workers in the Sugar Industry.
Whether or not the Commonwealth· Parliament attains enlarged powers
in respeet to industrial conditions, there are directions in which the sugnr-growing States, and particularly Queensland--concerning which the settlement question is urgent-might move to make labour conditions better. Amongst these we mention the folJowing : -
(I) A more liberal policy a:s regat·ds working men's blocks in the sugar growing districts, ami the opening of more land to working me.n applicants under the block system. If no Government land IS available, other land might be repurchased for the purpose, as in
South Australia.
(2) Cheaper railway fi1ciJities.
(3) Stricter control of the liquor tmffic. There was an overwhelming· weight of e,·idence to the effect that indulgence in alcoholic lit[UOrs is a great hindrance to successfully Clll"r_ying on operntions, and is a most set·ious cnuse of illness and degeneration among the workers in tbe industry. The fo1lowin g striking <'Videnc<' m it)' he quot<'d , :md could he :unplifi<'tl indefinitely :-J. Ar.LlSON', F1 Lrm er, G in Gin, 80 othor Cnn !!· Gr<>wcrl1. 21863. A grent deal of tue in fe riority of labour is due lo the usc of inloxicnl in g lirttJOrs, nrHI we Jlave littlo doubt that great impro,·emcnt. conltl he ctfcd l' cl by d osing nil prrblic-hmH ·s in sngnr di stricts
from 8 p.m. on S atunlays 10 fs a.m. on the f(>ll owin;.! :M on.Jay. arrol enforc ing S urulny
which is ulloweJ to be a dead le t1cr in mnny country di stricts.
X. A . JouBEf(T, Farmer, Ch inol cmh, N .S.\\".
I i521. These men yon for n fe w pound s, nJHI y on olo no r sec them for n we ek. They go ofT to the public-house and come hack with a hotllc of g rn;!, anol nrc no good fur a oln y or two.
E . C. J. Farmer, Tumlmlgnm, N.S. W.
17418. The majority of 1he men nrc very inferior a nti iutcrnpcratt.'.
C. W. H. :.\Inuagcr, Conolong )fill.
I i32l. Is the chief trouble the propensity of the men for the liquor habit ?- U ndot.htedly.
1097
lxiii
H. T. EASTERBY, General linnager, Maffra Factory. 131:106. We have a number of men who mn y go off to the hotel and not come back for twu or three tlays. We have a good deal of that sort of thing. I tilink it is worse even thau in the north of
A us tralin. -
T . Chairman of Directors, Cattle Creek )Iill,
11620. Great ,Jifficult.y has been experienced in gett.ing reliable men. ·
W. W. HoARE, l\Iedicnl Practitioner,
11545. I regret to say that, as a class, sugar workers are not by any mean ;; exempt from nlcoholic excess, and they indulge in occasional outbreaks of iutempemnce, though probablv unt more so than those engaged in other indust ries elsewhere, nn tl with nn excuse that thir>< t ,·er}: quickly when working hnrd under thermal conditions. However, it is certain thnt n lnrge amonut of the iul'nlidi:y evident iu c>ane workers, nfter a fe w seasons, is dne to alcoholism, more thRu to <"limat e or work.
T. J. \YnJTCOMD, Cbnirmnn of Dircetors, Racecourse Sugar Company, 11240. Great difficulty has been e xperienced in getting rcliab!P, sober men. The wnge sheets show a very lnrge number of men through the mill hooks. \Y c haYe hnd to pay tine!' to get men
out of the Iock·np, to enable m t.o carry on the work. The principal funlt is insobriety.
( 4) Amendment of the Queensland ShP-arers' and Sugw· !.Yorkers' Accommodation Act, to provide better housing, and the extension of the Act to cases where less than nine men are employed. It would appear that in such cases the requirements of the Act do
not apply. The minimum number appears to your Commission to be too high, and a material reduction might well receive cnreful consideration. Complaints were also made as to a general laxity in the a.dministmtion of the Act.
36. Recreation.-Upon the part of the large employers, an effort should he made to provide rea.â¢;onable recreation, in connection with the harr:1ek system. This is done in Haw:aii to the extent of providing hospitals, swimming baths, tennis courts. baseball grounds, dancing, and social halls, and even hillianl tahles and
pianos. It is also worthy of remark that great attention is there paid to labourers' houses, the custom on the islands being to give about a quarter of an ncrc of land to each dwelling. (See Mr. J. C. Penny's Report,
37. One of the drawhaeks of rural life generally is its social stagnation, and if this could be ovet·come, workers would be more satisfied to go into and remain in the country. Fur the most part, the communities are too small to affonl the out lay to provide rational amusement for the workers, and it is worthy of considcr;ltion whether something should not be undertaken hythe Government or the municipalities.
The suggestion is that some contt·ibution might be made towanls the establishment of comfortable recreation rooms in all centres where a considerable number of men are workino-, such rooms to consist of a writing-room, card-roum, and hilliard-room. A club of this kind could be established at a cost of, say, £200, or £30) (ineluding
the cost of the billianl table), and should readily pay working expenses. The men might pay a small smu for the privilege of meml>t'rship, and so much pc1· game on the hilliard table ; and there might also he provided for thcn1, at rcn ;;onahlc cost, ten, coffee and lit:rht drinks and reft·eshments. There is little donht thnt one of
the main 1?easons men go to the public-house is that they require recreation and company; and they will continue to go there until adequate counter attractions are offered to them. Whatevet· either the millers u1· the growers can do to make the quarters an.d e\·en cheerful, and .to pro\·idc soc ial in.tcl·conrsc,
must react m the (hrectwn of a more attrftcttve and effictent servwe. In connec tion, we may refer to the evidence of )fr .. John Drysdal e, of Pioueer )lill, :-7963. With regarcl to the clrink e \·il, nrul your alt empt to comlo: tl it ; you !J nilt a m'l·lc:l ho:t rc ling honsl', did you not ?-Y cs, a boarolin g;-honsc in_ It. ,f,>cs fairly Wl'l l: I think. .
7964. Have yon done anythiug at t he P10n ee r :\[Ill to unpro\"c ;; :w 1 :o l "l lrr<â¢llll â¢ltn;!" .,f the men there ?-I imilt a re: uling -room ar 11l a mn :> ic-room , an I the ill t: a the:n n ,J.: ·d .
7965. Did you fi ne! it ,Jj,J :some goocl ?-- · Y t ·!!. 'i9o6. Di·l it improve the gencr:iltone of til e m(, :l :â¢-Ycâ¢, J eci cJ ,",Jly. It 1c:·y 11111 ch lik e.l by manv of them. ⢠7967. Yon fc>ttntl 0 11 t.h c whole tl1a t it wa ⢠sa t i3 fa ctory !--Yc:l, I am g-J.ull l:nilt it.
7968. Do the men co ntribute anythiug to til e E:a int cna tt < :c of the an cl mn â¢ic-roo m ?
I think they tlo They have a small I thi nk. I lwn â¢lc·cl it over:'" th em tn what they
thought best with it., to manage it, ami cn·ry tl11n g <:lâ¢c .. I they hat! uettcr mnnagc rt I believe thev have a number of news papers :ltlcl 7969." Do yon contribu!c any ca5h to it ?-I diu at The)· want little uow; ,,rd y a fe1v
newspapers.
lxiv
38. Savings Banks.-Some of the mills have a Saving·s Rank svstem, and this is a facility that deserves the highest commendation. It wotild he n thin()'
for the men if it eould be extended to every mill. .':)
:3:). To one important nspect of the labour question we have so far not referred directly. 1Ye allude to the desimbility of maintaining n high standard of efficiency. 1Vhile we bP.lieve that in Australia, as elsewhere, employers will find that it pays to treat workmen well, the question remains whether in addition to sneh indirect means as we have already suggested-a living wage, provision for recreation, savings
banks, &c.-something more might not he done to give to the worker a direct interest in making the business with which he is associated profitable. In this con nection we may cite the evidence of Mr. C. E. Young, of Fnirymead-22163. Ha\·e yon any suggestion to make which in your opinion W(}UILl tent! t.o the promotiou of industrial peace and corresponding security hoth for employer and employee ?-Profit-sharing. This is a scheme of my own, which I have not been able to bring nbont bec:ause my brother, who is a partner in the
place, is away in England; but he returning shortly, and this scheme is to go before him when he returns. My scheme is t.his : All workers shall be considered as having an interest ·to the extent of the pay received by them for the year, nn
22164. Is not thnt very much the same scheme as Messrs. Lever Brothers, the great sonp manufacturers have 1-Yes; but there is this difference, that they have a fixed populntion, and it is always easier to do anything with a fixed population than with a floating population. We have to deal with people who come ar:d go ; but I think my scheme is elastic enough to apply to every man on our place.
40. As a substitute for a living wage policy, we cannot recommend profit sharing. But we see no reason why a provision for profit-sharing in the Sugar Industry should not be superimposed upon the policy of a living wage. We believe that if it pays an employer to employ men at the minimum wage fixed by law or by administrative machinery, it will also prove a paying proposition, even at the price of sharing profits, to give the worker a direct interest in maintaining a high standard of industrial efficiency. Australia is rapidly solving the problem of the living wa.ge, but the solution of that pruolem to be enduring should be
accompanied by means for maintaining such a reasonahly efficient output ns may be anticipated with confidence if a direet communitv of interest be est:lhlished between employer and employee. We advocate no Ian;' or legal machinery fot· this It is a purpose which should be effected by enlightened and voluntat'.Y co-operatiOn among the parties concerned.
41. RECOMMENDATIONS-We recomlllend-(1) That the minimum wa2·e for :ulnlt workers in the Sugar Industry should he not less Ss. per day of eight hours. (2) That remuneration for overtime should be fixl'd on :1. hasis which takes
into due consideration the f.·wt that a worker's keep is really pnrt of his wage. (3) Thnt the matters to wltidt attention hns heen dire<·tcd in p:H'agmphs 35 and 37, being matters in which tlte ameliomtiou of industrial
conditions is necessnrih· iii the lwnds of the Statl's, he refert·ed to the Go\'l'l'lllllents cot;cerned. 'V <' nlltule to the working men's blocks, tlte chenper railwny 1:wilitics, tlte f'Ontrol of the drink traffie, the nceonunodatinn nf the workers, and the increase of facilitiP.s for rcereation.
lxv
PART V.-ALLIED INDUSTRIES. 1. Large quantities of sugar are used in Australia as raw material in the manufacture of jams, jellies, preserws, canned fhtit, confectionerY condensed milk beer, aud mineral waters. The precise amount so emplon'd is estimated :
but it may he assumed to he not less than 50,1100 tons a;munlh·. ( lne witness .M/ W. Peacock, jam maker, of Melbourne, estimates it somewhat i1igher- ' ⢠.148i9. What do. yon consiâ¢ler approximn:tcly_ the nm onnt of su gar nsPd in the jam nml allied mdustr1es ?-For some t.1me we ha\·e been reekonmg 1t Letween 60,000 and iO,OOO rons.
2. With regard to all such industries, a /;rima facie case can he made out either for remission of the import duty in the case of imported suo-ar, or for the remission of the excise in the case of sugar produced locnlly, on the ;·ound that each Australian industry should be enabled to obtain its raw as cheaply as
possible and ti·ee ft·om artificial restrictions. 3. 'While the principle which is implied on the ground just stated will be genet·ally recognised, there are certain ohject!ous to giving effect to it in the way suggested.
(1)
(2)
(4)
F.J3'381.
The Commonwealth Legislature, in its protection of industries to-day, is not free from pmctical difficulties which arise out of the fact of an already established scheme of protection. The Sugar Industry has been developed under that scheme until its sugar lands, its
mills and its refineries, are capable of an output which, in normal years, approximates to the local demand, even including within that demand, the sugar which is required for the purposes
of manufacture in allied industries. One witness before the Commission, when urging the claim for a rebate on the sugar required for manufacturing referred to the practice of
Victoria in pre-federation times of grnnting a rebate of £3 per ton of the import duty on all sugar used in jam making. But at the time mentioned, Victoria had uo sugar indush·y of which the claims were likely to he by the concession in question.
The Commonwealth to-day is in a different position. Already the Australian Sugnr Industry has attained such a magnitmlc, that in normal years, if it cannot rely on the market wl1ich is offered for its product by the allied industries there would he a surplus of
Australian produced suo·ar whid1 could ouly he exported at a heavy loss. Hence the pnwtical dilemma suggests itse!f ;-If the allied industries are allowed to rret a rebate on tlU.'II' 1mported sugar, irrespective of ecommodity !s for
export ot· not, a lu.â¢av_): loss IS likely. t? he sustmned. m ordmary years, hy some portion of the e:ostmg· and esta hhshed sugar iudusttT. If, on the other haud, the manufactmers he allowed a rebate .-\ ustralian produced sugar of au amount equal to the
Excise duty, a henvy charge is imposed on the Commonwealth Treasury. So far as concerns :my export trade iu jams! jellies, mi!k,
conftâ¢ctionery, and canned or fnuts, the scvernl1.ndustr1es are pra<·tically unaffeetl·d hy the 1mport duty. nu sugar snu·e they :tre entitled unde1· existiug regulations to o.hta!n a Drawha<'k of the duty paid on the sugar, when tl!c commothty Is. l'X]'UI'tt·d (Customs · Regulations, 1909, nnd Hegulauons under Act 19111 ).
Each of the alliell industri<:s already enjoys a prot⢷ctin· duty, as regards tlwir respedive c·onitliOdities, wl1iclt. so we lwve heen nl;fe to ascertain, he regard<'d as adl'<[IIHtl· lor of
o·iviuo· those intlnstries a fair nnd ⢷IJ:tll('t' ol eomp<:tmg illlportt-â¢1 artit·lc 011 thl' e\·â¢·n allowance
is 111adP for till' pre,..;ent enlwllcl'd pr1n·s of su::·ar due to the impos;tion or CustoiiiS dut.\·. Tl 1l' a llicd industries l1a hel·ll spl'ci.all y HJIIl'l'd. by tl1t' .C olor!ial Hl'liniug Compauy as to pncc,.., c,f sngar lor manulacturmg
purposes.
E
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4. In brief, then, the position th:1t, so tin· as we can learn, the allied industries are ampl.r protected ali'eady on the that, generally speaking, they
ah·ead)· obtain a rebnte of import duty on sugar where they mnmtfacture for export; anJ that anv di sturbance of the existino- arrangements in the direction asked for would involve either a drain upon the Commonwealth Treasury or a heavy financial loss on the Australian Sugar Industry in normal years so far as part of its output is concet'l1ed. These reasons appear to us to raise a presumption against the proposal to allow ·' ft·ee sugar '' for the manufacturers engaged in the Allied Industries. After taking a great deal of evidence in several of the States, we were compelled to conclude that this presumption was not rebutted by the evidence submitted to us with the possible exception of the jam illdust⢷y . That industry is in some respects peculiar. 'Ve publish in Appendix !) to the evidence, a statement prepared by .Mr. Wm. Peacoek, of \"ictorin, in which the case of the jam is
ex pressed at length. W c here state our own conclusions with respect to the claims asserted on behalf of this industry to " fi·ee sugar."
5. At the outset we may point·out that the claim is advanced less on behalf of the jam manufacturers themselves than of the fruit growers. Such evidence as has heen submitted to us, goes to show that, on the whole, the jam manufacturer gets an adequate return on hi s capital outlay . Cases of inefficient return or of absolute failure, have been alleged; but there is every reason to believe that jam manufacture, if conducted with efficiency, is a reasonably profitable enterprise. So much the manufacturers themselves generally concede; hut they contend, and in this they are supported by the growers of jam fruits, that the price paid for those fruits involvQs an inadequate return to the growet·. If, it is alleged, the jam manufacturer could purchase his sugar duty-free, he would he :1ble to make a reasonable profit for hin1self, while pay ing a much higher price for those jam fruits upon the market value of which the fruit grower is often dependent for his livelihood. It is not denied that the import duty on jams is sufficiently high to admit of the jam manufacturers achieving the same result hy raising the price of jam; hut it is contended that this method of remedying the gt·ievance of the fruit growers would prove ineffectual, since any marked increase in the price of jam wo.uld matet·ially lessen the demand for that article on the Australian market.
6. \Ve think it important to point out, however, grievances of the growers of jam fhtits have vcrv often no the maintenance of' an import'duty on sugar. "
that the real or alleged necessary conncxion with
( 1) Acconlino· to the evidence of some of the leading jam manufactm·ers, they been prejudicially affected in their purchases of sugar, owing to a monopolistic control of the Australian sugar market h,v th e Colonial Sugar Refining Company . It is also t!tat tltc present impol't duty of £10 a ton sugar, by the
sourees of supply, ha s worked rn·eJndH·wlly to the Jam makmg, and inferentially, to the fruit growing imlustry. ( (Jnestion 14621.)
The jmn fruit gnmeL· is lnrg·ely concemed perisltahle_ commodities.
He is theret(>re fiu· more at the merey of the manufacturers tlum, to take a striking coutrast, the wheat fitrmer. Not infrequently, he must :t cecpt the price of tl1e nuumfilcturer nearest at hand. lf he has a choice between seYeml uumuf.·wturers, the dwiee may he nominal on ac eount of cx1n·ess or tacit noTeemeut. o1· "honourahlc " . uuderst:tndino·" amoncr the ma uufacturers as to prices. He lws, in other word s, pnt on;:,tiH· markt·t a conunodity which is peculiarly susce ptibl e to monopolistic manipulation 011 tiH· part of local
\\'ltile tiJC evidcnec t!·oes to show that jam manu
filCturcrs in on e State huy a portion of their fhtits .. in anotl.ll'r State it lltHst he oh\'ious tltat the tiwt c:mnot operate m to deln·ive a local of peculiar advant:tges wltidt he
can employ as a means of exploitation if to so. It
is a f:tct that nn importnnt witness hefore tins Com
who is at on ce a mal, er of j:un and a large fhtit g rower,
was quite content with the existing order uf things. (See evidence of Mr. of South Australia, tJuestion 13309 et seq.)
1101
lxvii
(3) The fruit grower is sometimes a leaseholdet· whose root trouble may be excessive 1·ental; ot· if he is a land owner he has J>erhallS â¢laid . ' ' ' [ too much for hts land. I ir, again, the laud may be in a com-paratiTely unsuitable location.
(4) The fruit like other producers, from the normal risks
of competttlve mdustry. for example, there is no effective co-operation among grow<.'rs, with a view to the regulation of out put, the .mere fact that a particular torm of ti·uit has been profitable m a partiCular season, is very likely to r('sult in a surplus being
produced for locul !Imrkets iu the season ot· seasons following, with t!Je result that the J:lm-maker sooner or later has more fruit of a particular type than he lmows wlwt to do with. Naturally he lowers the price. The remedy for this evil is, of course, not
cheaper sugar, hut co-operatiYe and intelligent foresight on the part of the growers with a view to some sort of reo-ulation of the output. The time has come for the producer to logk well ahead; and to do thi:'\ effectively, he must act in co-operation with other
pt·oducers of the same commodity. The regulation or organisation of the output need not necessarily be on the drastic lines adopted in some European countries where producers who produce in exces:s of a certain quantity are suhiect to special penalties.
Much might be done by periodic statements of the area which the individual grower intended to have under cultivation for each fruit. If such statements were tabulated by growers, aud sum maries of the results were distributed, along with estimates, official or other, of probable requirements, the evils of overpro
ductio.n would be to some extent guarded against.
7. The reasons just mentioned, taken together, may not constitute a valid arg-ument against duty-ti·ee sugar ; but they sene to illustrate some of the more obvious of the difficulties in the way of this Co111missiou. concemed it is
with the Sugar· Industry, in mnking any reeomuwtulation with n'gard to grnuting to jam makers the sugar rebate for which they Eveu if such a nâ¢hate wet·e
granted, it would uot follow tlt ·lt the fi'ttit would rec·eive
anything· more than a transient adnmtage. It is true that the jam makers have promised to pass ou a substantial part of any gain resulting· from cheaper sup;nr to the fruit grower·s. 'N e do not question tht· g·ood f:tith of promist' ; hut it
certainly cannot he regal'(led iu the light of :111 <>ft'ecti,·e and etuluri11g· p:uamntee ; and even if it could, othet· qn('stions woultl for settltâ¢nuâ¢Ht-quPstinus more appropriate for the Commission now on the Fruit l11dustry !!"<'nerally. Orw important witness, when asked why he did not on·r t.â¢xistiug- h_v raising
the price of jam, answered that <'Ompctition auwng- the mauufildllrcrs of jnm
l )reveuted such a suo·o·estion ti-cnn lwing CHITi1..â¢d into t'fii.·<·t. It is not appm·ent to \IS tow, supposing the just stated to he :H·!; ut·ate, the _jat.n
manufacturet·s would not, sooner o1· latct·, n·snlt 111 dcpressmg the pnce pmd to fnnt growers to the present le,·cl. 8. Apa.rt ft·mn the diffi culties llletttiuncd. if a di snimiuatiou made
among the allied iudnstrics as dnty-frcc sug·at· iu li!'·our of the .Ja111 ludustry, the discrimination would in,·itc agitatiou tuwanb the sante goal atnnm'; othct· industries. Indeed, the dillh:u)t,· he;.,t·in s in the .Jatn lndu,.;tn· it!"L ·If lu tlti s !'UIIIIL'dion, we mas dr·:tw attention tu the e.Yidcii ce of \V. l'en c« wk-
" li⢠c IIHIItllf:u:tnr«:r ;.!" l ''."a rc dâ¢.'⢠: li." li " ' t ;,,. i",'l"'"' dnr,v
to makin:.r jnn1, how wo:rltl Y"ll c xtl' lld tl. c 1,,.,.,.,,, '" tl⢠·: . .1"'" '"""··r. - I hat 1' tl, .., â¢lr!heult.
point. Y
maker is uow IJeiuJ! ""'''ek ed uu!, !I.e " '""'" t ic a rr a· le e<' rni';·rt:: wrth tl⢠e ] " m 11 1 111111·
factnrers.
If the cvidenc·e suhmitkd to us lrad )!IIIII' to ,.l!uw tl1at, wl1:1tevcr 111ay he
necessa1·v in the iutcres.ts of the jaut t'ru it gTo WL'I'S. t.luty-fn·e Sll!.::a r is we mi(J'ht at lihct·t,· to mak(⢠a spL't·ilic re cuttlllt eudatiou to tlwt eHi.:ct. But we teel to state that we :tre of ol'iuiuu t l1:tt 1111 ,.udt :d,;olute nen·,.:; ity as tl.at suggested
exists. We ha,·e it detiuitely iu e\·identc tltat. e\·en liJr the local market, with respect J::Z
lxviii
to which alone the import duty on sugar is operative, the fruit grower, who is aiso a jam maker, can secure a satisfactory return on his capital outlay. The circumstance seems t? indicate that other causes than the alleged cause of dear sugar must be responsible for such real grievances as the growers may have. In this connection we
beg to draw attention to the following extract from the evidence of Mr. McEwin, fruit grower and jam manufacturer, of South Australia :-13310. Do you grow fruit as well as make jam ?-I grow large quantities of fruit. I have 100 acres or more of an orchard. I am the largest jam manufacturer in South .Australia.
1334.0. As a jam maker, are you satisfied with the condition of things in the industry ?-Yes ; we are making 7 per cent., and that is a fair business profit all the world over. I have no serious complaint if I can make 7 per cent. 13359. Can you tell me the average prices yon have pai:l for your fruit for t.he last five or six
years ?-The average for the past six years has been :-Raspberries, 2,\d. a lb. ; black currants, goo»eberries, 3s. a bushel of 54 lb.; blackberries, 1§d. per lb. (they grow wild in the ranges);
plums, 2s. 6d. a bushel ; and mnlben·ies, I The prices for apricots were :-For 1912, 8s. per cwt.; 1911, 9s.; 1910, Hs. ld. to lOs.; 1909, lOs.; 1908, 9s. 3d. to 8s.; 1907, lOs. to 8s. Oranues for Marma lade were :-1907, is. 6d. per cwt.; 1908, lOs.; 1909, 8s. 6d.; 1910, 8s. 6d.; and 1911,
13361. Do you think a fi·uit grower can make a fair living at the prices you have quoted ?-Yes; and I speak as one having an orchard of 100 acres and more than 40 years' experience.
13364. Under present conditions and efficient management, the industries of fruit growing and jam making are in a fairly sound condition ?-Yes.
10. If, however, it could be shown that, at the present price of jams, it is not possible for the jam manufacturer to pay a fair price for jam fruits so long as sugar is not duty free, we conceive that the natural and proper remedy would be to raise the price of jam. The present duty on jams (£14 a ton British ; £18 13s. 4d. a ton foreign), is quite high enough to admit of this being done. In this connection we
may quote from the evidence of Mr. Henry Jones, jam maker, of Hobart.
12958. Is the duty effective to some extent in keeping· English competition out ?-Ye3; but we can put our jam up £14 a ton, and England would not be able to compete with us then. That is to say, if we put up our selling price another 50 per cent., we couhl still keep English competition out.
But it is alleged that there are other difficulties in the way of raising the price of jam. One of these ditfirulties is stated to be the competition among the jam manufacturers themselves as regards the selling priee. (See Question I 2923). But we believe it would be quite possible for the growers to bring such pressure to hea.r upon the jam manufhcturer as to compel him to charge a higher price for jam, on the assumption, of course, that otherwise he would not be making a fair
return. Naturally, cheap jam appeals to the jam manufacturer as likely to mean an expanding market ; and he '''ill he not indisposed to fix a low price for jam so long as the fruit growers are content to provide him with cheap jam fruits. But they are not compellable to do this. We are, of course, aware tlmt the difficulties of effective collective bargaining on the part of the growers are undoubtedly greater than in the case of the jam manuf.'lcturers, but we believe far more could be done in this way if the growers were prepared to make the sacrifices which co-operative enterprise demands. Apart from co-operation, the growers are in a position to bring pressure to hear upon manufacturers by diversion of their husbandry into other channels. l\fr. A. W. Smart, who had been appoi11ted by the Austrnlian Conference of Fruit Growers to represent them before tltis Commission, dwelt upon the apparent injustice of burdening the fruit grower with a sugar tax in order tt> support artificially a producing industry of a. similar charaetcr to his own. (Question 14662).
The suggested parallel between the two industries is open to question. We are not now concerned with the superior claims of an industry whielt is coutributing to the extremely difficult prohlem of the settlemeut and defc-nee of tropieal areas, although it must he appnrent tlmt on this ground alone the Industry stands
upon a wry speeial footing. \Vhat we are now cmwerned to point out is that the sugar g-rower of the tropical and scmi-tropienl :ucâ¢ns has all his eggs in one lwsket. He must rely on the local market exdusively, and on a single commodity, sugar-cam·. Tlte fruit grower, on the other hand, has au increasing export trade for fruits and for canned fruits ( tlte preservation of which is possible with very sma.ll sugar contents).
He has, moreover, some market outside of Australia for his fruit, either in the form of pulp (which requires no su,
110:1
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of jams, involving, of course, a great variety of fmit culture, with a vreat Yariation in the labour cost of production. Finally, since his commodity is much lesser bulk than sugar cane, he is less helpless, when bargaining with the local jam manufacturer, than the sugar grower is when bargaining with the miller of raw sugar.
It will therefore be apparent that he is able by co-operation or bv diversion of the forms of his frnit culture, to bring very considerable pressure to l;ear upon the jam manufacturer, if he is in earnest nhout doing so, and o-oes the right wav to work. '!e are aware that such considerations may seem outside gur It·is not our
direct concern to find remedies for the defects of competitive industries in fruit growing and jam manufacture. But we have felt it necessary to touch upon this matter in view of the argument that has been submitted to us that the jam
manufacturers were unable to improve their prices for fruit hv charging a bio·her rice for their jams on account of competition. o/ e
11. It is only fair to the jam manufacturer to say that, so far as most of those who gave evidence were concerned, the chief objection to raising the price of jam was not the fear of competition in the ordinary sense. The real fear was expressed to be a diminution in the demand for jam, due to the collateral competition of butter, golden
syrup, &c. It was admitted in evidence that a substantial increase in the price of jam in recent years had not been accompanied by a diminished local consumption; hut it was urged that further increase would necessarily have this effect. We will assume, for the sake of argument, that this result would follow, and that some consumers
would substitute butter or golden syrup for local jam. Golden syrup is a product of the Australian sugat· refining industry. The butter consumed in Australia is also an Australian product. If the facts be as suggested, the local market for local produce would expand in the direction of butter, and remain stationary, or even
slightly decline, in jam. More people might he engaged in the dairying industry; fewer people in the ti·uit growing and jam-making industry. The situation does not appear to us to be one specially calling for legislative intervention so long as locally produced jam is adequately protected against the imported article.
12. We have just conceded, for the sake of arg·ument, that, as a result of an increase in the price jam, there might ensue some diminution in the volume of the fruit-growing industry. We feel hound to state, however, that we do not regard this diminution as a probability.
(1) The increase in population and the rising standard of living ought, in our opinion, to be taken into consi.deration .as likely. to uul.lify wholly or partially the effects of an mcrease m the pnce of Jam upon the local demand. This has happened in the past, as we
have already remarked. It may well happen again. (2) According to Mr. Peacock's evidence (Question 1-1506) the comparative price of jam in Melbourne and f.o.h:, London, would to
JUstify the expectation of an increase the export trade m ]RID in the near future more than sufficient to compensate for any decline in the demand for jam. In this connection we
refer especially to Questions 1-!59-!-5. 14594. As to. the comparison yon made Let ween English f.o.b. anâ¢l ,iam, which &hat the Australian article was, roughly, Is. a case clle11pcr than th e nr n_cl<·, that companson between English jam f.o.b, aud Anstrali11u jam for the consumer 1-'\: cs.
14595. That being so, and supposing yoll 111'\de jam here for export, nnâ¢l wâ¢t ( !L!I the rebate on the sug11r contained in the jam, it would be an ad,·aut a::c t .. ! our _ mn11ulncturc. \Vhy could you not compete tllen with the English manufacturer c â¢I â¢â¢ that nlrendy;
we compete with him in the East and other places he â¢
(3) If neither of the prohahilities JUSt referred to are sttll. of
opinion that the Australian indu -.try, though It dechne
in the direction of jam fnuts, wuuld proba hly extend In other directions, more espe<:ially along the lines of an export trade in fruit, or eanned fruits.
13. The Commission of Your E.uellency whi ch is now engaged in making a more complete investigation of the Fruit lndustn· than it has been possible for us to attempt, may arrive at conclusions different fi·om thuse whieh we have
lxx
expn::-;scd. \Ve 1" :111 onh· s: l\· tl1 a t. "'' tilt' e\·id eJwe s ul.mittr d to we at"\"
unahle t o re1·omm e tHI :1 t'l'llli s:-;ioll .. r the Ex,·i ,;e or flltport dutil's 011 sug·ar u-.ed fiJr tlw llt:lllUf;l('tUre of l1w:tl j:un-..
Dridly stat(·d, tiH· po;-;itiull :tjllll-':tl'S to us tn l;c as ti,Jlow:-; :--(1) Tl11· .\u .;:traliall llt:trkl't fitr Sll!.!':tt·. i1wluding tl1e manufiwtun⢠of ]ll'lllllli"IS llllt of :-;u:.:·:ir. i,- lll'l 'llt-d hy tile .\u:-;rralian Sugar Industry, wl1i, -11 lias IH'l'll de n·lol'ed undl.'r tile pre=-'l'llt sd! l'IIH' of Bounty,
Ex,·i se, and CustnllJ.'. ami would h<' pnjudin·d if the m:ulllfitl'tun·rs in 'Jlll'"tion \rt·n · a llowed to illlj'OI't s u_ :.:·ar fn·c of duty. Tho:-;e manutiwturL'l':-'. g·,.n, ·rally :-;)wakin g-, aln·ady l1a\'e free s ug:ar as tar :t s tl1('ir export tr:uJ, . is ''llllc 'l'l'lll'd, :tnd so l:tr as their Ju,·nl tmde
is c·on <:l'l'IH''l. tlwy vnjoy an adviJU:tte prot⢠·,·tiou of tht·ir output in tiH· tiJI'IIl of :t l1i g· h iuqâ¢oJt duty. (2) .Althou_ !.dl , i11 inttâ¢n·sts of fruit !.!TO\H'rs, so 111e mig·ht
tnade iu f11\'dlll' of j:ttll', it l1as not :tpjH!anâ¢cl to us tlmt any
I'OUI·Ittsin⢠cast⢠litr stwh di:-
lar.!!·ely due to otl1er ,-auses t.llall the allt·gecl eause of tile sugm· duty. \\'!Jere the ja111 tnakc·t· is also tltc ti·uit g rower, t!Jerc is evide nce to show tlutt !Jc can lllak c n fitir retnm on his capital
ontl:t\'. En·u if this wert' not till' ⢷ast·. WI' t'Oill't' in⢠tlmt tile
prop,·· r l'l'llt!.' â¢!y wnttld lw to raist⢠till' prin· of j:tlll·- a whieh
the g-row(â¢rs tluâ¢mseln·s l':tll pr:wtieally f(,r,·t⢠upon tilt' jam lll:lllllf1wtlll"l'l' if till'\' 1"l1ost· to dn so. :llld :ll't in I'O·operntion wit l1 a ,-i,·w ro t l1at <·iul. ( A sslllniu!.!· fill· tlu· sal\ c of' ar. :.:·uuwut tl1at such an inerease in tlte priee
of j:llll \\'(' l'l' IWI'I'SS:tl'," to Sl'l ' ltl'(' :tdi'IJ113tl' l'l'tlll'llS aiJ I'Otllld , and assltlnitl!.!' that s u, ·ll :111 in⢠·n ·ast⢠\n·re :ll'tllallv lll:tde, WI' clo not 1111tic·ip:1f1' any dtâ¢,·lil H' in tiH' fruit g-ro\\·iu g· in;lustry. it.
happt·ll th:1t till' c·oiJ SlllllJ'Iion of A11stralian jalll on the lcwal lll:trkl't W1·n· n·du'''·d, WI' t hiuk rlw l'rohal,fl' tâ¢tf (>c t would he the din· r,..ioll i 11 t iII' t'ru i I !_!Tow i 11 :.:· i ud ust ries i 11 I lw di rcâ¢d i1111 of tâ¢x port. trad1· ; ,.jtfwr !itt' I'XJ'O rt jalll. or f(,r l'Xport fruit, or for export C:tlltled f'mit.
14. RECo:IDit-: :'\llATIIl:"S.-( I) Sllllll' or till' lll:tllllf111'tiii'I'I'S l' ll lll)llaitll'd of' tlw :trtiticial mul llllltlopolisti⢷ n·stri,·tiPIIS 1111 till' .-\ustralian sll_ !.!·ar trade. This i . ... di sâ¢'IJ sst·d in otlwr J':ll'ls of' till' J'I'I 'S I·nt Heport.
(2) \ritiii 'SSI'' ''"lllJdainc·d of till' artifil'ial lintitations of till' :mâ¢a of sn:.:·ar SllJIJlly rc·sultill _ !! fron1 till' l1idt duty nn IH·et. \V e h:we :tln·ad_,. rc â¢c'flllllll <' ll'l.-d t hl' n·nlo\·:d of thi:-; allolll:&ly . (::} \V, ⢠:tn· :tl ,.; .. :1:' ti l'· opinio111 tl1al :1 din·,·t ;..:·ain would n ·s nlt to till' nllif'd
i11d :I ' Jr !o· --. :1,.. ll :c- r.-.,u lt â¢. r .11 1 :td .. pti .. lt .. r tlt⢠· rc ·nâ¢lâ¢â¢lllc·udatiou \Ve llt:tdt· wit iJ rc·,pe.-t sl :llldardisiu_ !:!. I lw prj,.,. of sug-nr in
:\u,.tr:dia. .-\u autnlll:llil':tllJ rc·_ !:!·ulatc-cl C ustom s duty would, we lwlit·\·c·. in :'!:tndardi .. iu!! til l' price .,( Sll!,!':tl'. tt·nd to rl'g-ularisc tilt⢠.,( fruit. to cli,.., ·oura_ :..:··· tlw O\'l'l'Jll'odn eli"n likely to n
pniod of almonunlly l'iwap su, !,!'ar. and to prevl'nt sotne '.'' the bardsltip ,.; whi <: h an· lik e ly t o aris(· wh c·n th l' pm make r. oWIIlg' to till' ahnnrmally hi!!h prin⢠.,f sugar. is dri\'«'11 to p:ty :tlâ¢n .. rmnlly l .. w l'ri n ⢠( .. rj:tw t'rui 1.' . ( -1) \f,. rc ·c ·â¢tllll lll'lld tl w l'dl'lllion ol tilt' sy :-< tc·nt of rc·lt:\11' ,.f
-.U!.,!':tl' d11t _ \. till (.'\l ll tl'! 11f lll:tlllll;lCIIIr⢠·d f'l' â¢uinc ·b.
( :1 ) \\· l,il c· WI ' lll'l io ·\·,. th:ll lllllC'iJ lll " l'l' 111i :..: ltt lw dotll' th:tll is lwill!! dom⢠fctl \': tr.J, tlw ,J._.,-â¢. J.,f' llle'llt ., f tlw 1"\l'"rt tr:td t· .. ,- t'rn it â¢â¢r it .' Jâ¢r ,' t(furt.". we· rc·t'nin fr:llll 111 :1kin:.:- "i"'cit ir ro ·o' 'lllllllt 'lld:ttioll S. in vic·w .,f till' t:L.-t tlt :t l tl1 ⢷ .. u l,j t·, ·t wi ll ,J ,,u lâ¢t lt⢠,.. ... r<â¢c·c ·in· full co iJ sid⢠·rntioll :l l I ht⢠ltand <; .,,. the ( 'onllui ss iu u 1111 tlw Fruit r ndn,tr.' """'
in taking (l \·iO PnCI '.
11
lxxi
PART VI.-BEET SUGAR.
1. In Part I. (p. xiii) we have dwelt upon the suitability of the soil and climate of the Queensland littoral for the purposes of cane sugar cultivation. Our investigations have le
2. The initinl faet to be borne in mind is that, within the tropical areas, there exists abundant territory for the production of all the sugar for which a market can be found, even if we assume a rapidly increasing Australian consumption of sugar. Some advocates of the beet sugar industry appear to contemplate the rapid develop ment of that industry, a friendly rivalry between it and the cane sugar industry, and the gradual building up of a profitable export trade. In our opinion the last-named is illusory. ~ pr~"fitable export trade in Australian produced sugar, in competition
with the coloured grown sugar of Java and elsewhere, is only conceivable on the supposition of a large bonus on export. If that bonus were paid by the Commonwealth Treasury, the burden would fall on the taxpaver. If it were paid by the Sugar Industry itself, as under the Cartel system, the burd~n would fall on the consumers of sugar
within the Commonwealth. In either case the Australian citizen would be paying a sum of at least £5 a ton of sugar in order to supply foreign consumers with cheap sugar. We are aware that this sum is already incurred by the Australian consumer for his own supplies. But we presume that no one would urge the extension of this burden to meet the indefinite demands of an export trad~. It is clearly to the interests of Australia to advance her export trade; but the advance must be along lines where she can meet foreign competition on terms more nearly equal. Some witnesses before the Commission have expressed a great faith in Imperial Preference. While a scheme of Imperial Preference is possible, we cannot conceive that any one who has realised the necessity of cheap sugar to several very important British industries
would venture to anticipate a differential treatment in favour of Australian sugar substantial enough to enable Australiaa producers to meet the competition, for example, of Java. While a political party in Great Britain has continued to urge the claims of Imperial Preference, the drift of opinion, so far as the commodity of sugar is concerned, appears to us to have been rather in the direction of a free trade policy. Even if Great Britain adopted a scheme of Imperial Preference it would presumably apply to all coloured-grown sugar in the British possessions.
. 3. J?oubts have been expressed in the past as to the possibility of beet culture m Austraha1;1 temperate regions surviving the competition of cane culture in the Que~nsland littoral-presuming an equality of treatment in the forms of Bounty, Excise, and Customs. We are of opinion that these doubts were well founded. But the rapid improvements of the methods of beet culture, the accessory advantages of ~eet culture to the general agricultural and dairying industries, and the fact that there 1s good reason to believe that the failure of Victorian experiments in the past may be !arg-ely attributed to inexpert management and· culture and other disadvantages
mc1dent~l to the starting of a new industry, are circumstances which, taken cumulatively, render it impossible to speak with confidence as to the future. The H?n. George Graham, Minister of Agriculture for the State of Victoria, in his endeuce before the Commission went so far ns to affirm that the economic . . , super10r1ty of beet over cane culture is such that " the day is not far distant when the beet grown sugar of Queensland will displace th~ cane sugar of Queensland."
lxxii
(Question 14029.) While we cannot indorse this opinion, we feel that it would be to as axiomatic that cane culture must always enjoy, from an economic
pomt of vww, a superiority over beet culture. A recent nuthority, after reviewinO' the opiuion of the world's leading experts, concludes as follows : 0
men must draw their owu conclusions from the ,·aryirw (anJ conflictina) and facts
which I have heen able to bring tâ¢1gether. The fut.nre of cane and in competitio 0 n with one another
is certainly not a matter on which too readily to form an opinion. It is on e c.f the most interesting, hut one of the most complicated agricultural and economical problems of the daY. (Sugar Beet by "Home Couuties" 1911, at page 272.) ⢠·
It is interesting to compare with the foregoing, the statement of an eminent expert on the Cane Sugar Industry :-Before Brussels Convention had come into existence the much privileged and protected beetroot sugar Industry towered over t:1e suffering nntl cane sug'lr cultivation, on which
full import dnti;s had to be paid when exported to foreign markets. Nowadays we see the
reverse. With tne exception of and the Uuitetl State:i, hardly any beetroot sugar-producing country of importance subsidizes its home industry, wlrel'eas a great many cane sugar producing countries now support their industry by means of differential import duties, surt11xes, and direct as sistance, as will be shown in subsequent pages of this book. Owing to the ahove
meuttoned advantages the cane sugar iutlustry, iu its turn, predominates nowadays, but it will not be able to oust the beetroot sugar mauufuctnre, especially as an evergrowing con sumption draws on both kinds of sngar, and, consequently, gives both of them a chanr!e to spread and flouri sh. To how gr!_'at au extent both branches of the industry ha,·e de,·eloped since the Brusseb Convention c11n be seen from the following table (in which also a column is entered wuich does not inclucle the Britis)t Indian industry, and this for the sake of comparison with the table on page 21, which likewise omits the Indian output). It shows that neither indltstry is inferior to the other, a state of eqnilibrinrn which is not likely to cease .
Wonr.n's PnooucTrn:-; OF SuGAR r:v To:vs IN THE YB"Rs AFTER THE CnNVF::'I'TtO:'I'.
1903-04 1904-05 1905-06 1906-07 1907-uS 19\IH-09 1909-10 l!Jl0-11
Year.
1911-12 (estimate)
1903-04 1904-05 1905-06 1906-07 1907-08 190tHJ9 1909-10 1910-11 1911-12 (estimate)
Total Cane
Including British India.
12,022,000 7,14-t,OOO 14,007,000 14,799,000 7,691 ,000
13,861,0 0 fi,':l66,000.
14,58:!,000 7,6.)4,000
14,9HI,OOO 8,303,000 16,687,000 H, I 15,000
15,4-19,000 8,648,000
Not including British India. 10,080,000 4,234,000 I
9,654,000 4,776,000 I 12,083,000 4,910,000 I 12,349,000 5,241,000 11,7 45,000 4,7511,000 I 12,709,000 12,766,000 6, I i7,000 14,587,000 6,015,000 13,349,00()
Ilt'et Sugar. Per Cent. Cane Sugar.
4,87::!,000 59â¢4
7,173.000 48·8
7,108,000 6,995,000 49·5
6,928,000 .')2·4
6,.)88,000 55·7
8,572,000 4H·6
6,801,000 56·0
5,746,000 42 · 0
4,876,000 49â¢5
7,1i3,000 40· 9
7,JOH,OOO 42·4
6,995,000 40·5
6,928,000 45·8
6,51:19,000 48·3
8,.5i2,000 41 · 2
6,801,000 49·0
PRINSEN G&ERLIGS: 1'/te World's Pt·oducliun oj Cane 8ugar, I!JI2, at pages aH-9.
4. Even if it were possible to prove that beet culture in the Australian temperate regions could not survive the competition of cane culture in the Queens· land littoral, presuming :m equality of treatment in the wa.'' of Government suppot·t, we may point out that'""'the Federal Government is not a position iusu1·e such equality. The Parliament of the Commonwealth P.nJO)'S exclus1ve powers w1th regard to Customs and Excise. Nor can any State Govemmcnt grant a bounty on production save with the assent of the Commonwealth Pnrliament (Section 91 of Constitution.) But public support may take other forms. The Victorian Govern ment, for example, controls the )laff'ra fitctory for of sugar from the
beet ; and it can pay the producer of the beet any prtce wluc!I 1t necessary to keep the industry going. Mr. Cameron, Director of the V 1ctor1an Department of Agriculture, said in his evidence before the Commission The figures the farmers gave to the Commission were basod on los .. a ton, t.ne price last year When Mr. Dyer looked into the whole question, he came to tho tha.t tt would be " safe
proposition for the Government to offer 4s. more per ton of beet, and Ius advtce has beeu adopted. t Question 140 86).
1107
lxxiii
5. The Commonwealth hns therefore to recog·nise the pnssibiliflJ of gTowin.o rivalt·y htâ¢t\n.â¢en cane ami beet culture in Australia. If an export trade in sHgar he for, such a rivalry well. he \l"clcomed. But since an trade
m sugar IS not to he hoped for, :1 sertous nvalrv hetween eane mul beet culture must St'rious con ser1uences to the producers· of cane sug ar. In vie"· of till' t:'lct
that the rindry in question is only a possibility, it might seem proper to :nmit the comse of in pious reliance on the belief that sufficient unto the daY is the
evil thereof. 'Ve believe such an attitude of laisser fiti,·e would he inexcnsnhle. If the attitlllle wetâ¢e adl)pted, and if beet culture were tirmh· established, the
diffieultit'S in the wav of effective action bv the Commonwealth Go-\·t·rmncnt would he increased by the of lnrge vestetl interests. Every consideration of sound
requires that th2 Commonwealth Parliament :-;h onltl lnok ahead. and
should dcterllline whether it is wise to run the risk of the indu.;trial dislocation which must toliow if the beet industry were to establish itself as an effective rivnl of the cane industry. The Commonwealth Parliament must, in a word, fi1ee the intt·icate problem of the relative claims of the two industries to the benefits conferred bv the present syste m of Common wealth control. â¢
6. The relative claims ofbeet and cane require to he considered ti·om several points of view :-(1) The primary, though not the most importnnt, tltinp: to consider is which is the cheaper method of producing sugar. 'Ve hnve Rlready remarked upon the difficulty of expressing a final opinion upon this suhject in view of changing conditions in the processes of pt·odnction and manufacture. But we helit>ve that '" the
production of sugar from the cane is probably cheaper, and likely to contiutH.' cheaper, than the production of sugar from the beet. \Ve believe that the contrary opinion, which is otten expressed by advocates of beet, is the result of a fitil urc to realise to what extent heet culture in other countries is conditional upon the employment of cheap labour (including the labour of women and childre n) under eomlitious which could not be tolerated in Australia. \Ve will assume, however, tor the sake of
argument, that the production of beet sugar is economically as profltahle as the production of cane sugar. The relative claims of the two industries would then have to be determined by other considerati·Jns to which we shnll now reter.
(2) The cane industry is established, while the bert industry is not. The beet industry has a single factory at Victoria, which is still in the experimental stagP.Rnd has a milling capacity stated at 4,000 tons of sugat· per annum. Accnrdiug to the c->tim:tte of the Victorian of Agricultme, it wonld take ten such mill:-; to nwet the Victorian suo-<\r demand. On the other hand, the mills tot· the tr·entmcnt of raw caue su.!S:tr in and New South 'Vales have a capacity little, if at all. short of the total
demands of the Australian market. Assuming- an market, the new mills
which the Queensland Government contemplate erecting will, in all prohahility, he more than equal to the increasing demand.
(3) Beet culture is an ap.propriate to temperate regions .. those
regions at·e capahle of heing utthzed tot· g·eneral datrymg, a?d
other purposes. They do not present .to . Austrah:m the
difficulties incidental to the problem of eftectmg the s:ttlemcnt ol a wl_nte populatiOn in tropical regions where the is less the lorms of
profitable cultivation are far more lumted. The sup(·rwnty of thP of.
culture from the point of view of the prcscut argument was stat ... d to tiJ(' < tersely aud ti>rcihl y hy a witness who must l?e l"t'g":tnlcd a" beyond tlâ¢<· of
partiality, awl who has had a large expencucc hoth of Queenslaud :md \ tctonan agrieultme. \Ve refer to Mr. Eastcrhy, t!Jcll General t lw. :\[.atfra !leet
Factory. The witness in his vet·y int<·resting statcuH:Ilt hl'f.,re the <.. The Government of Victoria were fully pe rsnal c J tlaal it Wâ¢> nJ ,J """'' t".llf' to
furmcrs that hcc troots can Lc aut! protiJal .ly l!r" w": tl. t:. t·â¢â¢fl;r·.natrvo
is loath to eomano11CC n uew iuJns try wlum la c is n·r:· wel l w tth t lw â¢â¢l ·lcr " ' " ''⢠'"" r·· p ·â¢rt â¢e.ul nrly
The ;itnation in Qnec nslanâ¢l is a .Jitrr· rt: fll ""'·· . ""' ' .. t 111 til e
tropi cs who arc eager to j.!row for the mills , and wlan <:all ,J ., ,,,,,· pr, flta l. l··. It t la t·rr
were , ,, t !tey wâ¢mlrl fa:t with it, a n⢠l n ur dtc ru cr,a s t:d art::.⢠w o â¢tl· l ! .. , .. ,. me s pcoddy
clepopulaleâ¢l. (Q. P·
(-l) _.\s we have in 1.. the tropical or area
present pecnliat· «litfi c ulties 111 relntton .to settl.c,mcnt, hut thetr I S ntally
associated with the problem of national tlcleuce. I he urgency au J ,.;uprcm e unportance
lxxiv
of that problem becomes ever lllore apparent in the existing unstable conditions of world politics. The problem will he solved by no one device. Much certainly remains to he done. But a.Il impartial persons must agree that it is a first duty of Australian statesmanship to conserve the results which have been achieved towards its solution in the past; and among these results an important place must be found for the cane sugar industry. Anything which would imperil that industry must be regarded as a menace to our national safety.
7. For the reasons we have just indicated, we conclude that, as between cane and beet, the superior claims of the former to the benefit of a protective policy are clear and indisputable. The conclusion involves important consequences. The advocates of beet culture within the Commonwealth, who maintain the ability of beet to hold its own as in competition with ca.ne, are either right or wrong. If they are wrong, any encouragement to beet culture by the Commonwealth Government must stand condemned as a false economy of the national resources. On the other hand, if the advocates of beet he right in their contention as to the relative economic efficiencJ of that industry, its encouragement by the Commonwealth must imperil the very existence of a.n industry which has been built up at a great expense to the
Commonwealth and the Sta.te of Queensland, and which, as a contribution to the solution of the problems of tropical settlement and deftmce, serves purposes of which the importance to our national life can scarcely be exaggerated.
8. One apparent way out of the difficulties of the present situation would he the imposition of a Special Rxcise duty of £2 a ton on the manufacture of sugar from beet-subject to the proviso that the Excise should only be levied in any year when the output of beet sugar should exceed 10,000 tons. It might be assumed that the practical effect of such an Act, would he to prevent the States other than Victoria from embarking in the beet industry. The purpose of the proviso would be to safeguard vested interests in Victoria. Since the potential output of the Maffi-a mill is only 4,000 tons, the limit suggested by us would even allow the
Victorian Government to extend its experiment if it chose to do so-a course of action which it might be not indisposed to adopt· in view of the opinions which its representatives have expressed before the Commission as to the possibilities of the beet industry. The suggested limit of the output of heet sugar might be
increased in later years should it become apparent that the cane industry was likely to be unequal to the Australian demand. In the meantime the policy of the Commonwealth would be clearly defined with respect to the conservation of the cane industry-a conservation which we believe to be dictated by social and political considerations of the first importance. We are aware that some objection may be felt with respect to legislation for a contingency which may not arise. But as
we have already suggested, it is preferable to prevent an evil rather than to wait for the evil to arise, since in the latter case the Commonwealth Parliament would be confronted by great, if not insurmountable, difficulties which do not at present exist.
9. RECOMMENDATIONS.-We recommend for the of the Common wealth Parliament the question whether it is not advisable to pass an Excise Act imp9sino- a special Excise of £2 a ton on the manufacture of sugar from beet, subject
0 to the proviso that the Excise shall only be levied in any year when the total output of beet sugar within the Commonwealth shall exceed 10,000 tons.
lxxv
CONCLUSION.
Your Commissioners desire to record their high appreciation of the efficient service rendered by Mr. E. T. Hall, the Secretary to the Commission.
In conclusion, Your Commissioners hnve much pleasme in suhmitting to You Excellency this Report. ....,
Your Commissioners have the honour to he,
Your Excellency's most obedient Servants,
(L.s.)
(L.s.)
(L.s.)
(L.s.)
E. T. HALL, Secretary.
Melbourne, 2nd December, 1912.
.. W. JETHRO BROW.N, Chainnan.
ALBERT HINCHCLIFFE.
ROBERT M. McC. ANDERSON.
M. R. SHANNON.
1111
lxxvil
ANNEX
DISSENTIENT :NIEMORANDUM.
I.-CONSUMERS.
1. _was taken in all the c_apitals, except_ Perth, as to the effect upon a number of mdustr1es of the present conditiOns u:r.der which sugar for manufacturing purposes was obtainable in the Commonwealth. 2. It was learnt that at the time of inquiry, with the exception of some of the
brewers, all manufacturers were being supplied under contract by the Colonial Sugar Refining Company. . 3. A number orchardists _who gave evidence, complained that the prices of jam frmts, and more espemally raspberries and black currants, were not sufficiently remunera.
tive. On the grounds that the market value of these fruits was largely governed by the price of sugar, witnesses urged that a rebate of at least the amount of the excise, namely, £4 per ton, should be allowed on all sugars used in the manufacture of jam. 4. Manufacturers stated that if the above concessions were grant£d, they wculd
pay an increase of 25 per cent. on existing prices of fruit. Assuming this to average £7 per ton, the promised advance would amount to 358. per ton, and as fruit and sugar are used in about equal proportions, the manufacturer would retain more than half the remitted excise, thus profiting to a greater extent than the fruit-grower, in whoEe interests the concession was ostensibly sought.
5. Official figures showed that the prcduction of jam was rapidly increasil'g. It was admitted that manufacturers were making a profit of frcm 7 to 10 per cent. on their capital, that their industry was flourishing under a system of protecticn, that their position had improved remarkably since Federation, while the price of fnit had increased during the same period, and that supply and demand were really the factors
which determined its market value; all of which may be gathered frcm extracts of evidence hereto appended :-Question 12734.-L. M. Shoobridge, orchardist, New Town, Tasmania: The crops al so vary from year to year; if there is a large crop there is an exceptionally low price.
Question 12825.-F. W. J.ord, jam manufacturer, Hobart.-Question : According to .'·our figures there has been a good deal of fluctuation from year to year in the price of various fruits "! Answer : There must necessarily be in small fruits, because the weather affects them rapidly ; one or two hot windy days will considerably change the character of the market.
Question 12910.-H. Jones, jam manufacturer, Hobart.-In Adelaide, plums IHf' £5 per ton ; half the price we are paying in . . . . Question 1:!968.-We to at a
certain price, and we have carted frmt round to the back of the factory _ and tlpp⢷d 1t out : we ha\·e not destroyed any f<:'r over years; . before we 1t. . . . ._ 1:!953:
The greatest depresswn m Jam m Austraha was m 1899. . . . . . 1:!9,0.- l>urmg
the last ten years the Tasmaman fruit-grower has not had the low pncf's to coutend with that he had years before. Question 13179.-C. A. Stubhings, farmer, Lower Tasmania.-:Excessin crops aftf'r year· a lot of stuff from the previous year was carried forward, and a good crop followed. I tiLink th"' fruit industry is a precarious one. ·
Question 13298.-T. H. Robson , [ruit-grower antl fruit-prPst>rwâ¢r, H<>eton·iJI P, The price varies every season acco_rding to t.h <'_ . . .
Question 13361.-R. l\lcEwm , Glen Ew1n , South Au stralm. pun ru anufacturer awl The market since Federation is a little hetter-but nr_,. l1tt I e. It 1s sul.staut mil.'· hf'ttPr for Jam , and a little better for fruit. Our output siu ce Fedt>ration has tn·hl f'd , awl I think that statPnwut would appJ _ ,. to other jam-makers, too. _In thl' earl_,. days a gr<'at dPa l moll <' _'" was wa sh·d iu tht⢠jam £300 000 in South Austraha. A numhPr of firm s WP IIt . . . . Quf'stHJII
conditions and efllcien t managt>n1 rnt, the iudu stri('s of fruit -growiug and jam -makiug arc in a
fairly sound condition. . · . .. . ,
Question 14554.-W. P eacock, Jam man ufacturrr, South ) arra, \ year there will
be a variation in price-some fruits will go up and some down.
lxxviii
Quebtion U767.-Juhu Tully, fruit-grower, Doncaster, Victoria.-La::;t year we got from £3 to £5 & ton for our plums, and this year £7 to £8. . . . . Question 14 775.-Supply and demand is a natural
law that you can neYer get oYer ; it affects plums as well as anything else. Question 15106.-George Wright, managing director Taylor Bros. Limited Sydney.-In my opinion it [the price of fruit] is purely a matter of supply and demand. '
6 .. From the foregoing it is seen that prices vary from season to season, irrespective of the pr1ce of sugar, and that even in the same season there is a wide difference between the prices ruling in one State ar..d another. Apart altogether frcm the price of sugar, these factors must continue to operate. From the evidence tendered, it can only be
concluded that, whatever may be the disabilities affecting the fruit-grower, it is impossible to connect them with the price ja.m manufacturers have to pay for sugar. 7. Imported sugar, supplied by the Colonial Sugar Refining Company, as required, is used in jams for exportation, and upon this sugar a rebate of the full import duty
of £6 per ton is allowed.
H.-LABOUR.
8. Generally speaking, the standard of efficiency of the unskilled labour supply in the sugar mills and on the farms is not of a high order. This is chiefly due to the distance of the sugar districts from the centres of population. Usually sufficient cane-cutters are attracted by the prospect of large earnings, but as a rule there is a shortage of ploughmen and other field hands. The fact that most of the work has to be done during from seven to eight months of the year is responsible to some extent
for the scarcity of labour, but there was a great deal more complaint made to the Commission regarding the irregularity of the workers than there was about the intermittent nature of the work. It was very clear from the evidence that many of the men in the sugar districts either did not desire or were incapable of constant work. It is self-evident that it would be impossible to maintain an industry of such
proportions without a fair percentage of reliable and efficient labour, but none of the steady men in regular employment appeared before the Commission. 9. As a rule cane is harvested on the butty gang system, the men electing their own ganger and dividing the total earnings accordmg to the number of days each man has worked. The earnings of those employed as cutters under this system range from 8s. to 20s. per day, according to the quality of the crop, the conditions of the land upon which the cane is grown, and the capacity of the men forming the gangs. The evidence shows that in some cases gangs have earned as much as 24s. per man per day. The average may be set down at about 15s. a day. Accommodation, cooking utensils, wood, water, and all necessary field appliances are provided by employers, and the men find themselves in food. As a guarantee of good faith the usual practice is for growers to retain a percentage of earnings until the completion of the contracts.
Earnings forfeited under this provision are generally divided among the remaining members of the gang. 10. The Shearers' and Sugar Workers' Accommodat-ion Act prescribes in particular detail the accommodation to be provided for both mill and farm hands in Queensland. At the mills visited, the accommodation was in accordance with the provisions of the Act, and no fault could be found except in some cases where the occupants had to keep their sleeping apartments in a proper state of cleanliness, as required by the
Act. At every mill careful attention had been given to sanitation, and shower baths and other necessary conveniences were provided. There were reading rooms at most of the mills, and in some eases spacious concert halls and provision for out-door amuse ment. In many instances the mills are adjacent to business centres, mill
employees and other workers may become members of schools of arts, recreatiOn clubs, and other institutions. Where mills are situated some distance from Government Savings Banks, the State has established agencies at the mills in order that the men may conserve their earnings.
11. The minimum wages paid to field workers ranged from 22s. 6d. to 30s. per week, with board and lodging, in the off season, and from 25s. to 30s. per week, with board and lodging, in the crushing season. Hight>r rates rule in the North than in tlw South. At Mossman, a wage of 30s. a week, with board and Icdging, is paid throughout the year. In the crushir,tg seas_on very few men in any of dis!ricts l:_ss
than 30s. per week, which, with board and accommodatiOn, IS eqmvalent to £2_ os. per week. Since August, 1911, 30s. per week found been the re?ogmsed minimum wage for ordinary mill employees in Queensland. This and other illlll wages
lxxix
based the of a State Wages fo: the Mackay District, which gave
1ts early m August, 1911. The Colorual Sugar Refining Company pays
a m.m1mum wage of 27s. 6d. per week and found, and gives a bonus of 2s. 6d. per week. On the !arms,. usually same food and B;Ccommodation as the growers
and their families. At all the nulls VISited by the Comnussion, the food was abundant, well cooked, and cleanly served. . 12. the Colonial Sugar Company's refineries, the minimum wage paid to adults 1s 7s. per eight-hour day to men engaged outside the buildings, and 7s. 5d. per day
to. inside the buildings, with a bonus to each of 2s. 6d. per week. At the
Millaqum refinery, Bundaberg, the rate is 7s. per day, or 42s. per week of 48 hours. 13. Little evidence was taken as to the rates of wages ruling in other land industries of the Proper comparison can only be made by separating field
workers mto their several classes. It would, for example, be obviously unfair to the wages of persons engaged for a few weeks fruit-picking or wheat harvesting
w1th the wages of men employed throughout the year or for several months in the .fields. Cane-cutters on contract earn vastly more tha:ri any other class of
agriCultural labour, and the wages of sugar workers generally compare favorably with the rates paid for similar labour in the Commonwealth as a whole, which are officially stated as follows :-General Weekly Wages paid to Agricultural Labourers in Commonwealth.
1. General hands 20s. to 25s. and keep.
2. Ploughmen . . 20s. to 30s. , ,
3. Harvesters . . 30s. to 40s. , ,
14. During the crushing season, the mills are usually worked by two shifts of an average of 10! hours each. All time over 48 hours is paid for as overtime at the rate of time and a quarter. Millers contended that it would be impossible to rigidly conform to eight-hour shifts. When the crop is light, as frequently happens, the adoption of three shifts would mean so short a season that neither cane-cutters nor
mill hands would undertake the work, while under normal conditions, owing to the irregularity of harvesters, it is exceedingly difficult to maintain a full supply of cane throughout the 24 hours. Where one or two shifts are worked, it is necessary for employees on some stages to work overtime, as the process of manufacture must be carried on for some time after crushing ceases. Much of the mill work is not laborious,
high wages are paid on important stations, and, as the men live practically on the premises, no time is lost or money expended in travelling. Consequently, even when working overtime, they have more leisure than a great many t own workers. This also applies to men employed on the farms.
15. Labour witnesses as a rule urged the abolition of contract (â¢a n? han·csting, on the grounds that it tended to sweating and that under the system of dml y or weekly wages employment would be afforded to a greater number of The hi gh earnings of cane-cutters under conditions practically by _IS a compl ete. reply to
any suggestion of sweating, a.nd .w.here there Is an admitted of Ia hom: It be successfully urged that mdiVIdual should he lmuted. Th e obj ectiOn to contract work seemed to be founded on the Idea that the lower the labour product of each wage-earner the better for his class as a whole. On t.he other .ha nd , contract system has many advantages from the farmer's of n ew. It attra<:t tn⢠to !·he best class of workers, who prefer payment by_ results; It tltm; enahhng
growers to attend to other work; and relieves the fanner s wife of th e lahour responsibility of providing food for a large number men. } 'here were·. ot hc·r pomts upon which employers and held con_trary views_. "tthout nâ¢gard to
their importance, the mult iplicity ?f these t he mgP nt for
referring them to local tribunals whiCh would upo n conditions
of fairness to both employers and employees. Pronswn for. this Is made by the Qu el· ns land Industrial Peace Act , in which suga r work ers arc mcluded. Employers were unanimously in favour of industrial tribunals.
III.-G RO \V EHS.
16. The inquiry has Lcen practicall y to ten year:';
very little information being sought or obtamed co nce rnmg the condttiOn of the mdustry in pre-Federal days.
17. An appendix to the Report of the Select Committee on Sugar Industries presented to the House of Commons in 1880, showed that in 1853 the Australian production of sugar was 2,485 tons. According to Australian official records the yield was 3,532_ tons in 1870, and 22,864 tons in 1880. These figures indicate that the progress made durmg the early years of the industry was slow. Many of the pioneers failed in their undertakings. The shareholders in the Victorian Sugar Company lost no less
than £400,000 in their enterprises. (Question 27350.) 18. A return made to the Senate on the 18th December, 1911, gives the annual production of Australian sugar from 1870 to 1910 inclusive. The fiQUfes show a great fluctuation in output during different years, due chiefly to variation in conditions, but there is a substantial increase for each of the four decades as follows :-1871 to 1880, total production, 156,012 tons ; 1881 to 1890, total production, 583,865 tons ; increase, 427,853 tons; 1891 to 1900, total production, 1,176,013 tons; increase, 592,148 tons; 1901 to 1910, 1,646,779 tons; increase, 470,766 tons.
19. Thus it will be noted that the rate of increase prior to 1901 has not been maintained during the past ten years, notwithstanding the favorable seasons. It must be borne in mind that during the latter period the change from coloured to white labour has been made. This is a most important and commendable achievement, even though it may have temporarily impeded the expansion of the industry.
20. In the early days of the industry, practically the whole of the cane was grown on large plantations. But this system was abandoned by most of the mill-owning planters some years ago, and now the production of cane and the manufacture of sugar are generally regarded as two distinct branches of the business. In the co-operative mills, of course, the ownership is in a sense the same. The proprietors of Bingera and Fairymead, both in the Bundaberg district, have not fallen in with the general custom, and continue to grow a large proportion of the cane required for their respective mills.
21. No information was furnished the Commission as to the number of cane farmers prior to 1902, in which year the number of registered growers was officially returned as 2,496 in Queensland, and 1,120 in New South \Vales, prcducing 1,367,802 tons of cane. In 1910, the numbers were 5,352 i.n Queensland, and 954 in New South \Vales, producing for the year, 2,000,758 tons of cane. The number of farmers has, therefore, increased in higher ratio than the yield of cane, and it is noteworthy that in
1910, the year in which the maximum production was attained, the average quantity of cane per farmer was only 317 tons, or the product of 17 to 18 acres per farm. 22. The increase in the number of farmers was due principally to the subdivision of lands previously cultivated in larger areas, and also to extensior..s, chiefly by the State or local governing authorities, of railways and tramways, bringing new districts into communication with the mills. It is doubtful whether the present number of farmers can be materially increased without the erection of new mills an.d the opening up of what are now practically unsettled districts, there being but little rocm for the further subdivision of existing cane areas. The evidence tends to shew that some growers are at present working on what may be regarded as below the minimum profitable area.
23. There was an annual increase in the area under cane from 1902-3-the last of the drought years-until 1905-6, and thereafter the area gradually diminished. Next to the improved seasons, the main for the seems to have been that a
great many g!owers ma.de the most of the1! last cpp?rtumty to labour
in the extensiOn of then cane areas, clearmg, plantmg, ar..d eultJvatmg with Kanakas and other aliens, then registering for bounty, and, so far :!S the plant crop was concerned, doing little more than with (Qu<'stions 122:-124.) Und.er any
circumstances there was necessarily a lurut to this methcd of e:xtenswn, ard, \nth the voluntary emigration and the deportation of the Kanakas of. alien
immigration, the indus!ry has rapidly on t o a wlut e ln bcm bns1s w1th aJl
attendant difficulties. Th1s has unquestwna bly bren the mn ·.t potent cam:e c1f
the shrinkage in the area under Und('.r the new ord<'r , farmrrs ge nerally
are confining their attention t o their most prcdudiYc land. 24. In his rrport to the Minister of Tradr and Cm;toms in J anu ary, HH.o , Df'part mental copies of which were furnished to the Commission , Dr. l\laxwrll attn butNl t lw diminution of the area under cane in the years foll owing I !J05-6 the t s
in the Excise and Bounty l<'gislation, stating that ': thC' reYJ sed law, and provision was made for the gradual abolitwn of the Acts, the confidence of the growers was disturbed. A position of uncertainty was before them, and from
111 !1
lxxxi
that time many of the most pronounced supp0rters of white prcductiou beca me less resolute in their operations. On the other hand, some of those who had continued in producing by coloured labour were induced to hold on." These conclusions are not warranted by the evidence placed before the Commission. Some diminution in area did take place for the reasons already stated, but concurrent with the
reductiOn of area there was a steady and material increase both in the number of farmers and the percentage of white growers, while the very highest point of pToduction was in 1910, in connection with which t he whole of the field operations, except
harvestmg, must have been performed before there ,.-as any indication of the iutention of Parliament to pass legislation providing for the continuance of Excise and Bounty. 25. The evidence shows some divergence of opinion among growers upon the question of Excise and Bounty. A large majority, more particulady in the North, favour the abolition of Excise and Bounty, while firm in their desire t hat the prcduction of sugar should be upon an absolutely white-labour basis. Ot hers advocate t he continuance
of the present legislation with the proviso that Excise and Bounty be equalized. Those favouring continuance fear that the mill-owners may withhold fo r themselves some part of the advantage accruing from the abolition of Excise ; quite overlooking the fact that if the miller were really so rapacious he could now attain .the same result by a reduction in the ordinary price of cane.
26. The mill-owners disclaim any such intent ion, and have promised the growers some have ent-ered into binding contracts-in the event of abolition to pay an additional price for cane of from 8s. to lOs. per ton, the varying rat es being in proportion to the bounty now paid in the respective sugar districts. There is no evidence t o show that
mill-owners do not, as a rule, carry out their undertakings to growers, and instances were given where manufacturers had voluntarily paid more for cane t han the stipulated price. Some doubt was expressed concerning t he attitude of t he proprietors of Pioneer Mill upon the subject, but Mr. John Drysdale's statement to the Commission was clear and emphatic, being as follows:-
I have said that I am going to pass this £4 on to the farmer-t he whole of it. (Question 7082. )
27. The present method of maintaining the production of sugar by means of an import duty, minus Excise aud plus Bounty, was held to be not only cumbersome, but misleading as to the measure of protection really afforded to the industry, the popular idea, outside of those engaged in the business, being that the Import Duty and Bounty constituted a double impost upon the consumer, no allowance
being made for the Excise, which the industry itself has to hear. (Question 4. 89.) 28. In the event of the continuation of Excise and Bounty, it was urg·ed that the formalities connected with the system should he simplified. The grounds of complaint were more particularly set ont in a WI·itten statement presented by the growers of the Cairns distriP-t. (Question 2688.)
29. Some 4 · 7 per cent. of the cane is officially as the prcduct of coloured labour. This is produced almost entirely npon land occupied by coloured growers. 30. The Commission were repeatedly assured of the growers' t? the
National policy of a White Australia, and throughout the. whole not a farmer expressed a doubt as to the of the mdustry, pro v.Ided the price
realized for their commodity rendered 1t poss1ble for t.hem t o me et the mcreased c?st of production. In their opinion the of tropical settlement and productiOn
in Australia was simply a question of econonucs. . . . .
31. In addition to evidence elicited by _th e mterrogat1 on of statements were presented on behalf of growers m a of centres. Special we1_ght should be given to these, because they embody the considere.d, as as collective, judgment of the farmers of several districts upon the with wht ch t hey
These statements treated upon almost all the aspects of the the followmg
extracts are selected as illustrating, better than in<.li\·idual opmwns, the n ew:> of growers upon some of the most essential points :-Quest ion 2688.-Statcment handed iu :\Ir. A . . 1. IJ nqwr. au
district :-The complicat ed n ature and incidence of t h.- a u.d 1\ou ury )Pg;sl:â¢r io;, 1 ,,
ideas a s to t he help the Indust ry 1s rt â¢f ·c ' l'-111).! fro 111 t h e· _l· cdc·ral Lâ¢m t: l llllleltt.. I_ he main a rgument nscJ hy nu r d f' tracto:·s is t ha t t h" :" · '" '' ;.!ag⢷d 1 nt h·· 111 d u,;t ry nrc t: IIJO} IIIJ.( the ad vantages o f a houn t _ ,. , wlw n·as t h⢠·:·r· i,; iu c-ii c·< ·T 11'⢠llu u).! l.ouu ty, l11t t mcrcl_ y a. re ha t e of thrcc-,
1ua rt crs of tit,. E xci ,;â¢: paid 1 â¢â¢ ,. i h⢷ __ !.!1-.,-,,- â¢. r. h â¢: produceR ht s
cane wtder ce rtain prcscr il> cd cond it io11 s and â¢"11 -" . ar:,nranl.'· l:11J d ow u hy Minist er of T rade and Customs. Thcsf' a t:acks a11d t h e t ui!se â¢1ueu t IIII SIII tderstandmg
F.13881. F
Jxxxii
very naturally act as a material to financial institutions affording accollllllodatioti to those in the industry, and prevent increased investments by those already occupied in cane growing and sugar manufacture. They also act as a deterrent to those _who would otherwise be willing to employ their capital and labour in the sugar lands of North Queensland.
Question 3988.-Statement presented by Mr. William Stevenson, and signed by 73 farmers of the Johnston River district:- ·
On the question of strikes and an attempt to bring about more settled conditions in the way of industrial peace. We are in favour of State Wages Boards, but they must be clothed with full power to enforce their awards upon both the employer and the employee. We have no cause for complaint about the checks which are employed to ascertain the true
payment for the value of cane supplied.
Experience has proved that no other agricultural crops but sugar and bananas can be successfully farmed in this district, and, as to bananas, they are only grown successfully on the alluvial flats and river banks, and can only be maintained on the same land for five to seven years.
Question 7507.-Statement handed in by Mr. P. J. Hoey, and signed by 31 farmers in the Burdekin district:-We regard it as useless to attempt settlement of our Northern lands for sugar-growing purposes unless strong protective measures are adopted to exclude cheap black-grown
sugar from our markets. Supplementing this, we have to say that the health of the district is excellent, and observation will carry the conviction that the operations of sugar-growing here are quite compatible with the best ideals of a White Australia. Question 8757 .-Statement handed in by Mr. Alexander Stevenson, on behalf of the Mackay Combined Farmers' Associations-
In a season such as we are passing through, the majority of farmers who employ labour in this district make absolutely no profit for themselves, and in numbers of cases have actually incurred a loss in the year's operations, with the prospect staring them in the face of a further loss on next year's crop.
When men are" found," in addition to their weekly wages, much work is thrust on the farmers' wives and daughters, which work, in most cases, is greatly added to during the crushing season, when the cane cutters, whether on daily wages or piece-work, are boarded in addition to the ordinary farm labourer .. Whatever difficulty may be experienced in procuring men for field work, is multiplied over and over in procuring assistance for the farmer's wife, particularly if the farm is situated away from the railway line, or a
" bit in the bush." Very few farmers find time, under present circumstances, to keep a set of books, naturally thinking that each year will be better than the one that has run its course. Farmers keep on growing cane in the hope of soon getting out of debt; but, latterly, confronted
with the prospect of having to pay an increased wage, without any corresponding increase in the price of cane, farmers have had to look the position in the face, and the realization has been forced on them that with comparatively good seasons and the former rat.e of wages, very few profits have been made. Unless improved conditions are afforded, numbers of farmers, particularly those on leasehold farms, will abandon cane-growing, and seek other means of earning a livelihood. We would impress upon the Sugar Commission that manuring has become imperatively
necessary. At the average price paid for cane, farmers are afraid to risk the cost of manures. While the manure would amply pay for itself, if successful, a failure, on the other hand, would involve the farmer in a considerable monetary loss, which the freehold farmer will not face if he wishes to retain his holding. Question 21863.-Statement presented by Mr. John Alison, on behalf of 80 farmers in the Gin Gin district :-
A considerable area of cane has of late been taken out, and we cannot point out any new area having been put in, while to our knowledge, many growers have expressed themselves to th,e effect that they would plant no more cane until such time as there were soma more settled labour conditions; while others have expressed their intention of planting such areas as could be planted, cultivated, and harvested by members of their own families, and many acres which are now lying fallow or going into grass would be under cane were there more security in relation to labour. Question 22971.-Rtatement. presentt>d Mr. P. L. Elliot., on hehalf of growers in the Bundaberg d:strict :-
The accommodation for workers is laid down by the Shearersand Sugar Workers' Accommodation Act, and is enforced by periodical inspectioniJy a State official. On the question of strikes and an attempt to bring about more settled condi tions in the way of industrial peace, we are in fa vour of State Wages Boards ; but they must he clothed with full power to enforce their awards upon both the employer and t he employee. We have no cause for complaint about the checks which are employed to asce rtain the t rue payment for the value of cane supplied.
ll.l l
lxxxiii
. 32. Numerous estimates were submitted as to the costs and profits of cane produc-tion, and a great many farmers were examined as to the actual result oftheir operations. evidence thus obtained showed that a few growers, working under specially favorable
?Ircumstances, were doing fairly well, others were losing money, while the majority, m the words of the witnesses themselves, were but "holding their own." In the case of the large growers, Bingera and Fairymead (Questions 21754 and 22264) showed a P.rofit of £2 9s. 3d. and £2 2s. 6d. per acre respectively , but their yield of cane was con above the average. On the other hand, Qunaba Plantation, owned by the
Company, lost in nine years no less than £30,951 on their field operations.
This, it was explained, was partly due to costly experiments in irrigation.
(QuestiOn 22601.) _
33. Seasonal conditions and the quality of the soil are probably the most potent factors in sugar production, but pests and the personal equation are also important A combination of good soil, good seasons, gocd luck, and gocd husbandry
Is bound to prcduce good results, and such were the favorable circumstances of the more successful growers who appeared before the Commission. 34. Peric4ic reverses seriously discount any mere estimate of costs and profits, and only the actual experience of a series of years can be accepted as proof of the true position.
. 35. It should be recognised that throughout the cane-growing world the cultivator IS with a crop which takes enormous quantities of plant feed out of the ground. It Is therefore evident that the cost of constant manuring is one which the farmer has to meet, thus necessitating, on account of this item alone, a considerable floating capital.
36. The evidence shows that very few farmers do the whole of their work. Some hired labour is necessary during part of the year on even the smallest holdings. The production of sugar is not-and, indeed, cannot be-can·ied on as a one-man industry. In the case of the average grower, the change from black to white, whatever other advantages it may have secured, has not made his calling any more profitable, but rather
the reverse, as the subjoined examples of the evidence upon this point disclose:-Question 2688.-Extract from statements presented the cane-growers of Cairns district.-lt is desired to point out particulady t o t he Commission t hat although the risks attending the indust ry are the same as those that' existed before Federal legislat ion , and the possi bility of profit per acre no greater
than in former days, farmers require a much larger amount of capital to esta blish a11d maintain a sugar farm. Question 3991.-What, iu !·our opinion , as regards the success of the industry, has been the result of the change from black to white labour ? Al tswe r.-The first effect of the change was a one; the
land increased in price and profits wt're obtai111'd from the hon us. But tht> cane on the land ttseH had been cultivated largely by black labour. Rtill , the change stimulat rrl the price of land, and for some years there was a general improvement. Quest.ion 5747.-All the money I luwe made ;tnd t he fa nn T lo.; LY C HOW , I made w1dc r the old
order of things. I have only been g"rowinJ! cane with whitt' la hour fnr four :w a r:<. The returns show my profits are diminishing. · . .
Question 5932.--What is your opinion or thn effect of tlu,_d â¢? ug⢷ from hl ack wlut t· lahonr! Has it been beneficial to the district '! An swc r.-Yt>:;. to the ol ist n c! as a whule, to the hotel-
keepers. . _ _ . _ . . . . h
t
Qnest10u 5933.-Has tt been hent>ficm l t o the growers Ans w⢠·r.- 1 "ou!d n<_Jt hJ,e tn s:n t 3 it has from the financial point of view. If I had to an p, us,,-,.r I "·mllâ¢l sa_,-, no. It has uol. 37. From the foregoing it would appear that during the prrind, t h(⢠gained by harvesting with white labour what_ he had pl a n_tcd bl ack , that
he has no such adventitious aid, he reahses fr om h1 s dmun1 shed that
measure of protection afforded the indus try dnes nnt co mpensa tl· hun for hi s additional outlay. Nevertheless, farmers are oppose d t o fl l'r retllrn to col nm ed labour. 38. Evidence was obtained as to the of the prwe of land ur.on the pr<'sent position of growers. Most of the land concerning which information wa s wa s m<_>re
or less highly improved, and carried a crop of cane whi ch largely repres(' nted the paid. It is quite safe to say that, as disclosed by the eYicleiH'e pl ae<'d before the mission, sugar lands are commandina much lower prices tlwn la nd of <'qu al d 'b"l' · h f
0 h C ltl I t · · .-,) so JJ1 < Jll<' d câ¢a r that m an access1 11ty m ot er parts o t e ommonwea 1. . " a:- ' · · · . some of the best of the sugar di strict s, despite in creased s<'ttkment, the_ sellmg value of land has not appreciated during rece nt ye ars. On this partic·ul ar polllt the
evidence of Mr. A. J. Draper, chairman of the 'Itilgra,·c· Ce ntral 'Till Company, and a I d. · d · · · 1 Q ·1··111 11 111" \' he
on their farms, and have sold at just' mark time' pric-es.': (Q. : . I 1 39. The only conelusion to he drawn from the e n!lP II('(' 1s that t1 1" agiHil tura d . · · f h · · · · · J' · t·l . a1·rr·lll l>etw ee n the cos t of IVISion o t e mdustry IS not m a ftoun shmg c·o1H JtJOn , 1c m ..-: . production and the value of the cane being' so extremely. sma!l that gr?wers geinerally just- manage to struggle along, hoping for som e future anwhoratwn of their conclit ou.
lxxxiv
_Such the position when the Commission made its investigations in the
Smce then field wages have been materially increased and hours of labour
m the Ministerial Order of August last, copy of which has been
supphed to the Commission, thus making the condition of the grower more hazardous even than before. (Appendix No. I). -41. Various measures were suggested for the amelioration of the growers' position. T_hose genera.ll_y favoured were the abolition or equalization of Excise and Bounty, a higher protectiOn against foreign sugars, and independent industrial tribunals, whose awards should be rigidly enforced upon both employers and employees.
. 42. In support of the request for a higher measure of protection, attention was directed to the wide disparity between the remuneration of labour in Australia and that in Fiji, Mauritius, and Java, which are the more immediate competitors with Australian sugar.
43. Evidence was furnished that in Fiji the wages of workers in both field and range_d from Is. 5d. to 2s. 6d. per day, while statistics compiled by Mr. H. Prinsen Geerhgs, a recognised authority, and which were included in the documents supplied by the Government to the Commission, showed that the rate of remuneration in Java averaged about sixpence per day for men and threepence per day for women.
44. The Javan and Fijian rates of remuneration are understood to include cost of 1\ccommodation, where provided, and in both instances the workers find their own food. 45. To realize the full significance which should be attached to the wide difference between the remuneration of workers in the Australian industry and the rates ruling in countries where the standard of living is incomparably lower, consideration must be given to the very high proportion of labour employed in the cultivation and harvesting of sugar cane. Details, furnished by Mr. C. E. Young, of Fairymead, undoubtedly a well-managed estate, showed that labour represented 85! per cent. of the total cost of field operations. (Q. 22264.)
46. 'Vhile, generally speaking, it may be said that growers attributed their unsatis..: factory position to the low prices of cane, as compared with the relatively high cost of production, and to unsettled labour conditions, 'there were also other grounds of com plaint. These, hO\vever, had little, if any, bearing upon the general situation, beiug local and not fundamental, and for that reason are not dealt with herein.
47. Both from the statements of witnes:;es and the observations it was possible to make, it was abundantly evident that the industry supports a large and healthy lation in the sugar dif.\triets, while its area of activities is so extcusiYc as to make It impossible to ealculate the direct and indirect advantages accruing from the home production of our sugar. Facilities for communication must have a most important bearing upon all the problems involved in the question of tropical settlement. other forms of production may he established in A 11stra.lia.n tropical areas, the evidence conclusively shows that, so far as can now be secâ¢n, if these are to be effeetively occupied, sugar must remain tJw staple industry. Without it. the present shipping not have beell est.a hlishecl or nwi ntained, nor would there ha,·c been any J ushfi<'at.wu for the coastal railway now uJHler construction from Rockhampton to Caims, and which, when completed, will connect pm<:tically the whole of the Queensland sugar districts and adjacent high lands with the railway systems of the Commonwealth.
IV.- )fANUJ<,ACTURERS.
48. The ·manufnt"turers 11f raw :-;ugar may be divided into two classes:-(a) The retin.rrs wh·, Hl
49. 'Vhen mills a.r(\ owrwd b\· prinlte indtviducds or comp;1_nics t_hey are termed "Proprietary }fills," whih· tlw Co-npc·mtive Mills , whNe thP busmrss IIi controlled _by the farmers supplying cane, an⢠designntrd "C'f'ntral Mills." There are also fom vested in the Treasurer of Qneenslm:d, nPd these are krown as "Government Mllls."
50. The PvidPnce sh' lWS tlut nParly the whole of the Pr(jprietary }fills were bPtween thP. I'S lHRO to 1895. Since that time thf' I'Xpa!"sicw of the nt
State to co-operative bodies of farmers on the security (1£ their and supple
mented from time to time b.v sums taken out of mill earnings for Improvement or extension.
Ixxxv
.51. The nine owned by the Colonial Sugar R efi ning Company make about one-third of the Australian output of raw sugar. The capital outlay on these mills was £1,647,122, approximately £180,000 for mill. The capital r<)st of other mills was from £125,000 .downwards. As a rule, .these are of smf.. Jler caparity than those
by the refimng company. Every null requrres a considerable a mount. of workina
capital. 0
52. from the of sugar, the supply of cane, relative t o the capacity and
?ost of the rmll, 1s Important element m the manufactnring department. NECxt lU rank the of the cane, the cost of la bour, and the efficiency of both the
technical and commercial control of the business.
53. The law of averages must prevail, at any rat e so far as irremediable circum stance.sare if we wish to arrive at a true appreciation of the position. Both the
quantity quality of .cane largely depend upon variable and uncontrollable conditions, and the price of Is regulated by the market s of. the world. In some cases years
of loss alternate With years of profit. Just calculatwns therefore can only be based upon a series of seasons.
54. In the case of new mills, many years are sometimes occupied in working up to a profitable output. It was stated in evidence that the Pioneer owned by Messrs. Drysdale Bros., made no profit for the first twelve years. (Q. 7915.) 55. It was generally claimed that the mills were up-to-date and of reasonable efficiency. In the case of mills behind modern st a ndards it was cont ended that the present circumstances of the industry did not justify any expendit ure upon improvements.
56. Some witnesses e:x:pressed t he opinion t hat present pla nts should be scrapped and superseded by mammoth factories, such as now obtain in Hawaii. Figures sub mitted to the Commission showed that, if properly equipped and managed, mills of moderate size could do very satisfactory work, and there appeared to be much to confirm the view that in Australian circumstances t he mPst profit able results can be secured
by mills treating about 100,000 tuns of cane iu a :Many of the mills inspected
by the Commission were of this standard, but a full supply of cane is seldom available. In consequence of the great variation in crops, the capacity of mills has to be in excess of average requirements. Only in the Burdekin district can an even output be main tained. This is a dry area, but all the natural ret1uirements for succes!:!ful irrigation are present, and are t aken f111l advantage of by farml:' rs. H ence, being largely indepen dent of seasonal conditions, both mjllers a nd gro,,·,·rs ar<' morc :-: n<' crssful in that district. than in any other.
57. The idea prevailed among a section of tht· gr1 ''' er,.; 1 hat he mills were retaining an excessive share of the proceeds of the business .. A? prou [ p f this an of alleged cane values was submitted t o the at BttJ: daberg.
showed that this table was foundt' d on t he falla cy th
or low, while in estimating refined sugar valu('s both ExcJ:-t· " r·d wrre This was only one of many instances indicating the PXl l·nt t u 1h t· <'<·onomJ cR of the industry are misunderstood, even by some of th(J s<· eJJgagP d 111 It . . 58. Most of the shareholders in the Ce ntral Mills an' gruwf' l s, b.1t llliiP)'u t 1 he are not shareholders and this difference of r elationship t o the mill appea nâ¢d t o be a fruitful source of even when it implied n< 1 actual disa dvantage.
59. In several of the Central Mills share holders a nd 'non-share h cJlders on an equal footing, except that the latter have no part in the of th.e busn:ess. In a
few· cases there have been, in some years, a diffen·ntwtwn m_ tlw pr1 cc·s paid for ,enne to the two classes of growers. In the Racecourse Central .\I Ill. . t lw had
received bonuses on their cane, averaging pc⢠r t fâ¢n. wa,.; _d ann <' d that
shareholders were entitled t o some privileges in r<'tmn f()r pledgJPg t hl' lr . as security for advances made by the Stat e, besides undPrta kiJ g otlt(')' !rom
which non-shareholders were free,'{and which many nf them
vVorks Guarantee Aet were onlY nommal. \\ hf'fe nulls haY{' been ta ken ()\ ('f by_ the Government their dee ds have· beP n rd tmw d t() la r:d-()w ne rs. EYiderH'f' waR given , however, in the cas< ' of thP Ea st :\IcJl'Ptnn }fill. 11 f> tices of f
the bank advancmg £32,000 to hqUld< lte the C umpany s "'hole liab1bt) t o the State.
lxxxvi
61. Shares in the Central Mills were issued in proportion to the amount advanced by the Treasurer on the respective securities. Hence it followed that some holdings of shares were larger than others. Exception was taken to this on the grour.d that it was con trary to the "true principles" of co-operation. In the case of most of the mills it
was clear that, without the large properties, the necessary freehold security could not have been obtained. In the Plane Creek Company, where the alleged evil was most prominent, every shareholder has but one vote, and all suppliers are treated exactly alike. In many instances it was clear that the success of the mills was due to the business capacity of the larger shareholders.
62. The most successful o.f the central factories, having regard to both price of cane and mill profits, has been the Mulgrave Central Mill. Its circumstances have been unusually fB,vourable, particularly in regard to the supply of cane. The net profits of this company for a pericd of fifteen years were set out as follows :-
Question 3339.-The total quautity of cane crushed by the :Mulgrave l\-Iill up to 31st December 1910 ?-746,913 tons. Net profit made by the company per ton of cane crushed ?-6!d. Total quantity of sugar manufactured by the company up to 31st December, 1910 ?-88,787 tons. Profit per ton of sugar? --·4s. 3d. Percentage of profit on the value of the m2.nufactured s:1gar ?--2·14 per cent.
63. In regard to the Central !\f.ills generally, it may be said that the sums set aside for liquidation of liabilities to the State Treasurer, and necessary maintenance ar.d improvement, were never more than ordinary business prudence should dictate. 64. Excepting those of very limited capacity, all Australian mills have a properly staffed and equipped laboratory, and the process of manufacture is generally under
complete chemical control. The Colonial Sugar Refining Company has in this respect a great advantage, because its large interests enable it to maintain a central sta:ff of highly trained experts to check, compa.re, and advise upon the work of its several mills. In this way a degree of efficiency is secured, quite unattainable by mills working as separate units.
65. The value of cane to the mill-owuer does not depend entirely upon the percentage of sugar it contains. A :-;ma.ll supply of ver·y rich cane is not so profitahlc to n mill a:-; a full supply of cane of fair average
value of a fiu·mer's <·aue may he depreciated hy n number of causes, including the period of the season at which it is harvested. 66. The Colonial Sugar Refining Comp:my gives its growers the option of paymeut under a lltllnber of different schemes, based upon the sugar contents of the cane. Unde1· the individual system this is aseertaiued by the daily analysis of each grower's cane. \Vheu growers unite and choose to be paid on the collective value of thei1· e:me, they have the fmther option of deciding whether payment shall be
hast>d upon lahomtory tests ot· upon the sugar actually made duriug the season. In districts wJ1erc se1·ious loss is likely to arise from severe fi·osts, grower·s have the additional option of :t fixed price fcH' thei1· cane. The quality of e;me is affected hy :wmy intluenecs, and when g⢷owers choose to be treated individually wide differences in price oecur. The Company's mills are worked as :t siugle proposition, and the same price is paid for cane of equal quality throughout, inespective of local con siderations. 1 t is contended, therefore, that comparisons between the Company's prices and others should be based upon averages, and not upon prices paid by particular mills.
67. Prices of cane vary considerably, but except in the case of very small mills the minimum price paid is about 12s. 6d. pe1· ton, while the average would be, npproximately, lts. Gd. The average price paid by the Colonial. Sugar. Refining Company for ten years ended 1910 was 15s. 4:!d per ton. TJ1e prwes paid by the more successful co-operative mills are naturally higher than those paid by proprietary mills, but the higher rates of the former during recent years were preceded by very low prices while these mills were contending against initial difficulties and working up to a profitable output. Prices in the 1\orth, where the cane is richer iu sugar, are usually higher than those ruling in the South.
G8. With reference to the manufacture by the mills of a white sugar for direct consumption, it wns shown that the demand for this class of sugar was very limited, that there was great difficulty in selling it, and that the price realized was 30s. per ton below the price of refined sugar. Mr. W. Gibson, of Bingern, half of the
1121
lxxxvii
output is sold to the refinery aml the other half put 011 the O}Wll stated that
there was practically no E-xtra profit in mnking white sngnr. ( Q. 2N .... 9.) At Nerang Central Mill, after allowiug tlH: additional qunntity of cnne required, a loss of about lOs. per t.on was sustamed m 1910 ll\· makitw whitP instend
f
· e e
o raw.
V.-REFINERS â¢
. 69. The business is carried on by companies. The Colonial s·ugar
Refinmg Company 1s much the larger concern, havmg refineries at Brisbane Svdnev and Au?kland. The last-named was ,beyond the scope of,the
miSSion s mqmry. The capital outlay on the Company s refineries in Australia was £1,401,110, and the refineries now stand in the Company's books at a value of £1 163 404. 70. The Millaquin Company only refines at Bundaberg, but sells itR it can find a market in the Commonwealth. The value of this refinery is
set down at £138,769. 71. companies or other. hom molasses.
draws 1ts supplies from the m1Us m the Bundaberg dtstnct only, and the Colonial Suaar Refining Company from Fiji, supplemented to some extent bv molasses from its N°ew South Wales mills. ·
72. The predecessor of the Colonial Sugar Refining Company, in the production of refined sugar, was the Australasian Sugar Company, established in Sydney in 1842. The present company was formed in 1854, and, on the 1st January, 1855, took over the business then carried on by the Australasian Sugar Company. From 1855 to 1887, the liability of shareholders was unlimited, and the accounts were not published. In 1887,
the company was registered as with limited liability, and copies of the published records of the company since that date were furnished to the Commission. 73. These records show that the company has a paid-up capital of £3,000,000, which, on the 29th April, 1910, was divided among 1,740 shareholders. No watering of stock has taken place. The great part of the capital has been contributed by the share holders, and the balance transferred to capital account from reserves during the 70 years of the company's existence.
74. Mr. Knox, the company's general manager, informed the Commission that there were considerable reserves, in addition to those disclosed in the balance-sheets. 'l'hey are all employed in the activities of the company, and materially assist in the produc tion of profits. The profits made outside Australia have been applied to the extension of
the company's operations in Fiji. The business is conducted as a whole, and no separate accounts are kept showing the profit or loss of each of the company's seYeral undertakings. Exact figures, however, were given as to the profits per ton of sugar in refining, and the profits per ton of cane in the manufacture of raw sugar.
75. The business of the Millaquin Company was originally by a private firm, and was subsequently taken over by the Queensland Xational Bank. The present company was formed on the 4th April, 1911, with a capital of The Queensland National Bank still holds the bulk of the stock. In the case of this company, statements
were submitted, showing in detail the result of each branch of the company's business for the nine years ending 1910. . .
76. The two refining companies purchase raw and sell refined sugars on snmlar terms and conditions. 77. Sugar is purchased by the refineries on a _basis of 94 net sugars
of a higher or lower strength being paid for proportiOnately, prom.led a (:crtam aYerage standard of quality is maintained. Mr. S. W. DaYids, of the )lulgnwe Central Mill Company, thus explained the precautions taken by nullers_ to chf'ck th e analyses of the refinery:-" Our own_ chemist analyses the sugar It and get
the returns from every shipment. Our analyses tally wtth the Coloma} Sugar Hefinmg Company's every time absolutely." (Q. 3313.) . . . . _
78. Sugar is purchased by the refiners from th e at a ba s1e pm· (⢠of £9 1s. 6d. for sugar analyzing 94 per cent. net titre. An add1t10nal "bonus "-is made by the refiner to the extent of !.JO pt·r eent. , or 18:-;. Ill tlte £1, on any increase in the selling price of the of suwu a: L\. Ill excess of £HI
per ton. In actual practice, the whole ot the mcrcase Ill s(' lhug aiJo,·e tlt c standard of £19 is paid to the miller. The differenc e bet wee n l tl,;. aud .tl 1s fully by
discounts to purchasers, and the extra num her of to us of raw sugar upon which _the bonus is paid. It is manifestly impossible to make from a ton of per cent. net titre a ton of almost absolutely pure sugar.
lxxxviii
79 .. In every case the refiners supply the mills with bags free of charge, and pay exchange, msumnce, harbor dues, a.nJ. all freights and other transport charges on raw sugar from the port of production to the refineries. 80. In calculating refiners' profits on the basis of £19 for refined sugar, £4 per ton has to be allowed for Excise and £1 7s. for discounts, the latter including special reduction to manufacturers. This leaves a net price of £13 13s. per ton. The principal
charges to be met by the refiners are bags and transport charges on raw sugar £1 4s. per ton, cost of refining £1 5s. 9d. per ton, depreciation 4s. 6d. per ton. The reduction m tonnage owing to wastage in the process of refining and the great difference between the strength of raw and refined sugar has also to be taken into account. This was explained to the Commission in the following question and answer:-
Question 27457.-You say Ul your statement that the conversion of raw sugar of a strength of 94 per cent. net titre means a loss of at least 6! per ceut.. Is tha.t Gi pPl' cent. exclusive of the syrup? Answer (by Mr. Knox) : It is not inclusive of the syrups. It is the difference in strengths plus the actual loss in manufactare. You cannot melt sugar and recover the whole ot it. There is some destruction, once you melt sugar, before you turn it into sugar again.
81. It is impossible to make reliable comparisons as to the margins between the pricw; of raw and refined sugar in Australia and elsewhere. Such comparisons can only be approximations, because the conditions upon which raw sugar is bought and refined sugar sold -vary largely, and, to be of any -value at all, care must be taken that the sugars
are of the same quality. In his statement, published as an Appendix to the Minutes of E-vidence, Mr. Peacock erroneously places German first marks granulated on an equality with Colonial Sugar Company's 1A. This particular grade of beet sugar is not a refined sugar, as the term is understood in Australia. In the world's markets it sells at prices
far below those quoted for refined sugar of the standard produced by Australian refineries. The sample submitted to the Comnussion in Sydney was so much inferior in appearance to the white cane sugars made by the Queensland mills, and the beet sugar made at the Ma:ffra factory, that it is quite safe to say it would be practically unsaleable in Australia, at any rate for domestic purposes. Dr. Maxwell, in his report to the Minister of Trade and Customs, in January, in which he compared refiners' margins in Australia, London, and New York, omitted to take into account freights on raw sugar, dis counts, &c., which would ha-ve reduced the Australian margm by o-ver £2 per ton.
82. The Milliquin Company sells the whole of its sugar to distributors, but the Colonial Sugar Refinmg Company disposes of one-fourth of its total output to manu facturers at a price usually about £1 per ton less than the net price received for sugar sold to traders. This reduces the a-verage return from the company's sales by at least 5s. per ton. In some years, howe-ver, it has a greater effect. In for instance,
owing to the unexpected rise in the world's markets after contracts for the year had been made, the difference between the price paid by manufacturers and that received for sugar sold for direct consumption amounted to no less than £3 per ton. 83. The profit on refining made by the Colonial Sugar Refining Company during the five years, 1906--1910, was stated as 15s. per ton of raw sugar. (Question 26844-Btatement "A"). After allowing for depreciation, the net profit on refining was said to be 12s. 6d. per ton.
84. The result of the l\lillaquin Company's refining operations for nine and a half years was explained by the Secretary as follows :-From January to June we refine raw sugars, and this is known as our refining season; from July to December we refine raw and juice mixed, and
this is called the juice season. Of the profits above shown, £18,883 was made in the refining seasons. During the refining periods 80,539 tons of raws were melted, so that the protits on the raw sugar refined amounts to 4s. 8d. per ton. (Q. 22603).
85. Most of the Colonial Sugar Refining Company's sugar is sold through wholesale firms, to which discounts are allowed, according to the quantity purchased and time within which payment is made. The w.holesale distributors m allow theu customers similar but smaller discounts, owmg to the lesser quantities purchased. All deli-veries are made direct from the refineries, and only in such quantities as are necessary to meet purchasers' current requirements. In this way is and all possibility of a corner in sugar prevented, the company IS to mamtam supplies for all its customers, keep its refineries and employees
year, and gi-ve its Australian suppliers of .raw sugar t.he. full. of any mcrease m market values which may arise. Otherwise, no restrictiOn IS rmposed upon buyers or
11!
Jxxxix
sellers, and it was emphatically denied that there is any arrangement between refiners themselves, or with the mill-owners making white sugars, either for the regulation of prices or output, or allo cation of market s. (Q. ·22251.) 86. The price charged the manufacturers is net, and usually about £1 per ton less than t he net price t o wholesale traders. To secure thi s advantage, manufacturers have to undertake to limit t heir purchases t o Australi an sugars, but the company supplies imported sugar when required by manufacturers for exportation. Yearly contracts are usually made, and are for the supply of current requirements. When manufacturers have obtained suppli es in excess of requirements, increased or reduced prices have been arranged regarding stocks in hand, according to whether the rates provided in the new contract are higher or lower t han those of the expiring agreement. (Q. 15044. )
87. Imported sugar is not old to any great extent for general distribution, but the evidence shows that merchants are always on the qui vive for opportunities to place foreign sugar when Australian market rates will permit them to do so at a profit. 88. The reasons for the "cut" price of the sugar supplied to manufacturers were explained in the Colonial Sugar Company's general statement, as follows:~
(c) The primary point we have to keep in mind is that all the raw sugar produced in Australia under a protective Tariff must, after refining, be consumed in Australia, otherwise the surplus would have to be exported at a heavy loss in competition with sugar produced elsewhere with coloured labour. 89. Manufacturers generally expressed a preference for Australian refined sugar, but admitted that a less finished article would suit their purposes. Hence, manufacturers have to be supplied at prices about on a parity with the landed cost of Java and Mau ritius unrefined white sugars.
90. The Colonial Sugar Refining Company imports from Java or Fiji sufficient sugar to cover shortages in Australian production. During the five years ended 1910, this sugar, according to the evidence of Mr. Knox, after payment of import duty, cost the company ls. 8d. per ton less than its Australian purchases. (Question 26844,, paragraph 33.)
· 91. In the evidence of Mr. G. S. Pearson, of Messrs. Gibbs, Bright, and Co., importers, Sydney, some allegations were made against the Colonial Sugar Refining Company. These charges were recapitulated and emphatically denied by the general manager of the company in a written statement, tendered in evidence (Question 27521, paragraphs 6-22). Otherwise, no really definite complaints were made regarding the company's business methods, t he evidence generally being of a commendatory nature, as the following extracts illustrate :-
Quest ion 12850.-Mr. H . Jones, jam manufacturer, Hobart.-In Australia t hey give us better terms and more conveniences than other people can give us. . . . Question 12856.-How long is it since you bought imported sugar for your jam factory ?-Answer: About t hree years ago . It was some hundreds of tons. It was the end of J une when our contract expired. 1Ve sâ¢arted in July and went on for some months, and then found it better to go back to the company.
Question 13290.-Mr. T. B. Robson, fruit preserver and jam manufact urer, Hectorvill e, Sout h Austra!ia.-We can get sugar from the Colonial Sugar Refining Company just as cheap, or cheaper, than we can import it. I t hink t h.at company treats t he jam makers very well. Question 1332 6.-Mr. Robert McEwin, Glen Ewin, Sout h Austra!ia .-The company has not taken
t he smallest advantage, and they expect me to behave to t hem in exactly t he same way. . . . Question 13329.-Have you studied t he sugar market to see if you could do better by import in g sugar ?-Answer : I have, and I could not do better fo r t he past ten years. Some years ago I sp oke to t he manager of t he Colonial Sugar Refin ing Company here, and I said, " I would like t o import Mauritius sugar," and he said,
"Certainly, and see how you get on ." I did so, and fo und t hat although cheaper at fi rst cost, it lost con siderably in weight, and by t he t ime I had it deli vered at t he factory, it was dearer t han t he sugar of t he Colonial Sugar Refi ning Company. The quality was n ot so good eit her, and it sweats in t he ship 's hold. The sugar we get from t he Colonial Sugar Refining Company is excellent. .
Question 1445 3.- Mr . William Peacock, jam manufacturer, Melbourne.-They always t reat t he jam manufact urers very well-they always did. Question 14600 .- Mr . A. C. Palfreyman , jam manufacturer, Melbourne.-The Col onial Sugar Refi ning Company has t reated us always bett er t han any other individu al or company would. . . Question
14618.- We were fr ee t o contract outside, but we t hought we could do a little better with the Company . Question 14919.-Randal J ames Al cock, mer chant, Mel bourne.-As a dealer in sugar, and allowing for t he duty, do you always find your market fr ee ?-We can get what s'.lga r we want. . . . Question 14920. - Could you get the Colonial Sugar Refinin g Company to fulfil an order of 50 ,000 tons ?-No , we would n ot want it; we could order a!l our legitimat e requirements. . . . Question 14921. What do you mean by legitimate r equirement s ?-The Company would not let us speculate in sugar. If I thought t he price was going up, and I wanted to buy 1,000 tons, the Company would not supply me.' For all our trade purposes I have not had any difficulty in gettin g supplies .
F. l388l. G
XC
Question 14991.-l\Ir. Macpherson l\IacRobertson, manufacturina confectioner. Melbourne.-! cannot impute anything unfair to the Company, but the.v are strict people. · Question 15064.-l\Ir. Abel Hoadley, manufacturing confectioner, South Melbourne.-We get sugar to-day cheaper than we did twenty years ago.
Question 15115.-Mr. G. Wright, managing director of Ta?lor Bros., Limited, jam manufacturers, Sydney.-! am quite satisfied with my arrangement with the Colonial Sugar Refining Company, and the Company has alwa:rs treated me very fairly. ·
92. l\Ir. C. E. Young, of Fairymead, referring to a statement made by a witness, :-"I would like to refer to some evidence given by l\Ir. Pearson, on behalf of Gibbs,
Bnght, and Co. His statement was that plantation whites are controlled by the Colonial Sugar Refining Company. That does not apply to Fairymead. We are absolutely free from any such control. In regard to our mill output, we are active competitors in the open market, selling our sugars in Queensland, New South Wales, Victoria, South Australia, and Tasmania without hindrance."-(Question 22251.)
93. The evidence reveals that the Colonial Sugar Uefining Company occupies a commanding position in the industry, secured by steadily pursuing for a long course of years a policy which has won for it the confidence and good will of practically the whole of those with whom it has had business dealings. There is nothing to indicate that any of the Company's transactions have been in the slightest d.egree of a predatory character. Amicable relations subsist between the Company on the one hand, and the manufacturers of raw and the purchasers of refined sugar on the other. That the Company earns large profits, both within and without the Commonwealth, appears to be entirely due to the volume of its business, the command of adequate
capital, the complete utilization of by-products, thorough organization, able adminis tration, :mel high efficiency in every department.
VI.-BEET SUGAR.
94. All that need be said concerning the sugar beet industry in Victoria is that it should be encouraged as far as possible. In present circumstances, it is not likely that the sugar requirements of Australia will be met by the production of cane sugar in New South Wales and Queensland for several years to come. I have no sympathy with the suggestion that, on political grounds, the Victorian beet sugar industry should be sacrificed to the cane sugar interests. It must be admitted, however, that the evidence
did not disclose any earnest desire on the part of Victorian farmers to extend the cultivation of sugar beets.
VII.-SUMMARY OF CONCLUSIONS. 95. From the evidence submitted to the Commission, the following conclusions are drawn :-(1.) That an earnest and intelligent endeavour has been made, throughout the
industry, to meet the change of conditions involved by the substitution of white f(w coloured labour. (2.) That this has heen so far successful that the coloured labour is now less than 5 per cent. of the total labour P-mployed in the production of cane.
(3.) That concmrent with this change in labour conditions, there has been a large increase in the number of white farmers, and of the white popul».tion generally, in all the sugar districts. ( 4.) That the Excise and Bounty legislation, in conjunction with other measures, has fulfilled the purpose for which it was passed.
( ti.) That the total exclusion of coloured labour from the industry is and should be effected hy such legislation as the Premier of has adv1sed
the Prime :Ministe1· that he is prepared to suhmit to the State Parhament. ( 6.) That the profits of l\Iill-owners and Refiners, while sufficient, are 110t exces:;i \·e. ( 7 .) Tl1at tl1e and tl1e Primary Producer hetter under
existing conditions than they would he under a system of snmll mdependent Refineries. (8.) That timners are not recei\·ing an adequate return for their la hour and enterprise.
XCI
(9.) That the Excise and Bounty legislation should be t·epealed. This would place production on the same footing as other industries, would aftortl fal'!lt ers substantial relief, and would not increase the cost of sugar to the consumer. (10.) That the most satisfactory method of regulating wages and conditions of
employment is by means of local \Vages Boards. 96. In conclusion, I have the honour to recommend as follow s: ( 1) Abolition of Excise and Bounty. (2) Legislation by Commonwealth or States to prevent any coloured
labour being employed in the production of sugar in Au stt·nlia. ( 3) Incrense of Imp01t Duty on sugar to £7 per ton. (4) If Excise and Bounty retained, increase of Import Duty on sugar to £9 per ton.
(5) Regulation of wages and conditions of employment to he left nuder the control of local Industrial or Wages Boanls. (6) That a special Bounty of 2s. per ton he paid on all cane ha1·vested under Bounty conditions during the 1912 season, as compensation
to growers for the increased cost of production due to the Ministel"s order of August last.
Your Commissioner has the honour to be,
Your Excellency's most obedient servant,
(L.S.) THOS. \V. CRA \VFORD.
Printed and Published for the r ,, f tlw 1 o f .·\l.S TR .\ I. B b ,· A r. Bf.RT J. :'-h:LLE'IT,
Acti n::,! Pri n i er f,r tl w St.d c td \" ictori:-t.